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Waves of Change in the Kindlesphere: How the Kindle Store is Evolving into Three Stores to Sharpen Competition and Marginalize Outliers

The waves of change continue in the Kindlesphere.

  • In the next few weeks we expect to see the launch of the Kindle Apps Store, the rollout of new accessibility features including what Amazon calls “audible menuing,” big changes in royalties and publishing features for Kindle authors and publishers, and a completion of the rollout of version of 2.5 of the operating software for the latest generation Kindle and Kindle DX. 
  • Many of us are watching with great interest for the denouement of the negotiations/controversies/conflicts that’s currently keeping new Penguin titles out of the Kindle Store and all Random House titles out of the iBooks Store.
  • On the hardware side, it remains to be seen whether Amazon will work as hard or place as high a priority on delivering the inevitable Super Kindle with the color touch display as it is working to make what will soon be an installed base of 100 millions iPads, iPhones, and iPod Touches super selling venues for Kindle and other digital content, including wolfish Video on Demand offerings donning the sheep’s clothing of the Netflix for iPad app if Amazon pulls the trigger on a Netflix acquisition.

But let’s focus today on dramatic if evolutionary changes that are occurring in the Kindle Store catalog.

Yesterday’s report that Amazon will soon drop free Kindle books from its main Kindle Store bestseller lists is just another portent that, in some ways, the Kindle Store is in the process of being transformed into three stores:

  • the Kindle bookstore to which we have grown accustomed over the past couple of years, with a large and diverse catalog of over half a million titles priced mostly between $2.99 and $9.99, currently growing at around 25,000 titles a month, and including work of distinction by emerging authors as well as bestsellers by established author;
  • several thousand other “new release” titles from publishers who have signed onto the agency model price-fixing pact, at least temporarily, with prices set between $10 and $15;
  • a growing number of free books including Amazon’s current “private label” catalog of public domain titles, a growing number of free promotional titles, and millions of other free public domain titles from third-party sites that Amazon will make increasingly seamless to download and read on the Kindle platform, perhaps with the kind of overhauled, Kindle-compatible “Stanza @ Kindle” offering that might have been behind the departure of Stanza fountainhead Neelan Choksi from Stanza.Amazon.com the other day). .

Now, or beginning at some point between now and June 30, Amazon will be making a major effort to organize the vast majority of Kindle store prices so that they fall in the $2.99 to $9.99 range. As I noted here when Amazon announced this program, Amazon will be using honey rather than vinegar, with an offer to pay direct 70% royalties to all authors and publishers who set prices in this price range through Amazon’s Kindle-compatible Digital Text Platform and participate fully in other Kindle features like text-to-speech.

There will be other outliers, including declining percentages of the total catalog that is priced between $.01 and $2.98 or over $14.99. The contraction of offerings in these price ranges, of course, will be driven by the promise of direct 70% royalties. For titles currently earning the standard Kindle DTP royalty of 35% at sales-suppressing prices from $15 to $19.99, (or, for that matter, $10 to $14.99), bringing the suggested retail list price down to $9.99 and taking any other steps necessary to comply with the new 70% royalty program ought to be a no-brainer for any author or publisher capable of doing the math. As a cursory check of the Kindle Store’s current bestselling titles in that $15-to-$20 price range reveals, there are precious few titles that are cracking the top 2,500 at such prices, and many would experience significantly higher sales at the $9.99 price range.

In a post the other day about bargain prices for a couple of Elizabeth Peters ebooks in the Kindle Store, I made the point that readers may actually be able to influence publisher pricing behavior when we jump on bargain prices like those mentioned in the post, even while the Kindle bestseller list shows some signs that Kindle owners are accepting agency-model pricing:

When an agency model publisher fixes a low price for a backlist title like these, the publishing is putting itself in a position to learn a great deal about pricing, sales, and profitability in the ebook world. Based on my own experiences and those of other authors, I believe that the ideal Kindle Store price for many backlist titles is in the $2.99 to $4.99 range, and that most such titles, if they are quality books with a little bit of marketing effort behind them are likely to sell roughly twice as many copies if they are reduced from $9.99 to $4.99 or roughly three times as many if they are reduced from $9.99 to $2.99. If Hachette and other publishers find out that such formulas apply to their backlist titles, it could be a powerful incentive for them to lower prices wherever possible.

So, the fun continues. When there’s competition between business behemoths like Amazon and Apple, it tends to be complicated by all kinds of counterforces, not the least of which are the many ways in which the two companies are partners. But as nice a guy as Jeff Bezos may be, he is also, to his great credit, the leader of a company that is as ruthlessly committed to fostering competition within the Kindle Store as it is to competing with other businesses in the ebook sector. The result for customers in the Kindle Store as elsewhere in AmazonWorld is like to be ever greater selection and, over the long haul, ever better pricing.

Related posts:

Kindle Bestsellers by Category

Kindle Accessories

Kindle Store Bestsellers

Kindle Store Bestsellers: Newspapers Only

Kindle Store Bestsellers: Blogs Only

Kindle Store Bestsellers: Magazines & Journals Only

Kindle Store Bestsellers: Books Only

Kindle Store Bestsellers: Fiction

Kindle Store Bestsellers: Nonfiction

Kindle Store Bestsellers: Hot New Releases (This includes titles released within the past 90 days).

Kindle Store Bestsellers: Movers & Shakers (This highly volatile hour-by-hour list shows the titles from the top 400 Kindle store bestsellers that have experienced the greatest percentage jump in sales rankings during the past 24 hours. For instance, a title that has jumped from #7 to #2 will show a 250% climb).

Kindle Store Bestsellers: Publishing & Books

Kindle Store Bestsellers: Literary Fiction

Kindle Store Bestsellers: Contemporary Fiction

Kindle Advice & How-to Bestsellers

Kindle Arts & Entertainment Bestsellers

Kindle Biographies & Memoirs Bestsellers

Kindle Business & Investing Bestsellers

Kindle Children’s Book Bestsellers

Kindle Computers & Internet Bestsellers

Kindle Fantasy Bestsellers

Kindle Fiction Bestsellers

Kindle History Bestsellers

Kindle Humor Bestsellers

Kindle Literary Fiction Bestsellers

Kindle Mystery & Thrillers Bestsellers

Kindle Nonfiction Bestsellers

Kindle Parenting & Families Bestsellers

Kindle Politics & Current Events Bestsellers

Kindle Reference Bestsellers

Kindle Religion & Spirituality Bestsellers

Kindle Science Bestsellers

Kindle Science Fiction Bestsellers

Kindle Sports Bestsellers

Kindle Travel Bestsellers

Amazon to Drop Free Books from Kindle Bestseller List

To mangle a snarky old line from my not-so-recent adolescence, I took a picture of the zero-priced books at the top of the Kindle Store’s Bestseller list (at right), because it will last longer.

That’s right. Rachel Deahl of Publisher’s Weekly has reported today that an Amazon representative told her that, within “a few weeks,” Amazon “will be splitting its Kindle bestseller list, creating one list for paid books and another for free titles.”

As of today, the top 10 titles on the Kindle bestseller list, and 33 of the top 50, are either currently free or achieved their lofty ranking due to being free until the past couple of days.

The prospect of a bifurcated list will certainly create a different look and feel for the Kindle Store sales rankings, and could conceivable reduce the incentive for publishers and authors to offer free promotional downloads of some of their Kindle-formatted books. But if Deahl’s report is true the new top 10 will soon include names like Larsson, Patterson, Turow, Stocket, Quindlen, Coben, Bush, Baldacci, Junger, and Rachman.

We’ll be back soon with some analysis of how this reported change will fit in with a number of major changes that are now in the process of occurring in the Kindle catalog.

Kindle Store Bestsellers, Month-by-Month for the First 30 Months

There have been nights in my life when, in an effort to fall asleep without turning the light back on to read, I have relied not on counting sheep but on reciting silently to myself the regular starting lineups of each team in the American League for the 1961 season. It always worked, and I would usually doze off around the time I made my way around the nifty Indians infield of Vic Power, Johnny Temple, Woody Held and Bubba Phillips. I’ve always been a baseball guy, and like a lot of other fans I found that my memory works best for the first season that I paid attention to baseball, and that was ’61, a pretty cool year to become a fan. 

But I’m also a book guy, and things like bestseller lists can be as compelling for book people as batting averages and other stats are for baseball fans. So, just for fun and in case you want to any backfilling of your reading or drill down on the bestseller lists from the first 30 months of the Kindle Revolution, here they are. Click on any of these links to see the 100 bestselling titles in the Kindle Store for that month. I’m pretty sure that the Kindle Store has not gone out of stock on any of these, although the prices for some may have changed and the prices shown on these lists are, of course, the current prices for each book:

Around the Kindlesphere, April 29, 2010: Non-Freebie Bestsellers, Faith-Based Freebies, Prices at the Time of Paperback Release, Brisk Online Sales, Kindle Rising in the Land of the Rising Sun?

By Stephen Windwalker, Editor of Kindle Nation Daily

© Kindle Nation Daily 2010
Not for nothing, but from Publisher’s Marketplace via The Independent, here are the top ten bestselling non-freebie books in the Kindle Store for the week ended April 27, 2010:

1. The Girl With the Dragon Tattoo – Stieg Larsson (2=position last week)
2. Caught – Harlan Coben (1)
3. The Girl Who Played With Fire – Stieg Larsson (3)
4. House Rules – Jodi Picoult (4)
5. Deception – Jonathan Kellerman (9)
6. The Help – Kathryn Stockett (6)
7. Every Last One – Anna Quindlen (new)
8. Deliver Us From Evil(re-entry) David Baldacci
9. Major Pettigrew’s Last Stand – Helen Simonson (8)
10. The Shadow of Your Smile – Mary Higgins Clark (7)

Meanwhile, it’s time to  clean out the top drawer of my desk here in the corner office at Kindle Nation headquarters….

  • Speaking of freebies and non-freebies, I’ve noted here a few times my anecdotal sense that religious publishers seem to have a passkey to the portals through which ebooks are offered free in the Kindle Store, but I have resisted drawing any harsh conclusions since I had not taken the time to assemble any real evidence. So I appreciate the rigor that Bufo Calvin has brought to a post at his I Love My Kindle blog, “Onward Christian Freebies.” Calvin drilled down on the breakdown of the 59 free promotional books in the Kindle Store a few days ago. “When I analyzed the books I came up with 41 from known faith-based publishers, 18 from other publishers,” he wrote. So, not to draw conclusions, but what’s up with that, Amazon? I mean, I’ve downloaded and occasionally even reviewed (positively) books from faith-based publishers before, and I have nothing in the world against them. I am fully prepared to grant the possibility that there may not be a level playing field when it comes to salvation, but I — and many other citizens of Kindle Nation — have called in the past for parity in the feature and pricing offerings available to publishers large and small, and it’s about time Amazon put this in place. Any publisher that agrees to play generally within Amazon’s preferred Kindle Store pricing framework of $2.99 to $9.99 ought to have equal access to a “dashboard” option of offering certain titles, up to a set percentage of that publisher’s titles, at a zero-price promotion for a limited and specified period of time. Treat us all the same, Amazon, and perhaps we’ll all get to the Promised Land together!  
  • And speaking of Kindle Store bestsellers, I noticed today that Pat Conroy’s novel South of Broad, one of the top non-freebies in the Kindle Store during the late Summer and Fall of 2009, is climbing the Kindle sales-rank ladder again as public awareness is stimulated due to the marketing of its paperback edition, which will be released next Tuesday, May 4. Years ago Herman Raucher’s film adaptation of The Great Santini (with Duvall and Danner) drove me to buy and read the book. I’ve been a multimedia Conroy consumer ever since, and in August I purchased both the Kindle and Audible.com versions of South of Broad. I won’t be buying the paperback next week, even at Amazon’s discounted price, but I do find it interesting to note that, by abstaining from other publishers’ collusive agency price-fixing model and allowing Amazon to put its unparalleled multi-format pricing experience to work on behalf of all, Conroy’s publisher (the Nan A. Talese imprint falls under Doubleday’s umbrella, and thus under Random House) is maximizing brisk online sales in four important formats. The hardcover is currently ranked #1,896 in Amazon’s main bookstore with its price discounted from $29.95 to $19.77, pre-orders of the paperback are at #760 with a price discounted from $16 to $10.88, the $9.99 Kindle Edition moved from about #500 to about #400 in the past 24 hours, and the unabridged Kindle-compatible Audible.com version is, I’m sure, still selling a few copies with a price discounted from $31.50 to $23.63. For Mr. Conroy, life is pretty good, and all the better because he’s not published by MacMillan, Hachette, Simon & Schuster, HarperCollins, or Penguin/Pearson, the five agency model price fixers.
  • Speaking of brisk online sales, someone bought a Kindle yesterday after visiting Kindle Nation Daily and clicking on a link to Amazon. This has happened five times this month, and since Amazon sends $25.90 to Kindle Nation Daily two or three months after each such occurrence (yep, that was a disclosure), it looks like I will be in good shape to pay the various monthly fees associated with Kindle Nation Daily in July. So, thank you! And it appears that my sales are just the tip of the iceberg for Amazon, since I see that as of this morning the Kindle is still Amazon’s #1 selling electronics item, and Amazon said in a release earlier this week that in fact the Kindle remains the #1 selling item, period, for Amazon. Other products worth noting among Amazon’s top 25 in Electronics as of this morning are the Kindle DX at #7, iPod Touch models at #2, #3, and #19, other iPods at #14 and #15, and an Apple mouse at #24. Among Amazon’s top 25 in laptops are iPad models (offered by third-party sellers at premium prices) at #1, #2, and #4, and these models also rank #12, #23, and #74 among Amazon’s top 100 in computers, where Apple is additionally represented by 8 Mac models in the top 40.
  • Finally, I’m sure that folks who understand the 21st century innovation of “cloud computing” far better than I would be quick to tell me that it would be a huge stretch to link this news release from Amazon yesterday to global Kindle expansion, but I’m not so sure. Amazon’s headline reads: Amazon Web Services Launches Asia Pacific Region for Its Cloud Computing Platform; Cloud pioneer now offers its suite of web services from new Singapore datacenters to serve customers desiring an Asia Pacific presence, and you can click on the title to read the entire release. After all, don’t clouds often bring rain? Perhaps I am out of my depth here, but Bloomberg Business Week did have an intriguing story last week about talks between Amazon and Kodansha ahead of a possible in-country Japanese language Kindle launch, and I’m paying close attention to all the tidbits I can find about Amazon actually allowing the Kindle to establish country-by-country international roots for three reasons: (1) the number of Kindle Nation readers beyond U.S. borders continues to grow dramatically; (2) it’s potential news; and ( 3) I have a small vested interest, in that my Asian publisher (Nikkei BP) is releasing its Japanese translation of my book The Complete User’s Guide To the Amazing Amazon Kindle in paperback in May and wants to follow up with a Kindle edition as soon as Amazon offers a Japanese-language Kindle platform.

A boy can dream, whether he’s Ash on a Pokemon quest in Japan or an author in Arlington on a quest for first-mover status in the Japanese Kindlesphere.

From the Kindle Nation Mailbag: Understanding the Kindle Store Bestseller Lists

Thanks to Kindle Nation citizen Matt for this email with questions about the mysteries of Amazon’s famous sales rankings as they are played out in the Kindle Store:

Mr. Windwalker,
I’ve never concerned myself with how the New York Times or American Top 40 tabulated their “top sellers” or “Top 10”.  But, having just recevied a Kindle, the Bestsellers list has made me almost obsessively aware of these types of lists. 
Are these lists compiled hour-by-hour (like it says they are updated)?  Are they listed by number of units “sold” (since some are free)?  Are they really updated daily instead of hourly like it says?
I mean, you can’t tell me that “Male Call” – presently STILL ranked #1 in the Kindle store has been downloaded by the MOST people every HOUR for the past 3 or 4 DAYS.  There are only a finite number of Kindles out there and many guys like me who would NOT buy this book.  I seems logistically flawed that the top 5 Kindle sellers don’t move/have not moved hour-by hour in the past 3 days.
Could you please shine a little light on how these lists are compiled?  Thank you
Matt C.
Matt, although Amazon has very little to say officially about the exact formulas behind its sales rankings in the Kindle Store or anywhere else on its website, some of us who have been paying close attention to these matters for over a decade have developed some general expertise in these matters. A fellow named Morris Rosenthal has written extensively on the inner workings of the sales ranking over the past decade on his website. Here are a few things to keep in mind:
  • Although the sales rankings are, for the most part, updated hourly, this does not mean that they reflect sales for only the past hour at any given time. They actually reflect a balance of sales over the past hour, the past day, the past week, the past month, and longer, but Amazon does not reveal the weighting given to these different lookbacks.
  • The sales rankings reflect all transactions involving each item regardless of its price, whether the price is zero or over a hundred dollars. Consequently a free book that slightly “outsells” a $9.99 book over the weighted past periods will lead the $9.99 book in the bestseller list.
  • It is not uncommon to find that the listings near the top of the bestseller lists remain fairly consistent for days or even weeks at a time, in part due to the fact that, by definition, incrementally larger daily (and weekly, and monthly, and so forth) sales volumes are necessary to sustain each new step up the ladder. Just as a hypothetical model, here might be days on which it would take recent daily sales of 800 copies to earn the #4 position on the Kindle Store bestseller list, when it might require double that recent daily sales volume to get to the #1 position. Movement is more volatile at the other, “long tail” end of the sales rankings, a title that had sold one copy in the past six months might be ranked 260,000 in the Kindle Store, but if it sells a second copy in the next hour, its next sales ranking adjustment could vault it into the top 25,000, only to fall back a few thousand rungs with each passing hour until it settles back somewhere beyond the 100,000 mark.
  • The last point worth making is that it takes a long time and a lot of sales to saturate the customer base in the Kindle Store, and I don’t think there has been an instance yet where it has happened.  My Kindle guide was the #1 book in the entire Kindle Store for the entire year (taken as a whole) for 2008, including one run of 15 out of 21 weeks, but there were still about 90 per cent of Kindle owners who, much to my chagrin, had not purchased it. So the fact that the Male Call freebie shows some staying power as #1 does not necessarily mean that there are tons of “guys” making surreptitious purchases of a book that seems aimed at another demographic. Not that there would be anything wrong with that.
That’s my little light, Matt, and I hope it helps.

Amazon Launches Kindle Bestseller Archive

For those who like to keep their finger on the pulse of Kindle book sales, Amazon has just announced the launch of several bestseller archives including a comprehensive archive of Kindle Store bestsellers on a year-by-year, month-by-month, and week-by-week basis going back to the very first day of the Kindle era, November 19, 2007. Here are links to the three full-year bestseller lists, where you will also find pull-down menus that make it easy to focus on any week or month during the 25 months since we have had Kindle books to download.

I found it to be great fun to peruse these lists, and as is usually the case when I check out end-of-the-year lists for just about any year, I found a few titles that I really wanted to read, but somehow missed the first time around.

No doubt there will be far more interesting analyses of these archives by others, but there are a few things that jump right out at me about the 2009 Kindle Store bestseller list:

  • Over 20 of the 100 bestselling books for the entire year are public domain classics. Others can grouse about the devaluing of the book, but I frankly do not see it that way. What I do see is that the Kindle is playing a serious role in keeping significant numbers of readers in touch with great literature. 
  • Other data that is available to me strongly suggests that, although Amazon did not make a dime on the Kindle editions of the 23 public domain titles that I count among the top 100 Kindle Store “sellers” for 2009, these titles accounted for well over a million downloads to Kindle owners. 
  • Another 21 of the top 100 bestselling Kindle books for 2009 are “promotional” titles that are currently free in the Kindle Store, which among other things suggests that timing can be everything for books that have just become free. What I’m getting at there is that there has been an absolute tsunami of Kindle activity beginning at dawn on Christmas Day, such that the number of fresh downloads for a new freebie like Noel Hynd’s Midnight in Madrid could help to push it into the top 10 for the year, something that might not have been true if it had been free for a week in July.
  • I also noted that at least another 20 of the 100 bestselling titles in the Kindle Store for 2009 are books that, while not free any more, were free at some earlier point in the year and owe their precedence at least in part to that circumstance. As a result, that leaves about one-third of the top 100 Kindle titles whose 2009 sales chiefly involved actual payment transactions between Kindle owners and Amazon.

No doubt some wag will look at these numbers and conclude that the Kindle is cheapening the book, but that wag will be dead wrong, just as he would be dead wrong if he concluded from other data that libraries are cheapening the book.

Instead, here’s how it works:

  • Kindle books that are free or otherwise less expensive than the $14 to $35 that mainstream publishers try to get for trade hardcovers and paperbacks encourage people to buy Kindles, as about three million readers have done so far.
  • When someone buys a Kindle they buy, in the vast majority of cases, more books than they used to buy, at prices ranging from free to $9.99 and above.
  • There is ample room in the Kindle pricing market for significant margin and royalties for all concerned including Amazon, the author, and — where necessary — the publisher.

It really isn’t rocket science.