The hot digital publishing story yesterday was news of a deal between the ebook services developer txtr and a retail book distributor ReaderLink. The latter is now the North American agent for the former, and apparently that detail has a lot of people excited.
I was planning to skip this story due to the fact this partnership will have about as much effect on the ebook market as a fart in a hurricane, but I was inspired to cover this story by the absolutely nonsensical coverage this morning over on Digital Book World. Here’s the title of that article:
- Another Contender to Knockout Heavyweight Amazon?
Yeah, if you don’t know that the answer to that question is NO then I’m not sure what to say other than to offer to help you find your little red ball.
Clearly DBW is engaging in clickbait, but for once I will take the question seriously. I can think of 4 reasons this deal does not matter on the larger scale:
- buying decisions
- customer service
Let’s start with cost. According to the press release:
Mass, club, grocery, and drug retailers account for a large portion of the physical books sold in the United States but they have yet to enter the rapidly-expanding digital book space.
One detail that is left out of the press release is that those books on the store shelves don’t cost the stores much, if anything. The publishing industry currently sells paper books on what are very good terms, including the option of returning unsold titles.
The same cannot be said about ebooks. No matter how low txtr’s fees, running an ebookstore will not be as cheap as carrying paper books.
As for buying decisions, I’d bet the reasons mass retail sells the most books are gifts and impulse purchases (see a title you like so you buy it). I doubt that dedicated reader intentionally shops for books at a supermarket; they go to a bookstore or Amazon. That leaves only certain types of customers buying books in a drug store for certain reasons.
Can someone explain how those types of sales of paper books could be duplicated in selling ebooks? I don’t see it. An impulse purchase requires that you see the item before you buy it. And if you’re going to give an ebook as a gift then wouldn’t most people just give a gift card instead?
Customer service and tech support are another couple issues which I think could render this deal moot on larger scale. Sure, your local grocery store might get into ebooks but how competent do you think they will be at providing good customer service and tech support?
B&N and Kobo are terrible at CS and TS, and they are a heavyweight retailer and the sub of a heavyweight retailer. If they can’t get it right then what are the chances that the little guys will get it right?
And that brings me to market share. The problem with speculating about how indies can take down Amazon is that we already have indies in the US market and they don’t amount to much.
Ingram has been distributing to indie ebookstores for some years now via the Lightning Source service. According to one publisher I know, Ingram accounts for a negligible share of the US ebook market. To be more exact, he doesn’t get many sales through that channel, and I’d bet the same situation will apply to txtr’s partners.
Don’t get me wrong, this could open up some interesting possibilities for niche ebookstores. In individual cases we could see a decent quality ebookstore serving a particular community well. But even if that happens a lot, it still won’t mean much on the larger scale of the US ebook market.
Last week one reader introduced me to the economic theory titled “Gorillas, Chimps, and Monkeys”. It has to do with market share, and as you probably guessed Amazon is the gorilla of the ebook market.
Txtr’s deal could end up creating a whole bunch of new monkeys. Do you really think that they could take down the gorilla? I don’t.