National Association of College Stores wants to go digital
By Paul Biba
In a long article about the NACS’ trade show, that excellent daily newsletter, Shelf Awareness, covers the Association’s digital initiative. Mark Nelson, v-p of strategy and development, NACS’s digital content strategist said:
In digital matters generally … that “change often comes from very unexpected places and can happen very quickly.” He believes, he said, that in terms of digital material, “we are headed for a change.” Already there are signs of major shifts. While the paper book is just a device with “certain pros and cons,” so e-readers are also a device with pros and cons. Most people who try e-readers “actually like them,” Nelson said. (Interestingly “the No. 1 place people read e-books on the iPhone is in bed,” he said.)
One example of a shift: Stanza, the leading e-reader app for the iPhone, is only seven months old and has 1.3 million users globally who have downloaded more than five million books. Stanza is in the top 10 of the most downloaded iPhone apps and has “three times sales growth week over week since December.”
Some predict that within 18 months 2%-3% of all households in the U.S. will own e-readers, while in four or five years, there will “double-digit percentage e-reader penetration.”
Nelson predicted that the most popular future e-book reader will be a mobile device.
There are other indications of digital popularity. In 2008, for the first time, sales of e-books were 10% of unit sales at Taylor & Francis, and the company’s direct sales to consumers are at a 50/50 ratio of print to digital format. One large textbook publisher, Nelson continued, expects not to publish in traditional print form by 2012–any printed copies will come via POD.
Younger people, of course, have more familiarity with electronic devices than any previous generation. And these days, new technology in general is adopted more and more quickly than in the past, Nelson continued.
A recent NACS study showed that just under 6% of college courses have digital materials. The “median digital sell through” is about 2% of units sold, Nelson said. In some stores, 90%-100% of material in certain classes is digital.
“The greatest barrier to selling digital is that students don’t want or aren’t asking for it,” Nelson said. But at first, “people don’t often ask for a radically new technology.” That can change quickly.
Many companies are entering the digital business. Usually “incumbents don’t survive” because new entrants are the ones who improve initially poor technology and gain market share. By then, traditional players have lost market share.
As an industry, “we are hemorrhaging market share, and it’s going to get worse,” Nelson advised. The key thing is to provide market share in digital because “margins will return. It’s the transition that’s the tough time.”
Unfortunately for college stores, new competitors include such behemoths as Apple, which may have an e-reader later this year, Google and Amazon, which plans to go into the textbook business on the Kindle. “They are sophisticated players with sophisticated marketing and technology,” Nelson stated.He stressed that college stores’ choices are to do nothing; to develop plans but wait for the market to take off before aggressively marketing or selling products and services; or go full steam initiating new infrastructure and marketing. “Probably most stores doing something digital are in that midrange and are not really protecting market share,” Nelson continued, adding with some concern that only 38.1% of college stores are selling digital materials.
For perspective, Nelson quoted Seth Godin’s observation: “The new thing is never as good as the old thing, at least right now. Soon the new thing will be better
than the old thing. But if you wait until then, it’s going to be too late.”
March 30th, 2009 at 9:33 am
Thanks for the post and reference. A couple corrections/clarifications on the stats posted. Most of the stats presented came from other sources, not cited in the article.
The line on “In 2008, for the first time, sales of e-books were 10% of unit sales at Taylor & Francis, and the company’s direct sales to consumers are at a 50/50 ratio of print to digital format.” This is a misquote — the source reported the two data points separately, indicating that the second was across publishers they studied, not necessarily at Taylor & Francis.
On the stat: “only 38.1% of college stores are selling digital materials” it is important to note that this statistic does not include the contract managed stores, which comprise an important percentage of the industry. The percentage reported is the percentage among independent and private stores. If contract managed stores were added, the number would be much higher.
Thanks — and keep up the good work with your blog. I read it regularly.