Yesterday, I got an email from Sony informing me that they are closing their Reader Store as of March 20th. The Reader Store is Sony’s ebook retail store, and sells ePub books to customers with any ePub device, not just Sony Reader owners. The closure affects the US and Canadian Reader Store.
I’ve been expecting this move since last September, when Sony decided not to sell their newest e-reader, the PRS-T3, in the United States. (gigaom.com) Although Sony stated in September that they would continue to support the Reader Store (The Digital Reader), I was pretty sure the store was doomed. If they weren’t selling devices here, was there really much point to maintaining an ebook retail store? Especially since their share of the US ebook market is miniscule – a mere 1% to 2%, according to an estimate by eBook Architects.
The Reader Store’s closure won’t affect me personally at all. I stopped buying books from them over a year ago, because I found Kobo much easier to deal with. And now that I have my new Kindle Paperwhite, most if not all of my future ebook buying and reading will be in that format rather than ePub.
Sony has arranged to transfer its Reader Store accounts to Kobo sometime in March, so I won’t even lose the books I bought through the Reader Store. I’ve already got copies of the books in Calibre, so merging my Sony account into my Kobo account is mainly a safeguard against future data loss. (Reader Store customers will receive an email in March with instructions on transferring their accounts.)
Looked at from a broader perspective, though, this is not a good thing for the industry. Any time a company pulls out of a market, it strengthens the position of the remaining players, and this is a field that has seen a number of closures already, from small indie e-tailers to Borders.
Amazon is clearly king with 60%-70% of the overall US ebook market. B&N has between 15% and 20% of the market, Apple between 10% and 20%, Kobo 2%-5%, and the small remainder is split between Google Play, Sony, Smashwords, and other sources. (Specific numbers vary depending on the source; these estimates from eBook Architects.) While Sony’s 1% share isn’t going to make much difference to positions overall, it does reduce the number of big-name players.
Sony’s withdrawal may strengthen Kobo’s position slightly, but given Kobo’s small share generally, it still won’t rival B&N and Apple any time soon. (Kobo holds a stronger position in Canada and is also a player in several overseas ebook markets, so its low market share in the U.S. is a little misleading.)
Amazon, B&N, and Apple will benefit most on the name-recognition front. Where before there were four big-name companies selling both ebooks and e-reader devices, now there are only three. (Google has a big name, but not as an ebook retailer, so I’m leaving it out of the calculation for now.)
I don’t think we’ve seen the end of the shakeups in ebook retailing. Barnes & Noble has its own woes to contend with. I would be sad but unsurprised to see the company follow Borders into oblivion, leaving only Amazon and Apple in major contention. That in turn could lead to less discounting and higher prices. It could also strengthen Kobo’s and Google’s positions, since it would leave Nook owners very few alternatives to choose between. And subscription services Scribd and Oyster are poised to start stealing market share even from Amazon, at least among those who read on mobile devices rather than dedicated e-readers.
Sony is only the latest ebook retailer to close its virtual doors.* Stay tuned; the ebook retail marketplace of 2017 may look very different.
* Sony will continue to sell its ereaders in other countries, and plans to keep the Reader Store open abroad as well.
Edited to add: This article from GoodEReader explains how the Reader Store closure will affect customers.