Is it me, or you?
This morning, The Bookseller reported that Waterstones was taking Kindle devices off most of its shelves due to “pitiful” sales.
No great surprise here: the chain’s managing director James Daunt said after Christmas 2014 that device sales, once strong, had tapered off, a reflection of a digital market that has moved beyond its adoption-period.
Daunt has never made any secret that under him Waterstones’ job was to deliver what its customers want: at the time of the Kindle deal in 2012 Daunt said that a number were choosing to read digitally, and Waterstones needed to be in that game [the video of Daunt announcing the Kindle deal is still available via YouTube].
Yet he also maintained that there was room for both types of reading: that the Kindle would not entirely displace the need and desire to read physical texts. Yet as he admitted in 2013, there was an element of chance in the decision. There were many in the book business who thought he’d knocked the final nail in the Waterstones' coffin. As he told The Bookseller: “That is a bet that I am very happy to take, obviously Alexander Mamut is too. That is one where you have to look into the mirror, get the bottle of whiskey out and decide what you well and truly believe. The e-reading experience will always be something different.”
Now that his customers have stopped shopping for the devices the decision is relatively simple: de-stock and use the shelf-space for products they do want. Daunt told The Bookseller this morning: “Sales of Kindles continue to be pitiful so we are taking the display space back in more and more shops. It feels very much like the life of one of those inexplicable bestsellers; one day piles and piles, selling like fury; the next you count your blessings with every sale because it brings you closer to getting it off your shelves forever to make way for something new. Sometimes, of course, they ‘bounce’ but no sign yet of this being the case with Kindles.”
So does the latest announcement vindicate that original decision? Should we take Waterstones' move to de-stock Amazon’s Kindle as another signal that the era of the dedicated e-reader is over? Or simply that Waterstones, like Barnes & Noble, wasn’t a good seller of tech? In other words, is it Waterstones, or the Kindle that we should be worried about?
In response to the second question, Amazon says no. The company said it was “pleased with the positive momentum and growing distribution of Kindle and Fire tablet sales" and added that kindle book sales in the UK were also growing. Amazon said: "Our devices are now available in over 2,500 retail locations across the UK, including Argos, Tesco, Dixons, John Lewis and recent additions like Sainsbury’s, Boots and Shop Direct. Our UK, US and worldwide Kindle book sales are growing in 2015.”
It made a similar point to the Wall Street Journal a couple of months ago. Kobo and Nook, both of which continue to launch new devices, would doubtless agree. When Kobo first arrived on the scene, its founder Michael Serbinis said he expected this to be a 25 year transition. We are one-fifth of the way through.
However, there seems little doubt that the dedicated e-reader market is a tough one both for developers and retailers. It is incredibly hard to improve on the original design, and unlike some tech these pieces of plastic (as Daunt used to refer to them) do not break easily. If adoption slows, then replacement will not pick up the slack. As Douglas McCabe, analyst for Enders, said: "The e-reader may turn out to be one of the shortest-lived consumer technology categories.” David Prescott, c.e.o. of Blackwell’s, said that he was seeing replacement sales [of Nook devices], but not new people buying an e-reader for the first time.
The answer to the final question, posed earlier, is similarly nuanced. No, Waterstones wasn’t the best tech-retailer in the business. It’s m.d. didn’t believe in the product, its booksellers only sold them through gritted teeth, and its offer was confused. Yes, you could buy a Kindle, but no you could not buy content for it through Waterstones. At the time of the deal, Waterstones promised a Waterstones specific home-page for Kindle users, but if it was ever implemented I never saw it. Waterstones simply never bridged the gap between the sale of the device and the sale of the content. Instead the chain still sells ePub e-books from its website, pointing out that they can be loaded on to all devices “except for Kindle”.
Much as I admire the good work done across Waterstones to get back to its best as a book retailer (and comparing its current position to that of Barnes & Noble, one can only be thankful Daunt hasn’t needed to return to his whiskey bottle), its digital strategy could never be described as ‘joined-up’. Perhaps its customers simply got this not-so-hidden message. In the end Waterstones re-mastered the art of selling physical books in a digital age, but aside from its brief flirtation with Blinkbox Books it never attemped to acquire the skills to sell digital content.
But I don’t believe this signals yet the end of the e-ink e-book. In fact, the market for digital content could be as it is now for years, without there necessarily needing to be a new push on devices. The job now of e-book vendors is to service their customers, and grow sales incrementally. We see this in Kobo’s recent roll-out of its loyalty scheme, but also in much of what Amazon does, be that aimed at Kindle readers or Kindle authors (and both). This is a £400m sector, if it falls aways it is because retailers, publishers and authors failed to build on its dramatic beginnings.
Yet it is also true, as Chris McCrudden declared on Twitter, that the e-reader feels like a transitional device. The neanderthal of consumer tech. The belief is that just as the mobile phone has decimated the market for digital cameras, so the multimedia device will make the dedicated e-reader extinct: an evolutionary misstep. Although there may be an inevitability about this, there is also no road-map indicating how it will happen or when. That may be the fun of it.
Pottermore's relaunch as a mobile-first site is a marker of how seriously we should be taking this.
The mobile market for reading offers the book industry its greatest opportunity, and also its greatest challenge. Yesterday, I judged, with journalist Molly Flatt, the shortlist for FutureBook’s Book-Tech showcase, and while different companies had different approaches to tech and innovation, the one common denominator is that they all (to varying degrees) rely on mobile reading (or writing) becoming mainstream.
The dedicated e-reader clamps-down on innovation, partly because it offers little in the way of functionality beyond, ahem, reading; and partly because Amazon ring-fences what can be done on it (last week Amazon ended publisher O’Reilly’s ability to make use of its ‘send-to-kindle’ function). How ironic is it that the very device that provided publishers with the softest of digital cusions, quickly became the rock on which much innovation and creativity that might have brought a better future for publishers floundered.
Mobile comes at this from a completely different perspective: I have three different e-reading apps on my device, and two different audio apps. In this world, Penguin can develop its own e-reading app; as can Waterstones. I can choose to subscribe; read serials; or download a book app.
The publishing industry is poised between two different digital futures, each with their own set of challenges and possibilities. The one thing we cannot do is repeat the same mistakes made the first time around. This time we should pay attention to those companies foraging around in the fecund digital fields, and this time we should pay attention to what readers are telling us about how they want to read and what they want to read. We should tune in to the signal, not the noise. And this time we have both experience and data to guide us.
Daunt’s decision to stop selling Kindle devices does not indicate an end to the digital market as we know it, instead he’s fired the starting pistol for a new race. And it no longer feels like a false start.