Jon Michaeli’s Blog

Kindle and the future of books(tores)

I love reading books. These days, mostly business books, as time allows. And yes for me, a good part of the experience is physically holding the book and turning the pages. I have heard the same argument for newspapers and magazines, whose recent demise is well documented. In their case, they’re not only readily available online but also easily customized to an individual’s preferences through RSS feeds, Google Alerts, etc. Thus, digital is well on its way to supplanting the hard copies available at your local newsstand.

On the other hand, good business books start with a foundation and build on those core concepts, illustrating with examples and case studies along the way. Hence, you miss out on important takeaways if you don’t read a book cover to cover. And let’s face it, no one wants to read a 200+ page book on a computer.

Enter the Kindle and all of the look-a-like e-book readers that have started and will continue to penetrate the market over the months to come, and you have the perfect example of disruptive technology. While I don’t own a Kindle as of yet (I’m usually an early follower when it comes to gadgets and wait for the price to drop a bit before I jump in), my friends and colleagues tell me they read more quickly and it’s easy on the eyes. Apparently digital ink technology has eliminated one of the top reasons to do your reading

Now, let’s use the following evolution of movie rentals/ownership…

Blockbuster –> Netflix (via mail) –> Video on Demand (VOD)

…as an analogy to see how it relates and whether it can help us predict the future of printed books and bookstores:

  • Instant gratification – Because the internet is accessible 24/7, consumers have grown accustomed to getting what they want in real-time. Netflix pioneered cost-effective overnight delivery of movies, and now along with the broadband providers, is moving its library to VOD. Let’s face it, if you have some free time now, would you rather spend it traveling to the book store or downloading the title at the top of your list and reading the first few chapters?
  • Convenience – Netflix made it simple to return movies without incurring late fees. When you’re on vacation or in your second office (i.e. the airplane), the Kindle stores all of the books on your reading list and weighs far less.
  • Scarcity of time and space – Except for a select few real classics, most people don’t watch the same movie more than once in a short time frame. Hence, it makes little sense to own a movie, especially since Netflix has removed the pain points from the return process and the marginal cost of re-renting a Netflix movie later on is nearly zero (under most price plans). Similarly, while some folks like keeping good books on display at home or in the office, the trend towards urban living and cubicles means space is at a premium. (Trust me, it hurts me to say this, as I have dreamed of having a library in my future home. I really worry that our society will lose all of its character, and our abodes will resemble sterile laboratories in the not too distant future.)

You might claim the analogy is flawed in that, my definition of “movie” is as a secondary market (i.e. for the most part, movies are available on DVD/Blu-ray/VOD only after they have hit the theater), while books, by nature, address a primary market (i.e. there is no previously released version). It’s true some consumers watch a movie on the big screen and then rent it again at home (largely due to the low cost). There’s no doubt an e-book has similar residual value (as a reference tool or refresher), because it’s difficult to absorb and digest all key learnings after just one read. However, since you don’t have to return an e-book as you do a movie rental, this argument doesn’t hold weight.

So what’s my conclusion? Book stores will not disappear in the very near future; some genres with illustrations and other characteristics that appeal to the senses (e.g. travel books, cookbooks, children’s books, some novels) will still be preferable in hard copy. But if the Barnes & Noble’s of the world know what’s good for them, they had better innovate more quickly than Blockbuster has in this decade. Providing couches and chairs where shoppers lounge, sip lattes and leisurely preview the latest best sellers is not a viable business strategy. Further investment in e-commerce is insufficient. And with all of that costly real estate on their hands, they can ill afford to be defensive and simply rely on imitation Kindles to save their legacy businesses.


10 Responses to 'Kindle and the future of books(tores)'

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  1. beltwaybandit said,

    Very nice post! I have been contemplating the future of the publishing industry with the release of the Kindle. Barnes and Noble has introduced an e-reader that’s available for download for iphones, blackberries, and both mac and pc computers. I haven’t quite caught on to the e-reader concept, mainly because of how cost prohibitive it is. I would also like to see a different price structure for paperback releases, they aren’t really all that much less than the physical version, whereas new releases have a huge discount.

    I haven’t tried an e-reader yet, but I would definitely be interested to see how easy it is on the eyes. That’s been another reason why I haven’t bought one yet, because it looks like I’d be reading from a computer.

    • Jon Michaeli said,

      beltwaybandit – thanks for your comment. Personally, I’m skeptical of any e-reader that isn’t custom built for that purpose. Not sure a mobile phone will ever be conducive to reading long documents or books.

  2. LB said,

    I would like to own a Kindle, but there are a few things that have to be changed before I will jump in.
    1. The price
    2. The ability of Amazon to distroy what is on it.
    3. I want the ability to read other text documents easily.
    4. If I drop a book, I may injure the spine. If I drop a Kindle, uh-oh.

    • Jon Michaeli said,

      Good point about dropping it, thought back up of your books on a PC or in the cloud should be easy to do

  3. I am on my second Kindle (my husband got my Kindle 1 when I bought a Kindle 2), and I can tell you the instant gratification of an all-the-time wireless connection makes the Kindle into a crack pipe if you are a book addict. The free sample feature makes me more likely to try new authors, which is a good thing. What I like most is that I read a LOT more books now, because I keep my Kindle in my purse. That to me is worth the expense and the chance that I could break it (no problem so far). And by the way, I can easily put my own text and MS Word documents onto my Kindle (that has come in handy) as well as the many free ebooks that are out on the web.

    As for the infamous Big Brother incident, the thing that will prevent that form happening is not technology but public opinion.

    I agree that just as some books are a long way from working well as ebooks, some bookstores will still be around for the next several years, at least. I think the smaller stores with atmosphere and a knowledgeable staff (including used bookstores) are actually probably in better shape than the chains, because they offer something you can’t get from a Kindle– a social book/reading experience.

    • Jon Michaeli said,

      karen webster newton – I agree about the social experience at community bookstores – in fact there should be a way to leverage online interest groups (via social networks) into an offline setting. Question – how do they monetize this?

  4. Linda Dahl said,

    Jon – I’d suggest rather than monetize, you adopt your local library for a social, book reading experience. Your library probably has book groups and multitudes of genres. You have pre-paid for the experience through your tax dollars. Libraries now serve a variety of functions, not the least of which is that of a community gathering place where all are welcome.

    At this point, Amazon actively trying to keep Kindles out of library collections.

    • Jon Michaeli said,

      Linda – I am guilty of under-appreciating our local library until I had kids. Since then, it has been one of their favorite activities, especially when the weather isn’t cooperating. Perhaps libraries will be one of the beneficiaries, since they are funded by tax dollars, whereas book stores need to turn a profit.

  5. LEJ said,

    I think that you’ve hit the nail on the head with it being an indicator of a disruptive technology, and while I agree with you that current technology makes items like travel books and cook books somewhat impractical for for Kindle/e-Readers, that is only this generation. I suspect the Kindle 3, 4, or 5 will be able to handle that, and in spades.

    I’d also say that whether or not the Kindle makes it, the technology and concept, not the package, is key. What makes the Kindle and other dedicated readers different is that it reads like a book in terms of eye-strain and comfort level, but it makes it easier by adding technology that makes sense, and while all it does right now is adapt existing material to the Kindle format, there will be that breakthrough of some sort that takes the platform and transforms how we read. The dictionary and links in the Kindle are an example,but I’m thinking there is something more they can do. When they figure out what that is, THAT will transform more then just bookstores.

    • Jon Michaeli said,

      LEJ – Thank you for your comment. I agree next generation Kindles will be able to further diminish the advantages of printed books. That said, one of my favorite activities is to read books to my kids at bedtime, and without the hand drawn illustrations and turning the pages together, it wouldn’t be the same. One of my favorite books growing up was Where the Wild Things Are (coincidentally it’s one of my son’s favorites), and I cannot imagine that story having the same impact on a digital screen.

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