Print, which has been on the heart and lung machine for more than a decade, may finally be ready to give up the ghost. Many analysts thought newspapers and magazines would be the first to succumb to the digital age. New data from Amazon.com (NASDAQ: AMZN) says otherwise.
The huge e-commerce company says it now sells a larger volume of e-books than hardcovers:
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.
Sales of the Kindle have accelerated as well. Amazon ascribes this to the price cut it made two months ago. It is probably not that simple. Sales of Apple Inc (NASDAQ: AAPL) iPads, Barnes & Noble (NYSE: BKS) Nooks, and Sony (NYSE: SNE) e-readers have also increased if industry intelligence is correct. Amazon said unit sales have tripled since the retail price of the product was dropped to $189 from $250. It raises the question: what will happen if e-readers go through another round of price cuts before the holidays? This is likely since the battle for market share in the sector rages on. And price cuts mean margin problems. It is open to question whether Amazon is willing to lose money on the Kindle to build market share and a larger network of its e-reader to boost profitable e-books sales. More price cuts would probably make the Kindle more attractive compared to the relatively expensive iPad which is probably the most significant threat to its franchise.Amazon’s disclosure about the Kindle’s sales is cagey in places. It says sales of the e-reader are much higher, but is vague about exact unit sales.
Amazon sold more than 3x as many Kindle books in the first half of 2010 as in the first half of 2009
In other words, Bezos & Co. has important information, especially for investors, but they are not telling.
Book publishers should be happy with rising e-book sales, unless the margins on the product are well below those of printed books.
The Association of American Publishers’ latest data reports that e-book sales grew 163 percent in the month of May and 207 percent year-to-date through May. Kindle book sales in May and year-to-date through May exceeded those growth rates.
But Amazon is being coy about that figure, too.
Douglas A. McIntyre
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