Kindle's Here - Close the Book on Barnes & Noble

Amazon’s (AMZN) Kindle is about to light Barnes & Noble (BKS) on fire and stomp on the ashes.

Yeah, I said it. What?

I’ve been a big reader all my life. In fact, I go through books like Mary Kate Olsen goes through pills, and if I can help it, I’ll go to Barnes & Noble before any other bookseller.

But I just got a load of the Kindle and once I get one, I may never walk into a bookstore (or library or newsstand) ever again.

For the uninitiated, the Kindle is the book-sized flat panel digital device (in the picture to the right) that is now in its 2nd iteration and was developed by Amazon.com as a means of digital delivery and consumption of books and other reading material. The current version features 16 different shades of gray for image resolution, it can be read in any light with comfort and it's capable of holding up to 1500 books. Yes, I said FIFTEEN HUNDRED BOOKS.

After a decade of fits and starts, the holy grail of the “ebook” may finally be here.

It’s not that your grandmother won’t ever walk into a Barnes & Noble again to pick up the new year’s kitten calendar, and I’m not saying that no one will ever need a large, elegantly bound coffee table book ever again. But outside of that kind of purchase, once Kindle reaches broad acceptance, will Barnes, or even Noble for that matter, be able to cope with the persistent decline in store traffic that this device will engender?

Want the answer to that question? Go ask Tower Records. Oh wait, you can’t.

So look, the Barnes & Noble faithful and stockholders will come back at me and start talking about “there’s room for both, BN is coming out with their own device, people like the feel of books in their hands” and other assorted blah-bedy-blah-blah.

Fine. I’m not rooting for or predicting the death and demise of the fantastic company that is BN, I’m just saying stores will be shrunk and then closed, margins will shrink as well, and my three year old daughter and her friends will probably not know what the inside of a bookstore looks like.

And by the way, Amazon doesn’t necessarily have nothing but smooth sailing ahead of it. Sony (SNE) has a competing Reader product, and BN supposedly has a device in the works as well, and so will everyone else. Apple’s (AAPL) iPhone has several “reading” apps as well (although I wouldn’t be interested in reading a book for extended periods of time on something that small). I should also mention the fact that at roughly $359.00, the price tag has a ways to go if anyone but first adopters is going to make a grab for this thing.

In addition, many publishers aren’t thrilled with the Amazon-as-middleman setup as they have less power over their own pricing, but a la Apple CEO Steve Jobs and his iTunes revolution, I’m sure Amazon CEO Jeff Bezos can work this out with the publishing industry and authors as long as books are being bought and paid for.

The bigger-screen Kindle, which is days away from launching will have a big effect on other industries as well:

Dramatic change will be coming to those campus textbook shops we all loathed…

From newruntech:
As assumed, Amazon’s forthcoming, big-screen Kindle isn’t just for newspapers: It’s also for academic textbooks. Beginning this fall, Amazon will test the new Kindle with six universities, where some freshmen will be given “large-screen Kindles with textbooks for chemistry, computer science, and a freshman seminar already installed.”

And, the implications of a bigger Kindle for the physical newsstand are equally grave, but I have no pity for Hudson News when they charge me $1.65 for a Twix Bar in Penn Station…sucks for you, partner.

From the New York Times:
These new gadgets, with screens roughly the size of a standard sheet of paper, could present much of the editorial and advertising content of traditional periodicals in generally the same format as they appear in print. And they might be a way to get readers to pay for those periodicals — something they have been reluctant to do on the Web.

To sum up, I am not saying that Barnes & Noble’s stock will never go up or that the company won’t fight back, I merely feel that the company’s best, most profitable days are behind it. The Kindle has arrived and book retailing, along with other printed-word distribution systems, will never be the same.

Read Also:

Bigger Kindle (NYT)

Improving the Kindle (Felix Salmon)

Tipping Point for Publishing (Andrew Keen)

Comments

[Roger Knights:]

I feel that there's a good chance the Kindle will be a revolutionary device. It's a worthwhile bet--which I think is a major factor in the stock's recent runup. If its new, large-screen version gets traction with early adopters, it could really start to snowball.

One factor in its favor is its strong sales in the face of a wall of worry--that is, an unusually large number of outspoken naysayers and captious critics.

A lot depends on the sort of deal Amazon is able to work out with Apple regarding sales of Kindle books on Apple's new tablet/reader gadget. (I hope they call it the DynaMac, even though a defunct company once used that name.) If Amazon allows owners of that gadget to buy Kindle books without having to own a Kindle (perhaps for a two-figure up-front fee, or for a slightly higher price than Kindle owners), that would really entrench the Kindle's DRM format as a standard.

May 06 08:23 AM

[GetMeOnTop:]

OK, agree with most of what you say, but need to really throw one thing into the mix - The new but yet unannounced Apple tablet/netbook/newton gizmo/gadget/computer/...

The implications are huge for the Kindle (most number show sales of iphone/ipod touch to be 60 times greater) as a device, and for the presumption of the demise of Barnes & Noble and your corner newsstand.

I don't think one needs to be a soothsayer to predict that in 5 or maybe 10 years most physical (aka paper) reading will be a thing of the past!

May 06 09:08 AM

[Joshua Morg...:]

i completely agree GetMe...i note in my piece that it won't exactly be smooth sailing for amazon with other competition

thanks for reading

Josh


On May 06 09:08 AM GetMeOnTop wrote:

> OK, agree with most of what you say, but need to really throw one
> thing into the mix - The new but yet unannounced Apple tablet/netbook/newton
> gizmo/gadget/computer/...
>
> The implications are huge for the Kindle (most number show sales
> of iphone/ipod touch to be 60 times greater) as a device, and for
> the presumption of the demise of Barnes & Noble and your corner
> newsstand.
>
> I don't think one needs to be a soothsayer to predict that in 5 or
> maybe 10 years most physical (aka paper) reading will be a thing
> of the past!

May 06 10:38 AM

[mimimorgan:]

This will be interesting to watch as it unfolds, as public opinion falls all over the map when it comes to art vs. technology.

I admit the Kindle gadget is a pretty neat idea. But when it comes down to it, it's just a gadget. What happens when the device fails to operate properly, and there's no hard copy of the book, or magazine, or recipe, or whatever, to be had? What will we lowly humans do with ourselves when we have to search Google to get the India-based 1-800 customer support number for Amazon because it's not easily located anywhere on the site? Will the starving artists and poets of the world ever get something to eat?

Yeah, Kindle is cool, it's revolutionary, for the techy generation becoming as essential as the Blackberry and the space age microscopic cell phones a la Zoolander for "people who can't talk good". But I'll be hitting the used bookstores myself, and I imagine lots of other folks will, too. It's just this silly archaic notion of holding a book in my hands, knowing that short of major catastrophe - like a house fire or book-munching paper mites - I'll be able to revisit that book time and again. If I take really good care of it, my children and childrens' children will visit it, too. It'll be like dusting off an ancestor's crypt.

Ironically, Amazon will probably corner the dusty old book market too.

May 06 10:45 AM

[Taconia:]

The most successful e book reader will be the one that can download the most common forms of free e books rather than being convenient only for pay-per-book products. The old Rocket and Franklin readers could do that.

Why do most reviews of e book readers fail to tell us if the device can download free e books in PDF or Rich Text or Word (or read a card or flash drive with books in this format)?

May 06 11:58 AM

[BarcelonaBully:]

What you've failed to include in your post in any sense of a timeline. I think overall what you say is accurate - but is many many years away from happening. Simply put, the vast majority of people who read out there don't prefer to read books on a screen. That will change over time, but until it does, ereaders will only have a small, albeit powerful, segment of the reading population. There will still be a market for print-on-paper books for many years to come, despite any price improvements, accessibility improvements, portability improvements, etc.

May 06 01:42 PM

[ChickenLips:]

For now, this is purely a trendy gadget for electronics geeks. Avid book readers will prefer traditional books because they are cheap, unbreakable, manageable, and can be re-sold when we're done reading them! Electronic books are still way too expensive to be a real contender in the marketplace. These devices need to be free or the electronic media needs to be very low cost since I can't readily re-sell it yet. I might buy one if either of these costs gets lowered.

May 06 02:17 PM

[Roger Knights:]

"The most successful e book reader will be the one that can download the most common forms of free e books rather than being convenient only for pay-per-book products. The old Rocket and Franklin readers could do that."

So can the Kindle.

"For now, this is purely a trendy gadget for electronics geeks. Avid book readers will prefer traditional books ..."

In fact, the electronic geeks have been rabidly opposed to it, and the buyers have been non-techy older bookworms.

May 08 02:08 AM