The Implications of the GoodReads Acquisition by Amazon

The publishing industry is dynamic and volatile. New sales numbers come out all the time that hint at the fate of print vs. ebooks. It changes every day and it makes it difficult for authors (and publishers/agents) to determine how the market will shape the industry. But every once in a while, the industry is impacted by something other than the market. Every once in a while, a strategic move to gain a competitive advantage can seal the fate for brick and mortar stores, and subsequently print books.

On 3/27/2013, Amazon announced that it is purchasing the enormously popular book recommendation site: GoodReads. As long as you have a minimum of 20 book reviews/ratings in your account, GoodReads will recommend new books to you based on your preferences. In addition, it is a social networking platform for readers and authors. Since GoodReads is a highly referenced site for its book reviews and ratings, this (in conjunction with its recommendation engine) will undoubtedly be leveraged by Amazon to funnel more purchases their way.

This acquisition will practically dictate that consumers become dependent upon the book reviews and recommendations from Amazon. Statistics 101 will tell you that the larger your sample size (the more reviews on a single book), the more accurate the average rating will be. Then consumers will literally be a click away from a purchase on Amazon.

“How does this affect print books?”  you ask. Well, with GoodReads providing their users with the eventual convenience of purchasing the books that are recommended to them from Amazon, more sales will be funneled to Amazon. This means that less sales are funneled to Barnes & Noble. If B&N begins to lose revenue, we may begin to see their lower performing stores closing their doors. Since the traditional publishing industry’s backbone relies on brick and mortar stores to keep their engine running (with B&N being the largest component), the amount of print books purchased by retailers will drop significantly.

What do you guys think about how this will change the industry? Please leave your comments below.

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