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What’s Up with E-Books?

A lot has been happening recently that will surely affect the future of electronic books and of books in general. Starting with Barnes & Noble, two events have rocked their world: First, B&N announced that they will no longer make the Nook line of e-book tablets. This concedes the market to Amazon, maker of Kindle. Second, the CEO of B&N resigned, essentially an admission of the failure of the company’s e-book strategy. On another front, the United States District Court in Manhattan ruled that Apple had conspired with five publishers to raise the prices of electronic books. The publishers had settled the charges earlier, but Apple held out to the bitter end, denying any wrongdoing.

So what does this all mean, especially to consumers? For Barnes & Noble, the future looks gloomy. The company had invested a lot in the e-book business, and their decision to halt manufacturing pretty much ends their ability to be a force in that market. They have said that they will continue to sell Nooks manufactured by others (outsourced), but it’s not clear how long that will continue. Once the Nook business dies out, can their e-book business be far behind? To further complicate the picture, remember that the various e-readers – Nook, Kindle, Sony – all have proprietary formats. This means that you can’t read a Nook book on a Kindle or Sony Reader and vice versa. Unlike Amazon, who offer software that runs on multiple platforms to read Kindle books, B&N didn’t do this. So it means that Nook owners eventually may not be able to buy readers that will read the books they have already bought.

As to the Apple antitrust verdict, this should lead to lower e-book prices over time. It’s pretty silly that the cost of a Kindle or Nook book should be even close to that of a hardcover or paperback, since there is no manufacturing and distribution cost involved. Some observers have noted that prices on Amazon are already beginning to come down, but they are still too high, in my opinion.

So Amazon has lost a major competitor to the Kindle. The only viable competition is Apple, selling books to read on iPads and other Apple platforms. Without competition, it is always possible that Amazon may raise Kindle prices over time. Ditto for books… In a market dominated by a single vendor, there is no competition to keep prices in check.

In the near term, this is good for consumers, as we can expect e-books to become less expensive. Longer term, it’s anybody’s guess what will happen next. It is certainly arguable that the consumer won’t win in the long run. Meanwhile, anyone wanting to buy an e-reader is well-advised to buy Kindle, not Nook. Note however that the price of Nooks has decreased and will probably continue to do so. Thus if you are interested in an inexpensive tablet, this might be the way to go. Just don’t buy a lot of books for Nook!