Excerpt:
Recent trends and tech economics have made it abundantly clear that 2010 was the year digital books ousted traditional books as the leading format. Just this month, Amazon.com Inc. reported that it sold more eBooks for the Kindle than hardcover books for three consecutive months.1 While Amazon is only about 10% of the book business, it is representative of a larger trend. In December, Random House reported that eBook sales increased by “triple-digit percentages,”2 and in January, the Association of American Publishers (AAP) reported that eBook sales jumped 370% over January 2009.3 This explosion of sales is not entirely resting as a windfall within the publishing world as the industry doesn’t know yet if these sales are cannibalizing traditional books.4 However, Amazon’s recent news is a certain indication that this is the next phase of the industry, if not a long-term trend.
Although in a time of transition with many unknowns, publishers now must look at their business models and determine how best to navigate these uncertain waters. Should the eBook trend be a boon to sales without chewing up sales of the printed book, then publishers have a new format to manage, along with vastly different marketing processes, distribution channels, copyright infringement concerns, and the immense task of breaking through the clutter and reaching their target audience. If, on the other hand, eBook sales are cannibalizing print sales, even to a minimal extent, the publishers will need to readjust their distribution channels, fall back on print distribution, and somehow keep price points competitive on the eBooks without losing the bank to high marketing costs and distributor discounts. In either case, the existing model is inadequate to support such a massive shift in consumer behavior.
