Marketing eBooks: Breaking into the mass market

In my last blogpost I mentioned some of the biggest barriers to adoption for eBooks:

1. There is no physical ownership of the book and no bookcases to show off
2. There is no “touch and feel” of the book, which is especially important for hardcovers
3. Consumers fear that reading on screen will be tiring
4. Very high prices for e-readers, added to additional spending on eBooks

How will manufacturers of eReaders and distributors of eBooks get past this? I’ve outlined some ideas to overcome these barriers:

1. Go offline to get users online: As I mentioned in my previous post, one of the exciting things about eBooks is that all 4Ps of marketing take place mostly online. However, in such a new market and with a gadget that is competing with such popular consumer electronics like touchscreen mp3s, portable video game consoles and smartphones, companies have to go offline to get online customers.

eReaders are an experiential product. I told my story of how seeing an eReader piqued my interest in the category for the first time. It broke my main fear: that the screen would be like computer screens, which are very tiring. The reader I saw was a Sony eReader and one of the bigger ones. However, by actually seeing it, I could appreciate how handy it is for taking on trips. Though there is a lot of hype online about the product, it will not reach the mass market until people see other people using it. eReaders need the “white earbud effect” of the iPod. As more iPod users climbed on the bus with white earbuds, people became curious about the gadget. Though mobile apps have proved very successful for Barnes and Noble, you can’t tell if the person on the bus is playing a video game, checking emails or reading an eBook on his BlackBerry. How to do this? I suggest:

a) Improving distribution: Where is the eReader section in my local electronics shop? Is it even available in electronic shops in the city? I don’t think I’ve ever seen one in a store that I can play with. According to the Forrester study that I mentioned in the last post, distribution is one of the challenges for the market, which industry players are trying to improve. Big chain stores like Best Buy are also training personnel about eReaders, so they can be more useful to holiday shoppers.

b) Samples: Manufacturers won’t like this at all, but one suggestion is to plant samples of their products among users that are representative of their target groups. If they can show the gadget to their friends or just use it in a place where they will be seen by others, it can give target customers the opportunity to dispel myths, ask questions, and interact with the product.

2. Segment the market: Segmentation of the market doesn’t seem very clear. Students are an interesting target, because they need to read so much and love gadgets. But they are also price sensitive and until most textbooks can be read on them (and hopefully at a fraction of the price), it is unlikely that they will adopt, unless there is a steep price drop. Travelers are also an intuitive target. They have a lot of downtime, and only so much of it can be spent on the laptop and phone (especially because radios have to be turned off during flights). They also have to pack light and would appreciate a wide choice of books instead of the typical paperbacks you can find at airport bookstores. But with so many electronics already (laptops, smartphone, mp3 player), why carry another gadget? Also, WiFi downloads would become a must on all devices, or even a data plan, which is still being worked on by manufacturers. One interesting target are users who want to purchase books in other languages but don’t want to pay expensive shipping costs or higher prices in the local market. A friend recently told me she is very interested in buying one, but would really like the opportunity to see one before she picks the brand. In her case, buying eBooks makes sense because she can buy English-language books from Amazon, without paying the expensive shipping to Mexico. She also doesn’t have to wait months to have it delivered. This would only work for English-language books, at least until enough eBooks are available in other languages and eReaders have better distribution.

3. Lower prices: This is the single most important factor for widespread adoption, according to academic studies I’ve seen during my MBA. eReaders have an additional hurdle to high prices –they are competing (whether they like it or not) in the consumer electronics category. As mobile devices, including phones, video game consoles and mp3 players continue to converge, holiday shoppers will be deciding among the whole category when choosing a gift. Imagine my dilemma: should I buy a smartphone ($99-$200) which does a LOT of things, including an eReader app or an eReader that goes for over $149 and ONLY reads books. I’d have to pay significantly more to get WiFi service. And additionally, I’d have to purchase books, because –let’s be realistic –there’s only so many of Google’s 500,000+ free books that I really care to read. Kindle-level premiums will leave it in the “early adopter” phase for a long, long time. Especially considering that most users expect to pay closer to $99 for an eReader (according to Forrester’s study). Some analysts say consumers are expecting prices as low as $50. Because prices are so high, some analysts expect adoption of eReaders to follow the trend of digital cameras: it will take a decade to reach widespread adoption (and now these cameras are being replaced by mobile phones).

Analysts expect the eBooks industry to continue to grow. I’m sure that it will, considering the growing interest in consumer electronics. But I’ll keep waiting for that eReader that will cost close to $99 and have WiFi and that I can hook up a data plan to (or at least my cell phone, so I can get the data plan from there). I hope I don’t have to wait much longer.

If you’re curious about eReaders, here’s a good review of current products by David Pogue, from The New York Times: http://video.nytimes.com/video/2009/11/19/technology/personaltech/1247465674780/pogue-friends-2009-holiday-guide.html