Low Demand for eBook Readers in Physical Bookstores Highlighted by Struggles with Amazon Competition
In recent days, success stories in the eBook market have been balanced out or alternated with less successful reports. While E Ink Holding was able to boost its revenue in January, eBook.de experienced a record year for eBooks, and Amazon controls around 20 percent of the German book market, Thalia and its subsidiary Buch.de had to take losses.
Despite the mixed messages, one thing is clear: the eBook market is growing. In 2012, sales volume for digital books increased by 150 percent. Naturally, this raises the question of who can take advantage of market developments and who cannot. The spotlight often falls on the brick-and-mortar book trade due to these new dynamics in the book market.
Very Low eBook Reader Sales in Brick-and-Mortar Bookstores
This is also evident in a survey by Buchreport, which sought to find out how many eBook readers are actually sold over the counter in physical bookstores. The result is sobering. In December 2012, the busiest month for retail, 70 percent of companies selling eReaders sold only five eBook readers. You read that right: five units for the entire month. Over the course of the year, the situation could look even worse.
The larger the company, however, the better the sales figures for digital reading devices. With annual sales of 1 million euros or more, around 30 percent reported selling more than 25 devices in December—though there were some significant exceptions, according to Buchreport. But even that doesn’t seem like a lot to me.
Among the smaller bookstores, only about half offer eBook readers, while 85 percent of the larger ones do. The survey received participation from 300 retailers, with 292 completed responses returned.
Structural Problems and Amazon as the Main Competitor in the eBook Market
The main issue, from the booksellers’ perspective, is attributed to structural problems: Margins are low, the need for advice is high, and customers are more inclined to buy from electronic or online retailers. As is often the case, Amazon is cited here as a major rival, with complaints that the eBook trend may have been followed too late, allowing Amazon too much control over the field.
The final argument might hold for the USA, but certainly not for Germany. Amazon took its time in launching the Kindle in Germany. Meanwhile, the eBook market in the USA literally exploded, making it obvious that a similar development could be expected here without a crystal ball. The problem was clearly the lack of supply on the German book market.
However, they might have a point with one thing: Amazon has now grown into a heavyweight in the German eBook market. Kindle eBook readers are among the best-selling electronics on Amazon, which, considering the massive total revenue of 6.5 billion euros for the German branch, definitely represents a significant number of devices. The figures become even more explosive when you consider that the eBook share of the total book market doubled last year. Since brick-and-mortar bookstores are not making significant sales with eBook readers, it’s not hard to speculate where many customers are ending up. Given the closed Kindle system, it is likely that a large portion of Amazon customers remain within their system and generate most of their eBook revenue there.
