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06
Jan
2012

eBook boom gives Christmas cheer to Amazon, B&N

POSTED BY Global Administrator
Judging by the figures that have emerged from Amazon and Barnes &  Noble, rather a lot of you were either waking up on Christmas morning to a brand spanking new e-reader, or else to the realisation that Santa had gifted you a host of eBooks for your existing device. To take Barnes & Noble first: the company has announced that over the nine week period ended December 31, its digital content sales – covering eBooks, digital magazines and apps – rose by 113% year-on-year, while unit sales (including the Nook tablet as well as its eReader range) rose by 70% over the same period. Indeed, B&N has now indicated that it is in discussions to spin off its Nook operations in the near future. For its part, Amazon announced a 175% increase in the gifting of eBooks over the holiday season, while also announcing that, over the last five weeks of the year, sales of Kindle devices were “well over” one million per week. Looking at the content side, this is encouraging but perhaps unsurprising given the surge in adoption not just in dedicated eReaders – both throughout the year and at Yuletide – but of tablet devices, which are increasingly used as a means of accessing eBooks. (Indeed, Amazon, B&N and Kobo all offer storefront apps on multiple devices to expand their potential user and hence sales base).  While the installed base of eReaders in North America and Western Europe combined more than doubled in 2011, the tablet base in those markets increased by nearly 4x from a broadly similar starting point. However, given that neither Amazon nor B&N have released details on the split between their dedicated eReader and tablet sales, it is more difficult to gauge precisely how each of those segments have performed. Moving forwards, there must be concerns that if the US and major European markets re-enter recession, then there will be a negative impact on device sales: this is particularly true in the case of dedicated eReaders, which – as (largely) monofunctional devices, fall into the “nice to have” category rather than the “must have” category of the smartphone; tablets sit somewhere in the middle of the two. This potential exposure on the dedicated device side thus makes it all the more imperative for both B&N and Amazon to gain a foothold in the tablet space while also ensuring their storefronts are available across multiple platforms. Thus, if we do enter a prolonged downturn, it gives both players far greater scope to bring in new consumers to the digital storefront.