The way that coincidental news events sometimes happen really makes you wonder if there really is some unseen hand guiding everything. This week got me questioning whether there’s an omnipotent god of reading somewhere up in the clouds, overseeing the evolution of e-books.
We start with the news that e-books have apparently plateaued, making up about 15 per cent of all book sales, according to BookNet Canada. E-books peaked at 17.6 per cent of sales in the first quarter of 2012, which is normal given that people go on buying binges after getting e-readers and tablets for Christmas, then dropped to 12.9 per cent by the last quarter. So far in 2013, the same trend appears to be repeating.
Conventional wisdom suggests the percentage should be continuing to grow, similar to how other media including music and movies have done. With e-books being far more convenient to acquire and in many cases cheaper than physical counterparts, it’s normal to expect they’ll eventually make up the majority of sales. Yet, according to BookNet, that’s not happening – at least not in Canada – because buyers still like to shop in stores:
34% of book purchases were made in non-book retailers, 37% in bookstores and 25% online—print book purchases made online account for 19% of those online sales. The top reasons respondents said they chose brick-and-mortar bookstores were the convenience of the location, the selection available and ease of purchase. Non-book retailers, such as Costco and Walmart, were used for those same reasons, but pricing and the convenience of being able to shop for other items were cited more often.
The Canadian plateau is also out of whack with what’s happening in the United States. Not only is the overall percentage of e-books considerably ahead at about 22 per cent of all books, it’s also growing quickly. While e-book growth is not in the triple digits like it used to be, it’s still powering ahead in the U.S.
That, combined with the disconnect in how people buy other media (as in digitally), suggests there are other factors at play besides the odd justification that Canadians simply like to shop in physical stores.
The most likely culprit is weaker competition north of the border. BookNet lists the three most popular e-reading devices in Canada as the Kobo at 25 per cent, Amazon’s Kindle at 18 per cent and Apple’s iPad at 14 per cent. In the United States, that list is very different in two ways – both in regards to the players involved, as well as the devices themselves. Amazon is far and away the leader, with estimates generally giving the company more than half the market, followed by Apple and then Barnes & Noble’s Nook, with Kobo and others bringing up the rear.
Amazon’s relatively strong position in Canada is actually surprising, given that the company has barely put any effort into the country. Down south, it’s far more aggressive.
Kaan Yigit, president of Toronto-based tracking firm Solutions Research Group, says that Amazon’s competitiveness – combined with Americans’ greater penchant for spending on entertainment – is what’s really at the heart of the e-book discrepancy.
“Americans buy more music, games, apps and TV shows online or mobile versus Canadians as well. In the past we found that they are more likely to pay for content and entertainment, and leisure seems to be a bigger percentage of their budgets. This is along those lines,” he says.
“But Amazon would be a factor as well – 15 per cent penetration of Amazon tablets in the United States and they are hardwired to books, more or less.”
Lo and behold, on Thursday the company announced that very tablet – the Kindle Fire HD – will at long last be available in Canada as of June 13, which will complement the plain, old Kindle e-ink readers that have been available for years. The tablets won’t come with Amazon’s video streaming service or music store, but they will stoke the competition with Kobo and Apple. The company is also making its app store available in Canada, with the video and music offerings now its last remaining hold-out.
Will a hungrier and better-armed Amazon get those e-book numbers moving upward again? It’s probably a safe bet.