Friday, November 12, 2010

Will Amazon Dominate the eBook Market?

I'd forgotten how colorful painkiller-induced dreams can be. Last night I dreamt I was moving into an apartment that looked a lot like a Mexican restaurant sans tables and chairs. Someone offered me a housewarming gift: a wooden figure carved and signed by Neil Gaiman. I kept trying to show it to people, but the only person who appreciated it was this guy playing Farmville on the tiled floor. He turned out to be Gordon Lightfoot.

My Alice-in-Wonderland adventure ended there when the alarm went off.

The Business Insider had an article on Wednesday titled "Here's How Amazon Took the Lead in the Billion-Dollar e-Book Market--And Why They'll Dominate."

Here are some quotes:

  • [reports indicate] "the ebook market will reach $1 billion this year ... Amazon has a full 50% marketshare there thanks to its Kindle platform."

  • "...by letting people read Kindle books on any device, Amazon has preserved, and even arguably gained, marketshare."

  • "... we think Amazon's marketshare will end up closer to 90%."

  • "... even though the Kindle is useless for general computing, it is great for heavy readers ... By designing their Kindle for this market, ... Amazon locked up very important early adopters."

  • "Publishers want ebooks to sell for the same price as paper books, which is ridiculous. The marginal cost of selling an ebook is basically zero, whereas you have to actually print paper books."

  • "If [Amazon] wanted readers to adopt the Kindle and ebooks, they needed to price them lower, especially to make impulse buys more attractive."

  • "The Kindle didn't just set price expectations for ebooks below those of paper books, it also set them at a level above zero, which is much more important for publishers over the long run as they navigate the transition to digital."

Go here to read the entire article.

By the way, BI's claim that "the marginal cost of selling an ebook is basically zero" is almost as ridiculous as publishers' claim that they should price ebooks at the same price as paper books.

While my personal belief is that both Amazon and Walmart will prove destructive to the American economy, I do believe that Amazon's $9.99 ebook price point is on the mark.

2 comments:

Silicon Valley Diva said...

Great point, I believe the $9.99 price is the sweet spot for ebooks.

I must admit, I really enjoy having access to Kindle on any device. I alternate between different ereaders, my kindle to my ipod, etc.

(Your dream sounds similar to some of mine!)

Maya Reynolds said...

SVD: I won't ask what mind-altering substance you're using [grin].

Take care.