A Read on the Future of E-Readers

Aug. 13, 2009— -- Electronic readers, or e-books, use special screens that provide a paper-like reading experience. In 2006, Sony leveraged the high contrast and crisp readability of such a screen as it unveiled the Sony Reader.

It was joined the following year by the Amazon Kindle, which added a wireless way to buy books from nearly anywhere. But even in light of Amazon's recent price cut of its Kindle to $299, e-readers are still pricey, and their screens aren't well-suited to displaying photos or video.

The looming question, then, is whether people care enough about reading to invest in a separate e-book device as a panoply of converged devices vie against the ever-capable smartphone.

Bookselling giant Barnes & Noble recently announced its intention to enter the market, but at least one digital bookseller, Shortcovers (a division of Canadian retailer Indigo) is instead targeting the broadly available Web and smartphones as its primary platforms.

The Real Opportunity in E-Reading? Textbooks

According to The NPD Group's E-reader Snapshot Report, the idea of a dedicated reader has significant appeal, with 37 percent of respondents expressing that they were at least somewhat interested in an e-reader.

That number grows significantly among those who regularly read newspapers or magazines. There is even a major contingent interest in reading classic literature available for free at Web sites such as Project Gutenberg.

Prices for e-readers will come down as their screen technology gets less expensive and they become more popular, but the real opportunity to increase production by orders of magnitude lies in textbooks.

Amazon is already courting colleges with its large-format Kindle DX, and if those trials are successful, it could lead to large orders and more negotiating power with other textbook publishers.

One challenge, however, is that colleges would likely prefer a more open platform than the Kindle, which is tied to Amazon as its sole bookseller.

In addition, other screen technologies will continue to improve and may rival electronic ink for readability. Just one example is OLED, which is already used in a Sony television.

People Like the Feel of a Real Book

OLED displays are prohibitively expensive for an e-reader today (the Sony TV's starting price was $2,500 for an 11" screen), but could be used in a more general tablet device that included electronic books among a host of media applications, including movie watching and Web browsing.

Books, though, do not appear to be in any imminent danger of heading the way of cassettes or videotapes.

When asked why they were not interested in an e-reader, 69 percent of consumers surveyed by NPD said that they preferred the feel of a real book; this was the most popular response by far.

Respondents may simply be sentimental or underestimating the advantages that digital books bring, but even the best electronic ink displays today do not match the readability of inexpensive paper. Unlike the dramatic transitions we've seen in television and music, the digitization of books is a story that will take a long time to reach its final chapter.

Tech on Deck columnist Ross Rubin is director of industry analysis at The NPD Group. He blogs at The NPD Group Blog and his own blog, Out of the Box. Follow Ross and The NPD Group on Twitter.