Magazines and Books on E-paper E-reader Displays 'Approaching the Tipping Point,' Says Expert
Note: This article first appeared in Publishing Business Insider on Dec. 22, 2009.
A recent report issued by research and advisory firm mediaIDEAS projects sales of e-readers to grow from nearly 6 million units in 2010 to 115 million units in 2013, largely due to falling prices and rapidly advancing technology. "The E-Paper E-Reader Phenomenon" outlines the dramatic growth of these display devices over the next 10 years into a $25 billion market. Nick Hampshire, who authored the report, and his mediaIDEAS partner David Renard told Publishing Business Insider that publishers must recognize the looming shift in the way consumers read content and realize that the "e-reader threat" has arrived and actually presents publishers with a real opportunity.
In anticipation of this shift, mediaIDEAS has announced the launch of its TH(ink) E-readers 2010 Summit, with the support of the Publishing Business Conference & Expo, on Wed., March 10, 2010 at the New York Marriott Marquis Times Square. The half-day summit will offer attendees a better understanding of e-reader technology, developments and financial opportunities. Renard agreed to give Insider readers a glimpse at the upcoming event below.
INSIDER: What are the most significant takeaways from the results of your research?
NICK HAMPSHIRE: The most significant finding of our research has been the rapid future growth of the market. Since the first e-paper e-reader came onto the market in 2004, these devices, with their "green" credentials of reducing paper consumption, have already proven very popular with consumers, and the market for them is booming. By 2006, there were three types of devices available, by 2007, there were five, and currently there are over 40. This number will more than double in the next 12 months. Unit sales are also booming. In 2008, 1.1 million e-paper display-based e-readers were sold, in 2010 that number will rise to about 6 million, and by 2020 global annual e-reader sales will reach 446 million units with a value of over $25 billion.
Another significant result is that the market for e-paper e-readers will divide into four marketplaces by 2020, each with different device specifications and markets. Two of these will feature under 9-inch displays: the "roll-able/foldable" e-reader, similar to a communications device, with sales of 27 million units valued at $3.8 billion in 2020, and the "e-book" e-reader with sales of 115 million units valued at $6.5 billion in 2020. The other two will feature over 9-inch displays, and some significantly larger: first, a monochrome screen-based "paper replacement/newspaper" e-reader with sales of 24 million units valued at $1.2 billion in 2020, and subsequently the high-quality color display-based "magazine" e-reader with sales of 280 million units valued at $14 billion in 2020.
INSIDER: What are some of the most effective uses of e-paper e-readers in publishing today? What seems to resonate with consumers?
HAMPSHIRE: Undoubtedly what resonates most with the consumer today is books, and e-book editions are starting to outsell their print equivalents. It is the ability to instantly buy an e-book, to be able to store and carry a whole library in a single portable device, to take notes, increase text size, look up definitions, bookmark pages, but above all it has been the arrival of e-paper display technology with its paper-like reading quality in ambient light that has been the real attraction.
Magazine publishers need to stop believing that the e-reader "threat" is still far away and have to start realizing that this future is rushing toward them at great speed. In 2012, we will see the first real high-quality color "magazine" e-readers with magazine-size displays.
INSIDER: The emergence of e-readers (in use and design) seems to have been a relatively slow but steady progression. Is there a possible tipping point for adoption of the technology?
HAMPSHIRE: The market for e-paper e-readers is no longer growing at a snail's pace. We are approaching the tipping point for magazines but are in the midst of it for books. New manufacturers are announcing products on an almost weekly basis. Investments made over the last couple of years, in both e-paper displays and e-readers are now entering production, and new display technologies are about to appear. Unit prices are dropping fast, and should hit the $150 mark in 2011. In 2010, we will see e-paper e-reader sales in excess of 6 million units, up from this year's figure of 2.5 million. This is the beginning of a rapid growth period which will see over 446 million units being produced and sold in 2020.
INSIDER: Are you seeing book and magazine publishers on the whole finally leveraging e-reading devices in a profitable way for their businesses, or is their strategy still in its infancy?
DAVID RENARD: Book publishers are starting to make a greater effort in servicing this delivery medium, primarily because digital book sales along with the devices to read them are growing rapidly. But magazine publishers are just now realizing that this technology will be an important part of their success as well. Current e-paper e-readers are early versions of the feature rich, full color, flexible devices that are or will soon be in the pipeline. These devices and the rumored, and much discussed, Apple tablet are more appropriate for magazine content than today's Kindle or Nook, and will force magazine publishers to adopt this platform.
INSIDER: For those publishers not yet pushing their content onto e-readers' screens and monetizing those efforts, where would you propose they focus their efforts in pursuit of such strategies?
RENARD: For most book publishers that are not yet selling e-books, the most important thing to start with is to create, or in some cases, update the internal process of outputting content in the right format(s). That will permit their titles to be sold on key e-book stores and read on any e-reader hardware platform. Publishers of magazines (and highly visual books) need to rapidly gain experience in this area by being more aggressive with their digital paginated products (i.e. digital magazines) through sales, refining the reader/user value proposition, the use of user metrics data and feedback, and using platform-appropriate layout and design to take advantage of the medium's opportunities (and limitations).
INSIDER: Why launch an e-reader event now? Have we finally reached a tipping point of publishers' use of these devices and consumers' adoption?
RENARD: The market for e-readers and for the content that can be read on them is growing at a rapid pace with a new device announced nearly every week. But is this platform going to last and, if so, how big will it become? What is and will be the opportunity for publishers of books, magazines and newspapers? There is so little information about this young marketplace, and, for the book industry at least, it has become an immense source of hope. We are nearing a tipping point for e-readers, and publishers need a place to get answers to the above questions, as well as the leading forecasts, strategies and best practices about this critical medium.
INSIDER: What can the average book or magazine publishing executive expect to learn at the first-ever (TH)ink E-readers Summit?
RENARD: At the summit, publishing executives will learn about the developing e-paper e-reader revolution through:
• Technology analysis, trends, opportunities/limitations and expected outcomes (including hardware specifications, software functionality, formats, metrics)
• Successful strategies and effective business models
• Vendor Selection Matrix comparisons—Who are the best vendors to partner with and why?
• Detailed 2010-2020 e-reader unit and revenue forecasts
(Editor's note: Visit TH(ink) E-readers 2010 Summit for more information on this event.)