Ebook Readers Rising

September 2010

In July Amazon made the astonishing announcement that the previous month it had sold nearly twice as many ebooks as hardcover books: 180 ebooks for every 100 hardcover books sold.

I never imagined that this would happen so fast — more people reading their new books on the Kindle or Kindle reader software than are reading the paper version. Reading on the Kindle, iPad, and iPhone had still seemed a novelty to me, with most people reading real books. No more.

The change happened Christmas day of 2009. All those people who got Kindles for Christmas purchased ebooks, and Amazon sold more ebooks than hardcovers for the first time.

How did it happen? For one thing, Amazon’s ebooks go for $9.99, which is cheaper. Plus, ebook readers and tablet computers (think iPad) have reached critical mindshare and sales are exploding. Apple sold 1 million iPads a month in the device’s first three months. This is suddenly a multibillion-dollar industry.

Some had predicted that the iPad-compatible ebooks purchased from Apple’s iBooks Store would cannibalize Kindle sales. Just the opposite happened. The iPad seems to have helped ignite the market and stimulate sales of all manner of similar devices. Also, Amazon makes Kindle software available for the iPad, iPhone, and other devices, such that some iPad owners buy Kindle books rather than Apple’s ibooks.

Another factor has been price cutting. To compete with the iPad, Amazon cut the price of the Kindle, and Barnes & Noble consequently reduced the price of their Nook. Then in late July Amazon came out with much cheaper versions of the Kindle, priced as low as $139.

The trend will only accelerate. iPad-like tablet computers are starting to pour into the market. In July K-Mart began selling an Android-based tablet computer for $150. Android, you may remember, is the software the runs many of today’s hottest smartphones, such as the Droid. This new tablet computer, called the GenTouch78, looks like an iPad, has a 7-inch screen (compared to 9.7 inches for the iPad), and sounds very impressive. The number of Android apps available is approaching 100,000. India has even developed a $35 solar-powered tablet.

In late July Microsoft announced they were developing a tablet after saying earlier, when the iPad came out, that they had no plans for one. A surging multibillion market and seeing iPads fly off the shelf at the rate of 1 million per month must have helped CEO Steve Ballmer change his mind.

I’ll say it again. If you don’t now own one of these tablet computers, you soon will. They’re fun, they’re convenient, and they can do almost anything a computer can.

This transformation from books to ebooks and table computers is a sign of the times. Out with the old, in with the new. It’s a bit scary.

Consider some facts regarding how things have changed over the past 10 years (courtesy of Newsweek): the number of daily newspapers has declined from 1,400 to 1,300, while the number of active blogs has gone from 12,000 to 141 million. The revenue for CD sales has plunged from $943 million in 2000 to $428 million in 2010, and the number of iTunes downloads has gone from zero to 10 billion. The number of daily letters mailed has gone from 208 billion to 175 billion, while the number of daily emails has gone from 12 billion to 247 billion.

We’re not in Kansas any more.

But new media arise. Another interesting transition is newspapers. I love newspapers. But they’re gradually going out of business. And an interesting new development is the rise of “hyperlocal websites.” Finding a lack of local news, even in large metropolitan areas served by major dailies, people are starting blogs and websites that dig around for local news and report it.

West Seattle Blog, for example, reports news for residents of Seattle west of the Duwarnish River — civic projects, council meetings, accidents, crime. Those in that area appreciate getting the sort of local news not covered by the Seattle News. According to Time magazine, the website has been so successful that the husband-and-wife effort had revenues in the six-figure range last year.

Seeing the potential in hyperlocal websites, entrepreneurs are jumping in, and megasites such as EveryBlock and Patch.com (from AOL) are arising to, in a sense, create conglomerates of hyperlocal websites. EveryBlock covers 16 cities, and was purchased by MSNBC last August, suggesting that the old media see this as the future. Patch.com covers nearly 100 cities and towns in 9 states, and is expanding fast.

Me? I still read the good old-fashioned books and the local newspaper.


© 2010 by Jim Karpen, Ph.D.

E-mail Jim Karpen