Wednesday, June 9, 2010

Most media misrepresents Steve Jobs's statement on iBook Numbers

'Why Apple’s iBooks Numbers Are Meaningless.'

I saw this accurate headline from the New York Times article by Brad Stone before I saw the e-book market share numbers allegedly claimed by Apple's Steve Jobs and his merry band of high-pricing Big5 publishers :-)

He said, They said
  Then I noticed that what he said was different from the claims of a myriad of newspaper headlines that misrepresented his words (which I think was to be expected and likely yet another smart marketing ploy for Apple).
  Note that the slide label that Apple chose is what would be and was picked up by most.

Typical headline
An AppleInsider headline mimics the slide label: "Apple grabs 22% share of eBook market..." and states: "In the first 65 days, Jobs said users [of 2 million iPads sold] have downloaded more than 5 million books -- amounting to 2.5 eBooks for every iPad sold and giving Apple a near-instant 22% slice of the eBook market

But even the publishing industry's Publishers Marketplace, which keeps its articles behind a paywall, shows this much in the partial summary link:
' Jobs: Agency Publishers Say iBookstore Has 22 Percent Market Share ... Apple consistently talks about unit downloads (which include free books) rather than sales, and Jobs clearly spoke to e-book market share estimates from the ... '
The rest of that sentence would mention the domestic Big5.

Gravitational Pull, however, paid attention, in their headline, to "What Steve Jobs actually said about iBooks market share"
"Here’s what Jobs’ said yesterday in San Francisco:

"I’ve got a few stats today for you. In the first 65 days, users have downloaded over 5 million books and that is about two and half books per iPad which is terrific. The other interesting thing is the five of the six biggest publishers in the US who have their books on the iBookstore tell us that the share of ebooks now that are going through the iBookstore now is about 22 percent. So iBooks market share now of ebooks from five of these six major publishers is up to 22 percent in just about 8 weeks..."

So, Jobs did properly limit his description of iBooks “market share” as being just about US sales of ebooks by the five big publishers participating in Apple’s offering. With one biggie opting out so far (Random House) and no global sales included, the 22% figure obviously wildly overstates Apple’s real market share in ebooks.

So why were some people confused?  I’d say it’s all Apple’s fault.  First for not streaming Jobs’ keynote live to everybody and, second, for including the slide pictured at the top of this post which simply says 'Share of total eBook sales.'  That’s not accurate."

Right, and even Gravitational Pull didn't mention the effect from the Penguin Books negotations with Amazon over the last almost two months, withholding certain e-books from Amazon sales during that time.

Paul Biba of commented on this, and a few readers responded to the iBook numbers topic.  I added my own thoughts there and will include some of that here.
Re the average 2.5 ebooks per iPad downloaded in the first 65 days (preceded by half a year of frenzied media attention) and the notion of ‘considerable spending” on those books — it's worthwhile to remember that the iBook store has 60,000 books, 30,000 of which are *free*.

Now, when familes get a new iPad and are eager to try downloading a book, which type of book will likely be the first download?  Even the second download in some cases.

That’s without mentioning that from what some have seen of Kindle-book buying (hundreds for many on the forums), the 2.5 books average per iPad, downloaded in 65 days, is not high.  But, the dedicated e-book devices will attract a different set of book buyers — one with a more intense focus on just reading.

  On the 22% share of the e-book market idea, for the Big5 at least, not only did the largest of the Big 6, Random House, opt out of the Apple Agency plan and bookstore, but Penguin Group (the next largest, I think) did not make its newer and bestseller e-books available to Amazon for the last 1.5 months or so.  Skewed numbers there also.  Job's statement itself was actually precise but the presentation with the slideshow label smart enough that media headlines are screaming "22% of the e-book market," with ‘the general e-book market’ implied.

 As has already been said by Paul Biba, Brad Stone, and others, these numbers don't include sales outside the U.S. nor the fact that most small publishers don't sell books through Apple.  Stone notes that Amazon "has always been particularly strong at selling lesser known books in the so-called 'long tail'of publisher’s catalogs, many of which Apple does not yet carry."
 Apple has a product with a "wow" factor and has done well enough without inaccurate hype of a type that Alan Weiner, an analyst at Gartner, called “some sort of voodoo algorithm.”

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  1. Another piece of data that needs to be included is what the effect of the price raise did to the absolute number of units sold via Amazon. It could well be that this number is high because Kindle sales declined over that period. Without some absolute numbers, there is no reason for anyone to be gleeful about these statistics.

  2. Or to look at it another way, this just points out how few high-priced NY ebooks are selling

    Scott Nicholson

  3. Dave,
    True. First we have Random House not even being part of the 'total' in a 22% portion of whatever total... and Penguin (2nd largest) not being countable because they refused to allow Amazon to sell their new and bestseller items for about 2 months -- making the slide label statement inaccurate...

    Second, if Amazon has 3 million Kindles as has been estimated but it is a niche product for a group interested only in reading, and Apple has 2 million already for a group wanting it primarily for color-filled web browsing, web mail, and higher definition large videos and games, then the figure of 22% for just the Big5 reporting to Steve Jobs is strangely low.

  4. Scott,
    Very true, it seems. Now that Apple has made all the prices the same (high, except for Top10 NYT bestsellers), with the Big5 agreements in place at each bookstore (with varying dates the agreement pricing must be in effect depending on when the old agreement expired), then there's nowhere to go to find a more acceptable price.

    See my response to Dave too.


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