Amazon’s Kindle is about to light Barnes and Noble 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 (BKS) 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 above) that is now in it’s 2nd iteration and was developed by Amazon.com (AMZN) 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 its 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 has a competing Reader product, and BN supposedly has a device in the works as well, and so will everyone else. Apple‘s 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…
As assumed, Amazon’s (AMZN) 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 distributon systems, will never be the same.
Full Disclosure: I am not currently long or short BKS or AMZN, nor do I plan to be.