Editorial: "The market is even bigger than we thought." Maybe.

In today's PWxyz post about Kindle 3 being announced, the Amazon VP of Kindle Content (ie, the guy who holds the publishers' hands) was quoted.

“The market is even bigger than we thought,” said Russ Grandinetti, v-p of Kindle content about the size of the e-reader audience. He reiterated statements made by Amazon last week that since the company lowered the price of the Kindle to $189 sales have accelerated.

This feels a bit to me like Dave Bowman's famous last line from 2001, "... and oh my God – it's full of stars!"

Amazon has seemingly discovered the hollow star of the eBook market: get the price low enough and you discover a vast pocket universe of people who wouldn't have bought an eBook reader at twice the price.  But really, if you get it down low enough, you'll discover that even people who wouldn't have paid full price for a paperback screed by Glenn Beck with a blurb from George W. Bush and a metallic-embossed American flag on the cover at the checkout at Wal-mart will buy an ereader.  But then what?

The question is really not just about vast numbers of people buying low-priced ereaders equating to vast numbers of people buying books and buying more books after that.  Because at a super low price, the ereader isn't the same as buying a lot of books.  It's like buying a super-low-priced book cover that you can then put other books into.  You still have to go ahead and buy the books to put on the Kindle (or other gadget).

Will all those super-low-price buyers go nuts with their credit cards and become rabid ebook-edition buyers?  Have we really discovered a magical world full of customers who were just waiting for the GADGET that would enable them to start buying books? A magical world full of customers who seem to have been unaware of the wonder of books when they were merely printed on paper?  

Or have we just found a world of people who will buy the next hot gadget made in China, no matter what it is, so long as it's super-low-priced?  ("Dude - it's like a Nintendo DS for words!!")

It seems more likely that the universe of dedicated readers of books – no matter what the format might be – is a finite one.  There are only so many of us out there.  That's why the book business has been cheering so hard for young fans of JK Rowling and Stephenie Meyer.  THOSE new readers who got hooked on books are the future generation of book readers and we certainly want them to keep on buying and loving books.  But for the rest of us?  Our habits are set in stone.  We're already book buyers or we aren't.

A shiny new Kindle or iPad or Kobo or Nook won't convert a non-book buyer into a rabid book buyer.  It might give us some incremental growth.  But not revolutionary growth.   The market isn't bigger than we thought.  It's exactly the size we were afraid it might be.  eBook readers aren't a panacea for our business.  They're a bandaid.  A shiny new bandaid.

Publishing folks like to point at the music industry and say, "We saw what happened with the death of CDs and the rise of the mp3 and we don't want to make that mistake.  Look how hard we're working to make ebook purchasing friendly and simple.  We're not going to lose business to piracy."

But, to judge from the quote I opened with, we've forgotten the lesson the music business learned BEFORE the death of CDs: the death of the LP.  The music business hopped onto CDs with both feet and surfed a happy wave of massive sales as customers started replacing one format of recorded music with another.  But soon enough, even that wave petered out.

This massive acquisition of ebook readers in 2010 may make for a bright and shiny holiday season for ebook retailers.  And it might even contribute to a gloomy holiday season for bookstores that still specialize in the "books printed on paper" category.  But I'll be waiting and watching for statistics that come out in the next months that report on just how many actual paid ebooks are bought by all those owners of new ebook readers.  Then we'll see just how big this market really is.