Monday, March 15, 2010

The Future of Print - Is it on an iPad?

Business Week just reported that the number of e-book applications in the Apple app store now exceed the number of game applications.   The growth in digital books as a means of gaining access to text-based documents can be seen in the rapid growth in the interest in consumers in just six months.   According Mobclix, a company that tracks iPhone application use, in October of 2009 six times as many games were sold as e-books.   By February of 2010, the ratio dropped to 4 games to every e-book.  This shift occurred even before the more text friendly iPad device even hits the market.  More importantly, a higher share of the e-book applications are purchased creating a profit opportunity for book and magazine publishers that may not exist for game publishers.

What is clear from early adopters of e-books is that they like the new format.  As Kelly Gallagher, a vice-president at R.R. Bowker, which provides analysis of the publishing industry tells Business Week, "once a person buys an e-book, there's a 50% chance that they will buy most of their books in electronic form."

While e-books may not be advertising friendly, publishers of magazines and newspaper will have subscription and free iPad designed apps out when it hits the market in the next few weeks.  More than likely the competitive tablet devices sold by HP, Dell and other computer manufacturers will handle these or similar applications as well.   Amazon will eventually have to update its Kindle device to handle the broader range of content that readers want or switch its business model to strictly a distributor of books and other content on iPads and other tablets. 

How soon will the iPad, dedicated e-book readers and other tablets make a difference in the print market?   Clearly, not everyone will have electronic readers for quite a while.  In 2009, only 2.5 million were sold.  While this is expected to double in 2010 with the introduction of the iPad, the growth rate is expected to slow down once the market settles out in 2011.  For publishers of books and magazines, the question is not how many e-readers there are but how many are owned by heavy buyers of books and magazines.  It is these consumers that will drive the shift of publishers to e-formats and not those members of the public that rarely buy books and magazines and these customers are clearly moving to digital.

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