On Jeff Bezos, the Kindle sales numbers game and the new $359 price
By Joe Wikert
Walt Mossberg did a fine job interviewing Jeff Bezos at this week’s D6 conference. Here are a few notes I made while I watched the two-part video of the interview:
Sticking with tradition, Bezos declined to provide any sales specifics on the Kindle but he did offer one moderately interesting tidbit. If you take the 125K titles that are currently offered for the Kindle and look at the total sales (print and Kindle) for just those 125K titles, Kindle sales represent about 6% of the total. Good luck using that figure to come up with an estimate of the number of Kindles sold to date!
The recent $40 price reduction on the Kindle is the result of improved production efficiencies. When I first saw the price drop I yawned. Was anyone really sitting on the fence waiting for the price to go from $399 to $359? It’s more likely that some fence-sitters will just look at it and say, "See? I told you it would come down…I’m jumping on the bandwagon now!"; they’ll feel good about "not paying as much as the early adopters did" and the psychology of any price cut will mean more to them than the actual number of dollars saved. But you gotta love Amazon and the way they’ve approached this. Amazon is rich with data. Have you ever noticed how the discount on some titles goes from 34% one day to 37% the next day and then back down to 34% a few days later? You can bet someone at Amazon is studying the trends and learning from the adjustments, and that’s exactly what they’ll do with this tiny price reduction as well.
Bezos mentioned a for-pay video streaming service that Amazon is going to announce in the next few weeks. Sounds interesting…
May 30th, 2008 at 8:28 am
Well the 6% figure can be used to put a cap on things, but that cap is probably an order of magnitude or two too high. You have to make a few more assumptions to get a figure that is close to reality.
Amazon reported 2.4 billion in “media” sales in the first quarter of 2008. Unfortunately that includes books as well as DVDs and music. Hard to find figures that break down the percentages of each type of media. Let’s call books half. $1.2 billion per quarter, or $400 million per month.
So now, absolute cap: 6% of that is 24 million per month. That is the absolute largest possible figure for kindle content sales per month. But that would be true only if 100% of amazon’s print book sales consisted of the 100,000 titles available on kindle.
But that’s clearly way too high, since only about 100k out of 2 million book titles are in the “kindle universe”. And the Kindle Universe contains large numbers of public domain, specialty, self-published books that for all practical purposes have nearly zero sales. Only perhaps 25,000 of those kindle titles are major publisher mainstream trade titles that have any significant sales. We can conclude that Kindle is not “top skimming” from the long tail of Amazon’s books, but rather the universe of kindle titles has it’s own long tail. Our best guess would be those tails approximately match.
We can actually conclude that just taking a straight proportion of titles on sale in kindle format vs. all print books amazon sells is probably very nearly correct, mathmatically. 100k/2000k = 5%. And finally, 5% of 24 million is $1.2 million.
So my best guess is kindle content sales are around $1 million per month in round numbers. At $20 per customer per month that puts the number of kindles in the field at 50,000 in the first quarter.
This 50,000 figure is in the ballpark of estimates made by other analysts in other ways.
Your mileage may vary. Obviously a lot of assumptions are being made here. But I have other data that is also very consistent with these estimates.
-Steve P.
May 30th, 2008 at 9:25 am
Just one data point:
I have had my Kindle since the first day they were sold. Since then I have bought about 8 books/month. I have about as many samples “on-board” that I will buy as I work my way through the backlog.
More books per Kindle/month would - given all your other assumptions - mean fewer Kindle units in the wild than your estimate of 50K.
My guess is that folks that bought the Kindle are, given the price of the device, more likely to read/buy far more books than the average person. On the other hand, given the price of the device maybe most folks are just loading stuff from Project Gutenberg.
I don’t personally know anyone else with a Kindle. Perhaps there has been some discussion amongst the Kindle users in the forums on amazon that might give some more data as to the number of books other users are buying each month.
March 24th, 2009 at 12:55 pm
[...] been well written that Amazon CEO Jeff Bezos has not been forward with the sales numbers for the Kindle, thus it is difficult to compare how the [...]