Amazon Sold More eBooks than Physical Books on Xmas Day

[kjk]

http://www.businessinsider.com/henry...n-xmas-2009-12


Do have to wonder how many of anything physical they normally sell on Christmas Day, but still, nice job! Lots of people with new Kindles trying them out no doubt.

[K-Thom]

Well, since an order usually counts as "sold" when it's delivered (i.e. not cancelled before), it's no wonder that Amazon sold more eBooks than printed ones during Christmas days ... delivery on a holiday is much more easier when you don't have a need for a postman.

[GoblinWriter]

Yeah, people usually get tired of jawing the relatives after a few hours and start looking around for better entertainment. Yay for ebooks and instant gratification.

[Bremen Cole]

Instant gratification is the beauty of digital. Want to see a movie? Instantly stream it (Netflicks... and others). Want to buy a game? Instantly download it (Steam and Direct2Drive). Want to buy or listen to any album you want? Instantly via iTunes, Rhapsody, Amazon and a host of others. Want to buy and read a book? Again, instantly via tons of sites.....Great time to be alive

[lene1949]

I would be interested in knowing, if Amazon sold the same 100 ebooks, would they need to 'have them in store'?

It says in the article that Amazon loses $1 per ebook sold, but it doesn't say how much they gain per ebook sold internationally (add $2).

[pilotbob]

Originally Posted by lene1949

I would be interested in knowing, if Amazon sold the same 100 ebooks, would they need to 'have them in store'?

It says in the article that Amazon loses $1 per ebook sold, but it doesn't say how much they gain per ebook sold internationally (add $2).

The $2 covers the air time to d/l the ebook as many times as you want FOREVER (or as long as you own a Kindle and Amazon still exists.) I don't really think this is a major profit center for them.

BOb

[brecklundin]

The Kindle's economics are still lousy for Amazon: The company loses money on new releases and makes only a modest amount on older titles, thus losing an estimated $1 per Kindle book.

Anyone who actually believes that tripe, I have a bridge I want to sell you...how is it that Amazon is losing money again? Considering all the other online ebook stores out there selling for pretty much the same price when averaged out, some a bit more some a bit less...I am will to bet there are very few titles which vary in price...as in Amazon is paying the same royalty for each book in a publishers catalog, save a few best selling authors as well as, obviously, new releases.

I also promise you that it is those with a vested interest in manipulating ebook prices to preserve the same-old-same-old pricing model only with the kicker of people not being able, currently, to resell an ebook. If they want that model then when we buy a book, we have the right to sell that one "copy" (call it a license if you prefer, but ebooks are not software). If that is the case then FINE people should be able to resell and the publishers can keep the same over the top pricing for something that takes essentially no space, costs next to nothing to deliver and never will go out of print...it will just sit there in a database waiting for someone to buy a copy....for the next 70yrs...

Publishers never bring up that side of the equations, ebooks will not harm publishers, they will actually increase their business because simply due to attrition used book stores will become a thing of the past, save for those which deal in rare and hard to find editions. Thus, book buyers will have to buy at "retail" prices. And for every book a buyer who previously bought only used, now represents a whole new sale for the publisher and retailer.

In fact publishers would begin moving to ebooks exclusively to press their advantage now.

And to this end, not a chance Amazon is losing money on a ebook sale...just like other industries which cry poverty, any corporation worth its salt can cook the books to make it appear they have less profit when the need arises. Amazon just is standing up the the MAP (minimum advertised pricing) agreements crap so many mfg's are trying to jam down our throats these days by forcing retailers to stop advertising lower prices to increase sales volume (an aside: yes this is a real thing. Its roots are an attempt to work around consumer protection laws about price fixing. In fact the state of Maryland recently passed a law about such MAP agreements which affects any online seller who offers product to residents of the state...other states are going to follow suit in short order as well, the laws are already in the process)...so in return the publishers are likely spreading disinformation to try and anger Amazon stockholders.

There is no such thing as an impartial journalist anymore either, so I never believe squat I read in papers, magazines or whatever...just, as they say, follow the money and look to see who benefits from the such tactics.

[nick101]

I can't speak to whether or not Amazon loses/makes money on each ebook sale, but I can offer the following observations:

1. When Amazon started, it was common to hear that it lost money on sales so it could 'buy market share', 'establish its position against bricks and mortar rivals', 'discount because customers don't trust or understand e-commerce' and various other theories that sound extremely plausible in the conference room at a flip-chart.
2. Amazon makes lots (and lots) of money
3. Amazon is now such a big player in bookselling that it can exercise a major influence on the direction and style of the whole market, which is pretty much the marketing dictionary's definition of 'dominant'

My conclusion is that Amazon knows how to run its business; that makes it different from most publishers, who don't.

[Nathan Campos]

This is great!
If this values, we can know that people are reading more and that the digital way to read a book is taking more place on the market of literature.

[Bremen Cole]

@Brecklundin - Excellent post, and well written. Good points as well.

If Amazon was selling Kindles and ebooks and loosing money, they would be idiots. They are not idiots. Their profit margin may be less than they would like, but in spite of the accounting magic, they are making money. No need to feel sorry for them.

[Blue Tyson]

Originally Posted by pilotbob

The $2 covers the air time to d/l the ebook as many times as you want FOREVER (or as long as you own a Kindle and Amazon still exists.) I don't really think this is a major profit center for them.

BOb

It would be in the scenario that Kindle for PC sales were pretty good and Kindle for PC installations outnumbered Kindles/Phones significantly. How likely that is, good question.

[Kali Yuga]

Originally Posted by brecklundin

Anyone who actually believes that tripe, I have a bridge I want to sell you...how is it that Amazon is losing money again? etc etc

It is unclear whether or not Amazon is profiting or losing money with the Kindle and Kindle books. It is likely they have a thin margin on the devices, possibly very thin given the recent price cuts. What we do know is that Amazon in particular spent years losing money and accruing substantial debts in order to achieve a pre-eminent position in several markets; so it's not unreasonable to assume they are doing so with ebooks.

As to how ebooks might lose money: Publishers charge retailers a wholesale price based on the official cover price. Retailers in turn can charge whatever they want for it -- afaik there is no MAP with books or ebooks, hence the recent price war between Amazon and Walmart; so if Walmart and Sony and B&N want to lose money on every copy of The Lost Symbol they sell, officially there isn't much Doubleday can do about it. (They can't even cut off supplies, since retailers usually get their books from a distributor like Ingram or B&T.) Since the wholesale price on a new bestseller is probably around $12, every time the ebook retailer sells one for $10 they are losing at least $2 per sale, plus whatever their associated costs are (bandwidth, storage, staff, taxes etc, i.e. it's not free).

Also keep in mind that Amazon is not the one proclaiming that they are losing money; Amazon is not providing any real or hard numbers, so it's mostly speculation by analysts and journalists. Regardless of the reality, Amazon is spinning the few facts they reveal in order to cement the idea that "ebooks = Kindle."

Many ebook bestseller are therefore loss leaders; however, the same is true with paper books as well. So the key issue is whether an ebook retailer is collecting significant profits from the smaller sales. Some analysts think they are, some don't. In the absence of hard numbers, only the retailers really know.

As to the publishers, they are primarily defending their profit margins -- which aren't exactly as big as, say the oil industry -- and maintain the perception of value of their product. Most of their profits are made from hardcovers, and ebooks that cost half the (official) price and come out on the same day as the hardcover will clearly cannibalize sales. What is unclear here is how the book buyer will react to this relative windfall. Will they buy more books? Will they spend their money elsewhere, e.g. on movies and music? Will they save it? No one really knows. However, there is a lot of speculation that the retailers will pressure the publishers to reduce the wholesale prices -- which, by the way, almost certainly means lower earnings by the artists, unless it turns out that lower prices produces enough sales to balance out the reductions.

Few individuals or organizations can truly react efficiently and positively to disruptive technology, by the way, especially for the individual who is not in control of the process. The idea that publishers should just roll over and accept a new world without attempting to exert any influence whatsoever over the process -- especially when that transitional process could damage or completely destroy that organization -- is a tad unrealistic.

As to "cooking the books," keep in mind that some of those tricks are actually illegal. IIRC both Microsoft and Dell have gotten caught and finded for manipulating earnings reports. Maybe that's happening, but I need more that raw cynicism or skepticism before treating any such assertions as more than wild conjecture.

[jasonkchapman]

Originally Posted by Bremen Cole

@Brecklundin - Excellent post, and well written. Good points as well.

If Amazon was selling Kindles and ebooks and loosing money, they would be idiots. They are not idiots. Their profit margin may be less than they would like, but in spite of the accounting magic, they are making money. No need to feel sorry for them.

Something to keep in mind: Amazon only makes about 50-60% of its sales on media sales. That includes movies and music along with books. While books may be the most identifiable product Amazon sells, they're not that big a portion of the company's overall income anymore.

http://finance.yahoo.com/news/Amazon....html?x=0&.v=1

[kjk]

http://www.electronista.com/articles...ugh.christmas/

Electronista decides to report the story without mentioning it was just for Christmas Day...can't wait for the "Amazon sells more ebooks than paper books!" meme starts spreading as fewer and fewer people bother to read the original source