May 21, 2011
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Amazon online shoppers are buying more eBooks than traditional paper books. This new trend also covers hardcover and
paperback as well, according to Amazon. And the online store giant saw that one coming for a while.
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In July of last year, Kindle book sales actually surpassed hardcover sales. Amazon didn't make too much noise about
it at that time, but by December 2010, Kindle books overtook paperback books, becoming the most popular format on Amazon.com.
Amazon did back up its assertion with a few numbers though not all were necessary to do a complete analyzis of this new
direction. For example, since April 1st of this year, it has sold 105 Kindle books for every 100 print books sold, including
hardcover and paperback books that offer no Kindle version.
And the trend is increasing. A more telling comparison would be sales revenues by category, which Amazon did not
provide, although it did specify that its units-sold figures do not include free e-books.
Amazon didn't respond to a request for comment before we published this story. Traditionally, eBooks are priced lower--
in some cases, a lot lower than their printed cousins, noted Azita Arvani of the Arvani Group.
"Just like any other product category on Amazon's website, the lower prices gets higher volumes of sales. This is very
typical, especially in eCommerce. The business question now is how the high volume of eBooks with lower prices compares
with higher-priced printed books with lower volumes," added Arvani.
Without going into much detail, Amazon referred to some revenue numbers in its announcement, but it grouped all books
sold on its site together, regardless of the format so a bit of analyzis here needs to be done.
So almost five full months into this year, the growth of Kindle book sales combined with the continued growth in
Amazon's print book sales has resulted in the fastest year-over-year growth rate for the company's U.S. books business,
in both units and dollars, in more than ten years, Amazon said.
"If I had to guess, I would say because eBook costs are lower, Amazon's top-line revenues are likely higher," said
Rob Enderle of Enderle Group, an advisory firm in book sales in the U.S. "I would guess that its revenues of eBooks
haven't crossed over yet to the point where they exceed the revenues of print books but profits probably have."
And more clues can be found in the larger publishing industry as well, said Andrea Belz, president of Belz
Commercialization Consulting Group. "The Amazon announcement is consistent with first-quarter results from trade
associations showing that all publishers have seen a tremendous increase in sales volumes," she added.
"The publishing industry in the U.S. is finally following in the footsteps of the music industry and the broader
world of copyrighted works, where publishers serve as marketing entities rather than distributors. The inventory and
distribution costs associated with digital distribution are almost negligible and thus prices are likely to stay rather
flat," added Belz.
But overall, the larger impression that Amazon offers with this recent announcement is a world in which the eBook is
gaining slowly but surely over print books.
Scott Spiewak, CEO of Fresh Impact Group says "I have a few book titles, one in particular, that we are handling called
Surprised by Love, which is tracking stronger sales on the Kindle versus the paperback version."
"And that trend seems to be tracking true for other titles we are promoting as well. With the rise of tablets and
eBooks, the market is getting a nice shot in the arm, which doesn't hurt," added Spiewak.
And the technology has become much more reader-friendly as well says Ray Kurzweil, CEO of K-NFB Reading Technology.
"There are high-contrast, high resolution screens with wide viewing angles, ubiquitous high-bandwidth communication,
platforms that are the size and weight of a book, and the availability of high-quality digital content," he added.
"Readers are now rapidly discovering the benefits of being able to change and optimize their reading view, to search
through material, and to instantly share insights and passages with friends -- not to mention carrying hundreds of books
in a device weighing only ounces. I know quite a few students who have been carrying around 50 pound knapsacks of print
books that are very eager for that one benefit alone," said Kurzweil.
"With the wide-spread use of so many mobile devices everywhere and the associated screens that surround us, people are
feeling more and more comfortable reading on digital displays, even for longer forms like books. That, combined with all
the advantages of not having to carry a heavy load, paying relatively lower prices and instant access, has made eBooks
very popular, and will most likely continue to be even more popular and affordable," said Kurzweil.
Source: Amazon Inc.
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