Books are back because Amazon likes them

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Do you guys read hardcopies still or more on iPad/Kindle? Good article in the FT:

Ten years ago, as Jeff Bezos launched the Kindle ereader in New York, he declared that "the book is so highly evolved and so suited to its task that it's very hard to displace". Amazon's founder was right: this spring, despite the digital upheaval unleashed by the Kindle, it will open a bookstore in Manhattan.

There are signs of the book's renaissance all around. Waterstones, the UK book chain, returned to profit last year after suffering six years of losses. Sales of print books in the US rose by 3 per cent, while those of ebooks have fallen. Digital technology has not unleashed the same revolution in publishing that it has for music, television and news; we still like to read books.

The book's enduring popularity is widely hailed as a heart-warming tale of traditional values triumphing over cold, hard technology. This is not the whole story, however. It can equally be read as the narrative of Amazon's growth: if you cut prices, people buy more and if you raise prices, they buy less.

Customers enjoy the touch and feel of printed books: Americans read an average of 12 books a year, and most of those are physical. But they also prefer low prices, and do not like the fact that ebooks are comparatively expensive. Take The Whistler, John Grisham's new blockbuster, which was selling on Amazon this week for $14.47 in hardback and $14.99 on Kindle.

That is the new reality: ebooks from publishers such as Penguin Random House and HarperCollins often cost more than hardbacks as well as paperbacks. Mr Bezos's efforts a decade ago to promote mass adoption of the Kindle by discounting bestsellers to $9.99 and making ebooks cheaper than books has faded. It is now the other way round: Amazon favours print.

We are, in other words, witnessing not a bibliophile revolution against Amazon's digital hegemony but Mr Bezos changing his tactics. Amazon sold 35m more print books in the US last year than in 2015, according to one analyst, taking even greater market share from its old competitor Barnes & Noble. The 2m rise in sales at independent US book shops was a sideshow.

This is puzzling for anyone who witnessed the relentless struggles between Amazon and major publishers in the past decade, with Mr Bezos attempting to revolutionise the industry and publishers trying to restrain him. He even got the US government on his side with its antitrust suit in 2012 against Apple and large publishers for conspiring to fix the prices of ebooks.

But having fought for the right to set ebook prices in the same way as print book prices, Mr Bezos then backed off. Amazon signed fresh deals with publishers two years ago that limited ebook discounting and prices rose soon afterwards. Hardbacks and paperbacks are relatively cheap because Amazon discounts them; ebooks are expensive because it does so less.

The way to view this is as an industry reaching a competitive equilibrium after a decade of disruption, with the main forces -- Amazon on one side and the big five publishers on the other -- settling on a truce. They cannot formally agree one since it would provoke renewed antitrust action, but that is what it looks like, with the revival of the book as part of their detente.

It makes perfect sense for Amazon. The company invested in launching and developing the Kindle and now dominates the ebook market: B&N has retrenched with the Nook and iPhones are used for other activities than reading ebooks. To the degree that cheap ebooks were needed to promote Kindles, the urgency has passed and some profit-taking is rational.

The book, in digital or printed form, has been more stable than other kinds of media. Music has faced waves of disruption: first piracy, then people listening to single tracks rather than CDs, and finally the shift from buying to subscribing to services such as Spotify. Not so books: "We read books one at a time and each one takes us days," says Douglas McCabe of Enders Analysis.

Amazon and others have dabbled with trying to alter consumption patterns, such as turning publishing into a Netflix-type service. Little has changed: Oyster, an ebook subscription service similar to Kindle Unlimited, closed in 2015. Most people still buy books individually and Amazon has no pressing need to demolish this, given that it is the world's biggest bookseller.

The equilibrium also helps publishers, which profit from ebooks because they can digitise print titles and sell them at higher margins. Since Amazon eased discounts on their ebooks, the pressure has risen: one executive estimates that financing more marketing and discounting themselves could cost US publishers $100m a year.

They should not sit back and enjoy the truce: the big five's share of the US ebook market fell from 46 per cent in 2012 to 34 per cent in 2015 as independent publishers and self-published authors undercut their prices.

But for now, the book's renaissance suits Amazon, publishers, and readers. "It turns out people like paper if they are not penalised financially," says Mike Shatzkin of the consultancy Idea Logical. A decade after the Kindle's launch, Mr Bezos is rewarding them.

Comments (65)

Feb 9, 2017

prefer actual books, but need a kindle for when abroad. i read a lot more when i have the physical book, not sure why exactly but i know for me it's easier to stick with one physical book rather than jumping around to other books on my kindle (easy fix by downloading one book at a time, but ya know...). when i tried using kindle app on the ipad i never got any reading done

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Feb 9, 2017

Do your eyes hurt when reading on either device for longer periods?

Feb 9, 2017

book no, kindle paperwhite no, ipad.. yes and no, can't remember

for reading on computer screen need to wear glasses though, otherwise get migraines

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Feb 16, 2017

It was never an issue on my Kindle paperwhite, on the iPad it was an issue but you can toggle the screen on the iPad to be a black screen with white letters for easier late-night reading. Combine with iPad night-shift and max-dim on the screen brightness and it isn't an issue.

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Feb 20, 2017

Agree entirely. You can't take notes as easily on kindle as well.

Feb 9, 2017

I have audiobooks for efficiency and physical books for bookshelf porn and conceit.

I have a kindle, but have only used it once for reading a book. Audiobooks are more efficient - slower than reading on a per page basis, but I get through books faster as I can get through a book while walking the dogs, commuting to work, doing gym work, pretending to work etc.

Feb 9, 2017

Agreed, audiobooks are a great way to get through more materials. I'm still wondering if it makes sense to keep,buying physical books. The majority of stuff that's worth reading should be available in electronic form...

Feb 10, 2017

And @SSits Do you guys find you actually retain the info from Audiobooks? I was thinking about using them but I always figured I'd get distracted and the information would literally go in one ear and out the other,,,

Feb 16, 2017
SSits:

I can get through a book while walking the dogs, commuting to work, doing gym work, pretending to work etc.

I actually downloaded Audible and listen to audibooks during downtime at work.. seems like the most efficient use of downtime heheh

Best Response
Feb 9, 2017

I'm really a hardback tome kind of guy. They're much better for launching across the study at a case full of Baccarat crystal during fits of rage when my portfolio is tumbling

Feb 16, 2017
Lizard Brain:

I'm really a hardback tome kind of guy. They're much better for launching across the study at a case full of Baccarat crystal during fits of rage when my portfolio is tumbling

I'm more a "swing the fire poker at the liquor trolley in a rage" sort of guy.

Feb 10, 2017

I find the fact that e-books are not much cheaper puzzling.

No money will be spent on logistics, printing, materials, etc. Publishers will be able to publish more books and sell more books. Higher volume at a reduced margin cannot be that bad right? Profit still comes in and publishers are getting more market share.

Can anyone help me understand this better?

Feb 10, 2017

I'm also amazed that the "average" American reads 12 books per year. There's no way that's true

Feb 10, 2017

Do comic books count?

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Feb 13, 2017
QRF5:

I'm also amazed that the "average" American reads 12 books per year. There's no way that's true

Averages are offset by outliers. My girlfriend reads something like 8 books a month. She's a monster.

Feb 10, 2017

I don't get the same satisfaction completing an e-book compared to a hard copy. Plus when done I'll put it in my book shelf to make me look smarter than I actually am.

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Feb 10, 2017
WidespreadPanic90:

Plus when done I'll put it in my book shelf to make me look smarter than I actually am.

Big point for physical books, for sure

Feb 10, 2017

Bought Kindle Paperwhite recently. Regret I didn't buy it sooner. It's just so convenient when you can read with just one hand. Also the highlighting and dictionary features come in handy. And no my eyes do not hurt at all even when I read it in complete dark with a bit of backlight on Paperwhite version.

Feb 11, 2017

That's interesting. Maybe I should just got and try it out sometime to see how my eyes feel.

Feb 10, 2017

I've never actually read an ebook. Never wanted to, really. You can buy many used copies (both hardcover and paperback) in good shape from third parties on Amazon for $0.01 (all-in cost of $4.00 with S&H). Super cheap. Most of them are copies from libraries or stock that wholesalers couldn't move. Storage space isn't an issue, so I'm fine with the real deal.

Feb 10, 2017

If the kindle books cost a lot less, I'd consider it, but the <$5 books you can find at goodwill are a steal

Feb 10, 2017

This. I'm always shocked that people pay full pop for books. I love used book stores and Amazon marketplace

Feb 10, 2017

For me, it depends on the type of book. If it's a novel or beach read, then I love my kindle because I can have several books without taking up a bunch of space. Also, big kindle fan if you do a lot of traveling.

If it's an intensive read or textbook, I'm paper copy 100% of the time. I tend to mark up these types of book with sticky notes, handwritten notes and highlights. I think ebooks are a nice complement to this type of text, but not a full substitute.

Feb 11, 2017

That summarizes my current approach very well. Still, I was under the impression you can "underline" with kindle too?

Feb 10, 2017

Physical book copies are just fun to buy when you're walking through rows of bookshelves and imagining what content is contained beneath the title on the spine and front cover. The physical weight and thickness of what you have read and what's left to read is a motivational factor, like when you're about to bench press and there's one more plate standing between your meager, last week self, and today's greatness.

Feb 10, 2017
iBankedUp:

Physical book copies are just fun to buy when you're walking through rows of bookshelves and imagining what content is contained beneath the title on the spine and front cover. The physical weight and thickness of what you have read and what's left to read is a motivational factor, like when you're about to bench press and there's one more plate standing between your meager, last week self, and today's greatness.

funny that you bring up bench pressing. I was thinking to myself that audiobooks are the smith machine version of benching..

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Feb 11, 2017

At least use the squat as your comparison ...

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Feb 10, 2017

Only book I ever read in E-Form was Barbarians at the Gate. I had it on my phone and found I was constantly opening the app to read it on the tube while I lived in London or while waiting in lines. Being able to open up for 5 pages at any time was awesome. BUT I hated staring at a screen anymore than I already do.

More recently, I've gone towards buying physical books as I like the feeling of accomplishment when I knock out that 500 page book I've been wanting to say I've read. To me, finishing a book gives a really cool feeling that I never got when I finished reading Barbarians, even though I really enjoyed that story line.

...

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Feb 11, 2017

Fully agree. There is a psychological effect when finishing a book that you don't get from digital copies.

Feb 10, 2017

kindle cloud at work, books on train and everywhere else. read. my book collection/book shelf is my pride. my favorite books I have kindle and physical versions, also always read my books with a highlighter and highlight the most valuable stuff to me. already read 3 books this yr, psycho-cybernetics is awesome would highly recommend. also, Flow was great too. didn't really like David and Goliath, Outliers was awesome though.

Feb 10, 2017
BEAST MODE TRADER:

my book collection/book shelf is my pride. my favorite books I have kindle and physical versions

I am also guilty of multi-format book collecting, largely so house guests can see how smart I'd like them to think I am.

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Feb 10, 2017
SSits:

BEAST MODE TRADER:my book collection/book shelf is my pride. my favorite books I have kindle and physical versions

I am also guilty of multi-format book collecting, largely so house guests can see how smart I'd like them to think I am.

How's that playing out?

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Feb 10, 2017

Kindle. the convenience can't be beat. Can be sitting in the airport and purchase any book in the world with a few clicks.

Feb 10, 2017

Ever looked for a book and couldn't find it?

Feb 13, 2017

If you are looking on Amazon then i have not had an issue. I usually just rent the books using overdrive from the library and sometimes the book i want is rented out but you can place a hold and get it in a week or two.

Feb 13, 2017

I've come across some relic books that go for like $200+ on Amazon. Forgot the names of them but happens when I'm reading a book that was published decades ago (think it happened with psycho-cybernetics) and the author refers to another book.

anyways, psycho-cybernetics is awesome.

my top 5 books I will try to read once a yr

1) Power of Your Subconscious Mind

2) Master Key to Riches

3) Psycho - Cybernetics

4) Trading in the Zone

5) Reminiscences of a Stock Operator

recommended 1 time reads - flow, outliers, psychology of trading, jesse livermore's biography

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Feb 10, 2017

I find the claim that Americans read on average 12 books a year to be highly dubious considering something 14% of the adult population is considered illiterate and 21% of the adult population reads at a 5th grade level. An astounding 19% of high school graduates can not read. Unless we are counting children's picture books in this number I'm calling bullshit, of everyone I know maybe a third of them are even remotely regular book readers.

Follow the shit your fellow monkeys say @shitWSOsays

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Feb 11, 2017

Suppose I'm a regular reader - I read a book every week. Hence I'll be reading around 52 books a year, PIBs and SEC filings not included. That'll mean that for every 3 persons like me, we can assume there to be 10 persons who won't read a single book in a year. Or roughly 3 unlearned persons and a pair of limbs for every learned person. Which kind of follows with your observation.

Cover that for the entire American population, and you'll get 76.2 million people like me, and the rest who do not read books. This scenario is on an extreme end, by assuming that there are 76.2 million readers who read a book weekly. Most regular readers I know are voracious readers, who devour a book almost every week. That being said, most irregular readers do not read no books at all in a given year
So this scenario is possible.

I actually did these calculations to shit on the NYT's assumption, but apparently it holds up :/.

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Feb 16, 2017

Yes, I understand how mathematically it could be correct. Yet, when you have almost a fifth of the population who can barely read harry potter and one sixth of the population who can't read at all the numbers have to become even more skewed in the direction of the readers. Using the assumption that readers read a book a week is a terrible metric. I for one am constantly reading something, but I bet you I finish one or maybe two books a month. It has less to do with speed of reading and more to do with reading 20 things at a time and often just outright abandoning books in the middle.

Follow the shit your fellow monkeys say @shitWSOsays

Life is hard, it's even harder when you're stupid - John Wayne

Feb 15, 2017
heister:

I find the claim that Americans read on average 12 books a year to be highly dubious considering something 14% of the adult population is considered illiterate and 21% of the adult population reads at a 5th grade level. An astounding 19% of high school graduates can not read. Unless we are counting children's picture books in this number I'm calling bullshit, of everyone I know maybe a third of them are even remotely regular book readers.

The median American would be a better measure.

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Feb 10, 2017

I prefer hard copy books because my local library has them and I'm too cheap to pay for Kindle books. I also like the "accomplishment" of seeing the 500 read pages when I flip the page to 501.

Feb 13, 2017

Hardcopies when possible and summaries when not interested enough to listen to the entire rant. Audio books for the car ride and even electronic as little as possible to save my eyes.

Feb 13, 2017

Isn't there some website that offers abstract and summaries of every book so that "busy" people don't have to read the entire book?

Feb 15, 2017

Through work we get fortnightly abstracts from a company called, funnily enough, getabstract. You can choose genres and it attempts to tailor solutions to you, and shows what's popular amongst your colleagues - quite cool.

The abstracts are just a very brief summary < 5 pages, with each section of the book summarised and a few key quotes included along with some side notes - pretty good all things considered. More a way to discover a book you might want to actually go out and buy than become informed on a specific topic.

Feb 15, 2017
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Feb 15, 2017
Feb 15, 2017