Report: Hardware could be key disruptor in e-book market

New research suggests six key points that digital book sellers need to cover before securing the top spot in the market share.
Written by Rachel King, Contributor

Content discovery, distribution, and the customer experience used to determine the market winner in the book world before.

But with the evolution of e-book readers and tablets, it is not nearly that clear cut anymore, according to the GigaOM Pro.

The report, entitled "Connected World: The Consumer Technology Revolution," identifies six competitive areas in which large-scale market shifts are taking place and where the key players will position themselves in the e-book marketplace in the next few years.

Those six areas are the customer base, publisher relationships, multi-platform/cloud access, social discovery, hardware platforms, and the distribution/storefront.

Essentially, all of these points need to be hit, and GigaOM Pro's vice president of research Michael Wolf explains in the report that "these vectors are, in short, the areas in which companies will successfully (or unsuccessfully) leverage large-scale disruptive shifts over time to help them gain market success in the form of sustained growth in market share and revenue."

Many of the areas that Wolf proposes that are vital to a book retailer's success are rather self-explanatory if you read up on major companies like Amazon, Barnes & Noble, Google, and Apple often. For example, the importance of social media to content discovery is applicable to nearly every form of digital media, whether it be books, music, or movies.

Multi-platform and cloud access is definitely one area that is absolutely crucial to anyone entering this space in the future. To make it in digital book sales, you need to be available on every platform possible to attempt to control the market share. Amazon and Barnes & Noble have recognized this on top of the hardware that they have produced.

However, there are a few points that stick out.

Distribution and the storefront is one area where these two points have really converged into one thanks to digital book sales. Not only do players like Amazon and Barnes & Noble have control over both of these points for e-book sales, but they also have the power now to sign on publishing contracts themselves on top of their self-publishing platforms for authors.

Speaking of hardware, one conclusion that could be drawn from the report is that there isn't much room left for other e-book device manufacturers. The acquisition of Kobo on Tuesday would certainly lend to that theory.

Wolf writes:

The big players here who have established themselves early have distinct advantages within this vector that will be hard to erode.

At the same time, because of the importance of the hardware as a key disruptor and competitive weapon in e-books, many companies have tried to enter the space in recent years, only to fail. Companies such as Interead and Irex Technologies went bankrupt, while others such as Copia canceled e-reader devices as it became apparent that the e-reader hardware business is an extremely difficult one to play in against the big guys, who have larger resources and more-familiar brand names.

All in all, Wolf concludes that book publishing will be drastically different in a few years from what it is today.

Other key areas explained in the report, now available to GigaOM Pro subscribers, cover consumer tech revolutions in healthcare, digital music, and the cleantech industry.


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