Effects of Technology on the Publishing Industry
Effects of Technology in the Publishing Industry
The modifications in the publishing industry are continuous. Ever since the 19th century, when modern publishing began, there exists a decline in tangible book trades and an increase in that of e-books. Therefore, publishers need to modify their business tactics to keep up with the trends. The publishing industry has been continuously changing after the 2007 release of Amazon Kindle. Thus publishers need to come up with different means to make the revenue for sustaining the business. News organizations and reporters must comprehend novel technologies to make informed judgments. This paper aims to discuss how technology has affected the publishing industry using the Porter five forces analysis, with the area of focus being on Amazon Kindle and Wall Street Journal.
Amazon unleashed Kindle in November of 2007, which significantly disrupted the publishing industry ever since the paperback. People wondered whether printed books would be able to survive the onslaught of e-books. Even though on Amazon’s platform, the e-book transactions surpass that of hardcopy books, the demand for printed books is still in existence. E-books do not seem like they will go away, but so are the printed books. Currently, the Kindle store has about six million e-book titles, which are roughly 80 percent of total e-books retailed within the United States (Guion David, 2018). There is continuous progress in the popularity of e-books, whereby from 2013 to 2015, e-books covered about 20 percent of all book transactions (Association of American Publishers, 2016).
More consumption of online news by persons has led to the organizations having to reallocate resources to attract new viewers and readers while holding on their aging but still existing broadcast or print audiences. Revenues from online news is still a small percentage of the total income from old broadcast or print (Grabowicz Paul, 2014). Online operations in the Wall Street Journal at the end of 2008 amounted to 15 percent or lower of the total revenues. This was not enough to pay for the organization’s whole online and print news. Print Edition is a digital type of the Wall Street Journal’s day-to-day publishing. Members of the organizations only accessed it for private use. The e-reader form was the digital imitation of the newspaper, spread to the New York readers.
There are very few to zero hindrances to entry in the e-book business and the industry of digital news. This lack of barriers increased the risk for the existing publishing industry because of the new competitors in the industry. The release of Amazon Kindle propelled e-books directly to the majority with the original Kindle selling out within six hours. Kindle has faced competition from the Nook Tablet released in 2011, and the third-generation iPad in 2012 (Swenson Laurie, 2012). Nevertheless, signing contracts with editors for books or articles to be published as an e-book has always been a challenge. The lack of growth within the industry may be the leading difficulty that these corporations are facing presently. The only issue with the newspaper industry is the high risk of penetrating the industry and then being able to transform it. The competition for fresh competitors in the industry in the daily newspaper market is way lower.
The e-book market in 2010, at its primary phases, signified 6.4 percent of entire revenues for publicly purchased books. This indicates that the greater acceptance of e-book sales in today’s society. There is a significant price difference in diverse e-book readers’ manufacturers. Amazon moved into the e-book market at a considerably expensive price compared to the fellow competitors, causing the cost of their products to be way higher. Due to the small consumer base, manufacturers are willing to expand the industry instead of competing against each other. Accordingly, manufactures need to better their products and raise the interest of readers to e-books instead of competing on what to price the books. When the prices of Kindle decrease, the majority of people tend to purchase these e-book devices and penetrate the e-book market. If more individuals obtain e-books and can read unrestricted downloaded e-books, they are possibly going to purchase less to none of the hard copy books (Swenson, 2012). Wall Street Journal experienced a drop in its print readership due to digitization, which has resulted in significant changes to the corporation to charm its readers. They have been reviewing their content to appeal to particular and younger viewers (Krumsvik Arne, 2012). Innovation in this organization will entail modifying outdated journalism and integrating alterations into the sectors of marketing, business, and technology.
Bargaining power comes from the simplicity of changing to a rival product and the product’s worth to the customer. Kindle consumers have less bargaining power. Books bought from Kindle can never be read from a different device from a different company and the other way round. Most of the e-book reader consumers do not possess the modern automated library (Ascoli et al., 2008). Current libraries are still not a significant aspect of determining the purchasing decisions of a consumer. However, considering this is a continuously growing industry, when the market develops, a majority share of transactions will be to present e-book readers’ owners. Consumers of Wall Street Journal do have higher bargaining power because the competitors of the newspaper like the Times are also keeping up with the trends, and whatever major news is in Wall Street Journal can also be read from the Times. There is low price elasticity in the market of newspapers, and these corporations have a habit of copying the other company’s prices (Krumsvik Arne, 2012). According to research, the present demand in this industry has become more aware of costs.
Bargaining power of suppliers comes from their numbers, costs related to swapping to different inputs, and substitute availability. The number of substitutes in this industry is limited because this industry does not consist of many firms. Kindle possesses two significant compilations, net technology, and display. The bargaining power of publishers is a vital topic to reflect because Kindle is equally inoperable minus the e-books (Ascoli et al., 2008). For Amazon to increase the e-book library size, they must obtain permission from the editor to convert their books. Because of this, publishers do have higher bargaining power, and every title makes the publisher in control. Therefore, in the case where Amazon desires a particular book to be published in Kindle, they must compensate the editor equal to the prices of monopoly. Currently, the Wall Street Journal seeks to own its printers, which then lowers the bargaining power of the suppliers. Technology has also made content production way cheaper, which is a bonus for the newspaper industry but a negative influence on printers (Krumsvik Arne, 2012).
The leading alternatives to Amazon Kindle are online bookstores, Google Books, and physical libraries. However, Kindle does not need a computer, which is mandatory when using Google Books and online bookstores. Kindle consumers can buy directly at the Kindle Store using the Kindle device because of its open wireless connectivity, similar to that of cellphones. Every product a consumer purchases online is stored in the Kindle, and in case a customer loses their Kindle, their information will not be lost (Ascoli et al., 2008). The easy portability of Kindle has lessened the stress of readers having to deal with numerous or heavy books. The Kindle presentation is similar to that of ink on paper as compared to substitutes’ LCD screens and printed media, making it easier on the eye. The text sizes can also be adjusted to favor the reader, which makes it better than books. Amazon Kindle tries to let consumers peruse through books before buying by agreeing to them downloading and reading the opening chapter of the book without paying. Because the newspaper industry’s operation is dual, alternatives can deal with advertisers and consumers’ needs to acquire prospective clients (Krumsvik Arne, 2012). It then means only uniqueness can gain the Wall Street Journal with a considerable number of consumers and profits in return.
Amazon Kindle can attain a stable and dominant position in the market of e-books but only with the proper strategy. It can concentrate on advertisements to increase the market base, which is beneficial in the short run. The company can also work together with newspapers to enhance the content supply instead of only e-books. Kindle can also accentuate profits from hardware because the viewpoint intended for the e-books’ transactions is discouraging (Ascoli et al., 2008). The e-books’ price is by now at a competitive level, and therefore for Amazon to win, they can reduce the Kindle price to appeal to more consumers. This reduction in price will lead to the company to remain powerfully placed in the direction of continuous control in the evolving markets of e-books. Newspapers need to adapt and change their devotion towards the internet due to the gradually more online-dependent world. They ought not to hold on to a diminishing approach. Their focus must be on bettering its print publications.
The publishing industry’s future is stilly substantially undefined. The publishing of prints is still with us a decade later after the introduction of digitization in the publishing industry, which means there is a lower probability of it collapsing. The giant book franchises will still be in existence because they are needed for research, and specific genres still are hugely dependent on sales of hardcover books. The pressures of prices are expected to ease in the future, but even prices of the online newspapers and magazines will still fall. The future of digitization of the publishing industry is not yet here with us. There is more than this industry needs to do to be able to make it in this world which is more internet-based.
References
Ascoli, A., Cullina, D., Kunesh, L., Peng, C., & Xu, S. (2008). “Amazon Kindle.” McAfee. Retrieved from www.mcafee.cc/Classes/BEM106/Papers/2008/Kindle.pdf [Accessed 22 April 2020].
Association of American Publishers. (2019). “AAP StatShot: Publisher Net Revenue from Book Sales Declines 20 percent Through Third Quarter of 2015.” Newsroom Publishers. Retrieved from http://newsroom.publishers.org/aap-statshot-publisher-net-revenue-from-book-sales-declines-20-through-third-quarter-of-2015 [Accessed 22 April 2020].
Guion David. (2018). “How Amazon has Disrupted the Book Industry.” All Purpose Guru. Retrieved from www.allpurposeguru.com/2018/01/amazon-disrupted-book-industry/ [Accessed 22 April 2020].
Grabowicz Paul. (2014). “Tutorial: The Transition to Digital Journalism.” Berkeley Graduate School of Journalism. Retrieved from www.multimedia.journalism.berkeley.edu/tutorials/digital-transform/ [Accessed 22 April 2020].
Krumsvik Arne. (2012). “Why Old Media Will Be Funding Journalism In The Future,” Research Gate. Retrieved from https://www.researchgate.net/publication/263335302_WHY_OLD_MEDIA_WILL_BE_FUNDING_JOURNALISM_IN_THE_FUTURE [Accessed 22 April 2020].
Swenson Laurie. (2012). “The Impact of the Kindle and iPad on the Book Publishing Business.” Small Business. Retrieved from http://smallbusiness.chron.com/impact-kindle-ipad-book-publishing-business-47705.html [Accessed 22 April 2020].