That points to rougher sailing ahead for Amazon, which is counting on content sales to recoup the losses it takes selling the tablet. It's likely to be worse for major publishers, unless the industry collectively wakes up to new digital realities.
An old industry in peril
Publishing and the music industry have obvious parallels but critical differences. The music industry has seen its record sales -- including all digital formats -- fall by more than $1 billion since 2006. Publishing, on the other hand, is still reaping rewards from the e-book explosion. E-book revenues grew 1,200% from 2008 to 2010.
Biting the hand that feeds
E-book sales almost certainly took off last year, largely thanks to broader adoption of the Kindle, but also with an assist from Apple's
In the e-book case, however, Apple's insistence on high margins may undermine faster adoption, as the Fool's Evan Niu reports. Rather than pushing for low prices, as it did with iTunes, Apple encouraged publishers to set their own rates, undercutting Amazon's effort to keep big titles priced below $10. That's led to antitrust investigations that threaten to undermine Barnes & Noble
Same as the old boss
The Publishers Association, a printed-page analogue of the RIAA, hasn't helped its cause, either. The organization issued more than double the cease-and-desists for piracy in 2011 as it did a year prior. It seems like publishing's completely failed to grasp the iTunes lesson: Consumers are plenty willing to pay for content they want, but they want a fair price.
Amazon's positioning itself well in this battle, having founded several publishing imprints of its own. The company also makes it relatively easy for unheralded authors to get their writing into digital format, cutting out the middleman entirely. Music publishers aren't dead yet, but they're hardly thriving. Book publishers need to learn from the past before they repeat it.
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Fool contributor Alex Planes holds no financial position in any company mentioned here. Add him on Google+ or follow him on Twitter for more news and insights. The Motley Fool owns shares of Amazon.com and Apple. Motley Fool newsletter services have recommended buying shares of Apple and Amazon.com and creating a bull call spread position in Apple. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.