The iPad has just been released for sale on Friday and current estimates put the first days sales at 120,000 according to a report by Techcrunch.
The three most at risk with tens of billions of dollars at stake are
- Computer Gaming both Online and Offline
- Online and Offline Publishing
- Online and Offline Video
The current global sales volumes for these industries are
- Computer Gaming: $20.2 Billion in the USA alone in 2009 according to CDRInfo with estimated Global sales of $57 Billion
- Publishing: Worldwide revenue in 2009 was estimated at $130 – $150 Billion with eBook sales estimated at $9 Billion by 2013
- Video: By 2013 home video sales are projected to be $59 Billion
So let’s have a closer look at the publishing industry and the likely projected impact to this industry that is worth in excess of $100 Billion globally.
“But while it may not completely reinvent the rules of digital publishing in 2010, I have no doubt that within 18-24 months, you’ll begin to see the iPad have a major impact on the way both publishing houses and casual readers look at the digital publishing space, which the gadget should provide a major boon in coming years.”
The reality is that it is not only the online sector that will be transformed but also the offline games, video and publishing industries, as anything that can be published offline is going online as the ability to upload easily onto the big copying machine called the internet at faster and faster speeds with decreasing friction through higher speed broadband both fixed and wireless will continue unabated. The other part of the puzzle regarding the threat to these industries is not just the usability, design and attraction of the hardware device but Apple’s iTunes and Apps store for its Internet and and iPhone users. So the ease of these cloud sites and the new iBooks site will transform the publishing industry. Scott goes on to say.
“Just as importantly, iBooks looks to provide a simple, elegant and intuitive means of browsing, purchasing and enjoying digital content, making the experience of flipping through favorite novels or publications in virtual format much more of an engaging and organic experience than you’d find on current eReaders”
The Retail Muse says.
“Publishers are on the bandwagon, and ready to embrace Job’s new product. The five largest publishers, including McGraw Hill and Simon and Schuster, are ready to provide content to the new device”.
So to get some perspective on what the impact will be on the publishing industry we need to have a look at what has happened in the music industry since the introduction of Apple’s iTunes.
iTunes was introduced in 2003, since that time these are some of the milestones.
- iTunes sold 25 million digital tracks its first year in 2003
- By 2006, sales had reached 1 billion
- Apple’s iPod, the leading MP3 device reached 220 million in sales by November, 2009 – or 73 percent of the total digital music-player market
- Apple sold its 10 billionth song on February 24 , 2010 via iTunes
So what has been the impact to the offline industry in that physical sales represented 80 percent of all music sales in 2007
- In 2010 they represent 64 percent ( a drop of 20% in just 3 years)
- Digital sales increased 80 percent in the same time period
- Bricks and mortar record stores are closing in record numbers
If you take the impact of the offline music industry as an indicator of what will happen to the publishing industry over the next couple of years we could see more than $20 Billion dollars wiped off the book publishing industry’s annual sales figures. Will that happen? The game is on and the industry’s business model is under threat.
The upside is that the unforseen benefits to the planet is that the ability to distribute books electronically will minimize the environmental impact due to reduced emissions in transporting goods and less trees having to be cut down to produce the paper.
So how long will the offline book industry last?… 20 years..30 years? Will the printed book become a souvenir or a special limited edition?
What do you think?
Note: In future posts we will take a closer look at how the iPad could challenge the computing gaming industry and Video industry.