Last week, both Amazon and Barnes and Noble announced plans to slash the price of their e-readers in response to the threat posed by Apple’s iPad. Apple fans like me are hoping to see similar price cuts for their iPad, but we are not holding our breaths.
The e-reader war is clearly underway and this is great news for consumers and publishers alike. The more people using the device, the more content is going to be produced and consumed, because it is a cheaper, faster way to digest the written word than ever before. And for publishers clearly struggling, this is good news.
While traditional print publications have been hurt by the recession, online has not been as hard hit. According to the annual global entertainment and media outlook from PricewaterhouseCoopers, U.S. consumer magazines will continue to earn increasing digital ad revenue over the next few years, but not enough to erase their troubles selling print advertising. U.S. consumer magazines’ digital ad revenue never declined in the recession – just grew at a far slower rate: 1.6% last year compared with 114.5% in 2008. Their digital ad revenue will grow 8.5% in 2010 and post double-digit percentage increases after that, according to the outlook. U.S. consumer magazines can expect digital ad revenue of $1.6 billion in 2014, up from $902 million in 2009 and $414 million in 2007.
This research, coupled with the increase of e-readers in the market, should have publishers planning digital versions of their publications for these devices.
The biggest hurdle to the rapid adoption of the e-reader is nostalgia. According to a stat reported at DPAC last week by The Harrison Group, nearly 70 percent of respondents in the top two spending brackets said “they just prefer holding print editions of books, magazines and newspapers.” This is certainly an understandable argument. But how soon before these numbers change dramatically? Just ten years ago if you asked consumers if they would prefer digital music versus physical albums, I bet no one would be willing to forgo that incredible feeling you get when you tear open up a new album from your favorite band. Yet, today, digital music is clearly on the way to outpacing physical album sales.
It’s time to face the fact; companies like Barnes & Noble, Amazon and Apple are the newsstands of the 21st century. This is where the next generation of readers will look to consume their content.
