Is the success of e-readers only hype?

December 31, 2010

On the heels of major booksellers Barnes & Noble and Amazon.com announcing milestones related to their e-readers, The Pew Internet and American Life Project has released a survey called “65% of Internet users have paid for online content“.

Reading past the single conclusion of the title, it’s easy to appreciate how varied that content is.

For example, the survey says that 33 percent of U.S. Internet users have paid for digital music online. It’s the same for software.

According to the survey, paid content among U.S.  Internet users breaks down as follows:

  • 21 percent have paid for cellphone or tablet apps
  • 19 percent for video games
  • 18 percent for magazines
  • 16 percent for movies or TV shows
  • 15 percent for ringtones
  • 12 percent for digital photos
  • 11 percent for members-only premium content, and
  • 10 percent for e-books.

That’s right — ringtones are more popular than e-books, according to the Pew study.

Mind you, ringtones generally don’t run you $9.99 and up, like Amazon.com charges for most of its e-books. And that might help put the figures into perspective, given the study’s correlation between income levels and paying for online content.

Still, declaring the e-book a success story may be premature.  The basic e-readers, from Amazon’s Kindle to Barnes & Noble’s Nook, can’t handle the trumpeted enhanced video content. And selling lots of iPads doesn’t guarantee that they’ll be used for much more than games like “Angry Birds”, especially considering, like the Pew survey reveals, Internet users’ penchant for buying only one or two types of content.

Things don’t look much brighter for the online magazine publishing industry. Magazine sales on the iPad have tanked since Wired sold 100,000 copies of its debut issue, earlier this year. Pricing and poor distribution may be the cause, writes The Next Web’s Alex Wilhelm .

Eating 10 percent of the online media content pie doesn’t sound as impressive as proclaiming that sales of digital books have surpassed traditional ones.

And let’s keep in mind that e-books still only account for 10 percent of all books sales.

In other words, the imminent tablet revolution may not usher in a new era for e-book sales.

Extrapolating from the Pew survey, for online e-book sales to compete with other media such as digital music, prices have to come down and subscriptions heavily promoted.

2 comments

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I love statistics, but some care must be given to comparing apples to apples (no pun intended). Most of your comparisons involved mobile phones, computers/tablets, and media other than books. E-readers are a unique and niche category, and very little else with which to compare. Avid book readers may be slow to adopt e-books, and if they get an annoying first experience, they might dismiss the whole idea. The positives have to dramatically outweigh the negatives from the individual user’s point of view. My wife will likely never go back to buying physical books after nearly two years’ experience with the Kindle. But she hates computers, so it was the similar-to-paper readability of e-ink, the two-week long battery life, and the instant browsing and purchasing from any location, (no Wi-Fi limitation and no monthly fee), that clinched the deal. I don’t think she would have tried it on her own, but I gave it as a gift, provided adequate instruction as to its use, set up the Amazon account for purchasing, and then just waited to see what her decision would be. Now she won’t even buy a purse that doesn’t have a convenient pocket for her Kindle. If I had given her something with a computer-type screen, Wi-Fi limitations, 1-2 day battery life, or a monthly fee, I know exactly what would have happened. It would be sitting around the house somewhere, battery dead, soon forgotten. I believe that e-readers like Kindle will continue to expand market share over printed books, and that they are not in the mobile phone, computer or tablet categories. Amazon has done a particularly poor job of differentiating and advertising the positives of Kindle over computers/tablets for people who love reading books. Even so, it has become their number one sales product.
The next big step will be for textbook and reference book publishers to recognize the advantages for education and the workplace using the larger size DX. I work in the legal profession, and if the books that I buy were available in Kindle format, I would gladly pay the same price to have the convenience of Kindle, and the publishers/authors would improve their bottom lines. I can’t take my legal library with me when I leave my office, but I would sure like to do so.

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