E-books: Not Just for Geeks

Will e-books save the publishing industry or sink it?
Barnes & Noble recently rolled out its new e-book reader, the Nook, right, a dual-screen device priced at $259. Its most talked-about feature: It allows users to "loan" an e-book to someone else's Nook for two weeks. (The cute designer covers by Jonathan Adler and Kate Spade are cool, too.)  B&N already had an e-book store that allowed buyers to download books to iPhones, BlackBerrys, PCs and Macs.

 

The bigfoot to beat in the e-reader market is Amazon.com's Kindle, which has an estimated 60 percent of the market (followed by the Sony Reader with 35 percent). Just a couple of days after the Nook was released, Amazon.com CEO Jeff Bezos announced, "Kindle has become the No. 1 bestselling item by both unit sales and dollars -- not just in our electronics store but across all product categories on Amazon.com." He also lowered the price of the new international Kindle from $279 to $259.

The market reacton to all this? Analysts lowered their ratings of Barnes & Noble stock. One Credit Suisse analyst wrote, "As the math currently works, each sale through a Nook is not just unprofitable but potentially replaces a higher-margin sale at stores." In other words, the lower prices of e-books could hasten the pace of losses at B&N's bricks-and-mortar stores.
Meanwhile, in Amazon's online-only world, sales indicate people who buy Kindles purchase 3.1 times as many books as they did before they had the e-reader, and the company's third-quarter profits jumped 68 percent, with shares up 26 percent.
In another angle, the American Booksellers Association formally asked the Department of Justice to look into the possibility of price-fixing for print books by Amazon, Walmart and Target, who are all offering upcoming bestsellers like Barbara Kingsolver's The Lacuna for about $9. Also suspect, the ABA said in its letter: Amazon's "loss-leader pricing of digital content."

This article written by Colette Bancroft-St. Petersburg Times Book editor