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Newsflash: Amazon is NOT ‘dominating’ the e-book market OR winning the e-book war
September 4, 2009 | 2:26 am
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By Joanna
Reminder: These are Ficbot’s personal opinions. Feel free to speak up in the comments area! – D.R.
I am sick and tired of endless blog commentary regarding Amazon’s “dominance” in the “e-book market.”
Amazon is not dominating the “e-book market” because it is not participating in the “e-book market.” It is participating in the American market, and according to stats posted earlier in this very blog, it only has 45 percent even there.
That sounds like a lot, but the flipside of 45 percent is the 55 percent Amazon is not occupying—and nearly all of that chunk is filled by Sony, which “dominates” the market elsewhere by default, since Amazon won’t play outside the USA.
Why an Apple Tablet could crush the Kindle
My prediction? The rumored Apple Tablet will be an oversizef, Kindle-sized iPod Touch. It will run all existing iPod Touch/iPhone apps, including Stanza and eReader, which will mean that its adopters can read not just the Internet freebies but also encrypted ePub (the rising standard) and the secure eReader favored by e-book giant Fictionwise/Barnes and Noble.
It will work with WiFi just like the Touch, so it’ll be available here in the non-3G hinterlands of Canada. And it will kill the Kindle dead, dead, dead.
I am not saying Amazon isn’t “dominating” the hype war for the moment. But to say that it is dominating the “e-book market” when it is a USA-focused company—and not even at 50 percent of the market there—is quickly becoming offensive to the rest of us. There are dozens of other English-speaking countries out there where Amazon won’t play ball. And there are many dozens of other countries where expat Americans and other English speakers are a growing e-book market.
Say that Amazon is “dominating” the American market if you want to. It’s not quite true, but 45 percent is an impressive market share. And say that they are “dominating” the hype war, too. But dominating the “e-book market?” Not so much. And as soon as a major global player like Apple gets its act together, my prediction is going to be “not at all.”
Editor’s note: See the Wiktionary defintion of “dominance.” What do people think of the first def as applied to the Kindle? “1. The state of being dominant; of prime importance; supremacy.” – D.R.
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Comments:
It’s very hard to make sensible arguments based on this worldwide market share data without knowing the figures for the US (where Kindle is available) versus the rest of the world (no Kindle). I would suggest that if Kindle has 45% market share worldwide and isn’t even competing in much of the world, that it’s likely very dominant in the US. So in the one market where Kindle and Sony go head-to-head, Kindle is far ahead.
We’re still left with all the usual speculation and arguments about what that means in the future. Does the historical market share predict much about the future when Kindle will available more broadly, Sony has revamped products, Apple’s tablet arrives and other expected new entrants enter?
Also, I’m not sure I understand how it can be offensive that Kindle isn’t offered everywhere yet. I guarantee that the reason is NOT because Jeff Bezos doesn’t like England or thinks people in Japan can’t read or something. I’m sure it has to do with the economics of book buying habits, publishing contracts that treat every country market separately and maybe limits on manufacturing capacity.
Of Amazon does start selling the Kindle in UK soon as is rumored, then they could quickly dominate that market. Maybe this would open Europe (especially france) as well. Remember, the Kindle store is excellent and extensive and cheaper than the others. THIS is where they will dominate.
A couple of quibbles, Ficbot:
1. The 45% stat was, according to the TeleRead blog post, most likely a guess.
2. Of the guessed-at remaining 55%, Sony does not hold ‘almost all of it’ but rather a little over half.
You leave the impression that Sony outsells Amazon in the US market. The stats you refer to show Amazon outselling Sony — selling 50% more than Sony does, indeed.
Your other point, on global vs. US markets, is a good one. Amazon became enamored with the idea of a cell-phone partnership that would allow the Kindle to connect to the store and purchase and download books from wherever you are; and this has proved to be one of the most-appreciated features of the Kindle. But it has its downside, because sticking to this vision means Amazon has not been able to expand into other territories.
I wonder why Amazon, in ‘playing the sedulous ape’ to Apple’s iPod platform strategy, hasn’t developed a Kindle version of the iPod Touch, i.e. a wifi-only Kindle, that they could market worldwide.
“And it will kill the Kindle dead, dead, dead.”
No it won’t.
If Apple makes a tablet/iPod touch that you can read outdoors in bright sunlight, has a battery life that lasts two weeks (7,500 page turns), will fit in my suit jacket pocket, is completely silent, runs without dissipating any heat, is non-proprietary and costs less than $300; THEN your argument might make sense. I am unaware of any display technology that will beat a dedicated eBook device.
I agree that the mythical Apple tablet, which we’ve been obsessing about on this blog for a couple of years or so, is unlikely to directly compete with a $299 Kindle or a $199 Sony. I welcome Apple to the party but their pricing strategy has generally centered around the premium market rather than the mass market we’re looking for in the eBook world.
Rob Preece
Publisher
And even looking at just anecdotal evidence, how many of us with non-Kindle reading devices have been approached in public and asked, “Is that a Kindle?”
At least in the U.S., Amazon has at least the perception of dominance.
Personally I think Sony, with its embrace of open standards and expansion of retail outlets, has more of an opportunity to break things open than Apple.
A couple of points:
First, these stats refer to e-reader and not e-book sales. Because e-book sales occur much more frequently, they are a better estimate of each company’s control of the market. According to Pubtrack, Amazon controlled 4.67 times the e-book market share that Sony did from January-July 2009. More importantly, Kindle showed growth throughout this period and overtook PC downloads of e-books to become the largest platform in July 2009.
SOURCE: http://www.publishersweekly.com/article/CA6686612.html?industryid=47151
Second, I cannot find the methodology of the study, making it difficult to evaluate its conclusions. If it simply asked consumers which e-reader they own (vs. focusing on purchases in the last month or 6 months, etc.), the resulting figures would necessarily be impacted by the length of time each company has offered devices. Sony has been in the market in the US since 2006 while Amazon has only been in the market since 2007. This means that for 1/3 of the time that Sony has been selling devices, Amazon was not — and yet Amazon has sold significantly more devices in the US.
I doubt that Amazon will seriously want to attack the European market. It isn’t really an international company in the sense that (for example) Apple is. It’s merely seven businesses in seven countries, and it can’t even present a unified interface to its suppliers, who have to establish separate commercial relationships with each national Amazon company.
Moreover, the Kindle is not designed for international use. The iPod’s keyboard layout can be switched to German or French or Italian or Spanish or Polish in a second or two. So can the Sony Reader’s. To switch the Kindle from one national layout to another, you need to throw the machine away and buy a new one.
It looks to me as if Amazon’s strategy is to use the Kindle device to establish market dominance in one middle-sized, prosperous, not-even-diglot country, for Amazon as an e-book supplier and secondarily (and possibly temporarily) for the Kindle format as an e-book format. That dominance can then be expanded to the other six countries that Amazon operates in. Channel and format dominance is much cheaper to establish and maintain than dominance in hardware, especially when so many other hardware businesses operate truly internationally.
I’m glad you bought this up as I am getting increasingly annoyed by how everyone ignores the Australian/Asia Pacific market! We don’t have Sony e-readers here, let alone the Kindle (which there are no plans to sell here). We can buy them abroad and hack them, but that’s not exactly ideal. I read ebooks on the iPhone and desperately hope the Apple tablet will address the imbalance.
It also seems strange that sites like Scribd.com won’t sell ebooks from non-US authors, or even let us buy them (last time I tried, it wouldn’t let me buy). Ebooks are by nature international and as a self-published author, I hold the rights.
Do you have any thoughts on when ebooks might actually be truely globalised? as opposed to US-centric!
Thanks, Joanna
Joanna,
Maybe if we get a high profile bankruptcy in a few years.
I agree with Joanna there. We do not have the Kindle in Singapore (or the entire Southeast Asia). And I am also annoyed with Scribd for not selling e-books from non-US authors as well. Does everything have to be US-centric?!
I self-publish on Smashwords which seems to be a good site for e-books at the moment.
Seems to me the bigger idea in this conversation is not who has the most downloads/market share or what device will work in the country you live in but rather the availability of a digital book.
As a content aggregator myself for children’s books, I find the press and whoopla surrounding the Kindle to be a great advantage for all. It has given rise to acceptance of ebooks no matter what device you use to read on. If Apple comes out with a “kindle killer” it will only appeal to a limited number of people because of the price point but it will add more clout to the platform of ebooks.
This is still a small market but one on the rise and as readers or publishers we all need to look at the bright side and realize this conversation is good for all of us. As an industry it will evolve, new readers will appear and country barriers will be broken. Time and support will tell the real story and you can bet that the history books will be touting the Kindle as a leader in ebook publishing no matter what their current market share is.