Pottermore.com is great news for Harry Potter fans, who have not been able to read the series in digital form until now; for J. K. Rowling, who stands to make millions from e-book sales; and for other parties–Bloomsbury, Scholastic, Sony–directly associated with the site. But yesterday was a bad day for two big companies that have become accustomed to hearing good news–Amazon (NSDQ: AMZN) and Apple (NSDQ: AAPL). Here’s why.
Pottermore.com: The Losers
— Apple: Pottermore.com is also going to be the exclusive place to buy Harry Potter digital audiobooks–which are currently sold on iTunes. The Financial Times reports that those editions “will be removed and sold solely on the Pottermore site when it opens to the public in October, people familiar with the business said. As a result, Ms. Rowling’s audio sales contract with Apple will in effect be terminated, the sources confirmed.”
— Amazon: As we mentioned yesterday, Pottermore.com is not a good thing for Amazon. Amazon currently does not support EPUB, the format in which the Harry Potter e-books will most likely be released. But if they want Kindle owners to be able to read Harry Potter, they will have to add EPUB support despite the fact that they stand to make no money from the sales of the e-books because Rowling is selling them directly. It’s not a great position for Amazon, which says its goal is to make the Kindle Store “the best bookstore in the world,” in the words of Jeff Bezos at the Amazon shareholders meeting earlier this month. Bezos described this as a “straightforward,” “simple-minded” approach that “seems like what our customers would want.” Well, Kindle owners will definitely want to be able to read the Harry Potter e-books, and Amazon risks losing market share to the Barnes & Noble (NYSE: BKS) Nook, Kobo and other e-readers that support EPUB if for some reason it takes a stand against Pottermore.com.
It almost definitely won’t. It’s been rumored for awhile that Amazon is going to begin supporting EPUB this fall, and luckily for them, Pottermore.com doesn’t start selling e-books until October. That gives Amazon plenty of time to, for instance, launch a new Kindle that just happens to support the format (the Kindle tablet, perhaps?) and to then roll EPUB out to older Kindles as well.
— Bookstores everywhere: Booksellers are, to put it mildly, not happy that they’re being completely cut out of this deal. The Bookseller has reactions from a range of UK booksellers, which tend to go something like this: “It’s another madness of the digital publishing world that doesn’t support the booksellers that have sold the books and supported them. It’s just another step on the path to death by 1,000 cuts” (Tom Hunt, Norfolk Children’s Book Centre). A spokesperson for Waterstone’s said the chain is “disappointed that, having been a key factor in the growth of the Harry Potter phenomenon since the first book was published, the book trade is effectively banned from selling the long-awaited e-book editions of the series.” Meanwhile, in the U.S., Roxanne Coady, the owner of leading independent bookstore R. J. Julia told the AP, “Bricks and mortar stores are taking a lot of bullets and there’s a limit to how many bullets we can take.”
There could still be a silver lining for booksellers here: Renewed interest in Harry Potter may spur sales of the physical books and associated merchandise.
And one surprise winner…
— Sony: Sony (NYSE: SNE) has partnered with Pottermore.com to provide interactive technology for the site. In addition to the revenue Sony gets from the joint venture, this could be a boon for the company’s beleaguered e-readers, which hold minuscule market share and are currently out-of-date, overpriced, and on the whole worse than competitors’ less expensive offerings. The FT reports that Sony is “developing related products, including a themed version of its Sony reader.” Who knows if anyone wants a special Harry Potter e-reader, but this could be an opportunity to reach out in particular to younger kids who might like that sort of thing. (I’m thinking magic wand stylus…) And no major brand currently offers an e-reader aimed specifically at children.
Plus, take our poll: Are you going to buy the Harry Potter e-books?