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Thursday, February 3, 2011

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U.S. E-Book Sales To Reach $2.7 Billion In 2013

Falling prices and new business models will help U.S. e-book unit sales to grow from an estimated $313 million in 2009 to $2.7 billion in 2013, according to a new Yankee Group forecast. The research firm predicts that e-book downloads will outpace those of paid mobile apps during the period, growing at an annual rate of 83% compared to 72%.

A separate Gartner forecast last week predicted that mobile app sales worldwide will triple to $15.1 billion in 2011 from $5.2 billion last year.

In addition to wider adoption of e-book readers -- the Kindle has become Amazon's best-selling product ever -- the growing affordability of digital titles will be a key factor driving sales. By 2013, the typical e-book retail price will fall to $7, down from an average of more than $9 in 2009, according to Yankee Group. With a third of consumers on the fence about embracing e-books, lower prices could help make the difference.

New ways of selling e-books and new formats will also help expand the market. Emerging models include e-book rentals from companies like Chegg and Skoobit, which allow students to rent textbooks at discounted prices for a given period. Given the high cost of print textbooks, the study noted that a quarter of students express high interest in e-books, making college campuses a ripe market.

Other business approaches expected to gain steam in 2011 include ad-supported e-books, micropayments for book chapters and shorter works and annual subscriptions. Sesame Street's online store, for instance, offers 100 e-books for $40 a year.

The Yankee report also points to a growing range of tools for discovering e-books, including predictive analytics engines such as Reader and WhatShouldReadNext. Google's integration of e-books into search results and book-based social networks like HarperCollins' and Inkpop will also play a role in boosting sales.

New e-book formats -- such as platforms from Vook and Sideways that enable authors to embed audio and video into their text -- will provide additional incentives for people to make the switch from print. Amazon nearly doubled its e-book library from 450,000 to 810,000 titles in December.

While projecting that e-book revenue will top app sales in the next few years, the study nevertheless highlights the importance of apps and smartphones to the e-book market. Barnes & Noble's e-book apps for the iPhone hit 1 million downloads in three months. "Exposure to e-books through smartphone apps has led nearly a third of smartphone owners to consider digital formats," states the report.

Given that, Apple's reported rejection of Sony's iPhone app for buying e-books from the Sony Reader Store could be a troubling signal. What impact that move could have on companies like Amazon, which offer free mobile apps and sell e-readers competing with the iPad, isn't clear. The online retailer also offers apps on other smartphone platforms including Android, BlackBerry and Windows Phone 7. The company last month said Kindle e-books now outsell paperback books on

Courtesy of ©2011 MediaPost Communications. All rights reserved.

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