Thursday, September 29, 2011

Prediction: Fewer ebooks per Kindle for lower cost Kindles

$99 ereaders are here and they will push ereaders into new markets. Unfortunately, many of those new Kindles sold will not sell as many books per Kindle.

Why? Many of the early adopters of the Kindle read over a hundred books per year.

I know of one individual who is buying 'extra Kindles' to avoid the inconvenience of forgetting to pack a Kindle for travel or even walk across the house! That will increase the reading a little (in particular not forgetting the Kindle on a six-week trip...), but only incrementally.

I know of several families who either made their kids share a Kindle or wouldn't risk giving a $139 device to that young of a child who will be buying a new lower cost Kindle. This will increase reading, but not as many books per year as when the family shared a Kindle.

Multiple coworkers 'jumped off the fence' and have already ordered a Kindle. Something about the 'below $100 price point.' None of these coworkers read more than thirty books per year.

I know of a few grandmothers who will buy grandkids Kindles. Some of those grandkids are voracious readers (that is good...). Some of the grandkids will say a polite 'thank you' and never buy more than one or two books for the Kindle. :(

I also know of a few parents (mostly the moms) who still eread on smartphones or a laptop. In general, those that didn't buy a Kindle or Nook in the past were those that read less than twenty books per year. More than a few will buy a Kindle (or Nook, if the price drops enough) this holiday season for themselves (or buy it for the hubby to put under the tree). ;)

Most of the potential Kindle customers seem undecided between the $79 Kindle, $99 touch Kindle, and $99 Keyboard Kindle. Or even splurging on the $199 Fire... Amazon gave customers too much choice! Perhaps the mid-November ship date is having customers wait to decide? However, birthdays and the holidays put a forcing function on the buying decision. I would be surprised if some of the Kindles didn't sell out and force the selection decision.

I estimate that these lower cost Kindles might sell as few as half the ebooks per Kindle as the earlier Kindle sales. The lower price points are reaching out to less intense readers. However, that is a good thing; it still expands the customer base. I hope low cost ereader sales will turn some 'moderate readers' back into 'intense ereaders.' e-readership is known for 'convenience reading' which increases the quantity of books sold. :)


Why the talk of Vinyl and Paper books?

Vinyl made a comeback with 2.8 million albums in 2010

Music's lost decade has been brutal. $14.6 billion a year in sales down to $6.3 Billion in 2009 and the above link says sales declined 2.4% or to about %6.1 Billion in 2010.

Why is this held up as a model for print? I fully expect print to survive. However, the librarians I know are being inundated with books handed over from the Boarders bankruptcy.

Now ebooks are different than music. Napster dominated music as there was no usable and legitimate way to load mp3s until 2003 and the iTunes store opened. Read the link, music is still dominated by piracy. eBooks are being led by legitimate outlets.

I expect print to remain a good fraction of the book market. Perhaps 20% of the revenue. How much is Vinyl? Assuming $25 per record, I calculate Vinyl is 1.15% of the music market. I probably overestimate the price per album... So let's be generous to Vinyl and call it one percent.

Why so much noise over about one percent of the market! I'd be happy if print were to survive at 20% to 30% of the market. I fervently hope print does better than a lonely one percent.


Wednesday, September 28, 2011

$99 Ereaders

Amazon just dropped the knife on ereader prices via the 'with offers' (add supported Kindles).

Thre Kindles $99 and under.

The new $79 Kindle
The new $99 Kindle touch
The renamed $99 Kindle Keyboard (ex-K3 with Special offers)

Figure 11 shows how many people would, by an older survey, buy ereaders at each price point. I'm going to sum the numbers:

Above $400 1% of the market
Above $300 4% of the market (3% of $300 plus the sum of the higher price points)
Above $200 15% of the market (again, summing the price points)
Above $100 46% of the market will consider an ereader.

Now that we're $79 to $99, 79% of the buying base of ereaders will consider an ereaer. Just by lowering the price of the ereader, the ebook market should grow 71%!

But wait... we still had 'resistance' to ereaders who are 'giving in' and buying an ereader. This is readers 'pulled' to ereaders.

The Boarders BK will 'push' further readers to ereaders.

2012 will have tremendous growth in ebook sales. The last price point of resistance is to get below $50. Amazon has a goal for next Christmas. ;)


Ps (Late edit)
I noticed the new 'Kindle' and 'Kindle Touch' are lighter than the 'Kindle Keyboard' (renamed-K3 w/special offers). I'm still using my K2 and found the lighter weight of the 'Kindle Keyboard' one of its best features.

Monday, September 26, 2011

25 to 30 million e-ink ereaders in 2011

E-ink is reporting that they'll meet projections for ereaders in 2011.

I found this bit interesting:
But global shipments of e-book readers experienced a seasonal dip in the second-quarter, according to IDC. Shipments reached nearly six million units in first-quarter 2011, but shipments in the second quarter totaled 5.4 million units, up 167% on-year but down 9.2% on-quarter.

Amazon Kindle's market share slid to 51.7% in the second-quarter from about 53% in the first, while Barnes & Noble's Nook dropped to 21.2% from about 23%, according to IDC.

Amazon is barely holding onto half the market. Since they are the most 'indie-friendly' ebookstore, that is bad on one hand... on the other, it is good not to have a market dominance.

I blogged before don't count on keeping the market lead. For example, For the last 3 months in the US Android cell phones have outsold iPhones two to one. I'm surprised to see B&N and Kindle both lost market share. I'm wondering who gained? (Google? Apple? With Boarders going kaput, I doubt it was Kobo and Microsoft dropped their initiative.)

Got Popcorn?

This doesn't include tablets.

The above sales figures show that ereaders sell ok in the 1st and 2nd quarters but are really a back to school and holiday phenomenon. 1H2011 11.4Million out of 25 to 30 million (e-ink). I suspect we'll see another 5 million LCD ereaders in 2011. So the 2nd half of the year is about 2/3rds of the sales. Hence why Amazon is waiting on their new ereaders, tablet, and B&N the rumored new Nook tablet right before the holidays.

I'm big into cell phones as 'convenience readers.' We recently returned from a cruise and for every reader on a Kindle, I saw one on a smartphone, one on a tablet (almost all iPads, a few Samsungs, but not many), and three to five playing games on their cellphones or tablets. :( And for each Kindle reader two reading pbooks. :) Mind you, it was a Disney cruise, so lots of waiting in line. ;)

So only somewhat related, Microsoft's phone strategy baffles me. February is too late for Nokia. B&N showed how it should be done. The nook color October 2010, Nook simple-touch in

updated 12:40pm

Friday, September 9, 2011

June 2011 Ebook sales

June was not a pretty month for print sales. I've read before that Borders represented close to half of paperback sales and judging from the cliff-fall in Adult paperback, that was indeed the case. Total print trade sales are down $120 million per month from the prior year trend. With AAP ebook sales only at $80 million, we're talking about an 11% drop in gross revenues for June.

Now, I expect this is hit of the Borders failure and shutdown. The question is, will there be a rebound after the Borders inventory has been liquidated?

I did expect Ebook sales to be slightly better in June. If Ebook sales had truly followed the 2011 growth curve, they would have been $83 million versus $80 million. Is that significant? Since more than a few indie authors report a drought and blamed the 'Sunshine Deals,' which favored AAP publishers, I suspect the real reason was we finally broke the crappy winter weather and people went out and played. Then again, growth has been so tremendous in 2011, we can take a breather.

But you come here for the charts, so here they are.

Overall, ebook growth is still faster than the 2010 growth trend by quite the margin!

I'm resurrecting an old chart format. This is by year ebook sales with 'events' that I believe helped shape AAP ebook sales. I'm rather surprised that the 'Sunshine Deals' didn't spike up sales further.

I've noted before that ebooks jump in market share at the start of the year. We seem to be holding to the pattern but a different month to month variation over prior years:

Edit: I had bad links in the excel sheet on this chart. Mea culpa and corrected 2:30pm 9/11/2011
I've started a new chart: A comparison of how that month's sales did versus the nominal for the last few years, 2010, and a trend. Print books are slowing quickly. 80% of the prior year's sales except for kids books which are doing much better. Ebooks have fast growth and while I commented about June, graphically it looks like it is just maintaining 2011 growth with a little noise. Edit: Don't get excited about MMPB doing a little better than prediction; my once favorite format is in decline. June is MMPB's 'month to shine.' So it did better than falling off a cliff, but not by much. :(

Trade print was very weak. Adult paperback and MMPB and thrashing print sales. More on that later.

Adult hardcover was OK. The weak side of OK, but ok.

Adult paperback fell off a cliff. Nothing seasonal about this drop. It is the changes in the industry that are happening. The question is, will any other bookstore step into Borders space of selling high volumes of paperbacks?

My pre-ebook favorite form factor was MMPB. MMPB is on life support. It cannot survive at these low sales.

It makes me happy to see how well kids books are doing. :)

Seasonal Charts:

I like the bar chart to emphasize how strong, versus prior years, ebooks are doing. :)

I'll go out of order in the seasonal charts and show just how nicely childrens books are selling. :)

Again, hardcover is OK, but weak:

One didn't have to plot a seasonal chart to see that paperback books fell off a cliff.

I usually comment on how poorly MMPB is doing, but adult paperback made this category look 'better than usual.' But MMPB is weak and is pulling down trade print sales.

Overall, June was a weak month for books sales. While ebooks did well, the wholesale side of the business took a hit due to the Boarders bankruptcy to the tune of about an 11% cut in revenue. I wonder if there will be a snap back after the liquidation (which is still going on in September)? Or is this just a setup to selling ereaders and tablets?

Got Popcorn?