By Dan Ness, Principal Analyst, MetaFacts
The newest e-Book Readers from Amazon and Barnes & Noble have received many rave reviews, with some focused on the power button placement, others on the logo’s gleam. While these articles are interesting and timely, do they help an understanding of whether or not people will want to buy them; which ones they will buy; and then having them, whether they will they fully use them? Will they help anyone know if readers will instead choose a generic Tablet PC, Apple iPad, their Smartphone or Notebook, or some personal combination of devices?
To offer the customer’s own views to the dialog, I’m analyzing the survey results in the latest wave of the MetaFacts Technology User Profile (TUP). I’m reviewing current e-Book Reader customers, non-users, and those who read eBooks and ePeriodicals on other platforms for their behavior, attitudes, buying patterns, and other defining characteristics. My full analysis will be released later this month in the MefaFacts e-Book Readers Profile Report. This TUPdate gives a preview of the findings during this week of announcements.
MetaFacts predicts that one in six American adults will have an e-Book Reader by the middle of 2015, up from almost one in ten today.
Why does e-Book Reader adoption matter? e-Book Readers are at the center of changing consumer behavior that spans traditional publishing, retail distribution, paid content, media, new devices, and shifting payment models. Depending on consumer acceptance in the coming year, e-Book Readers may go the way of historical tech flashes such as the GridPad or Apple Newton, be relegated to niche status, or spur further changes in the combination of tech products that consumers use and how they use them.
To develop a detailed profile and forecast of e-Book Reader users, I’ve focused on several pivotal questions.
Will consumers adopt the entire package offered by Amazon and Barnes & Noble? Will they see the newest Nook or Kindle e-Book Reader for what it looks like and its customized software, as a well-integrated and subsidized experience, or as a toll booth leading to a proprietary “media service”? Fickle consumers continue to dance between the desire for openness and flexibility vs. smoothness and vertical integration.
What mix of products will readers use to enjoy written content? Many people have already invested in a combination of devices which they enjoy for other activities. They may choose to simply add a reader app than juggle one more device. Right now, 20% of Smartphone users read a book on it and 25% read a magazine, newspaper, or other ePeriodical.
Will readers want their eBooks on one device and their ePeriodicals on another device? Or, will they demand that their content be synched everywhere? In that case, are they willing to pay for the service or the bandwidth, and willing to accept a different reading experience across different platforms? This raises questions about the consumer’s center of attention – the content, the experience, or the device?
When consumers choose between Nook or Kindle, will their shopping preferences and habits have a strong effect? To reach the many Americans who still prefer retail shopping over online, Barnes & Noble has recently expanded its Nook distribution with announced outlets widely spanning techie-havens Radio Shack and Fry’s Electronics, office supply retailer Office Max, electronics giant Best Buy, regionals Fred Meyer and hhgregg, to mass marketers Target, Sears, and Kmart. This will at least reach adults otherwise offline.
Furthermore, there are questions about whether there will be a net readership increase across all platforms. Will more readers leave print for eBooks or ePeriodicals, or will readers find their experience too disjointed, the paywalls too steep, or will inertia continue?
TUP survey respondents have addressed these questions through what they own and perceive, forming the foundation for a nuanced profile and market adoption forecast.
While there are many forecasting models and methodologies, one effective approach for tech products and services begins with the assumption that each potential buyer is an independent agent – making choices based on their individual conditions and perceptions. Arguments abound that buyers either follow a stochastic or a deterministic path; that they act randomly in response to stimulus or that their mindful behavior can be predicted given the correct explanatory factors.
Demographics may seem like a convenient forecast foundation, but in this case don’t provide enough statistical explanation. After multiple correlation and clustering analyses of e-Book Reader adoption using demographics – both personal and household-level socioeconomic profiling – the statistical relationship is low for most factors. It’s tempting to use one of the various geodemographic modeling systems. However, for many new tech products, these factors simply don’t deliver definitive results. Convenient information may actually be counterproductive, or at best useless.
Instead, I’ve started with a simplified agent prediction model. I’ve clustered the adult population into multiple subsegments across five broad segments using discrete combinations of behavioral and attitudinal factors.
- Current e-Book Reader users – The first adopters in line will be current e-Book Reader owners. Many like what they have and want more of the same done better. As Amazon and Barnes & Noble continue to innovate, a large share of current e-Book Readers will want to upgrade to the newest offering. Others will switch between Nook & Kindle or stay with what they have. Yet others will drop away, shifting to another platform, and then donate their e-Book Reader, pile it in their personal tech landfill closet, give it to the kids, or recycle responsibly.
- Stated e-Book Reader purchase intention – Another segment reported they had plans to purchase an e-Book Reader. From experience, I’ve seen many purchase plans turn out differently than consumers anticipate, as they see competitive offerings (such as a software reader on another platform), balk at the offering, or simply change their minds.
- Readers on other platforms – With truly disruptive technology offerings, one of the historically richest adoption segments are current users of substitutes. People who are already reading eBooks or ePeriodicals on PCs, Smartphones, Tablets, or other platforms have already demonstrated that they like electronic content. Of these, those that already read across multiple platforms are likely to consider and adopt e-Book Readers.
- Tablet PC users, Mobile PC planners, Early Adopters, Active shoppers/fun lovers – This broad segment has several subsegments not included in the other segments. Those already using Tablet PCs have relevant experience. This has been a quickly-growing group and one likely to include buyers who will consider an e-Book Reader as a substitute or compliment to their Tablet PC. Similarly, some percentage of those planning to purchase a notebook or netbook may also consider an eReader. Also, this broad segment includes the early adopters of PCs and Mobile Phones who don’t already have an e-Book Reader. Also in this segment are subsegments of people who use their PC online for the widest range of entertainment and shopping activities.
- GUM (Great Unwashed Masses) – Not meant to be a derogatory term, this broad segment includes all other adults, some of whom are not even using a PC online. With somewhat limited, but stabilizing, web and email capability on newer e-Book Readers, some percentage of this group may consider an e-Book Reader as their portal to the Internet, just as they may alternatively consider Tablet PCs with specialized reader-oriented apps or general purpose browsers.
Based on the research results we have today, MetaFacts forecasts 31 million e-Book Readers to be in the hands of U.S. adults by the end of 2012. Of those, 23% will be in the hands of first-time users. This spells a healthy market, yet expanding relatively slowly. With the resulting 13% of American adults using an eBook Reader, the market will be larger than a niche, yet hardly as widespread as Smartphones.
Source & Methodology
The information in this MetaFacts TUPdate is based on the Technology User Profile service. The preliminary forecast included here is based on analysis of MetaFacts surveys and assumptions based on adoption patterns within each subsegment. The analysis is based on what survey respondents have, what they do, where they shop, and how they adopt technology based on patterns tracked in Technology User Profile for the last 29 years.
To see other research coverage of Internet products and activities – from smartphones to feature phones, desktops to notebooks, social networking, demographics, and attitudes – see the many other questions TUP answers on technologyuser.com. Tech market research professionals can license direct access to TUP.
MetaFacts releases ongoing syndicated original research on the market shifts, trends and consumer profiles for eReaders, Smartphones, Mobile PCs, Home PCs, Web Creators, and many other technology products and services. These TUPdates are short analytical articles in a series of specific topics utilizing the Technology User Profile Annual Edition study, which reveals the changing patterns of technology adoption. Interested technology professionals can sign up at technologyuser.com/contact/ for complimentary TUPdates – periodic snapshots of technology markets.
MetaFacts helps technology marketers find and measure their best and future customers. MetaFacts’ Technology User Profile (TUP) survey is the longest-running, large-scale comprehensive study of its kind, conducted continuously since 1983, the year before Apple released the Apple Macintosh. The detailed results are a primary market sizing and segmentation resource for leading companies providing consumer-oriented technology products and services, such as PCs, printers, Smartphones, consumer electronics, mobile computing, and related services and products. TUP analyzes key trends and the data-rich source can be dived into more deeply for custom analysis. For more information about the syndicated research service, analysis tools, publications and datasets, contact MetaFacts at 1-760-635-4300.