DEVICE WARS: The Battleground is not what you read but what you read on
Most Australian bookshops have been able to sell eBooks for over 12 months with varying degrees of success. Amazon are the dominant eBook retailer in the Australian market with an estimated market share between 60-70% . Apple are second with 15-20%. And Kobo third with 10-15%. Google have around 5% at best guess. The rest is shared between ReadCloud, Booki.sh, Booku and others. 90% of eBook sales are going to offshore retailers.
In Australia eBooks are estimated to represent 10% of books sold. In the US it is almost 30% and still rising in both markets. In some genres eBooks sales are over 50%. The majority of this is at the expense of print book sales. Australian bookshops account for the majority of book sales in the Australian market. As eBook sales continue to grow and print book sales contract, less books will be sold in Australian bookshops and there will be consequently be less bookshops in Australia. If the number of bookshops contract in Australia the number of print books sold in Australia will fall even further.
Amazon, Apple and Kobo are winning the battle for eBook market share through their devices. It is estimated that The Kindle accounts for 75% of eReaders in Australia. The iPad and iPhone are still the dominant tablet and smartphone device despite the growth of Android devices. Kobo eReaders are making in roads with multiple retail partners and a strong marketing push in this market.
While any eBook retailer can sell onto tablets and smartphones, as well as Kobo eReaders, the majority of users purchase from the default eBook provider on their device (iBooks, Kobo, Amazon). The Kindle App is also widely used as Kindle has become the default eReader in consumers minds. Non-Amazon retailers cannot sell onto The Kindle device, although it is technically possible to transfer non-DRM ePub files to Kindle devices.
Kobo have recently partnered with the American, New Zealand and United Kingdom Bookseller Associations to enable their members to sell Kobo devices. Bookshops, who are members of these associations, get revenue from eBooks purchased on the devices they sell. I like this model as booksellers don’t have to worry about competing in the online space. They can focus on what they do well; sell physical products with good customer service. The more devices they sell the bigger the share of revenue they can earn. This kind of partnership is unfortunately not currently available to the Australian Booksellers Association and it’s members.
The eBook market is essentially a device war: Kindle vs iPad vs Kobo (and to a lesser extent Android). Investing in devices is extremely expensive and devices are being superceded every 12 months which means any investment in a device must be repeated every year.
Pages & Pages were selling an Android tablet we called The Cumulus. But it became obsolete very quickly and we were stuck with inferior stock (you cannot update Android software like iOS). I have been investigating a number of other devices but they are all far from perfect and to get any real integration with my eBook store I would need to purchase up front 10,000 units! Per year!
However a bookshop does have its own device: the physical book – available in a variety of different models: Hardback, Trade Paperback, Mass Market Paperback. I believe bookshops should use this device to compete against eBook retailers. And the way to do this is to bundle print books with eBooks.
The hardback and paperback book formats have always complimented each other. They are released, on average, 12 months apart at two distinctive price points, high and low. Whereas the eBook format competes directly against these formats as the cheapest price point in most cases. Bundling the eBook format with the print format would be a way to curb this competition which is cannibalizing the print book market.
Bundling is currently being used in the DVD industry, in particular to encourage people to switch to Blu-Ray, but there is a huge push with the new UV format that will be offered with every new DVD release in Australia from May. Bundling has been inherent in the Music industry as people have the ability to rip their CDs into a digital format (you can do this with DVDs but it is illegal). Being able to bundle an eBook with a print book would ensure that print books remain a relevant format. If consumers could also choose the eBook format they want (Kindle, iBooks or ePub) bundling could also combat format and device restrictions for both consumers and retailers.
If bundling was done with print books and eBooks it should be used where it can enhance a print book format. There is already a perception that an eBook should cost less because it is a digital product, despite the fact it shares many production costs with print books and you cannot separate the two. The hardcover format, particularly for fiction, has become maligned in the Australian market. I would like to see the hardcover format used for bundling. The hardcover is the premier book format and this would also mean bundling was only available in a book’s first format. Bundling with the hardcover format would add value to that format and as it is the highest price point format it would not devalue the eBook.
In Australia most first editions of books are in Trade Paperback at $29.95. I think it would be great experiment to see an eBook-bundled-hardback at $35-$39.95.
Bundling would open a lot of doors currently closed by eBooks. People could easily gift a bundled book without fear of what device (if any) someone reads on. An eBook reader would have a copy to put on their shelf or loan a friend or family member. And their eBooks are backed up in print and vice versa.
- A consumer buys a print book from a retailer.
- The book contains a unique code to access the eBook (if available)
- The code is then activated by either the retailer at time of purchase or the consumer at home who nominates what format/device they would like the eBook in; (epub, Kindle, iBooks etc.)
- A copy of the book is sent by the publisher either directly to the consumer or via an eBook vendor.
- There would be no extra charge for the eBook as the consumer has purchased a copy (the print book). The code can only be used once
- Type of device and digital format becomes irrelevant
- Retailers can sell to all readers
- Consumers can gift books to any type of reader
- Print book sales will remain stable
- Physical retailers remain the premier channel for book sales
- Book sales remain in Australia
Would you buy a bundled book?