Amazon hints at ebook inflection point, continues to confuse on Kindle sales

Amazon announced some very impressive numbers on Kindle book sales and some predictably vague details on Kindle sales. It’s hard not to get the feeling that it really, really doesn’t want to give out any details on Kindle hardware sales and at the same time wants to put an end to the ‘iPad has killed the Kindle’ nonsense spread by people who don’t really read.

Not sure why Amazon wouldn’t wait till its Earnings Release on Thursday to talk about Kindle and Kindle Book sales figures.

Kindle Sales Growth Rate is Accelerating, Kindle selling more every month

It’s like a chart of Kindle growth rates with nothing on the Y axis. We know sales are improving but nothing beyond that.

Amazon still coy and vague about Kindle Sales figures

While everyone is oohing and aahing, and to be fair there is a lot worth marvelling at in today’s Amazon Kindle news release, it’s hard not to notice that Amazon continues to be vague about exactly how well the Kindle has been selling. For example, we now have a very vague idea that Kindle sales are increasing -

Kindle sales increased each month in the second quarter, the same period that Apple began selling the iPad, 

… the growth rate tripled after Amazon lowered the price of the Kindle from $259 to $189 in late June …

Some news sites are already tripping over the ‘growth rate tripled’ part and writing that Kindle sales tripled. Growth rate tripled could mean absolutely anything – Perhaps it went from 100% to 300%, perhaps it went from 10% to 30%.

Here are Mr. Bezos’ exact words -

Today, Amazon.com announced that Kindle device unit sales accelerated each month in the second quarter–both on a sequential month-over-month basis and on a year-over-year basis.

“We’ve reached a tipping point with the new price of Kindle–the growth rate of Kindle device unit sales has tripled since we lowered the price from $259 to $189,” said Jeff Bezos, Founder and CEO of Amazon.com.

That acceleration each month is easily explained by the release of the Kindle 2.5 upgrade, a price cut from $259 to $189 on the Kindle 2, the release of a new $379 Kindle DX, and the availability of numerous refurbished Kindles at really cheap prices. The acceleration in sales serves only to prove that the iPad hasn’t killed the Kindle (and probably not killed other eReaders either).

Beyond that it only says that Kindle sales have increased – The ‘tripled in growth rate’ part is rather vague and it could mean absolutely anything.

The fact that sales are more than they were last year isn’t even worth mentioning – last year the eReader market was just beginning to explode, the Kindle was at $299, the Kindle DX wasn’t out until June, and there were no $109 and $139 refurbished Kindles.

Amazon’s simple message about the Kindle

Basically, Amazon is sending a rather simple message -

The Kindle is alive and kicking though we won’t tell you how hard.

We did better than last year – which should be a given.

We did better each month – which should also be a given.

The growth rate tripled – This way we can indicate things are going well without revealing any figures at all.

The iPad didn’t kill us. The Nook price-cut didn’t slow us down.

In typical Amazon Kindle press release style they’re doing this without mentioning exactly how many Kindles have been sold.

Kindle Book Sales knock it out of the ballpark

Amazon are much more transparent when it comes to Kindle book sales and prove beyond a doubt that the ebook inflection point is well behind us and might have passed us as far back as December 2009.

  1. Kindle books are outselling hardcovers on Amazon.com. This excludes free Kindle book downloads (the remaining numbers exclude free Kindle book downloads too).
  2. For the last 3 months there have been 143 Kindle books sold for every 100 hardcover books sold at Amazon.com. For the last month the ratio has been 180 to 100. 
  3. Kindle book sales growth has beaten the industry wide numbers – which includes beating the industry-wide 207% growth in ebook sales for the first 5 months of 2010. Amazon sold over triple the number of ebooks they sold in the first 6 months of last year in the first half of this year.
  4. Out of James Patterson’s 1.14 million ebook sales 867,881 were Kindle books. That’s 76.13%.
  5. 4 more authors have sold more than half a million Kindle books – Charlaine Harris, Stieg Larsson, Stephanie Meyer, and Nora Roberts.

If you’re a Publisher you have got to be wondering what you’ll be doing in a few years. If this growth rate for ebooks persists Publishers are going to start dying out by early next year.

Amazon even take a jab at the Agency Model by pointing out that 510,000 of the 630,000 books in the Kindle Store are at $9.99 or less.

Amazon’s simple message about the Agency Model

Again, we have Amazon sending a direct message -

We now sell more Kindle books than hardcovers and the writing is on the wall – eBooks are going to rule and within ebooks Kindle Store is going to rule.

The Agency Model isn’t killing ebook sales and it’s not taking over – We’re still selling lots of books below $9.99 (80.95% of the Kindle Store to be precise).

It isn’t affecting our dominance either. We’re growing faster than the rest of the industry.

In stark contrast to the vagueness with Kindle Sales figures we see a lot of clear data with Kindle book sales.

Reactions to Kindle book sales figures 

New York Times points out that paperbacks probably still sell better than Kindle books

It’s a good thing they do – lest we start thinking the war is already won. Here’s what NY Times has to say about exploding Kindle book sales -

The Kindle sales figure does not include free Kindle books,

Amazon does not disclose how paperback sales compare with e-book sales, but paperback sales still probably outnumber e-books.

… even with the popularity of the iPad, which Apple has marketed as a leisure device for reading and which has its own e-book store, sales of the Kindle are growing, Amazon said.

It highlights something – Amazon’s vagueness is going to cause a lot of confusion. It is a bit strange to give Kindle Book vs Hardcover figures and leave out Kindle Book vs Physical Book figures.

Wired strike out twice

In some cases Amazon’s vagueness really trips up reporters. We have Wired writing that ebooks outsell paper books on Amazon.com -

E-books have hit the mainstream, and for the first time are consistently outselling their pulp-and-ink brethren, according to Amazon.com.

Amazon hit a symbolic milestone last holiday season, when for one day its sales of e-books exceeded the number of dead-tree books it had sold.

How do you confuse hardcovers for ‘all paper books’?

Wired achieve the rare distinction of not only confusing hardcovers for ‘all physical books’ but also confusing ‘growth rate tripled’ for ‘Kindle Sales tripled’ -

Amazon also stated that sales of its Kindle e-book reader have tripled since it cut the price from $260 to $190 …

The little cherry on top is their analysis that Kindle owners recoup the cost of the Kindle after 11 ebook sales.

Bloomberg address Kindle vs iPad

Bloomberg brings up the whole Kindle vs iPad angle and talks to an analyst who thinks there’s room for both -

Its release of growth figures may be aimed at quelling concern that the iPad has crimped Kindle demand, said Dmitriy Molchanov, an analyst at Yankee Group.

“There’s a real perception that the iPad has completely squashed the e-reader space and that’s really not the case,” said Molchanov, who’s based in Boston.

“Amazon is doing really well and both companies can profit at the same time.

That’s very true. There’s little doubt both companies will profit. The question is – Which of these two is going to get a top two spot and really make money from eBooks? Could it be both?

Jacket Copy wonders whether Amazon can continue to dominate ebooks

It’s good to have a few people who aren’t dumbstruck by the Kindle book sales figures. Carolyn Kellogg at Jacket Copy (LA Times) has some Kindle book sales questions -

what isn’t being said is that these aren’t necessarily new books; most of these authors have an impressive backlist.

How much of Amazon.com’s Kindle sales are an echo of this —  readers purchasing much-loved favorites in a new format –

Once, the word ebook was all but equivalent with a book sold for the Kindle. Amazon.com may be a huge part of the ebook picture, but now it has to share the stage with other players.

The last point is particularly relevant. There will be a lot of companies eager to steal a share of the 80% of the ebook market the Kindle Store has. We have to wonder how Amazon are going to hold on to such a large chunk.

Galleycat says Amazon just rocked the Publishing World

You bet it did.

Galleycat points out the good and the puzzling about Amazon’s Kindle Books announcement -

Amazon founder Jeff Bezos rocked the publishing world with a Kindle sales quote today.

Nevertheless, the company still has not released straightforward figures about total Kindle sales or total eBooks sold.

In a way you have to love the vagueness when it comes to the effect it has on Publishers. They probably have a very good idea of hardcover and ebook sales from Amazon – Yet, the way Amazon puts it they have no option but to either reveal figures (which hurts their whole ‘power and control and secrecy’ obsession) or have people think ebooks are completely destroying hardcovers.

Amazon has well and truly rocked the Publishing World. If it wasn’t painfully obvious to them yet that this time they can’t sabotage eBooks and eReaders it should be now. Can’t wait till next year’s July Kindle news release announcing that ebooks have surpassed combined paper book sales at Amazon.

Test comparing Kindle, Book, iPad reading speeds loses the plot

Jakob Nielsen runs a Kindle vs iPad vs Physical Book reading speed test that totally loses the plot. The results of the test are that the Kindle is 10.7% slower than print and iPad is 6.2% slower than print.

Users at the official Kindle forum are up in arms and quite rightly point out that reading on the Kindle is actually faster. Let’s explore why Mr. Nielsen’s test is biased against the Kindle and see what interesting observations we can make.

Decades of Experience with Books Vs 17.33 minutes with the Kindle

Let’s start with the obvious problems -

  1. It’s 24 people reading stories that took an average of 17.33 minutes to read. That by itself is a good indicator of the unsuitability of this ‘reading speed comparison’. How can you use 17.33 minutes of reading to contrast reading speed on books which usually take 3-6 hours to read?
  2. The people recruited liked reading and frequently read books. There’s no information on whether they’d used the Kindle, the iPad, or iPhones before. Chances are high that these are people who had their first experience with the Kindle – You’re literally comparing reading speed during first 17 minutes of using a device with reading speed on physical books which they’ve been using for decades.
  3. They compared customer satisfaction levels – After people read 17 minute short stories. Perhaps that’s what Amazon’s Kindle return period should be – You get 17 minutes to read a short story when your Kindle first arrives. After that you have to instantly decide – You either keep it for life or the UPS guy will take it back with him.
  4. Another really important factor missing is lighting conditions – Was there bright lighting? Did they read in sunshine? Did they read in the dark with a reading light?
  5. They say that the difference between the 6.2% lower reading speed of iPad (as compared to the print book) and 10.7% lower reading speed of Kindle (again, it’s 10.7% lower than reading speed on the print book) is not statistically significant. If a 4.5% difference isn’t statistically significant then how much more significant is a 6.2% difference? What’s the exact margin of error? 

They conclude -

 tablets still haven’t beaten the printed book: the difference between Kindle and the book was significant at the p<.01 level, and the difference between iPad and the book was marginally significant at p=.06.

Really?

Wouldn’t the more accurate statement be – Tablets like the iPad and eReaders like the Kindle don’t beat physical books if the user has used them for a grand total of 17 minutes.

A comment from Robin at the kindle forum is very apt -

One thing that popped out at me is that they were testing people who were evidently unfamiliar with either the iPad or Kindle and who normally read paper books.

Even though they taught the test subjects how to operate the devices before running the actual testing, I think it’s a bit absurd to think that a reader would adjust that quickly to using something new.

It’s very unlike Jakob Nielsen to do such a remarkably poor usability study – There’s absolutely no way you can review reading speed on the Kindle and user satisfaction for a user when it’s the user’s first 17 minutes with the Kindle.   

Kindle Specific things Users can’t be expected to grasp in 17 minutes

Just to highlight how absurd this comparison is here are a few things a user is not going to be able to figure out in the first few minutes of using the Kindle -

  1. How best to work with Page Turns. Most of us know just when to press the Page Turn button to catch the last line just as the page refreshes – This, in fact, makes it much faster to turn pages on the Kindle than on a physical book.
  2. What they feel about eInk and what lighting condition goes best i.e. the more the better. If they compared the iPad and the Kindle in similar lighting conditions one of the devices probably got read in non-optimal lighting conditions.
  3. What’s the most comfortable Font Size for them. They probably didn’t even realize that they could set line spacing and the number of words per line.
  4. How best to hold the Kindle and where to place hands. If they were moving their entire hand every time they had to flip a page that’s adding a second per page.

There are additional reasons this study is biased against the Kindle, especially when it comes to user satisfaction, including – 

  1. No tiredness comes into play. In 17 minutes hardly anyone is going to realize that books and the Kindle are much better for the eyes – unless of course you’re LCD compatible.
  2. You don’t get to see a lot of Kindle benefits like the in-built dictionary, saving of last page read, searching the book, searching Wikipedia or the Internet.
  3. Users don’t know that they can continue their reading on their Android phone or iPhone or Blackberry and on their PC and then continue it on the Kindle.
  4. Users won’t know that their brother or mother or husband can read the same book at the same time on another Kindle or device.
  5. You don’t get a chance to switch back and forth between devices and compare. Ideally you’d want people to read 1 or 2 books on each of the devices – PC, physical book, iPad, and Kindle.

Interestingly enough this 24 person, 17 minute reading speed comparison is being picked up by the Press as a sign that reading on the Kindle is slow or in some way inferior to reading a physical book. The Press just love to write negative things about the Kindle.

Looking beyond Reading Speed on the Kindle

There are a few things much bigger than an imaginary 10% difference in reading speed to consider -

  • Lots of people need the Kindle’s larger font sizes and text to speech feature. This includes blind people, low vision people, those not comfortable with the size in printed books, dyslexic children, and even most young children as they prefer size 24 and size 28 font.
  • People are now reading more as they can get books easily and quickly and aren’t distracted.
  • The Kindle probably leads to longer stretches of reading. It’s much lighter than a hardcover, it can be read using a single hand, you can use the text to speech, and it’s easy on the eyes.

Here’s Jakob Nielsen’s study summary -

 Summary:
A study of people reading long-form text on tablets finds higher reading speeds than in the past, but they’re still slower than reading print.

Here’s my Summary of the study -

24 people tried out the Kindle and iPad for 17 minutes each and then an expert made the assumption that their observations are the holy grail and that ‘reading speed on the Kindle is slower than on physical books’.

Various Blogs and newspapers read the above summary in 17 seconds, spent another 43 seconds to quickly scan for a paragraph they could quote and then wrote about how physical books are better than the Kindle.

It’s 2.5 years since the Kindle was launched and the Press and various ‘Experts’ thought Amazon would be lucky to sell 10,000 Kindles. We might have had millions of Kindles sold but as far as the Press and Experts are concerned – not much has changed.

The touch and feel of a real book

Finally beginning to understand what people mean when they talk about the touch and feel of a physical book. Why people think the Kindle or Sony Reader cannot replace physical books.

It’s important for eReader companies to understand this and address it -

  1. The Olswang survey says that over 50% of people love holding a real book and don’t want to give it up.
  2. It’s the #1 reason holding people back from buying an eReader. 
  3. It’s not very well understood.

This post will talk about why the bond to paper books is so strong.

Years and years of holding and loving books

This is worth acknowledging before we get into the level of the senses.

Association of Books with Reading

Most of us have been reading for a long time -

  1. The physical book was the channel and all the value got linked to it.
  2. All our love for reading is tied up with physical books.
  3. The joy of reading gets associated to the smell, the touch and the feel of a physical book.

This is definitely one element of people’s love for ‘real books’.

Familiarity and Liking

  1. We tend to like and even over-value things we are familiar with.
  2. If we like something, we are very, very resistant to changes in it.

Books were reading and we are very familiar with reading in the form of physical books.

We liked books and are comfortable with books and it bothers us, and perhaps even scares us, that we might have to give them up.

The line between physical books and the reading experience

There is a line between loving the sensation of holding a book and associating the experience of reading with physical books.

We’re not quite sure where that line exists.

Basically, our love for books is split between -

  • Our love of reading. 
  • Our love of physical books.

Let’s investigate all the benefits a physical book provides.

What benefits does a Physical Book Provide?

The Book is a physical real object and we can hold it

One of the biggest benefits of a physical book is the solidness – it’s something you can hold and feel.

  1. We like to have something we can hold in our hands.  
  2. There is a very real ‘feeling of touching the material of a book’. 
  3. It’s an object – it occupies space.

As opposed to an ebook, which is just invisible bits, a physical book is an object and an object we are used to holding and valuing. 

The Senses and Layering of Sensory Experiences

Consider the senses that get activated by a book -

  1. The smell talks of the book’s freshness or its antiquity. 
  2. The touch of the cover, of the paper and the book’s weight are all tangible things. 
  3. The type setting and font type and the illustrations paint a picture.
  4. There are so many hints of the book’s secrets.

Plus they all get activated at the same time -

  • It’s not some sequential, boring process. 
  • You get the touch and the smell and the feel and the visual delight of the book at the same time.

A Book’s Uniqueness and Character

Each physical book has -

  1. A unique cover. 
  2. It’s own cover design.
  3. A choice of material for the book.  
  4. Different paper.
  5. Different fonts and typesetting.
  6. A smell based on age and material.

And so many other things that make up its character and set it apart from every other book.

Yes, there are books that fail to do this. However, a lot of publishers and authors do set their physical books apart.

Where does that leave eReaders?

 There are three parts to the equation -

  1. Love of reading.
  2. Love of Physical Books.
  3. Benefits eReaders have over Physical Books. 

While eReaders have done a good job of providing a good reading experience (good battery life, great screen, etc.) and of pushing benefits physical books can’t match (huge storage, portability, text to speech, etc.) they are completely missing one crucial fact -

  • Physical books don’t disappear into the background straightaway.  
  • Actually, books set the stage – They involve the senses and help create a unique experience and they keep the senses involved.
  • The physicalness of the book makes it easier to get lost in the book and stay lost. 

That’s something that’s completely missing from eReaders.

Whether it’s on the Kindle or on the iPhone or on the Sony Reader Touch – ebooks just don’t pull you in the way physical books do.

  1. There is no smell that tells you how long this book has travelled.
  2. There is no unique crinkle in the paper and no oddity in the print style.
  3. There are no cover images and every book has the same cover and its devoid of character.

Basically, every ebook has the same story behind it. They’re all clones – all with the touch and feel and smell of a 1-year-old Kindle 2.

Amazon need to fix this to pull in the 50% of people addicted to physical books.

Flashback: Jeff Bezos compares the book to a horse ;)

Book Purists everywhere are probably scandalized. Thought it’d be interesting to look at some past interviews and see how they hold up now – First off is a MarketWatch interview with Jeff Bezos conducted on May 28th, 2008.

This an interesting interview overall, with Mr. Bezos talking to Stacey Delo at MarketWatch, and saying some interesting things -

  1. The main important feature of a book, in his opinion, is that it disappears in your hands while you’re reading it. 
  2. Kindle owners’ favorite feature seems to be WhisperNet. To be able to get a book within 60 seconds. 
  3. Physical books are not going to disappear.
  4. Sales are well beyond Amazon’s expectations (at that time – now they’re beyond Amazon’s wildest expectations). 
  5. Its interesting to note Mr. Bezos’ focus when he’s talking about price and value for customers (“in difficult economic circumstances, customers disproportionately value that”).
  6. Another snippet I really liked was -

    Taking a 2000 pound car to buy 5 pounds of stuff becomes really expensive.

Does the Kindle make physical books the equivalent of horses?

Well, we’re a long ways away from eReaders that could do that. Kindle 2 is hardly enough of an improvement to be talking about books as outdated. However, in 2-3 years, we might well have eReaders (Apple’s iBook, Kindle 4, Plastic Logic Color) that really make books seem as outdated as horse carriages.

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