Big Changes in the EBook Market

kindle It is no secret that I am a big eReader fan. I’ve talked about it here and here. And from the very beginning I have been a loyal customer of Amazon. With the introduction of the Kindle, I knew I wanted one but waited until 2009. The Kindle Two had just been introduced, giving me the security of a second generation device, plus the slight decrease in price from $399.00 to $359.00 helped.

Fast forward almost three years later. Amazon now has plans for multiple models. Last month Amazon announced a new lineup of Kindles from your basic model to the Kindle Fire, the one that is supposed to give iPad a run for its money. If the figures quoted in this BGR article are correct, Amazon’s first tablet, sold 95,000 units on the first day of pre-sales. A purported leak later suggested that Amazon was taking an average of 50,000 pre-orders each day. However, it is the most inexpensive Kindle, priced right under $100.00, that has many people talking.

Per Forbes, the low price Kindles are the ones that are going to revolutionize eBooks since the price lends itself to impulse buys and gift giving. The eBook market should explode, not that it hasn’t been growing at a rapid pace already. And Amazon is in the perfect position to take advantage of this because Amazon is in the hardware business to sell books, and Apple is in the business to sell hardware. In May, Amazon announced that it selling more eBooks than paperback or hardback. And that trend can only flourish.

Amazon is making sure that it does with their new publishing unit run by publishing expert Laurence Kirshbaum with imprints like AmazonEncore, AmazonCrossing (publisher of the highly successful Hangman’s Daughter), Montlake Romance, ( with Connie Brockway being the launch author) Thomas & Mercer, (with thriller author, Barry Eisler) and Powered by Amazon. One hundred and twenty-two books are due out this fall. Amazon has also inked a deal with the self-help author Tim Ferriss and actress and director Penny Marshall. But that is not all.

Amazon has started giving all authors, whether it publishes them or not, direct access to highly coveted Nielsen BookScan sales data, which records how many physical books they are selling in individual markets like Milwaukee or New Orleans. And guess what? Right after this Simon & Schuster, Random House, and the Hachette Book Group announced that they would be setting up their own portal allowing authors to access this data.

In this ICv2 article, the author discusses how “Amazon was able to use its distribution muscle to gain a 4-month window of exclusivity for digital editions of DC Comics’ bestselling graphic novels including Watchmen,” This didn’t make Barnes and Noble happy and created a backlash, causing them to pull DC’s graphic novels off their shelves (see “B&N to DC—It’sOn” and “Books-a-Million Joins DC Boycott”).’

Amazon doesn’t have the apps like Apple, but they also have been courting magazine publishers and they are embracing the Fire and Amazon. With Conde Nast on board, more magazines should follow, with approximately 300 available. One reason is that Amazon is willing to share more customer details than Apple. As explained in the Good E-Reader article, since Apple doesn’t give magazine metrics and statics on customers, their advertisers have no demographics, which is not making them happy. Publishers speaking off the record, have been very pleased with their dealings with Amazon. Are you seeing a pattern here? And we haven’t even discussed how Amazon is positioned as a competitor against Netflix. It wasn’t a good time for them to lose 800,000 customers.

So far I am all good with these changes since I am the beneficiary of low cost readers, and original works. As more readers hit the market, authors benefit too, since they can digitalize their backlist as talked about in this Forbes’ article. Amazon and growing companies like Backlist eBooks are giving readers the opportunity to find out of print books at extremely inexpensive prices. If you haven’t checked out the EBook Bargains thread on the potpourri board, then you need to do so. These readers have done a wonderful job of keeping others informed of bargain prices. Plus it is about time that authors had access to their own sales data. And after the six major publishers agreed to Apple’s demands with agency pricing, I am looking forward to Amazon shaking things up. As of right now that means more selection for me and better prices, but I’m not sure I want Amazon to be the only player in town because a monopoly doesn’t serve anyone well.

There is one potential change on the horizon that I am ambivalent about: putting advertisements in eBooks. Many publishers are considering the idea, because it will allow them to sell books at a greatly reduced price, but they will receive long term gains from ad-clicks or purchased products. Amazon obtained a patent for that in 2009 and supposedly they are considering offering consumer a choice. Book with ads, pay a lower price, or books without are higher, similar to their Kindle with special offers. And authors might still be able to make money on pirated books.

As Bob Dyan stated “Times They are a-Changin.” So, is Amazon getting too big? Or they just competing with Apple? Both Apple and Amazon seem to be aiming for exclusivity. Is that good for us as a consumer? If you haven’t purchased an eReader, are you tempted now? Would you purchase a book with ads?

– Leigh Davis

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