Amazon: We have 70-80 percent of e-book market

[kjk]

http://reviews.cnet.com/8301-18438_7-20012381-82.html

Fascinating numbers:

80 percent of Kindle books we sell are sold to Kindle owners. They may have a Kindle app on a phone or an iPad or Mac or PC, but they at least have a Kindle.

Honestly, something doesn't add up because we're pretty sure we're 70 to 80 percent of the market.

But we would expect our device business independent of accessories to be profitable. But normal-Amazon-profitable, which means we try to make it as inexpensive as possible yet make a fair profit.

[GA Russell]

Interesting to read, but the company isn't giving any numbers to back up their claims. Why should they be believed?

[carld]

The 70%-80% share sounds about right. Why not believe them?

[Kali Yuga]

I don't think anyone is publishing any numbers; ergo "trust no one."

My best guess is that they're looking at overall industry estimates and using that as a basis for their figures. I wouldn't be too surprised if Amazon was still holding close to 70%.

[SensualPoet]

Originally Posted by GA Russell

Interesting to read, but the company isn't giving any numbers to back up their claims. Why should they be believed?

Really ...

I've been an Amazon customer (CDs, DVDs, books, .ca, .com and .co.uk) and frankly Jeff Bezos is right when he claims that Amazon is striving to be the most customer-centric company on the planet. There is certainly no other retailer, online or offline, government agency or other consumer service provider I deal with which is better at listening, and delivering, exactly what they are selling. And, standing behind it.

That alone is my personal reason for "why they should be believed".

Amazon figured out from day one that they had to do two things: make it easy to buy from them, and make it easy to fulfill each order -- both from the customer's point of view. There is no other online retailer experience better than Amazon. Search, recommend, review orders, track parcels, create a wishlist, share comments, purchase, get confirmation or make a return ... sorry, but Amazon defines best-in-class and leaves most retailers -- online and offline -- to eat their dust.

Amazon gets it: they are only as good as the last transaction. Customer loyalty is razor-thin and building brand equity is about repeat action, not fancy commercials.

I recommend anyone interested in the current e-book battle read the CNET article linked in the first post. Ian Freed, VP Digital at Amazon, directly answers every question and adds extra details to CNET's David Carnoy's queries -- Carnoy having in the past written less than flattering opinion pieces about Amazon (ie: "What Amazon didn't say about ebooks").

Freed noted: "Some numbers we haven't released before...80 percent of Kindle books we sell are sold to Kindle owners." As he explains, that means 20% of Kindle books are sold to people who do not own a Kindle. That's incredible, isn't it? People are actually paying good money to buy Kindle formatted books to read strictly on Apple devices, Blackberry, Android and Windows PCs. 20% are buying without any Kindle hardware. Wow.

Freed noted: "And since some of the publishers have decided to price their e-book above $9.99, we've definitely seen a shift of customers going to e-books that are $9.99 or less." Not surprisingly, consumers vote with their pocketbooks. You can only read one book at a time; if the price goes too high, consumers will read something else till the price comes down. Common sense, and Amazon is confirming it.

Freed noted: "we're pretty sure we're 70 to 80 percent of the market. ... Obviously, from the beginning of Amazon we've been very metrics-focused and we don't typically throw out numbers we don't firmly believe in". The folks who actually DO know the facts -- the major publishers and any anonymous collective data they share through the American Association of Publishers -- will act accordingly as time passes. It's a bit of common sense stretch to believe Apple iBookstore has captured 20% of the e-book market, B&N has done the same with Nook, and, allowing 10% for all the other players ... Amazon is struggling to reach 50%? Well, ok, so we don't actually know. But if Amazon states in public they believe they are in the 70-80% range ... and the one metric we do have is that James Patterson's e-books were 75% sold as Amazon Kindle e-books ... well, Amazon's view seems more credible than others.

When Carnoy claims Amazon doesn't want to be in the hardware business, Freed noted: "I wouldn't actually say that. We really set up the businesses independently. We fully expect our device business to stand on its own. And we think of our device business as device and accessories. But we would expect our device business independent of accessories to be profitable. But normal-Amazon-profitable, which means we try to make it as inexpensive as possible yet make a fair profit." As noted in other threads, it's a dangerous assumption to make that Amazon is selling Kindles "below cost". Their new $139 wifi Kindle, IMO, probably costs $70-$90. If B&N can sell a dual-screen Android/e-ink wifi Nook at $149, what makes anyone think a single screen Kindle at $139 is "subsidized"?

Freed noted, delivering the customer service coup de grâce: "our customer service costs today compared to when we first introduced Kindle are way lower. So when we look at the device business, we look at it all in, with customer support and everything else, and ask whether it's a healthy business. The big thing about consumer electronics is that the more units you sell, the lower the overall cost. The more we sell, the more we can lower the costs across the board, which is what you're seeing with the new Kindles." Which, reading between the lines, explains why Sony has been so reluctant to cuts prices -- it isn't doing enough volume to lower costs.

And this is why Amazon is leading in e-books and e-readers today. They may not always lead ... but competitors need to stay sharp, nimble and well-financed to stay in the game going forward.

[J. Strnad]

When I went looking for a case for my Kobo, I started at Borders and Kobobooks and ended up at...Amazon. When I went looking for a book by John D. MacDonald, I found none anywhere...except one at Amazon.

I hate the proprietary format and honestly don't see a need for it. If Amazon sold ePub as well, they would basically own the ebook market. So, B&N or Sony or Kobo would make an initial sale of their reader, but most people would end up back at Amazon for the ebooks. They just do it better.

[Ken Maltby]

Originally Posted by J. Strnad

When I went looking for a case for my Kobo, I started at Borders and Kobobooks and ended up at...Amazon. When I went looking for a book by John D. MacDonald, I found none anywhere...except one at Amazon.

I hate the proprietary format and honestly don't see a need for it. If Amazon sold ePub as well, they would basically own the ebook market. So, B&N or Sony or Kobo would make an initial sale of their reader, but most people would end up back at Amazon for the ebooks. They just do it better.

It leaves one to wonder if they (Amazon) feel that they should emulate the
Apple I-tunes model? I totally agree that they could offer more than other
distributors, due to the advantage of their volume of sales, no matter what
format was used, common or not. Amazon must be aware that "Kindle books"
are being read using other readers, all the time. Forcing their customers to
go through an extra effort to make their product usable cannot be good for
long term customer relations.

Luck;
Ken

[banjobama]

80 percent of Kindle books we sell are sold to Kindle owners. They may have a Kindle app on a phone or an iPad or Mac or PC, but they at least have a Kindle.

I didn't know it was even possible to buy Kindle books without a Kindle device or application of some kind.

[EricLandes]

Originally Posted by banjobama

I didn't know it was even possible to buy Kindle books without a Kindle device or application of some kind.

I think they're saying that 20% of the books are bought by people who don't have Amazon hardware. They have an app on one device or other, but not an actual Kindle.

Which, frankly, still blows me away. Assuming B&N has 20% of the total ebook market (which is not a safe assumption) that means Amazon's ebook sales on non-AMZN hardware are nearly B&N's ebook sales in total.

[Ajax]

Originally Posted by Ken Maltby

It leaves one to wonder if they (Amazon) feel that they should emulate the
Apple I-tunes model? I totally agree that they could offer more than other
distributors, due to the advantage of their volume of sales, no matter what
format was used, common or not. Amazon must be aware that "Kindle books"
are being read using other readers, all the time. Forcing their customers to
go through an extra effort to make their product usable cannot be good for
long term customer relations.

Luck;
Ken

It is not necessarily Amazon that is forcing the DRM on the books, it is more likely the publishers requiring DRM. Amazon has a large number of books with no DRM, however most of those are from independent authors/publishers.

[igorsk]

Originally Posted by Ajax

It is not necessarily Amazon that is forcing the DRM on the books, it is more likely the publishers requiring DRM. Amazon has a large number of books with no DRM, however most of those are from independent authors/publishers.

They do force DRM on books from "big" publishers. That's why Baen ebooks are not available at Amazon.

[J. Strnad]

I've bought two books from Amazon, neither one DRMed, both converted by "calibre" to ePub for my Kobo.

[tench]

Originally Posted by Ajax

It is not necessarily Amazon that is forcing the DRM on the books, it is more likely the publishers requiring DRM. Amazon has a large number of books with no DRM, however most of those are from independent authors/publishers.

I think the original point was more about format rather than DRM--why won't they sell epub, either DRM'd or not? That's the mystery to me.

[joblack]

80 % of the e-book market isn't right for the world market.

In Germany the kindle has not that big market (IMHO because of the missing German books) but there are a lot of independent publishers like Addison-Wesley, O'Reilly, ... publishing e-books.

Percentage may depend what you see as 'the' e-book market. By downloads the biggest e-book 'seller' may be Google books with its free bookss

[fjtorres]

Originally Posted by tench

I think the original point was more about format rather than DRM--why won't they sell epub, either DRM'd or not? That's the mystery to me.

Well, DRM'ed ePub would require them to pay Adobe for their software.
(Remember the Adobe snit when they added drm-free PDF but refused to license ADEPT?)

It would also double their back end costs for having to maintain two separate server/vending/DRM-tracking systems. And it doesn't look like that cost doubling would result in a doubling of market share.

Finally, assuming they did sell ePub and it did increase their share any higher: how soon before the antitrust whining/whinging began?