Amazon.com's Kindle: Publishing Industry's iPod?
Details
Themes: Strategy
Pub Date : 2009
Countries : US
Industry : Services
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Case Code : INA0111
Case Length : 25 Pages
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Kindle and the Future of Publishing Industry cont...
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Analysts opine that the e-readers are likely to save the publishing industry which is withering away and give it a new life. According to them, e-book readers will not only save publishing industry but also the environment in the process as publishing requires a lot of paper. It is estimated that almost 70% of the industry's emissions are contributed by paper production.36 According to a report released by The Book Industry Study Group37 in 2008, the publishing industry produced carbon dioxide equivalent net emission of about 12.4 million tons in 2006, and a net emission of 8.85 pounds per book sold to consumers.38 In US alone, in 2008, more than 30 million trees are cut down for making books. On the other hand, the newspaper industry devoured 8.7 million metric tons of paper.39 Whereas, in the case of e-book readers, the production of the device is the only process that emits carbon.. |
Speaking on the significance of publishing and the role of e-book readers in saving the traditional
publishing industry, Russell Wilcox, CEO, E INK Corporation40 , opines, "We can't have meaningful
discussions or try to solve the world's problems using blogs and 140-character Tweets. What we need
more is calm, prudent thought - more expertise. We're not only going to save publishing, we're also
going to save civilization."41
Few analysts opine that though the e-readers are considered as a salvation for the book publishing
industry, it is the business model of e-book readers that is posing a threat to the publishing industry.
Some book publishers are sceptical that the players in the e-book reader segment might tend to
dominate the publishers in the long run. Amazon is paying publishers more than $10 for a book.42 It
is paying more than the price at which it is selling. Aiken, executive director of the Authors Guild,
opined that if Amazon becomes a market leader, it might tend to force the publishers to give their
content for a much lesser price.43 He also commented that if such a scenario arises, "That would be
potentially devastating to the industry."44
Coming to the newspaper and magazine publishing industry, the big question is to what extent the
e-readers would be able to protect the industry that is struggling to survive. The newspaper industry
heavily relies on the revenues generated through reader subscriptions and from advertisements. Their
revenues dwindled as more and more advertisers shifted to online advertising which is much cheaper.
36]"It's Easy Being Green: How to Be a Greener Reader", http://www.americanprogress.org/issues/2009/02/greener_reader.html, February 25th 2009
37]Nonprofit research group comprising organisations from all sectors of the publishing industry
38]"It's Easy Being Green: How to Be a Greener Reader", op.cit.
39]Ibid
40]Is a privately held manufacturer of Electrophoretic Displays (EPDs), a kind of electronic paper, based on a research started at the MIT Media Lab.
41]"The end of paper?", op.cit.
42]Manjoo Farhad, "Fear the Kindle", http://www.slate.com/id/2212320/#b, February 26th 2009
43]Ibid
44]Ibid