The challenge for Fishpond

Here’s Fishpond‘s latest email to me. I like the company a lot, and they are justifiably doing well, but I find it difficult to buy anything from them as I’ve moved increasingly into an electronic world.

In September last year I purchased the latest Kindle, which is smaller, faster and a lot lighter than my A4 sized Kindle DX. More importantly it actually works in NZ (over Wifi) to instantly download purchases, and so I have purchased over 40 books from Amazon USA between then and now. In the same time I’ve purchased just one regular, paper, book – and that cost $1 at a second hand store in Echuca, Australia. I struggle to justify spending money on other paper books as the Amazon prices for Kindle books are usually much much cheaper compared with NZ prices for paper books, but more importantly the e-books weigh nothing, are able to be purchased anywhere and are always with me on one of my many devices. Each book purchased gets downloaded to one of three Kindles (two of us read them), an iPhone, and iPad or, extremely rarely, a computer.

It’s the same with music – it’s very rare that I will buy a CD as it’s much simpler, faster and cheaper to buy on my iPhone through iTunes.

In each case the decision to buy and the download is concurrent with the purchase itself, and usually seconds after I have discovered the book or music. The discovery of the book could be through a recommendation from a friend, or through browsing through the physical books in a regular bookstore. It’s probably one of the reasons that Barnes and Noble is in so much trouble – there is little rational reason for having huge stores full of popular books when a virtual store with infinite inventory is everywhere.

This probably means the death of most bookstores – at least those that cannot make the switch to electronic media. There will be very few winners as we will most likely end up shopping in the same place. This year we will continue to see buyers of books switching to electronic media, and this will make it even more difficult for those stores with marginal economics. Fishpond and their ilk are better off than physical stores, but they are in a dilemma – can they switch their business to electronic delivery if the publishers won’t play? How can they make the Australian and New Zealand markets attractive to publishers without invoking the giant Amazon giant to actually get its act together downunder?

Overall I now see no reason why the physical book isn’t doomed. It makes no sense to spend so much money on the printing and distribution of physical books when an electronic purchase is available so much more conveniently. Yes we will still love the smell of books, and reading a Kindle at the beach or in the bath is perilous, but these are small problems in the scheme of things.

Fishpond, rather smartly, have diversified away from books and CDs into other products.

Sadly the same thing is happening to games and DVDs as happened to music.

Movies are large, and so in New Zealand and Australia our constrained bandwidth (along with the small markets) has meant that purchasing and downloading movies is still small. But in the USA the legitimate movie downloads have been huge, with both movies and regular TV increasingly being delivered over IP. Meanwhile the prices of DVDs are just silly, and it’s difficult to justify the time spent viewing a $40 or $20 DVD with the time spent playing a decent $1.29 iPhone game. Meanwhile I’ve sharply reduced the amount of time watching the TV, be it movies or otherwise, as I’ve switched to using other more engaging media.

Apple has transformed the games industry by making it oh so easy to buy Mac or iOS games using their app stores. Steam has done the same on several platforms for games. So it’s hard to justify buying a shiny disk that won’t arrive for days, and it is especially hard to justify spending $50 to do so. All this gets worse for the sellers of shiny things as the data capacity and download limits available to us increase.

It’s going to be very hard to be an electronics manufacturer this year. Cameras are now a part of cell phones, music players need to be iPhones or iPods and the market moves wildly quickly, while the standard for design is relentlessly high. Apple dominates an increasing number of categories, rendering much of the rest to be commodity products. Even watches are barely required today when we have so many digital devices that tell us the time.

But selling stationery and kitchenware is a good extension for Fishpond, as it’s hard to substitute these for electronic versions. It’s a sign that they are determined to be the Amazon of down under, and good for them.

However the proverbial elephant for Fishpond and their competition MightyApe is that substitution by electronic media, and they would each do well to ensure that the domestic industry has an answer that serves us all well.

About Lance Wiggs

@lancewiggs
This entry was posted in Australia Business, Internet Business, media, NZ Business. Bookmark the permalink.

10 Responses to The challenge for Fishpond

  1. Dylan says:

    I still find myself preferring books to electronic books. I like being able to view and admire my collection, and I only read one book at a time so I don’t feel the need to have my library in my pocket.

    I feel the same way about movies, games and music. I like to be able to view my collection and feel like I own something. I’ve been burned by iTunes in the past (single download of tracks) and feel more comfortable buying (and ripping) the CD.

    Games are not under threat in NZ (especially on console) until bandwidth is sorted out.

    I accept I’m probably in the minority (hey – I still prefer the manual transmission and refuse to own an auto) but I haven’t lost sight of the upside of physical media.

  2. Gordon J Milne says:

    I like eBooks but I would also like the option to make my own physical copy as well. I already buy eBooks from a publisher (The Pragmatic Programmer) that allows me to make a copy of a book., However, I cannot find any copy shop that will print and bind the damn thing for anything less than $40, which kind of makes it an overly costly activity.

    I have bought something from Fishpond twice. They offer a good service but these days I take a good long look at The Boo Depository first since it offers free international delivery to NZ and doesn’t (like Amazon) charge a per-item fee as well as a postage fee. TBD is often the cheapest option for me too. And, things turn within two weeks of ordering, although a specialist item once took three weeks to arrive.

  3. Jafa says:

    Yeah, the book sellers are going to have it harder and harder with e-books and also global players like a bookdepository.

    And there is fresh answer to fishpond Sell yours from Mighty Ape – Market Place as well.

    http://www.mightyape.co.nz/sell-yours/

  4. Dan Slevin says:

    iTunes downloads are still not lossless so for music I really, really love I buy the CD and rip it. But I play back from an Apple TV v1 which has a a lovely sound (much better than the Apple TV v2). I don’t even have a CD player in the living room now. I do love being able to buy single tracks, though.

    As chain record stores like Marbecks suffer, specialised venues like Slowboat are doing ok. They provide expert service and also serve collectors via the Internet.

    For movies I still prefer blu-ray on a big screen. The Apple movie downloads are better than DVD but seem to have too much colour – too rich, too hot.

    I can see a market sustaining (and even growing) for artisan, handcrafted, limited edition books – beautiful artifacts, lovely design, objects you want to hold in your hand and display. But for textbooks, airport novels, scripts, etc. I can certainly see electronic distribution dominating.

  5. Welly says:

    I have found their aftersales customer service really good. Good customer service goes a long way in getting repeat business.

    I think there will always be a market for coffee table books, which tend to be high cost/large margin books anyway.

  6. Paul Easton says:

    You are right -competition is hard for a company like fishpond -not to say they cant do well, but need to be fast moving with the trends. I bought a book from bookdepository in the uk just before christmas – so I got free shipping, and was then blown away getting in 4 days! – hard to beat when the price was 20% less than local.

    Digital will become more popular – as iPads/kindles drop in price = more users – more electronic options. -plus the “get in 10 seconds” appears to Gen Y

    As far as prinitng costs (as Gordon Milne mentioned) – Take a look at printstop. Last time I used them you could print any book (even you own personlised diary) for less that the cost of getting it in whitcoulls – Printstop has high end printing presses runing every night and 1 copy is possible

  7. Mike Maguire says:

    I think a key issue with electronic media that there is loss of residual value.

    I have numerous paper books that have been read by myself, wife, son, daughter, friends etc. My audio books are impossible to share and yet are not 1/5 the price of the paper book. I think by buying an audio or ebook there is a huge saving to the publisher in printing, stocking, distributing and retailer margin, but the purchaser has lost the residual value in being able to trivially loan it to others.

  8. the watcher says:

    1) Online sales of books continue to grow absolutely and relatively in total book sales. While ebooks do as well, both the growth comes at the expense of brick and mortar.

    2) fishpond has been very effective at knocking off their competition. Say goodbye to booktopia.com.au, seekbooks (both NZ and AU), the nile (ditto), etc etc.

    3) fishpond’s greatest competition comes from other international online booksellers, not from ebooks

    4) ebooks for the time being and the near term is really just centred on tech savvy geeks, who use articles like this to look down on “the masses” of un-electronic folks. ebooks may well wind up not doing all that well. and if it does, it will still take time for it to hit NZ in earnist.

    5) fishpond can sell ebooks if they so chose. they have wisely not spent millions of dollars like REDgroup to go and do so

    6) looks like fishpond has heaps of other categories, unlike its domestic competitiors

    7) knowing some of the people in fishpond, and seeing first hand their continued rapid revenue growth to this day, I don’t think they are all that interested in articles like this.

    So lance, after all that, i think an interesting article, a bit snobby, and probably very detached with the reality of fishpond putting REDgroup out of business and growing year on year revenues by some stupid amount, consistently. Cool that you can write an article – even cooler to see what these guys are ACTUALLY doing.

  9. Lorraine Irvine says:

    How do manage to download your ebooks from Fishpond to your Kindle?
    I have a Kindle and would prefer to read my books on that rather than sit at my desk to read my Fishpond books on the desktop.

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