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Stephen Windwalker  

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  • Amazon Positioned for 50% Overall Market Share by End of 2012 [View article]
    We hear a lot these days about Amazon and other retailers having made 50 per cent margins on hardcover bestsellers in the past, etc. Never happened. In fact, Amazon provided deep discounts of 34 to 46 percent on over 95 percent of its hardcover units sold in recent years. So, on a $25-list hardcover for which Amazon paid $12.50, the actual retail price was $13.50 to $16.50, which means that Amazon’s gross margin was somewhere between 7 and 24 percent.

    Similar situation with ebooks. Prior to the agency model, there was no 50-50 split: Publishers were setting list at $25 on bestsellers, Amazon was paying $12.50 and charging $9.99 for a 25% negative margin. in spite of the considerable evils of the agency model price-fixing scheme from a consumer’s perspective, it did have the effect of greatly limiting that loss-leader pricing, i.e., selling ebooks at a loss, by Amazon prior to April 2010. Amazon is now making a 30 percent margin on the vast majority of its sales, although it certainly is doing some selective discounting below wholesale, for instance, with certain Random House titles (including, apparently, the $5 Larsson bestsellers), as retailers will always do.
    Feb 4, 2011. 08:04 AM | 1 Like Like |Link to Comment
  • Just How Big Is the Kindle Revolution? [View article]
    @Marc wondered: "Is the existence of a massive Kindle revolution all that controversial?"

    It's a reasonable and thoughtful question, Marc. I suspect matters where the conversation is taking place. As recently as the past few months otherwise smart observers were opining that the iPad would cut seriously into the Kindle market, but instead what we have seen is that the iPad and its competitors have become Kindle content delivery devices at a pretty significant level.
    And traditional publishers are still being dragged kicking and screaming to the ebook revolution.
    But your basic point is right on the money: certainly there is no longer much factual basis for the controversy.
    Jan 15, 2011. 08:07 AM | Likes Like |Link to Comment
  • The Kindle Revolution: Outlook for Amazon Ahead of Earnings [View article]
    @roisescenario, I think another explanation is that the initial panic around 4:15 to 4:30 pm Eastern on Thursday was driven by a kneejerk reaction to the EPS number. Once investors looked beyond that and absorbed all the data they saw that AMZN made discretionary decisions to plow serious money into new distribution centers and a huge advertising campaign for Kindle, they realized that not much had changed, at least not toward the downside. So the net result of the Q2 is that AMZN was sown about a buck, which seems about right. But nothing I'm saying here should be construed to support anyone's misguided notion that they should trust Wall Street.
    Jul 24, 2010. 11:56 AM | Likes Like |Link to Comment
  • The Kindle Revolution: Outlook for Amazon Ahead of Earnings [View article]
    @trader_747 One man's ouch is another's buying opportunity, but thanks for the great advice. AMZN was at 13 when I started buying it.
    @roisescenario Point well taken on GOOG threat, which could be challenging, although I think it is front and center on AMZN radar and we shouldn't be shocked if AMZN finds a way to render the challenge beneficial. GOOG's recent ventures (like Buzz, hardware manufacturing, etc.) may help concentrate the company's focus on making its next big venture more successful.
    Jul 23, 2010. 08:07 AM | Likes Like |Link to Comment
  • Is the Agency Model a Clear Case of Price-Fixing Collusion in the eBook Market? [View article]
    @GSlusher, not guilty, thank you.
    Jul 21, 2010. 05:56 PM | Likes Like |Link to Comment
  • Of Apple, iPad and the eBooks Pie: 'Oops, We Really Only Have 10% of Total eBook Sales' [View article]
    @rayzmd, re:
    ..."corporate credibility" -- an oxymoron?

    Yes, sadly so.
    Jun 11, 2010. 04:41 PM | Likes Like |Link to Comment
  • Of Apple, iPad and the eBooks Pie: 'Oops, We Really Only Have 10% of Total eBook Sales' [View article]
    @davesmall, Sorry if my treatment of it was couched in the "long tail" jargon, but I think you're spot on about the growth of published books that is enabled by these new technologies. It's true, as you suggest, not only of emerging authors but also of backlist titles by established authors. And it is true not only for ebooks but, with the pretty incredible production and distribution efficiencies available with CreateSpace, for print books too. Major music labels are using the same company's POD efficiencies for their backlist, and there's growing migration of publishers in the same direction. That, rather than with bestsellers, is where AMZN's real edge over AAPL may be with respect to ebook content market share, but we'll see. What AAPL would need to battle on that terrain would be to give it priority in dozens of operational approaches and to totally redesign the iTunes infrastructure for ebooks, since there isn't the kind of search/sort/browse array there to enable much penetration into the long tail.
    Jun 10, 2010. 12:37 PM | 2 Likes Like |Link to Comment