Publishing in 2013: The Rise of the 7 Sisters of Digital Media Retailing

There seemed to be a sigh of relieve the last few months of 2012 as the trade publishing establishment trumpeted the slowing growth of eBook sales. It may indeed be slowing but the pain of adjusting to new economies of scale, changing consumer habits, technology adoption and lack of business model options are even bigger threats to the independence of large traditional publishers.

The digital revolution has had an undeniable impact on how businesses operate. Costly technology and complex analog media production (music, publishing, film) are no longer the purview of large organizations. With lower technology costs and easy access to Internet-hosted markets, self-publishers can compete effectively with large companies. Computers have given way to Smartphones and cloud-based tools allow anyone to produce and distribute media. No more silos.

Amazon, Apple, Barnes & Noble, Google, Kobo, Samsung and Sony: the 7 Sisters

The 7 Sisters—Amazon, Apple, Barnes & Noble, Google, Kobo, Samsung and Sony—will deepen their control through their own eco-systems at the expense and frustration of publishers. How is this possible?

Each of the 7 Sisters produce hardware that is tightly coupled with digital media marketplaces—an eco-system.

Why is this powerful? For three reasons:

1. The threat of piracy has scared media companies to demand that those selling their content control its distribution. While it’s possible to do this with software-only programs it is more easily implemented using one’s own hardware.
2. Consumers prefer simplicity! This is what made the Apple iPod/iTunes combination so popular and gave the Amazon Kindle such a commanding lead. Average consumers don’t want to deal with the complexity of collecting, storing, tracking and transferring files to and between devices.
3. The third advantage has less to do with publishing and everything to do with business models. The 7 Sisters have multiple revenue streams they can tap to help sustain their advance into digital media retailing. They are not reliant solely on the sale or rental of media products.

Questions to Ask

As we head into the New Year it will be interesting to see how each company evolves their position and how publishers will respond. Here are my questions for each of the 7 Sisters.

1. Can Amazon continue to subsidize hardware with razor-think retail margins? Will Prime membership result in more digital media consumption?
2. Can Apple’s commanding market share of hardware sales continue in the face of so many competitors? Can they build demand for differentiated media products that work only with their hardware?
3. Even with the backing of Microsoft and Pearson, can Barnes & Noble/Nook survive as a major content retailer?
4. Can Google become a major media retailer even as Amazon and Apple invade its advertising franchise? Can Google balance its own hardware efforts at Motorola with support for its Android partners?
5. Will the sum of its international market presence be enough for Kobo to compete effectively with Amazon and Apple? Just how committed is parent company Rakuten?
6. Samsung may be struggling to get traction for Media Hub but they somehow overtook Nokia and now Apple in mobile phone sales. Expertise in hardware helped Apple build a media franchise, can Samsung follow the same playbook?
7. That leaves Sony. Unlike the other six they seem to be running every unit independently without a strong vision or strategy, at least when it comes to selling content and the hardware to consume it. They are also a true international player. Will Sony finally coordinate its efforts in 2013?

Do you have other questions? Am I leaving out any “sisters”?

Image: The Pleiades (1885) by Elihu Vedder