Is this what an Amazon.com store shelf would look like?

By Jeremy Greenfield, Editorial Director, Digital Book World, @JDGsaid

E-tail giant and major bookseller Amazon may be headed to a neighborhood near you if a rumor published online proves true. Question is: Would it be good or bad for the book publishing industry?

In a blog post titled “Rumor: Amazon Retail Stores Coming & Predatory Pricing Channel Destruction,” Jason Calacanis wrote, “Just heard an interesting piece of gossip from a very credible source: Amazon is going to open retail stores and will start making its own branded merchandise.”

It’s the one thing that Amazon hasn’t tried in order to serve its customers better, points out David Streitfeld in a blog post at the New York Times. Amazon has relentlessly cut down on the time that most people have to wait between ordering something and receiving it. But, “Until we achieve the teleportation of objects, there is only one way to immediately get physical goods. It is called a store,” Streitfeld wrote.

Streitfeld went on to compare a possible Amazon.com bricks-and-mortar play to Apple opening its own stores in the early 2000s. A hi-tech company opening old-fashioned stores? It will never work, analysts crowed. Those same analysts later ate crow as the move has been one of the most successful in the company’s storied history.

According to reporting by FINS.com (a website for which the author was an editor), in 2010, Apple stores accounted for $10 billion of the company’s $65 billion in revenue. Its stores averaged $4,000 of annual sales per square foot, five times that of Best Buy. The Apple flagship store generated about $35,000 per square foot that year, double that of nearby Tiffany’s, the luxury jeweler.

Things are different with Amazon, however. The Apple store stocks and sells a limited kind of item: Apple electronics, software and accessories. The Amazon store would conceivably be Costco plus Whole Foods plus Barnes & Noble, but bigger.

Calacanis envisions many possible scenarios, including a show-room for goods (Consumer Reports meets the Apple Store on crack!”), an Amazon-branded Wal-Mart, a used book and DVD store or a library.

As publishers figure out how to sell and market their books in a world with fewer bookstores, a new nationwide books retailer could be welcome news. However, publishers, many of whom are wary of Amazon’s growing influence in the books business, may not wish Amazon to be the company to deliver that dream.

For Amazon’s part, a significant bricks-and-mortar presence could do much to give it leverage in the company’s most recent conflict with bookselling-rival Barnes & Noble, which said this week that it would not stock physical copies of any book that was exclusively sold electronically through Amazon. For its own part, Barnes & Noble executives are likely not excited about the possibility of Amazon taking the battle between the two companies to the street.

To be sure, it’s unlikely that this rumor will come to pass, reports Streitfeld, as Amazon analysts think that investing in physical storefronts would be a bad way for Amazon to derive good return on investment. Still, the same was said of Apple.

Write to Jeremy Greenfield

Jack McKeown presenting the results of Verso Digital's reader survey at Digital Book World.

Community Note: Throughout February, we’ll be sharing some of the best speakers and sessions from Digital Book World Conference. Keep checking Digital Book World for more.

Want more video and audio from digital publishing’s premier event? We’re currently uploading all of the sessions to our members archive.

If you’re not a member yet, you can join the community for only $99 a year. That gets you streaming access to the full conference, as well as our best-in-class WEBcast archive and deep discounts in our store. Corporate rates are also available for companies interested in sharing the Digital Book World Conference with 5, 10, or 20 members of your staff.

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How do people discover books in the digital age? The answer might surprise you.

According to a recent survey, presented at the Digital Book World conference in New York last week, nearly half of readers discover new books through the recommendations of family and friends, and nearly a third discover them at bookstores.

How will readers discover, buy and read new books as e-reader and tablet ownership increase and traditional books sales channels are challenged? In the video below, Jack McKeown, president and co-owner of Books & Books Westhampton Beach, presents the results of a survey by New York-base advertising agency Verso Digital of readers on discoverability, book-buying, pricing and much more.

By Jeremy Greenfield, Editorial Director, Digital Book World, @JDGsaid

Sesame Workshop is now selling seven titles on the Nook Color, marking the first time that Sesame will sell digitally through Barnes & Noble and signaling the company’s expansion strategy. Barnes & Noble is expected to announce the new initiative tomorrow in a statement.

One of the seven titles, The Monster at the End of This Book, is already the No. 1 selling book in Nook Kids, according to Barnes & Noble. The popular title has been a perennial best-seller for Sesame, both in print and electronically.

The expansion is the third such move since late November 2011 for the non-profit children’s publishing powerhouse since it quietly started selling 26 color children’s picture e-book titles on the Kindle Fire, which neither Amazon nor Sesame has yet announced. Amazon is expected to make an announcement on a number of similar licensing deals, including Sesame, in the Spring.

“We love what Barnes & Noble is doing for us,” Jennifer Perry, vice president of worldwide publishing for Sesame Workshop told Digital Book World in an interview today. “Barnes & Noble is an important part of Sesame Street book distribution and we’ve been looking forward to working with Barnes & Noble in digital for a long time.”

Last week, at the Digital Book World Conference in New York, Sesame announced a partnership with Random House for the big-six publisher to develop and distribute print-book-based e-books and apps that will be designed in-house by subsidiary Smashing Ideas. Random House is a long-time publishing partner of Sesame Street print books.

The Random House partnership along with expansion to the Kindle Fire and Nook color are part of Sesame’s plan to widen its e-book distribution, according to Perry, with the goal of fulfilling the non-profit’s mission of reaching children “everywhere.” Previously, the only tablet computer Sesame e-books and apps were available on was the iPad.

Expanding into the Nook Color and Kindle Fire will help Sesame reach nearly the entire tablet market. The partnership with Random House will help Sesame expand even further into Kobo, Samsung and other tablet devices, according to Perry.

Sesame works with many developers, print publishers and booksellers to create and distribute its electronic media, including New York-based app developer Callaway Digital Arts, Lincolnwood, Ill.-based children’s publisher Publications International and New York- and India- based digital publishing vendor Impelsys, among others.

Seven titles is just the beginning for Sesame on the Nook Color.

“There are lots more to come,” said senior director of children’s digital products at Barnes&Noble.com, Wendy Bronfin, who joined Barnes & Noble in 2009 after six years at Sesame Workshop. “We’re happy to work with them on as many titles as they want to bring to us.”

New to the Nook Color are three titles with audio supplements, which is a feature not offered in the 26 Sesame titles available on the Kindle Fire.

The bulk of Sesame’s business is still in print, said Perry, but that could shift soon as more people own tablets and parents spend more money on digital rather than print children’s books. In each of the past four years, Sesame has sold between 22 and 23 million print books a year.

“We’re at the infancy of adoption of digital picture books for kids,” said Bronfin. “Certain titles are selling like wildfire in digital format. We see certain titles in digital format outperforming the print books.”

Related: For Reading and Learning, Kids Prefer E-books to Print Books | How to Build a Best-Selling Children’s Book App

Write to Jeremy Greenfield

Mike Shatzkin at Digital Book World.

By Rich Fahle, Founder, Astral Road Media, @richfahle

Couldn’t make it to Digital Book World? Came but want to relive the excitement?

This is the first in a series of video interviews from Digital Book World, created by DigitalBookWorld.com and Rich Fahle at Astral Road Media.

In this video compilation of thought leaders at Digital Book World’s Day 2, publishing consultant (and DBW partner) Mike Shatzkin says, “The big six is run by the smartest group, the most innovative group, the most forward thinking group across the board that major publishing has ever had…. Each and every one of these companies is run by a legitimately smart, forward thinking leadership. And, yes, they are in a very, very difficult position.”

Also hear John Donatich, director of the Yale University Press talk about why books still matter and why “the idea of the finished book isn’t going to go away.”

Michael Fabiano, general manager of NBC Publishing gives details on his company’s nascent publishing division, including that it will start with e-books.

And Shane Norman, group director of interactive marketing at HarperCollins talks about making smart investments in experimentation.

A joint production of Digital Book World and Astral Road Media: http://www.astralroad.com/. Founded by Rich Fahle, Astral Road Media is a full-service digital media agency, providing content strategy, design, video production, and other creative forms of social outreach for authors and content creators of all types.

By Jeremy Greenfield, Editorial Director, Digital Book World, @JDGsaid

The Kindle Fire and third-party sellers helped Amazon reach $17.43 billion in fourth quarter 2011 revenue, a 35% increase over fourth quarter 2010 revenue, according to a financial statement from the company.

Net income for the quarter was $177 million, a decrease of 58% from its 2010 fourth quarter.

“We are grateful to the millions of customers who purchased the Kindle Fire and Kindle e-reader devices this holiday season, making Kindle our bestselling product across both the U.S. and Europe,” said Jeff Bezos, founder and CEO of Amazon.com in the statement. “Our millions of third-party sellers had a tremendous holiday season with 65% unit growth and now represent 36% of total units sold.”

For the full year, Amazon had $48.08 billion in sales, at 41% increase over its $34.20 billion in 2010 revenue. Net income decreased 45% to $631 million in 2011 from $1.15 billion in 2010.

Kindle unit sales, including the Kindle fire, increased by 177% over the nine week holiday period in 2011 versus the same period last year. Since it was introduced four months ago, the Kindle Fire has been the most gifted and most wished for product across all Amazon products, according to the company.

Amazon ramped up its headcount significantly in 2011, growing to 56,200 employees versus 33,700 a year ago.

Write to Jeremy Greenfield

Kobo's Michael Tamblyn presenting at Digital Book World. Photo credit: Babette Ross

Community Note: Throughout February, we’ll be sharing some of the best speakers and sessions from Digital Book World Conference. Keep checking Digital Book World for more.

Want more video and audio from digital publishing’s premier event? We’re currently uploading all of the sessions to our members archive.

If you’re not a member yet, you can join the community for only $99 a year. That gets you streaming access to the full conference, as well as our best-in-class WEBcast archive and deep discounts in our store. Corporate rates are also available for companies interested in sharing the Digital Book World Conference with 5, 10, or 20 members of your staff.

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E-reader and e-book seller Kobo was born international.

The Toronto-based company had to expand abroad from the very beginning, as Canada isn’t a very large market, said Kobo vice president of content, sales and merchandising Michael Tamblyn at the Digital Book World conference in New York last week.

How has the company expanded to multiple foreign markets in just a few short years? At any given time, Kobo is acquiring content in nearly 30 countries and the key is local operators who understand local markets.

By Jeremy Greenfield, Editorial Director, Digital Book World, @JDGsaid

As tablet sales surge and put downward pressure on dedicated e-reader ownership growth, publishers are pessimistic that tablets will provide readers with an enticing reading platform.

According to a recent Digital Book World survey, conducted by Forrester Research, 31% of publishers think iPads and other tablets computers are the ideal e-book reading platform, down from 46% a year ago. Only 30% of publishers think reading tablets like the Nook Color and Kindle Fire are an ideal reading platform. This question was not asked in the previous year’s survey.

In late 2011, book publishers representing 74% of U.S. publishing revenues were surveyed on a wide range of topics concerning digital books. The same survey was conducted in 2010.

“The devices [tablet computers] are capable of so many more distracting things,” said James L. McQuivey, Ph.D., vice president and principal analyst at Forrester, who conducted the survey. “If you have an iPad and 15 minutes to kill, are you going to do something more cognitively difficult like reading, or something brain-dead simple like going on Facebook or watching a YouTube video?”

Still, crossover devices like the Kindle Fire – not quite a full-sized tablet like the iPad, but with functionality far beyond that of an e-ink reader – may be a boon to publishers. Kindle Fire owners read e-books on the device more than any other activity. A recent survey of 216 Kindle Fire owners by RBC Financial Group found that 71% list reading e-books as one of the two activities they do the most on the device. “Brose the Web” came in distant second at 39%.

These data about crossover devices contrast greatly with data about the iPad – only 53% of iPad users read books at all on the device, according to a September 2011 survey by Forrester.

Publishers should continue to monitor the space closely. Tablet and e-reader ownership doubled in the U.S. over the holiday period, according to new research from the Pew Internet Project, a Pew Center project dedicated to providing research on how the Internet affects life in America. Nearly one fifth of all Americans now own a tablet computer or an e-reader, according to Pew.

Despite all of the positive energy around device ownership growth and device usage, publishers may have been shocked to find out that e-book purchasing growth may be slowing. According to data presented by the Book Industry Study Group and Bowker at the Digital Book World Conference last week, there was only 17% growth in the number of print-book buyers who also purchased an e-book; this was markedly less than the 25% to 30% growth people had reportedly hoped for.

But if people who buy devices still read books – in some cases, this is much of what they do – and device ownership is growing quickly, posited publishing consultant Don Linn, then why is e-book sales growth sagging?

The question has publishers confused. How should they proceed in a device market that is getting more complex?

“They’re just not sure what to make of it yet and they’re not committed business-wise,” said Forrester’s McQuivey. “That’s an issue for 2012: What do you do as a business when you’re not sure how it’s going to net out between these three categories of devices?”

Write to Jeremy Greenfield

By Rich Fahle, Founder, Astral Road Media, @richfahle

Couldn’t make it to Digital Book World? Came but want to relive the excitement?

This is the first in a series of video interviews from Digital Book World, created by DigitalBookWorld.com and Rich Fahle at Astral Road Media.

In this series of interview excerpts, Hyperion publisher and president Ellen Archer, Forrester Research vice president and analyst James McQuivey, OverDrive president and CEO Steve Potash and The Atavist editor and CEO Evan Ratliff talk about pressing digital book issues.

A joint production of Digital Book World and Astral Road Media: http://www.astralroad.com/. Founded by Rich Fahle, Astral Road Media is a full-service digital media agency, providing content strategy, design, video production, and other creative forms of social outreach for authors and content creators of all types.

By Jeremy Greenfield, Editorial Director, Digital Book World, @JDGsaid

Major book publishers should abandon the use of technology that limits how their copyrighted digital material is used by readers after sale, according to Matteo Berlucchi, CEO of London-based social e-retailer Anobii.

In a speech this afternoon at the Digital Book World Conference in New York, Berlucchi argued that digital rights management technology, or DRM as it is known, prevents more readers from buying e-books and may actually encourage piracy of copyrighted material.

Industry observer Mike Shatzkin, who is also chairman of the Digital Book World Conference called the argument “significant” because Anobii is partially owned by the UK arms of three major publishing companies, HarperCollins, Penguin and Random House.

In our interview before his speech, Berlucchi stressed that the views were his own and that he hoped that all major publishers consider his recommendation.

“I’m not talking on the behalf of the publishers. I’m an independent company,” he said. None of the publishing companies that are Anobii investors have seats on the Anobii board, Berlucchi told DigitalBookWorld.com.

If major publishers abandoned the use of DRM, Berlucchi argued, they would sell more books, specifically to readers who own the popular Kindle e-ink devices. Those users would be able to buy or download a book from another retailer or from the publisher itself, and then side-load that book onto their Kindle and read it, something that DRM makes difficult.

“What is the challenge the industry faces from a retail perspective? That the consumer marketplace is dominated by Kindle,” he said. “Dropping DRM would enable any retailer to sell e-books to Kindle customers.”

Books without DRM technology are easily shareable between users, just like print books. Therefore, books without DRM are more valuable to readers, Berlucchi said.

Would users actually take advantage of being able to buy from any retailer and side-load to their reader? Would they share books?

Readers are already doing this, said Berlucchi, through services like Calibre, which allows users to buy, read and share e-books without DRM protections and has millions of users. Tech-savvy users would be more apt to take advantage of the device interoperability dropping DRM would encourage.

DRM is often employed by publishers to protect copyrighted material from piracy. Determined intellectual property thieves won’t be deterred or stopped by DRM, said Berlucchi. The music industry dropped DRM en masse in 2007, five years after the rise of the iPod, and there was no rise in music piracy, Berlucchi said. Five years after the rise of the Kindle e-reader, Berlucchi predicts that the book industry’s major players will also drop use of DRM.

Speaking to publishers who worry about the growing influence of Amazon in the book industry, Berlucchi argued that DRM helps protect Amazon’s market position.

“Amazon uses DRM to lock people in. You can’t take the files out. The problem [for readers] is that if you go down the Amazon road, you can’t drop out. If you drop out of Kindle, you lose all your books. They [Amazon] are using DRM to build their silos, like apple did in the beginning with the iPod, which is how they [Apple] dominated the music market,” he said.

As for copyright protection, Berlucchi recommends that publishers use “watermarking,” or tagging copyrighted material so that if it is pirated, it can be tracked to the original buyer. Lawsuits and education are the best ways to fight piracy, Berlucchi said.

Anobii was founded in 2006 by Greg Sung and was meant to be the “Facebook for books.” In June 2010, a consortium of investors led by UK-based retailer HMV bought the company. The UK-arms of publishers HarperCollins, Penguin and Random House also have small stakes in Anobii. Berlucchi would not share how many users Anobii has, but said that the company’s website gets 12 million pageviews a month.

Write to Jeremy Greenfield

Elmo Says Achoo! and Elmo’s Breakfast Bingo will be the first titles for sale on January 25. An additional 19 titles will be available this Spring.

Related: For Reading and Learning, Kids Prefer E-books to Print Books | Kindle Fire Owners Buy More Children’s Books

See the announcement from Random House and Sesame Workshop below:

(January 25, 2012, New York, NY)— Random House Children’s Books (www.randomhouse.com/kids) and Sesame Workshop, the producer behind Sesame Street®, announced today the launch of a new digital publishing initiative, which will focus on early learning and reading readiness.  Select titles from the Random House Children’s Books Sesame Street® library will be available as ebooks for the first time, beginning January 25 with Elmo Says Achoo! and Elmo’s Breakfast Bingo. The digital editions will be available in the U.S. and Canada wherever Random House ebooks are sold.

An additional 19 titles will be released this spring, including Get Moving with Grover, Big Bird Says . . . and Baker, Baker, Cookie Maker. Several titles will include audio narration from Sesame Street®’s Bob McGrath, who has performed on Sesame Street® since its premiere in 1969.

Kate Klimo, Vice President and Publisher, Random House/Golden Books Young Readers Group, said, “With this program, Random House and Sesame Workshop are expanding our long-standing partnership of more than four decades and extending our shared commitment to children’s literacy and enriching children’s early learning experiences to a new platform.”

Sesame Workshop’s Jennifer A. Perry, Vice President, Worldwide Publishing, added, “Sesame Street® has always aimed to reach children everywhere, and today that includes the evolving digital arena. With Random House Children’s Books, we are creating new ways to enjoy story time with Elmo, Big Bird, Cookie Monster, and our other beloved characters.”

Random House Children’s Books was the first trade book publisher to launch a leveled reading program that recognizes the different developmental stages of beginning readers; offers a learning-to-read series as original paperbacks; and offers a mix of original and licensed titles—Step into Reading™. The focus of the new Sesame Street® digital program from Random House Children’s Books will be Early Step into Reading™ titles.