Monday, Amazon announced that sales of its Kindle reader have tripled since they discounted the price from $259 to $189. And while there’s no way to extrapolate units sold because Amazon won’t reveal their base sales figures for the Kindle, it sounds impressive.
But the most impressive part of the announcement is that during the past three months, e-book sales outpaced hardcover book sales by a ratio of 143:100. In the past month, that ratio increased to 180:100. As Amazon put it:
Over the past three months, for every 100 hardcover books Amazon.com has sold, it has sold 143 Kindle books. Over the past month, for every 100 hardcover books Amazon.com has sold, it has sold 180 Kindle books. This is across Amazon.com’s entire U.S. book business and includes sales of hardcover books where there is no Kindle edition. Free Kindle books are excluded and if included would make the number even higher.
Why not include paperback sales? Because those have been trending downward for quite awhile, so comparing e-book sales to them would have been quickly called out as misleading. Meanwhile, because of Amazon’s aggressive discounting of hardcover books, their sales have been stable or trending upward, allowing for a more meaningful comparison.
Whether the combination of trends has resulted in more books being sold by Amazon isn’t clear. But the trend toward e-books continues unabated.
Demand for e-readers is high. Amazon feels an inflection point has been reached:
We’ve reached a tipping point with the new price of Kindle — the growth rate of Kindle device unit sales has tripled since we lowered the price from $259 to $189.
And it’s not just the Kindle. Recently, Books-a-Million sold out of Sony Readers after lowering the price to $99. With Barnes & Noble having led the charge by dropping the price of its Nook reader to $199, it seems the mass market for e-readers might have finally arrived. Then we have the amazing sales numbers surrounding the iPad, another e-reader, joining the iPhone as a place where people can read books without paper.
How fast is change happening for publishers, bookstores, and authors? In a recent post, Mike Shatzkin speculates that within five years bricks-and-mortar bookstores will lose significant marketshare, falling from today’s 72% rate to around 25%. While “bookstores” remain open and available, the signs of the marketshare drop are apparent to anyone who has recently been inside one, only to find it cluttered with clothing, knick-knacks, snacks, and sundries:
Shelf space for books is probably dropping faster than the number of stores as book retailers look for other items to keep their customers more satisfied and give those items space previously devoted to books. And shelf space available for publishers who don’t own bookstores is dropping faster than that because Barnes & Noble, the leading provider of bookshelf display space, is aggressively sourcing their own product both to improve their margins and to develop proprietary product not available to their competitors.
As bookstores empty out of books and continue their decline into becoming mixed retail shops, readers will probably only be driven more quickly into e-book shopping — where more titles are available immediately at lower prices.
Personally, I’ve watched in amazement the past couple of months as my own e-books have been selling rapidly through Amazon’s store. In April, I decided to lower the price of my first novel to $0.99 as part of a pricing experiment — other authors I know had claimed that it really drove sales and increased royalties. Given that my third novel is about finished, it seemed like a good time to move some e-books for the first novel, in hopes that would spur interest in the second and third.
Sure enough, starting in June, sales of my e-books took off, with my first book cracking the Top 1,000 on Amazon’s tally of paid e-books a few times and sales only building as the weeks went by. Most interestingly, despite the very low price, I’m making more in royalties from the e-book sales than I did off the print during a similar period, even comparing sales to the 2009 holiday season, when this same book was picked as one of the Top 10 Books for the Holidays by IndieReader.com, a designation that drove both in-store and online sales of the print.
Even though the royalty per-sale for the e-book is 1/3 the royalty for print, the low-price/high-volume aspect of e-books has been a pleasant surprise. I’ll be able to buy more than a few nights’ worth of pizza with this total.
But is it a blip? Will e-book prices rise as the novelty wears off, as print sales no longer pad publisher margins, and as authors demand a larger share? Will demand taper off?
The months or years during which e-books and e-readers penetrate the reading market will shake up book publishing, book selling, and authorship in ways that will fundamentally change our definitions of each of those terms.
Buckle up. We’re just about at the top of the first hill on this roller coaster ride that will collapse familiar distinctions like paperback and hardcover, decimate publisher pricing schemes, and level the terrain from one favoring production and distribution advantages to one favoring marketing advantages.