Lesson in Amazon ebook strategy

MIKE O'DONNELL

OPINION: Despite the Rise Up Telethon, the creation of CERA, the appointment of straight talking Roger Sutton, and regular media coverage, it's surprisingly easy to forget the ongoing impact of the Canterbury earthquake. Even more so if you live in the North Island.

What tends to bring you back is the real absence of stuff you've always taken for granted. If you are really unfortunate that might be a person you loved, for others it might be a favourite cafe or piece of architecture. Last week I was in Christchurch and what I noticed was the absence of a secondhand bookshop.

When I was a student attending Canterbury University 20 years ago, Smith's Bookshop in Manchester St was an oasis of literature and art. In particular, it seemed to draw all the insanely pretty Left-wing girls, whom a rural bogan like myself never had any chance of ensnaring. Dressed in old tweed, velvet waistcoats and Last Footwear Company shoes, the staff always had time for a chat, giving useful advice and the occasional cup of tea.

It was spread across three rambling and slightly musty storeys and you were just as likely to run into a poet as you were a pensioner or politician.

I tried to fit in a quick trip to Smith's to buy a book for my daughter while I was in Christchurch. Such a quest was doomed as Smith's is within the red zone, with its historic premises suffering extensive damage.

Smith's came to mind again as I read the latest news off the Nasdaq about eCommerce giant Amazon. Amazon began selling books online in 1995. Founder Jeff Bezos played the long game and for 10 years established a client base and brand without making a profit. A strategy which, in hindsight, has been utterly brilliant.

In November 2007 Amazon introduced the (then) revolutionary Kindle digital book reader and started selling ebooks. Competitors and commentators poked the borax. "It's a gimmick, no-one really wants to read a book on a piece of plastic."

In February 2010 Amazon proved them wrong, announcing that when a book was available in both hard and soft copy, they would sell six Kindle versions for every 10 hard copies. Sixty per cent take-up from a standing start. The market was stunned.

By July 2010, Kindle book sales surpassed hardcover book sales. Then last week, less than four years after its launch, Amazon advised the market people were purchasing more Kindle books than all print books - hard and paperback - combined. Phew.

It took cars 40 years to replace the horse, the CD took just 15 years to replace the vinyl record, but it's taken just four years for the Kindle to overtake printed books on Amazon.

While it's important to put this milestone in context (after all, if you are on Amazon you obviously have a predilection for digital consumption), the speed and direction of this change is remarkable all the same.

There's a rule of thumb that says New Zealand is about five years behind the United States when it comes to consumer participation. But unlike cars and unlike CD players, the Kindle (or iPad, BeBook or Nook) is a perfect global commodity. It is small, generic and easily shipped. This all means the US trend is likely to be followed here as our increasing local take-up of global eCommerce means the historical restrictions no longer exist. Local players need to be on their toes.

Right now you can buy a wi-fi- enabled Kindle for US$139 (even less if you are prepared to put up with ads). Once you pay shipping and allow for currency that means it will set you back about $200 and be with you within a week.

Meanwhile, you can choose from 950,000 books, most of which cost less than $12. Just three months ago (before it was placed under administration), if you tried to do the same locally on the Whitcoulls website you would have been paying $250 for a standalone reader. Today you can buy a wi-fi-enabled Kobo for $199. In other words, Whitcoulls has smelt the coffee and upped its game. Good on it. However, the one thing that is certain is that the change will continue.

Like many of the small businesses that have tried to keep income above expenses, Smith's Bookshop also smelt the coffee. A few years ago it set up an online bookshop that allows not only current customers, but thousands of historical customers like me to enjoy its expertise (which isn't so easily commodified). And its focus is on rare and old New Zealand books.

Meanwhile, old-fashioned book browsers like me look forward to the day Smith's will again have a physical presence. And maybe even a couple of those Left-leaning assistants.

Mike "MOD" O'Donnell is an author, professional director and eCommerce manager. His Twitter tag is modsta.

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