Wednesday, July 21, 2010

Kindle books outsell hardcovers at Amazon. A Kindle rumor by Bloomberg

Amazon's Kindle books have outsold hardcover books at Amazon during the last quarter, Amazon announced, during a time when most columnists had predicted the iPad would spell the end of the Kindle and Kindle sales, the general press even avidly misrepresenting an Apple sales statistic giving attention only to a wildly incorrect Apple slide-label rather than to what Steve Jobs actually said about Apple's market share of e-book sales.

Insofar as the Kindle itself, Amazon CEO Jeff Bezos noted that "The growth rate of Kindle device unit sales has tripled since we lowered the price from $259 to $189."

The details
  As ECommerceTimes writes:
' For the first half of 2010 it sold three times as many Kindle books as it did in the first half of 2009.  For the full second quarter, it reported sales of 143 Kindle books for every 100 hardcover books sold.  Over the past month, it sold 180 Kindle books for every 100 hardcover books. '

The e-book sales increase vs the hardcover book sales increase
  This has happened at a time when the Association of American Publishers reports year-to-date sales up by 21.7 percent.  It's just that e-book sales are increasing at a much faster rate, up 207.4 percent year-to-date.

Free books were not included in the sales figures
  Jeff Bezos was careful to note that free books were not included in the figures given.

  Amazon, as usual, didn't provide specific sales numbers or make comparisons with sales of its paperback books, but ECommerceTimes reports that Bezos did note that Kindle books have been selling for just 33 months, while Amazon has been selling hardcover books for 15 years.

Kindle books readable without a Kindle
  Amazon's foresight in making Kindle books readable on all types of e-reading devices, detailed below (while Apple's iBooks are readable only on Apple devices), was shrewd, and customers using any of these devices haven't missed that.

iPad-audience feature-focus / Readability in sunlight and without reflections
  Not mentioned much is that in surveys most consumers report buying iPads primarily for the web and video features rather than for the e-reading capabilities which are increasingly noted as not good (or even doable) in sunlight and under some heavier office lighting because of both the LCD screen and the glossy surface which offers reflections as an obstacle for many trying to read the text.

Amazon's target audience of enthusiastic readers
  When Apple announced that downloads of iBooks amounted to about 1.5 books for each customer on the average, during the first two weeks, this was a figure that included free books during initial use and was considered quite low in comparison to what the Kindle's "avid readers" report.  Kindle owners buy the device for one reason only -- to read books or newspapers & blogs and are more apt to purchase e-books.

  The free 24/7 3g cellular wireless and experimental Basic Web browser is useful when away from one's wireless networks but the wireless access is mainly text-oriented.

3 Million iPads add Kindlestore exposure
  Obviously, in addition to all the other devices, the sale of iPads increased the availability of Amazon's Kindle store while giving its readers the ability to also buy from other online stores like Barnes & Noble, Borders, etc.

Jobs in a changing industry
  ECommerceTimes' report mentioned the concern over loss of jobs in the book industry, mentioning graphic artists who design book covers (which the publishing industry depends on for what is called the "subway effect" -- interest in buying a book from noticing others reading it in public places).

Reasons for popularity e-books
 Factors cited are convenience of accessing e-books, font-size adjustments for eye comfort, and lower prices.

Networkworld also wonders why this has happened and cites portability, accessibility, cross-platform availability (Kindle books can be read now on the PC, the Mac, and the Blackberry, Android, iPhone, ipod, iPad devices) and conservation, explaining the latter this way:
' With e-books, you don't kill any trees, and the world is a greener place.  More importantly for many people--your library won't need its own room (or a separate apartment), and a simple search of your e-reader can locate the title you're looking for in a matter of seconds. '

Brand and quality recognition
  James Brehm, a senior consultant in Frost & Sullivan's information and communication technology practice points out:
' "When people think of a generic e-reader, they think of the Kindle.  The fact is, in the eyes of many people, the Kindle is representative of the e-reader and e-book market" ... a fact that no doubt has fueled Amazon's e-book sales. '

Lead author sales on Kindle
The Los Angeles Times's Carolyn Kellogg also reports Amazon's announcement that authors Charlaine Harris, Stephenie Meyer, James Patterson, Nora Roberts and Stieg Larsson have each sold more than 500,000 ebooks for the Kindle.
  Christopher Null, a technology writer for Yahoo! News, Technology, writes that of the 1.14 million e-books sold by James Patterson, 867,000 of them were sold for the Kindle platform.

Cost factor
Wired's Dylan F. Tweney cites The New York Times's figure (by Motoko Rich) for the average cover price of $26 for a new hardcover and mentions Amazon's own figures that 510,000 of Amazon's 630,000 titles cost $10 or less.

 And The Washington Times's Mark A. Kellner brings us an even more interesting figure, considering the current price wars over recently elevated e-book pricing by the Big5 using Apple's new 'Agency' model:

  Kellner mentions that the 510,000 Amazon books costing $10 or less include "75 New York Times Best Sellers."  All online e-bookstores must use the same pricing now for the Big5 publishers, but it seems more may be at the lower price now than they were a couple of months ago.

 The savings for those who used to buy hardcovers, even at high bestseller discounts, would be large enough to make the now $189 purchase easily justifiable.

That free 3G wireless
In the past, Amazon didn't stress the free 3G wireless, but in the most recent press releases they tend to emphasize it.  From Monday's press-release:
' 3G wireless with no monthly fees or annual contracts--all at a $189 price. '
While roaming the forums I saw many notes from potential customers newly aware of the 3G and the web-browsing availability in, officially, about 56 countries now and, in reality, available in about 65 (possibly due to the Facebook and Twitter book-passage sharing feature).

  Reviews don't normally mention the feature, even missing that the Kindle's is useable globally - a unique feature.  Many who know the cost of free 3G know the value of it and are spreading the word while others want to know how much it costs and don't seem to believe it when the answer is that there's no added cost for that access to primarily text-based websites.  This is also spurring sales.

Kindle and iPad co-existence for differing needs
The New York Times's Claire Cain Miller notes that
' Some industry analysts say that many people do not consider the iPad to be a reading device the way the Kindle is, and see a need to own both.

  Amazon’s latest sales figures are “clearly an indication that the iPad is complementary to the Kindle, not a replacement,” said Youssef H. Squali, managing director at Jefferies & Company in charge of Internet and new media research. '

As for the still-active Kindle rumor from Bloomberg
Bloomberg reiterates ONE of the Kindle 3 rumors while writing about the ebook sales story.
' To fend off competition from Apple and Sony Corp., which also makes e-readers, this month released a version of its larger Kindle DX with sharper contrast and cut its price by more than $100.

  It plans to introduce an updated version of its smaller Kindle next month with a sharper screen as well, people familiar with the matter said in May. '

This would make sense since the E-Ink makers have said they have made the new higher-contrast screen in smaller versions also.
  Bear in mind that Amazon has a 30-day full refund policy when returned in good shape and in the original box within 30 days of shipping.

In the meantime, the Amazon Kindle forums and the technically focused Mobileread Forums are alive with rave reviews from Kindle 1 and Kindle 2 owners buying the new Graphite DX despite the higher pricing.
  And those will be helping to increase Kindle book sales too, from what I read of people reading into the night or early morning in some cases.

Check often:  Temporarily-free late-listed non-classics or recently published ones
  Guide to finding Free Kindle books and Sources.  Top 100 free bestsellers. Below are ways to Share this post if you'd like others to see it.
-- The Send to Kindle button works well only on Firefox currently.

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  1. Thanks for this great post and thorough research. I'm an early adopter who has just upgraded his Kindle 1 to a DX Graphite. I love the DX as I am now able to turn any paperback into a hardcover! I love Amazon's uber-customer service but am discouraged by publishers dictating e-book prices to a company wanting to stimulate the e-book market (thanks, Apple!)

    I'm curious to know what you think of the fact that an increasing number of books are selling cheaper new by Amazon in their hardcover format than in the Kindle one (1776, An Honorable German, etc.) Shouldn't an electronic format always be the cheaper format?

    Thank you.

  2. Danny,
    Thanks for the nice feedback!

    Amazon isn't bound by Agency pricing for the hardcovers, only for the e-books. The Agency publishers seem to care only about the paper books when it comes to prices 'devaluing' their books ... not so much when the hardcover prices are lower, which means that they'd sell at those prices (as they did when discounted as bestsellers at 40% everywhere) and that customers still 'want' them.

    Of course many do, but if they didn't just see 'e-books' as a threat to their paper output, they'd make a lot more money.

    In your eyes and mine, it's obvious the e-copy should be less expensive to make and to buy than the hard cover, but the Big5 have not been using logic much when it comes to The Threat.


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