Amazon and Apple rule the roost in publishing Over the last decade or so the once-genteel book publishing industry has been turned on its head by supermarkets and online retailers such as Amazon, which have steadily forced the price of books lower and lower. Traditional booksellers, unable to match them, have been steadily disappearing from the high street as a direct result. Borders was the most high profile casualty, but hundreds of independent booksellers have also gone to the wall. The number of bricks and mortar bookshops in Britain has more than halved to just over 2000 the last seven years, according to research by Experian, and nearly 600 towns do not have any bookshops at all. With many fewer places in which to sell their wares, publishers have steadily lost power to a new generation of technology companies headquartered in America. Meanwhile, these digital tomes have taken a bite out of paperback sales, which have fallen by a quarter in the last year, and fuelled a steady rise in piracy. Digital books are so much easier to copy. At the same time, Amazon has used the innovation to slash its prices even further. It is not unusual to see books on its site for 99p - far cheaper than Mr Lane's ambition to put them on a par with a packet of cigarettes. By linking the device to its Amazon bookstore, it has been able to establish a near-stranglehold on the digital publishing market, with around 70pc of all ebook revenues worldwide. More than half of its book sales are digital. By contrast, ebooks account for just shy of 10pc of book sales in Britain, and 30pc in America. Unsurprisingly, Amazon's competitors all want a part of the action. Waterstones has given up trying to compete and thrown its lot in with the online giant by offering to sell its Kindle. Meanwhile, Microsoft, arguably the corporate antithesis of the book publishing sector, has shelled out $300m for a 17.6pc stake in the Nook, the ereader established by US books retailer Barnes & Noble. Kobo, another ereader, has also gained traction through an alliance with WH Smith. But the biggest threat to Amazon is arguably Apple. The company has tried to establish its iPad device as an alternative to the Kindle, winning publishers" support early on by offering them an opportunity to boost their margins. It set up the so-called agency model of pricing ebooks, whereby publishers get to dictate the price as long as they hand 30pc of the proceeds to Apple and ensure no other retailer gets better terms. The company is now battling numerous lawsuits on both sides of the Atlantic amid claims that it colluded with five publishers to fix the price of ebooks. Random House is not involved but Penguin has vowed to keep on fighting the case on a matter of principle. Meanwhile, the Amazon threat continues to grow. The Seattle-based company has launched its own publishing operation in America, buying up prestige lists like Ian Flemming's James Bond novels, and is expected to follow suit in Britain. Publishers are on the back foot. But hitched together, Penguin and Random House would be in a better position to take on the new generation of power-brokers, and accelerate growth in a digital age. The sometimes sleepy world of publishing has been forced to wake up to the new reality.