Writer's Report 2.0

This is big news for writers of all genres.

As I said last week, e-book sales may currently make up only 1% of total book sales, but the fact is e-book sales are growing while overall hard copy book sales are stagnant. This is only the beginning – signaling the tipping point…and Barnes & Noble is keenly aware of it.

Barnes & Noble, recognizing the growth in demand for e-books, has acquired Fictionwise, an online retailer of electronic books. B&N paid $15.7 million in cash for Fictionwise.

Steve and Scott Pendergrast, who founded Fictionwise nine years ago, will continue to operate its two retail sites, Fictionwise.com and eReader.com (which they acquired in January, 2008), as independent brands.

Although B&N has not sold e-books on their site in recent years, William J. Lynch, president of bn.com said, “The market hasn’t been that developed to date. We think it’s a big growth area going forward.”

E-book sales have more than tripled last year at a time when overall book sales were flat or falling. According to a survey by Codex Group, a book marketing research company, 3 percent of book sales from mid-December to mid-January were in digital form.

This acquisition sets up BN.com to compete directly with Amazon.com’s e-book sales and their Kindle 2 reader.

Titles bought on Fictionwise.com or eReader.com can be read on the Apple iPhone as well as on personal computers. Fictionwise currently has a catalog of about 60,000 titles.

Scott Pendergrast, CEO of Fictionwise, said the company believes Barnes & Noble will provide “more resources, more contacts with publishers more content and give us the power to compete in this market as it explodes across the U.S. and the world.”

Publishers are happy Barnes & Noble is a player in the e-book marketplace. They feel it dilutes Amazon’s ability to monopolize the e-book market.

Fictionwise recently signed a partnership deal with Plastic Logic, a company based in Mountain View, Calif., that plans to start selling an electronic reader (dubbed the “Kindle killer”) next year. However, Mr. Lynch said Barnes & Noble was, “not prepared to talk about” any plans to offer its own e-reader.