Sunday, April 10, 2011 0 comments ++[ CLICK TO COMMENT ]++

Sunday Spectacle CXVII

The Book Industry

(source: "The business of book selling," The Globe & Mail, April 8, 2011. Accompanied the article, "Indigo's Heather Reisman faces digital reckoning" by Marina Strauss for The Globe & Mail.)

Something doesn't look right with the numbers in the chart. It says paperbacks are 2.5% of the market and I find that hard to believe.

The most interesting graphic is the bottom bar graph showing the changing industry. The price of a book (hardcover vs e-book) drops from around $25 to $10. The two industries that completely dissapear from the process are the printer and the distributor. The retailing landscape will also change, with retailers earning roughly half of what they used to. However, given how online services tend to be winner-takes-all type of market—not sure if e-books will follow that—the impact on retailers will be significant and only a few will survive. Companies with legacy costs, such as physical bookstores, will suffer at the hands of new (online-focused) entrants.

Everyone—author, publisher, online retailer—ends up with less dollars. This isn't necessarily a bad thing since declining prices may lead to increased sales and, as Chris Anderson has suggested with his Long Tail theory, increasing the quantity of goods should lead to the capture of large but infrequent sales.

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