It looks like Amazon’s e-book strategy is paying off. CEO Jeff Bezos revealed Monday that, “even while our hardcover sales continue to grow,” his company sold 180 Kindle edition books for every 100 hardcovers last month. That figure has accelerated since Amazon dropped the price of its best-selling product, the Kindle e-book reader, by $70.
Full press release here.
Clearly e-books are cheaper to produce and distribute than their physical cousins, but, as the Los Angeles Times points out, there is some skepticism about whether Amazon keeps e-book prices low to help Kindle sales:
“We don’t know the economics of these e-books,” said Colin Gillis, an analyst with BGC Financial. “In our opinion, they are losing money on a lot of the bestsellers sold as e-books.”
The site has about 630,000 e-books for sale, plus numerous titles that are available as free downloads. About 80% of the priced e-books go for $9.99 or less, according to the company, significantly lower than the approximate $25 average for hardbacks.
[...] The company is much more likely to be making a profit on sales of its Kindle device, he said, even with the price cut. “There’s one thing that we’re pretty certain on,” Gillis said. “They’re making a lot of money on the hardware.”
Amazon says it excluded free Kindle books from its sales comparisons.
Whatever Amazon’s motives, consumers clearly expect a discount when buying digital media. And why not? Digital books don’t have to be made from trees and inks, shipped half way around the world and moved from warehouse to store to home. Why shouldn’t the publisher pass on the savings to the consumer? —PZS