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70%, 47%, And Why Even Agency Didn’t Stop Amazon

Amazon released their year-end status report list of boasts yesterday and there’s one detail that keeps bugging me:


Jeff Bezos boasted that Kindle ebook sales were "up approximately 70% last year". Amazon’s book sales didn’t see nearly that much growth (only 5%), suggesting that Amazon has gained as much market share as they’re going to in that mature market. I have another figure for you:


That’s the latest figure from the American Association Publishers for how much the US ebook market (all segments) has increased over last year (January to September). The data comes from just AAP members, so it doesn’t reflect the entire market, but it does make you wonder. Where did Amazon’s increase come from? I can’t answer that question (only Amazon can), but I do have a few theories on where it came from. I’m thinking there was an increase:

  • in Amazon’s global market share,
  • in Amazon’s US market share, or
  • in the number of self-pub titles sold in the Kindle Store.

The third option spells bad news for the legacy publishers, and the first 2 options should worry Amazon’s competition.

But it doesn’t really matter which is the cause because they all are bad news for the Big 6/5/4 publishers. 5 Publishers conspired with Apple to bring about Agency ebook prices in order to stop Amazon from dominating the ebook market and Amazon has broken free of their control.

The only thing that surprised me is that it took Amazon this long to adapt to the new market. On the other hand they might have adapted some time back but only know started offering comparative figures on content sales. That would tell us that Amazon has completely transitioned from a hardware focus to a content focus.

Of course, we already knew that from the Kindle apps being updated (in 2011, no less) with the same features as on the Kindle hardware. We also knew that when Amazon only updated one Kindle model in their big press event last October (the Kindle Touch got a new name, new screen, and frontlight). But to have the new direction confirmed publicly, well, I’m not sure what that means.

Any ideas?

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flyingtoastr January 30, 2013 um 10:41 pm

You’re comparing different time periods. The AAP numbers don’t take into account the holiday season, while Amazon’s marketing spin does. Given the drastic seasonality of the tablet market in particular, it isn’t something you can ignore.

Nate Hoffelder January 30, 2013 um 10:50 pm

I figured someone would say this so I also factored in the stats for last 3 months of 2011. That bumped it from 47% to 49%. My point is still valid.

If you like we can revisit this in 3 months when we have AAP’s year end stats. I don’t expect the percentage to be much different.

carmen webster buxton January 30, 2013 um 10:55 pm

I don’t understand why some people seem to think "only double digit growth" (as opposed to triple-digit in past years) means that ebooks are somehow not important anymore. Yeah, the rate has slowed but it’s still pretty strong growth. And it’s not like print is surging back.

Olympia Press January 30, 2013 um 11:48 pm

Don’t forget, amzn took market share at the expense of profitability. Their worst fear, google, is waiting in the wings while still making shedloads of cash.

fjtorres January 30, 2013 um 11:58 pm

I would respectfully suggest Apple is going to be a bigger challenge than Google and sooner.
Apple actually has a measurable presence in a lot of markets while Google is still just noise.

Mike Cane January 31, 2013 um 7:36 am

>>>I would respectfully suggest Apple is going to be a bigger challenge than Google and sooner.

Apparently said by someone who never price compared eBook titles at iBookstore v Kindle Store. I just did. Last night.

fjtorres January 31, 2013 um 11:53 am

Not everybody price-compares.
Especially among the Apple user base. 😉

You’ve likely seen the current US market share estimates that peg Apple at 10-15%, no?
Then factor in the Apple is already running ebookstores in over 30 global markets. More than Kobo, Sony, and Google combined.

Try this thought experiment:

With ebook reader adoption in the US slowing down it is reasonable to expect a good chunk of near-term growth in ebook sales to come from casual readers sampling ebooks rather than avid readers switching over. (That is why both B&N and Kobo are doing android tablets even though, unlike Amazon, they don’t actually offer music or video content themselves.)

NOW: There are, what, 200 Million active iPxxx devices that can run iBooks.
If Apple gets 10% to buy *one* ebook a year that will amount to $200-300 million a year.
(Thank those high prices.)
Not quite in Amazon territory but well ahead of Sony and Google and maybe even Kobo.
If they get that 10% to buy two or even three over-priced bestsellers a year they’d be in B&N territory.
And, don’t forget that 10% is low; the last time anybody reported on iBook sales on iOS (Nov 2011, if I remember correctly) Apple had 16% of the ebook customers. That was what spurred the prohibition against in-app content sales.

iBooks may not (yet) be a billion dollar a year business like Kindle but it is at least in the top three globally. Don’t underestimate the power of their userbase brand loyalty. And price tolerance. 🙂

Mike Cane January 31, 2013 um 7:18 pm

>>>200 Million active iPxxx devices that can run iBooks. If Apple gets 10% to buy *one* ebook a year that will amount to $200-300 million a year.

500M. And that "if" argument is the bullshit pitch VCs laugh at when startups address the China market: "Just think! If we can get 1% of that…"

And you’re so damn wrong about Apple iBookstore being all out there iternationally. The stocks are so bad in some other countries people don’t even bother with it. And iBooks is still an optional download to thwart the EU. And I said elsewhere I don’t expect Apple to drop out. Sony hasn’t, and they have more reason to.

Fbone January 31, 2013 um 1:09 am

My guess would be the increase in KDP Select titles sold nowhere else. The press release said 23 writers sold more than 250,000 copies.

Franc January 31, 2013 um 6:39 am

I can not see how this is related to US market share. Apple reports book sales numbers , reported on at, and while they are terrible they are not going backwards. If the growth in kindle sales were all a bite out of the nook, the nook would be dead.
My guess is the extra growth is e-book sales not reported by publishers, either because they are independents, and were not asked, or mainstream publishers who are attempting to minimise the rate to the digita transition.

Mike Cane January 31, 2013 um 7:37 am

You are comparing two different sets of numbers, Nate.

Will Entrekin January 31, 2013 um 8:18 am

My wager would be that the AAP tracks ISBNs–which neglects a huge portion of the digital market. Per Amazon, more than 500 KDP Select books reached the top 100 Kindle bestsellers list; I doubt Bowker, and by extension AAP, sees most of those, as I’d wager a majority of them are published without ISBNs. As a concrete example, the small publishing company I founded at the end of 2011 published more than 40 titles last year, all of which were downloaded more than 50,000 times (and saw several thousand sales), but Bowker didn’t see any of it, because there were no ISBNs involved.

Truthfully, Amazon’s sales and market figures and perspective are probably more accurate, because Amazon sees both titles that have ISBNs and titles that don’t, while Bowker tracks only the former.

Paul January 31, 2013 um 3:32 pm

Although Amazon’s numbers might be down for this quarter if they can’t get their web site back up.

New AAP: eBook Sales Up 41% in 2012 – Stephen's Lighthouse April 19, 2013 um 6:41 am

[…] Amazon “reported a much higher growth rate for their ebook sales in 2012 – 70%, in fact.” […]

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