E-Books are racing through milestones. In July, Amazon announced that e-books for its Kindle outsold hardcover books in its latest quarter; in January, it expanded that and said e-books were now outselling all books. And in February, Borders filed for bankruptcy.
How long do traditional book retailers have to adapt to an e-book-centric industry? Two years. Tops.
That’s the forecast from Barnes & Noble executive Marc Parrish, who spoke Wednesday morning at GigaOm’s Structure Big Data conference in NYC.
“The book business is changing more radically now, and quicker, than movies or music or newspapers have, because we’re doing it in a matter of months,” he said. “In next 24 months is when this business will totally shift.”
In 2011, analysts forecast e-reader sales of 18 million units, and 35% market penetration. That is, among all those in the U.S. who read one or more books a month (a depressingly small percentage of the population), more than one-third of them will have a device they use for reading e-books.
For right now, most readers are print-and-pixel hybrids: They read some books on their Nooks or Kindles or iPads, and others on paper. But the tide is turning fast, and Parrish’s presentation had a sense of urgency. The clock is literally ticking for retailers, who have to come up with a new strategy to stay relevant and implement it extremely quickly. Otherwise … exhibit A: Borders.
“The question then is, what is the retail portion of the business in business for?” Parrish asked.
He offered up one partial answer: When B&N polls its e-book buyers to learn where they found out about the book they purchased, 34% say they spotted it in a bookstore — then went online to buy a digital copy. “In a sense, the stores are becoming a huge advertising model for publishers, a discovery model,” he said. “We’ve already seen that on e-readers people buy a narrower range of books, because they can’t discover what’s out there.”
Bookstores are perfect for browsing — but I can’t see B&N spending millions each year to keep hundreds of fully stocked bookstores around just to serve as billboards for its online e-book catalogue.
The retail book industry has been declining for decades. Most of my favorite independent and secondhand shops are gone or giving off death rattles. If Parrish’s prediction is true, the e-book sea change is going to be a wipeout. -Stacy (who is currently reading Cloud Atlas on her Nook)