Kindle Sales Outstrip Dead Tree Books: Nobody Makes Money
by Joel Naoum - July 20th, 2010
Amazon announced this week that for the first time sales of Kindle ebooks have outstripped the sales of hardcover books. Is this a surprise? Not particularly. Amazon have been flogging their ebooks to death since the release of the Kindle, they’ve done a fantastic job getting publishers on board, and have the biggest range of ebooks of any store on the web. If it was going to happen to someone, it was going to happen to them. However, the news comes with some pretty massive provisos.
Firstly, the question of how much money is being made here is completely opaque. I know it’s gauche to wonder about the money – but for there to be a future to this ebook game (or any book industry at all) we need to know if there’s money and how much of it is being made and for whom. Amazon has been incredibly tight-lipped about sales of both the Kindle reader and ebooks. They’ve reported that the Kindle itself is now the single highest selling item on Amazon, but that doesn’t give us a clear idea of whether they’re making money from it. The prices for the readers are dropping, but all this proves is that Amazon is getting increased competition from Barnes & Noble’s Nook and to a lesser extent from Apple’s iPad. Despite the shift to the agency model, many publishers are still selling their books for the $9.99 price that Amazon set for Kindle books more than a year ago. What this shows is that, just as they did for selling dead tree books online way back at the beginning of the decade, Amazon are willing to be loss leaders to capture market share. As I’ve mentioned before, maintaining a profitable industry is a mug’s game when it comes to technology – market share is where it’s at. The fact of the matter is, if Amazon were making truckloads of cash on ebooks and Kindles, they would be reporting that, not the proviso-riddled fact that they have sold 143 Kindle books for every 100 hardbacks.
So is this announcement, as the New York Times said, ‘one for the history books – if those will even exist in the future’? Not quite yet. Don’t get me wrong, it’s quite impressive that Amazon have managed to increase sales of ebooks to such a huge extent so quickly. But this isn’t the death knell of the dead tree book – or even of the hardback. Until someone starts making a lot of money from ebooks – and can show that the money will keep flowing – the ebook will remain the poor second-cousin of the mighty hardback*.