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"We believe deceleration in Amazon’s North America Media revenue segment is increasingly...

"We believe deceleration in Amazon’s North America Media revenue segment is increasingly likely for 2Q13," says Barclays in a note helping Amazon (AMZN -0.8%) shares fall on an up day. The firm's remarks come a couple days after Barnes & Noble delivered ugly April quarter numbers and FY14 guidance (though share losses to Amazon were almost certainly a culprit). Lifted by e-book sales, Amazon's North American Media sales rose 14% Y/Y in Q1 to $2.5B, and made up 16% of revenue. International media sales rose only 1%.
Comments (13)
  • Tae Kim 75
    , contributor
    Comments (181) | Send Message
     
    "(though share losses to Amazon were almost certainly a culprit)" REALLY? What's your proof?

     

    Kindle Fire searches are down huge y/y (30%+) in 2013 vs. 2012 just as bad as Barnes & Noble Nook searches on Google Trends. This must be bullish for AMZN! Oh wait..

     

    "Fifty Shades of Grey Kindle" searches were down 95% y/y last week. That's bullish for AMZN too! Oh wait..

     

    Quote from BKS conference call transcript yesterday:

     

    "Stuart Quan
    I had a few questions. The high single digit negative comp guidance for next fiscal year (book sales), what is that for core comp?
    ...
    Andy Milevoj - Vice President of Investor Relations
    Hey, Stewart, it's Andy. The only thing I would point out that Mike alluded to in today's speech is that when you're thinking about where comps will unfold over the next 12 months, obviously, Q1 and Q2, you had the significant impact of Fifty Shades last year, which is going to impact the core comp. The difference between the headline comp and the core comp is the device sales. So as you're looking at core versus the total comp, obviously, the core will be impacted by that comparison for the first half of the year.

     

    William J. Lynch - Chief Executive Officer, President and Director
    And just maybe to provide a little more color on the impact of Fifty Shades, it was worth 4 to 5 points of comp for us last year. It was that big a book."
    http://bit.ly/11QqToI

     

    So BKS said book sales are going to be horrendous (significantly negative y/y) next 2 quarters/full year due to tough comps on Fifty Shades and Hunger Games (amazing 4-5 points of the sales comp last year).

     

    This is very bad for AMZN media book/ebook sales next 2 quarters. A lot of high profit margin ebook (30% margins) business to comp too from last year.

     

    BKS decelerating quarterly digital content (includes ebooks) sales y/y matched and correlated very highly with AMZN media sales last 5 quarters.

     

    Not really surprising because AMZN and BKS have the EXACT SAME failed color Android forked tablet strategy which is losing huge market-share to Google and Apple tablets.
    27 Jun 2013, 03:01 PM Reply Like
  • SA Editor Eric Jhonsa
    , contributor
    Comments (753) | Send Message
     
    I was thinking more about B&N's poor retail sales, and guidance for further same-store sales declines. Clearly Amazon (both via physical and e-book sales) has been playing a role here for a while.

     

    But if you're intent on putting every piece of Amazon-related news in the worst possible light for the company, don't let me stop you....
    27 Jun 2013, 03:08 PM Reply Like
  • Gary J
    , contributor
    Comments (3576) | Send Message
     
    B&N is trying to get the stock price as low as possible to buy back the company.

     

    But let's not that stop every desperate short of AMZN. lol
    27 Jun 2013, 03:20 PM Reply Like
  • Tae Kim 75
    , contributor
    Comments (181) | Send Message
     
    BKS conference call this week. Quote from BKS CEO on physical book market-share:

     

    "As far the market share, it stayed about the same over the last couple of years"

     

    Source link: http://seekingalpha.co...
    27 Jun 2013, 03:40 PM Reply Like
  • Tae Kim 75
    , contributor
    Comments (181) | Send Message
     
    It's gotten so bad for Amazon Kindle Fire that even Groupon is fire-selling it. Nook bad sales = Kindle Fire bad sales using same hardware offering strategy of less functional forked tablet vs. Google Android/iPad competition.

     

    Groupon fire-sale link that is live now:
    http://gr.pn/18jjzta
    27 Jun 2013, 07:37 PM Reply Like
  • Tae Kim 75
    , contributor
    Comments (181) | Send Message
     
    BKS had strong y/y same-store books sales comps growth in 2012 thanks to Fifty Shades of Grey (as quoted in conf call) and Hunger Games (from movie launch). It's a general books slow-down, not shift to AMZN.
    27 Jun 2013, 03:18 PM Reply Like
  • SA Editor Eric Jhonsa
    , contributor
    Comments (753) | Send Message
     
    B&N's retail sales fell 10.3% Y/Y in the January quarter. Same-store sales fell 7.3%, and core comps (excludes the Nook line) fell 2.2%. Last quarter, the numbers were -10%, -8.8%, and -5.8%. Whereas Amazon's North American media sales rose 14% Y/Y in the March quarter.

     

    It wouldn't surprise me to see Amazon's growth rate slow down in Q2 for the reasons you mentioned, particularly following Barclays' note. But it definitely looks like B&N is losing share (in part due to Amazon's ~65% e-book share).
    27 Jun 2013, 03:52 PM Reply Like
  • Peter Larson
    , contributor
    Comments (611) | Send Message
     
    Amazon's total media sales do not equal ebook sales.

     

    Nobody is arguing that Barnes and Noble's sales declined. They're nice enough to break the numbers out for us. And those numbers match Google trends for nook very well.

     

    But, if you look at Google trends for the US market (Nook is only sold in the US and UK), a year ago the ratio of Kindle/nook searches was 3.167, during the holidays the ratio was 3.03, and in the past week the ratio was down to 2.167.

     

    In other words, the objective third party evidence is showing Nook actually GAINING significant market share even as sales sharply contract. Kindle appears to be doing even worse.

     

    At least in ebooks.

     

    Additionally, Tim Cook testified under oath that Apple has about 20-25% market share, and that they trade off for number two with Barnes and Noble. That confirms Barnes and Noble's claim that they have 25-30% of the market and means Amazon's market share has fallen to at least below 50%.
    28 Jun 2013, 02:46 PM Reply Like
  • Tae Kim 75
    , contributor
    Comments (181) | Send Message
     
    Yea good find. Apple confirmed IN COURT in the past month they have 20% ebook market-share. And BKS repeatedly said on earnings conference calls in the past year their ebook marketshare was 25-30%.
    28 Jun 2013, 02:51 PM Reply Like
  • SA Editor Eric Jhonsa
    , contributor
    Comments (753) | Send Message
     
    "Amazon's total media sales do not equal ebook sales."

     

    Obviously. I never suggested that they did. But there is a ton of overlap between the products covered by Amazon's media sales and the products B&N sells (whether physical or digital).

     

    Amazon and B&N's 2013 figures to date strongly suggest to me Amazon is gaining media share relative to B&N (as they have for many years). I say that as someone who doesn't have a horse in this race, and just tries to call things as he sees them.

     

    "the objective third party evidence is showing Nook actually GAINING significant market share"

     

    Google Trends data doesn't equal market share data. Factors such as marketing activity, discounts, and buzz around a new product launch can skew the figures relative to market share. B&N's recent Nook HD price cuts may have led to a bump in search activity. That said, I'm not that bullish about Amazon's Kindle hardware business either.

     

    Good point about Apple's e-book share. It looks like they've taken some share from both Amazon and B&N.
    28 Jun 2013, 03:06 PM Reply Like
  • Tae Kim 75
    , contributor
    Comments (181) | Send Message
     
    Searches for "Kindle Fire" significantly double-digit negative y/y YTD:
    http://bit.ly/11NJ91W

     

    Searches for "Fifty Shades of Grey Kindle" down 90%+ y/y last few weeks:
    http://bit.ly/11NJba6

     

    Searches for "Hunger Games Kindle" down 90%+ y/y too:
    http://bit.ly/11NJbaa
    27 Jun 2013, 03:36 PM Reply Like
  • Mark Krieger
    , contributor
    Comments (3775) | Send Message
     
    Paulo was right!
    27 Jun 2013, 03:51 PM Reply Like
  • maximumvalues
    , contributor
    Comments (440) | Send Message
     
    So long as AMZN does not make a new WEEKLY CLOSING HIGH ... i will stay short. In fact i added to my short just above $281.

     

    Short AMZN, GM, V, TGT and long HSE.TO
    1 Jul 2013, 11:49 AM Reply Like
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