Quote:
Originally Posted by rhadin
I think you are right that the second group is a smaller group than the first group, but I think that the second group is made up of the people who actually buy and read more than 1 book a year, whereas the first group is not.
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If your primary business is selling books, as is the case with B&N, then your focus probably should be on the second group. I'm not quite sure what Amazon's primary business is other than to be a general retailer, in which case the focus probably should be on the first group.
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There is no question that the second group (let's call it reading-focused) of tablet buyers is smaller than the first (let's call it media-focused). And, lets add in that it is a known fact that book buyers have a 70/30 split between casual readers (a few books a year) and avid readers (a few books a month). And in the US only 40% of the population even reads books.
Avid readers have no problem justifying the purchase of a device solely for reading. Which device will depend on their needs for mobility, battery-life, and type of content. They can even justify, as many of us do, having multiple devices.
Now, the mainstreaming of ebooks started with eink devices and for avid readers of narrative text--which is where the bulk of consumer publishing money lies--eink is a very good match. After the 8 hour price war (that B&N started) walled-garden eink readers have been priced at near cost. Which these days means well under $100 for the entry-level readers and not much more for the premium models. This meant explosive growth in 2010-11 as avid readers jumped in, practically en-masse.
Since then growth has been slower as few avid readers remain willing to adopt ebooks that haven't. New eink sales are coming primarily from younger readers, upgraders, and replacement sales and international sales. (Hence, Amazon and Kobo doing well--Nook, not so much.)
All that applies to narrative text. Other areas of consumer publishing, though, haven't been through the ebook mainstreaming process yet. Magazines, cookbooks, travel guides, art books, coffee table books, comics... All those segments are a poor fit for current eink tech. And since narrative text ebook adoption is now fairly mature in the US, growing the market for ebooks in the US means targetting those un-tapped markets *and* casual narrative text buyers.
Which brings up tablets, which can be well-suited to that content. And, because they are multifunction media consumption devices, can be justified purchases on reasons other than their ebook reading functions. Note I said *can* be well-suited to reading. Because, while they can be used that way, as multifunction devices, they aren't optimized for reading the way eink devices are. Size, weight, battery-life, aspect ratio, ergonomic design, are all areas where tablets can be suboptimal for reading.
Which brings us back to the types of readers and the reason they pick one product over another.
Avid readers looking for tablets will seek the best set of features for their reading needs but casual readers looking for tablets will be more interested in the device's suitability for other uses since they won't be using it primarily for reading.
Oh, and then there's a third class of tablet buyer; those who aren't at all interested in how good they might be for reading. And that last group is way bigger than the other two.
To the last group, tablets are really just another kind of computer and they prize flexibility and computing power over all else. Suitability for reading is incidental.
Casual readers will appreciate suitability to reading but, again, won't be too willing to trade off much computing flexibility against reading suitability. Their choice will be used as a media pad or computer most of the time and as a reader occasionally.
Avid readers looking at tablets will be looking at a usage pattern where long reading sessions and access to many sources of content of different types is critical. And, so far, it seems like trading off the full computing power and app stores of the generics is a tolerable price of admission as long as the desired features and content are available at a tolerable price. Avid readers will make trade-off the casual readers won't, so suitability for avid readers does not mean suitability for casual reader buyers.
Basically, B&N *correctly* identified the need to go beyond avid readers of narrative fiction and start targetting casual readers but failed to provide enough non-reading value to take the color Nooks into the casual reader space. The Nook Color didn't and reportedly sold 340K units in the full year they were unchallenged. The Nook Tablets didn't either and were totally lapped by the Fire in weeks; it wasn't until the Nook HD/HD+ that they even *started* getting serious about non-reading content. And mostly it's just video. That may be... too little, too late...
Whatever the reason, the entire Nook line's appeal (eink and color) remains limited to avid readers and loyal B&N customers. Casual readers seem more likely to buy into Amazon's trade-offs or Apple's pricing than they are Nook's value proposition. At least so far.
The big problem is that there are a whole lot more casual readers out there than there are avid readers. And a clear majority of avid readers in the US are by now either commited Nook customers or they are Kindle customers. Any installed base growth needs to come from international markets (where B&N brand loyalty is meaningless) or from casual readers. And in the latter range there is a 900lb gorilla named Apple.
Consider this: there are, what?, something like 200 million *active* iPxxx devices out there. Say Apple gets them to each buy just one ebook a year on average, that is 200 million ebooks. We just saw the size of the global market estimated at 900 million ebooks in 2012 so 200 million ebooks would be 22% global share. Versus Amazon's 45% global share.
Now, Apple is clearly not averaging one ebook per customer yet. They probably won't for a while. If ever. But there is real money and real market power in those onesy-twosy casual reader sales. (Just ask Costco.)
So I don't think any serious ebook retailer can afford to focus solely on the likes of us, the avid reader; they need to go after casual readers too. iOS, Windows, and android reading apps are a good start. But a solid line of multifunction devices is probably a necessity, too.
And it may be time to stop thinking of the ebook retail world as Amazon vs Nook, with Kobo trying to elbow in. The reality is looking more like a global Amazon versus Apple vs Google race with Kobo trying to outrun them all.
And I'm not sure I see much of a role for a B&N-hobbled Nook in that race.
I still think Nook needs new owners.