Growing Device Markets Mean Opportunities for Publishers, Marketers

The FINANCIAL — The publishing industry has been rocked by the shift from print to online access, a development that has been notoriously challenging to monetize.
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Consumers have shown little appetite to pay for content on the web, and the soft economy has taken a toll on the online advertising-based models that many publishers embraced as a replacement for declining print income. So the arrival of ereaders and tablets comes at an opportune time for publishers.

The Kindle and iPad have ushered in a new device market and consumers have responded by buying more digital content. eMarketer estimates the US installed base of ereaders will be nearly 21 million by the end of 2011, a 62.3% increase over last year. Further double-digit growth in ereader penetration is expected in 2012.

“There has been enthusiastic device adoption at both the high and low end of the ereader price spectrum and strong momentum in ebook sales,” said Paul Verna, eMarketer senior analyst and author of the new report, “Epublishing: Books, Periodicals and Devices.” “As prices continue to come down, there will be increasing opportunities for both publishers and marketers to address an even greater market.”

The installed base for tablets, despite the devices’ higher price point and shorter time on the market, is even larger. eMarketer expects 24 million US consumers to have an iPad or similar device by the end of 2011.

“These devices have opened a market for electronic books and periodicals,” said Verna. “For that market to reach its full potential, the publishing industry will need to reverse negative trends in magazine and newspaper readership and overcome consumer resistance to paying for digital content.”

Ebook revenues are rising quickly, currently at 6% of total US book publishing revenues, according to IHS iSuppli, double their 2010 share of 3%.

“Publishers and retailers need to find the right mix of ebook pricing, enewspaper paywalls and emagazine subscriptions to grow their digital customer bases without alienating their print readers,” said Verna. “The recipe will vary on a case-by-case basis, even among different titles from the same publisher.”

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