E readers are considered to be one of a few “hot gadgets” of the future. Sony introduced an e reader last year and a new touch screen version recently. The Amazon Kindle has shown early signs of success in the US, and a version is now available in the UK. Several other manufacturers, including the value notebook manufacturer, Asus, are looking at introducing new colour and touch screen models in 2010.
The question remains, is the e reader concept something worth getting excited about? Certainly, leading book retailers have made in roads in pushing the new format over the last year. In the US Amazon are pushing hard both book sales and newspaper and magazine subscriptions on the Kindle platform. Waterstones, in the UK, were early leaders in offering an expanding range of e books, and sell Sony e reader devices.
Current sales of e readers in the UK are low. Our survey of 1,000 UK consumers showed that 2% already have an e reader, and another 2% indicated they will buy one in the next 12 months. Although a further 12% said they would consider buying an e reader, around one third (34%) are resolutely unlikely to buy, and another 50% not very likely.
So what are the chances of persuading more people to buy e readers? In our poll, just 6% are enthusiastic about them – “they are great”. Another 14% either don’t know what they are, or are confused about the formats of e books. These people are likely to include technical laggards who would be difficult to reach in the medium term. But the real challenge is persuading the 44% of people to move away from traditional paper books. Women are far more strongly wedded to the reliable hard copy amd paperback (48% are not interested in e books, compared to 38% of men). That said, there are indications that it is possible to push the e book beyond the niche gadget buyer. 16% of consumers felt that the e reader concept is attractive to people who read a lot of books, and 20% feel it is particularly useful for those who travel a lot or commute regularly. But it wont be easy. One group of people we know it will be difficult to persuade are younger readers (18-25). The proportion of young people who don’t read books in our poll was double of the national average (14% compared with 7%) and this age group was the least likely to buy a e reader in the next 12 months (45% compared with 34% overall). The 36 – 45 age group are marginally more likely to have an e reader already (3% compared with 2% overall), but the 46-55 age group appear more willing to consider them in the next twelve months (4% compared to 2%) less likely to definitely dismiss the idea (27% compared to 34% overall) and least likely to be wedded to the old fashioned paper book (36% compared with 44% overall).
So what can manufacturers and book retailers do to make the e reader more attractive? Well it appears that the older demographic are going to be difficult to persuade what ever is done to promote or change the format, because they are strongly against the concept of e books. In our poll, 63% of people in the 56-65 age group wouldn’t want an e reader to read books or newspapers in any circumstances (compared to 48% overall).
Book retailers are already experimenting with introducing variations on the formats (e.g. extra content, interviews with the author, etc) and looking to extend the range of titles available. Other ideas include introducing a colour display. But in the end the current state of the e book market suggests that there are two over riding obstacles to significantly increasing the penetration of e reader sales. The first is attitudinal – e.g. people who are not open to the idea of reading a book electronically, and are emotionally attached to a good read, printed on paper. This is a much more difficult task of subtle persuasion of benefits and functionality over emotional barriers. The second barrier, is also a possible lever – cost. Currently most e book titles have a marginally lower price tag than the paper and hardback equivalents. Given the saving on distribution, storage and printing costs, there is surely an opportunity to offer e books more cheaply. Overall, 48% of people in our poll indicated that reducing the cost of e books relative to paper copy books would make them consider buying e books. It would have to be “much cheaper” than paper books – so the question remains for the book retailers and publishers on whether the economic of discounted e books makes commercial sense over the current pricing of traditional paper books. The other financial barrier is the cost of the e reader devices. On that issue, there are already signs that the cost of devices are coming down, and there is further scope for differentiating the price of entry and high end models.
The e reader market is growing and will likely to grow faster in the next couple of years. The really interesting questions about services, formats, devices, core markets, and suppliers, and how consumers react to these new offerings is only just beginning. I for one can’t wait to read more.