Thursday, October 29, 2009

E-books to hurt booksellers

Just as downloadable digital music affected the entire music retailing industry, analysts are expecting that a shift from physical to digital books will hurt traditional brick-and-mortar booksellers, analysts said as Barnes & Noble launched its new e-reader. Introduced last week, the Nook is designed to compete against’s Kindle, which has dominated the e-reader market, and Sony’s Reader.

While Barnes & Noble might become a major player in the digital book business, its e-reader could actually speed the downward trend in its revenue and profit, said Credit Suisse analyst Gary Balte, in an Associated Press report.

“As the math currently works, each sale through a Nook is not just unprofitable but potentially replaces a higher-margin sale at stores,” Balter wrote in a client note Friday.

One obvious risk is that downloading books reduces the need to go into stores, Balter said.

E-book readership is small, but growing fast. Forrester Research predicts 3 million e-readers will sell in the United States in 2009, and twice that many in 2010.

Although there will always be something special about walking into a bookstore, perhaps it's inevitable that consumers will choose immediacy and convenience over that in-store experience ...

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