Monday, February 28, 2011

Three aspects of tipping points

The tipping point is a bit of a misnomer in technological adoption. While on small scales it happens rapidly, it is better to think along the lines of technological diffusion.

So how does it really happen?

1. The 'new technology' gains 'economy of scale.'
2. The old technology loses 'economy of scale.'
3. Vendors defect to the new technology.

Since this blog is about ebooks, we'll compare ebooks to pbooks.

1. The 'new technology' gains 'economy of scale.'

We've been seeing this for years in ebooks. There are three aspects:
A. ereader prices have dropped and will continue to drop
B. Ebook availability easily exceeds print (pbook) availability.
C. Ebooks everywhere.

The last point bears repeating. I 'consume' ebooks via text to speech when I commute. Having a Kindle fit into the diaper bag allows me to 'sneak reads' during kiddie naps or when they're occupied on the playground. We're the 'odd couple' in our playgroup as we're not reading ebooks on our cell phones. (Wife is glued to her IPad though...). Multiple coworkers read on IPod touches during flights, etc. I think ebooks everywhere has increased ebook consumption further than most predict (by 1/3rd).

I also keep bumping into casual readers who bought an ereader due to ereading on their phone. Not to replace the phone, but for bed time reading.

2. The old technology loses 'economy of scale.'

We've seen this in book store closings (e.g., Borders books) and downsizing of book distribution and print runs. An easier way is to look at sales volume. If sales volume goes up 10X, the cost per unit should drop in half (for physical goods such as pbooks or ereaders) and costs drop even faster for electronic goods (ebooks).

Robin posted a nice summary of book sales. After 3 years of sales decline, pbooks are starting to feel the loss of 'economy of scale.'

3. Vendors defect to the new technology.

Vendors are what preserve old technology. Their resistance to change makes it difficult. That isn't the case with ebooks.

Legacy publishing locks out a large fraction of the good authors for arbitrary reasons. It could be too many writers in their sub-genre or the publisher being risk adverse. I'm just doing a quick summary of what has already posted.

What happens when ebooks are the preferential way for authors to publish? Editors and cover artists often work by the job anyway...

I'm not predicting the end of pbooks. There is a love of print volumes. However, practicality rules over nostalgia. Already for my favorite genres, there is far more worth reading in ebook form.

2011 is just a transition year. 2012 is when the tipping point hits.

Got Popcorn?


  1. In a very real sense, we hit the tipping point in mid-2010. Up to that point we released new titles primarily in paperback, with ebooks being a secondary source of income. Since then we haven't released any new titles in paperback (though we are debating whether to do so with some more popular titles), and have experienced exponential growth with ebooks.

    Reasons are many, but it really comes down to the fact we can make much more profit on ebooks (even selling them for significantly less) than paperbacks, since we don't enjoy widespread bookstore distribution. The real tipping point will come when the large publishers approach that point, and they're already on their way...

  2. Tuppshar Press...

    You are a case where the 'vendor' hit the tipping point early. :) There is always a distribution of when 'vendors' will 'jump ship.'

    I think what we'll see in 2012 will be a vast and fast change as publishers and self-published authors switch from Legacy publishing to ebooks.

    10% of the market is nice... It takes 20%+ to create the stampede.