Let’s come back to the ebook with more questions. There is no doubt: the digital book will find its place under the sun; its prospects look much better than those of the online press. In the first place, there isn’t an ingrained, now decade-old, habit of reading news for free on the internet. Second, the book (in its physical form) is the centuries-old incarnation of the “cognitive container”, with its unparalleled convenience and with a value attached to it. And third, it can’t be unbundled.
For the online press, on the contrary, more than 90% of online newspapers are available for free. The “cognitive container” is totally non-practical in terms of size, readability; the interface sucks: most broadsheets’ stories run on two pages but many readers don’t go beyond the jump. Lastly, the daily news is begging for unbundling (look at the Sunday edition of your favorite newspaper, with its ten plus sections).
What does the book gain by switching to the electronic format?
– new formats with rich media appealing to reluctant books readers (the current Generations X and Y, mainly)
– enhanced capabilities such as search, ability to create a personal table of contents, or to extract and index snippets
– a complete overhaul in the production system, which will breed new market opportunities as editorial works, once finished, will enjoy instant worldwide availability.
Interestingly enough, said its authors Patrick Behar and Laurent Colombani, the nostalgia of the “paper experience” is disconnected from the generation factor: all age groups continue to enjoy the book as a physical object. This guarantees some level of coexistence between the two medias. But the authors also admit the two next barriers – the price of the device and reading comfort – will fade quickly as Moore’s Law still rules, both for mass produced devices and for screen quality (see for instance Qualcomm’s Mirasol display combining the advantages of electronic ink and the color depth of LCD screen — see also this story in The New York Times). On the devices’ price, Bain & Co sees the following evolution and point to the thresholds required to convert purchase intents:
Using this backdrop, let’s now try to see how the different participants might fare. (For a close-ip on the digital rights issue, see last week’s Monday Note)
Manufacturers: uncertain. Users expect around a hundred dollars or euros for an e-reader and will soon expect three times this amount for a full color, full-feature tablet. To put things in perspective, a teardown analysis made by iSuppli shows the cost of components for an Amazon Kindle is $176 as the iPad reaches $264 and $214 for the Samsung Galaxy Tab. This gives an idea how thin margins are likely to be in the future. In other words, manufacturers who won’t be able to sell the blades (i.e. contents) along with the razor will have a hard time making any money.