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.