KINDLE – WHY IT ROSE, WHY IT MAY FALL

In mid-2008 the four biggest distributors of our ebooks, the four who sold the most copies every month for us, each accounted for about 20% of our overall sales, while a misc. of smaller sites made up the remaining 20%. These four sites were:

* Distributor A (long established with one of the best and most reader friendly ebook sites),

* Our own website

* Kindle (then less than a year old)

* Distributor Z (who had until Kindle the best, if priciest, ereader)

 

Today things are dramatically different. One distributor now dominates the ebook business, and its rise has drained sales from most competitors, who experienced a sharp decline in sales. Here is the approximate percentage of our ebook sales which each of our current distributors accounts for:

*Kindle = grew to 70%

* B&N = grew to 18% (did not exist mid-2008)

* Distributor A= declined to 3%

* Our own website = declined to 4%

* Distributor Z = declined to 3%

* (Misc. small sites = declined to 2%)

 

What is the reason for this amazing redistribution of sales to a single ebook distributor? Not the Kindle itself. The original, and still basic black and white, Kindle was neither the best nor the cheapest of the ereaders.

What made the Kindle so special was one major sales innovation: 24/7 instant wireless delivery of your ebook to your Kindle, almost anywhere in the world you were. Amazon had it, and had deep enough pockets to afford to have purchased dedicated space on ATT three-sixty-five.

To download your ebooks from other sites after ordering them, you had to connect a USB cord to both your pc and your ebookreder, and then click on various icons, and then copy and paste the books from one folder to another, and then click “safely remove hardware,” and then uncouple the pc and reader, and finally turn on the reader and locate your new books, and only then were you, at last,ready to begin reading. Compare that to clicking the Buy button at Amazon and Bam! there’s the book in your reader. (B&N gave you instant wireless delivery, but only if you drove to the store and downloaded your ebooks there!!)

That’s how, from the moment it was out of the starting gate, Kindle left its competitors in the dust.

Over the next three and a half years they became THE market for ebooks. They were the 600 pound gorilla in the cage. They dictated terms and authors and publishers took it, because without them there weren’t enough sales to keep anyone afloat.

But last year Barnes & Noble, and the once laughable Kobo, acquired deep pockets and initiated their own 2/7 instant wireless ebook delivery systems, just in time for the holiday selling season. Meanwhile, Sony which had had deep enough pockets to afford to lease cell time three-sixty-five like Kindle, had been caught flatfooted by the idea of wireless delivery. They had to take the time to develop and test their own wireless ebookreader, losing more than two years in the process, which they also launched at the holiday season.

So for the first time the Kindle has rivals who also offer wireless delivery straight to your ereader, and could cut into Amazon’s ebook sales. A lot of people, including readers, have indicated their displeasure with Amazon over the years. They could lead an exodus.

On the other hand, it might be too late for Amazon’s rivals to catch much in the way of future ebook and ebookreader sales. After all, Amazon has already sold so many Kindles of so many types at such low prices that everyone interested in reading ebooks may already be said to own one. Why switch? Better yet, as far as Amazon is concerned, is the fact that they started as a bookstore, are still the web’s largest and most complete bookstore, and offer the convenience of one-stop purchasing for both paperbound and ebooks. That’s something Sony and Kobo will never be able to do. Only B&N seems to truly have a chance in this arena, and Amazon still has the lead, as they carry far more ebooks than B&N.

However, none of this factors in in the rest of the English speaking world and Europe, where Amazon is not as big as it is here and the ball is still in play. For instance, Kobo has already partnered with the W. H. Smith, the U.K.’s largest book chain, to provide content for and run Smith’s ebookstore, while Smith sells the Kobo in its stores as its branded ereader. Meanwhile, Sony is opening ebookstores with various partners throughout Europe.

I guess we will know the results when we have the next three quarter’s sales reports in hand.