According to the findings of several related market studies, the next big global disruption will occur in the traditional publishing sector. In the same way that the music recording industry lost control of their marketplace, the large legacy print media companies are equally vulnerable.
As an example, according to the latest market study by eMarketer, they predict that sales of ebooks and the devices on which people read them -- i.e. ereaders, tablets and smartphones -- are on a steady upward trajectory. Much of the new digital publication revenue growth could come at the expense of print publications.
The U.S. ereader user base is poised to grow at double-digit percentages this year and next, but by 2014 and 2015 the expansion will likely slow to about 5 percent. eMarketer believes that this reflects market cannibalization from media tablets, not necessarily a loss of interest in consuming ebooks.
People are using these devices -- both ereaders and media tablets -- to read a variety of digital content from a multitude of sources. The Online Publishers Association (OPA) has found that tablets encouraged book purchases.
In March 2012, 35 percent of American tablet owners purchased ebooks on their devices -- that's more than the number who bought movies or TV shows, purchased magazine or newspaper subscriptions, or bought single copies of magazines, according to OPA.
Similarly, Harris Interactive showed that ereader owners tended to buy more books than non-owners. Harris also indicated that ereader owners read more than non-owners.
Apparently, there are difficulties to overcome in the ebook market -- they're primarily associated with content delivery and pricing. Although ebook production generates its own set of costs, consumers still believe that an ebook should be significantly less expensive than print book.
Regardless of whether publishers, distributors, retailers agree with the value perception problem, they're still under intense pressure to meet their customer's expectations.
Moreover, a recent action by the Department of Justice against Apple and five publishers for alleged ebook price fixing will likely result in a period of uncertainty over price levels.
In addition ebook library lending is becoming more popular. Although these programs provide revenue and promotional benefits to media publishers, they also raise the prospects of digital piracy and potential revenue cannibalization.
eMarketer says that while all indicators point toward robust sales and a healthy growth outlook for the ebook business, the publishing industry is in the midst of a standoff over competing business models.
The long-term outcome is uncertain, but it could result in an closed marketplace in which a few companies could have unprecedented control over pricing, marketing, technology decisions and other critical aspects of ebook commerce.