Print Books vs. E-Books

On Thursday (September 24), I came across this Tweet by Professor Stew Friedman: “I love the smell of paper in the morning. E-book sales slip, print books alive & kicking! @xanalter @NYTimes http://nyti.ms/1KuGItp” I clicked on the link and landed on New York Times article titled: “The Plot Twist: E-Book Sales Slip, and Print Is Far From Dead.”

Some of the key points from the article are:

  • E-book sales fell by 10% in the first five months of this year (Source: Association of American Publishers)
  • While analysts once predicted that e-books would overtake print by 2015, digital sales have instead slowed sharply.
  • There are signs that some e-book adopters are returning to print, or becoming hybrid readers, who juggle devices and paper.
  • The article quotes a co-owner of a bookstore saying, “The e-book terror has kind of subsided.”
  • The double- and triple-digit growth rates in sales of e-reading devices have become thing of the past.
  • Around 12 million e-readers were sold last year, a steep drop from the nearly 20 million sold in 2011 (Source: Forrester Research).
  • The portion of people who read books primarily on e-readers fell to 32% in Q1 2015, from 50% in 2012 (Source: Nielsen survey).

As I was reading through this article I was reminded of an article about ‘climate change’ from nature.com that I read last year.  The key quote from the article from Nature.com that would serve as counter point to the New York Times article is: “If you are interested in global climate change, your main focus ought to be on timescales of 50 to 100 years.’ I guess the article in New York Times is getting the timescale wrong. Looking at what happened in the first five months of a year or in particular year might not serve as a good barometer for a long term trend. If we are interested in examining a business trend then we should be looking at least a ten year period. We might brush aside the comment from nature.com as a natural phenomenon and is not applicable to economic systems. Let’s take the example of the Dow Jones Industrial Average. In the long run it has been going up, but there have been short term reversals (during recessions). The dip in e-book sales could just be a short term reversal.

Another key aspect to keep in mind is that usually most analysts predict technological shifts to happen (using models) in much shorter time frame they actually take in the real world. Think of what analysts have written about adoption of cloud computing, etc. These technological shifts have taken longer than what the analysts had predicted. E.g. Oracle and many other technology companies had envisioned and were working on projects of what would eventually become cloud computing way back in the nineties and yet cloud computing is nowhere close to replacing legacy systems completely.

When analysts predict the adoption of new technologies, they place less weightage on how the players who benefit from the status-quo would retaliate. One of the reasons for the dip in e-book sales could be aggressive initiatives by print book publishers and distributors. Or it could be due to the fact that people are spending more and more time with electronic media and once in a while may return to non-electronic formats like print books. Also historically new technologies have not replaced old ones like an asteroid-strike wiping off dinosaurs from the face of the planet. There have been extended periods of time where the technology that is being replaced and the one that is replacing it have co-existed; examples: horse drawn coaches and motor cars, land-line phones and mobile phones, feature phones and smart phones, type writers and printers, etc.

Like the New York Times article rightly concludes, it’s too early in the day to conclude that print books have defended their turf against invading e-books. The trend of digitization is all around us and consuming books in electronic format is consistent with the way people consume other forms of media. There are multiple benefits of reading books in electronic format compared to print book format and in due course of time an entire generation that will find it very natural to read books in electronic form will form the bulk of the customer base. I guess eventually e-books will become the dominant form.

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