Watch CBSN Live

Who Will Buy E-Books, and Where Will Amazon Sell the Kindle?

Forrester has an interesting new report on its expected view of the e-book market. There's a growing number of owners (though I wonder if the figures take into account all the devices like smartphones and PDAs that could act as an e-book reader) and broader interest in the category. But the really interesting possibility is the change in the nature of the audience.

In the second quarter of this year, about 6 percent of the group of online consumers who don't own e-book readers say they are planning to buy one in the next six months, up from 2 percent in Q2 of 2008. Although I couldn't tell how representational, and, therefore, how statistically projectable, the sample was, given that there wasn't enough information given to draw any kind of judgment,

And as the numbers grows, Forrester suggests that the audience for e-books will change:

They're more likely to be female, less tech optimistic, and they read a lot (on average, 5 books per month) but they buy and borrow books from multiple sources, as opposed to buying lots of books online.
That group is likely to be less tied-in to Amazon, according to the researchers, which could open the market to others, not that they're actually missing even now. In a copy of the report that someone let me see, Forrester makes the point that from 2008 to 2009, Amazon sold an estimated 600,000 Kindles. But Sony sold an estimated 400,000 of its e-readers. That was a bit more balanced than I had expected And that doesn't even begin to consider the download of e-reader software from a variety of vendors for the various mobile handsets.

In other words, this doesn't appear to be anywhere near a monopolized marketplace yet, and market pressures will diversify it even further. Borders in the U.K. is rolling out its own device, and Barnes & Noble is promoting its e-book site to the extent that it's even offering free WiFi access at its stores. If other competitors to the Kindle push even harder on the price bounds, bringing them down to under $200, every company involved in the electronic book market may find that it must accommodate a variety of e-book formats, reader devices, and consumers, because the audience won't gravitate to one provider and one location to purchase books.

Jordan Golson at GigaOM has another interesting suggestion: Amazon will need to start selling the Kindle elsewhere in the distribution chain, taking a note from Apple's iPod playbook and expanding availability to gain market share.

The one potential weakness that I see? Ironically, Amazon, a titan at the retail end of the distribution chain, isn't set up to work with distributors and other retailers the way that Sony is. Even Barnes & Noble has a publishing division that sells to other outlets, so it gets how to make an outbound distribution chain work. But if Amazon were to push hard to learn that area of the business, might it end up also turning into a distributor for the mass of other items it carries? Talk about a way to pump volume up even more and drive incremental costs per transaction down.

Illustration via stock.xchng user ba1969, site standard license.

View CBS News In
CBS News App Open
Chrome Safari Continue