eBook Market Needs Transparency, and Fast
By Guy LeCharles Gonzalez, Chief Executive Optimist, Digital Book World
“Five of the six biggest publishers in the US, who have their books on the iBookstore tell us that the share of eBooks now that are going through the iBookstore, is about 22%.
So iBooks market share now, of ebooks from 5 of these 6 major publishers, is up to 22% in just about eight weeks.”
From consumer demand, to devices and DRM schemes, to piracy concerns and reliable sales data, the nascent but undeniably booming eBook market is becoming a smoke and mirrored mess for anyone looking for straight answers.
During Apple’s Worldwide Developer Conference 2010 on Monday, Steve Jobs added the latest puff of smoke with his carefully worded statement on iBooks’ eBook market share that many media outlets took out of context, paying more attention to his visuals than his words, gleefully “reporting” that Apple, in only two months, had miraculously cornered more than 1/5th of the market with their relatively minuscule selection of eBooks from only a handful-plus of publishers.
One of the most glaring instances is the sensationalistic Motley Fool article, Apple Will Eat Amazon Alive, in which they engage in the kind of “analysis” that enabled little things like Enron and the sub-prime mortgage crisis:
That’s good enough for a 22% slice of the e-book market, according to Apple’s publishers.
Now, before we begin shrugging our shoulders at a 22% sliver of the nascent digital book market, or musing on how many of those 5 million books were public domain freebies, let’s consider how remarkable an accomplishment this actually is…
If you’re Barnes & Noble (NYSE: BKS) or Sony (NYSE: SNE), throwing in the digital towel doesn’t seem like such a crazy idea at this point.
This isn’t Mashable or even Publishers Weekly getting it wrong, but a notable financial news and analysis outlet that claims to be “The World’s Greatest Investing Community” ignorantly pushing a lie that could adversely affect both Apple’s competitors and their publishing partners.
Even Allen Weiner, a research VP for Gartner, was misled by Jobs’ discordant visuals and heavily nuanced statement:
At the Apple World Wide Developers Conference, CEO Steve Jobs announced that in 65 days, five million e-books have been downloaded for the iPad. Using some sort of voodoo algorithm, he claims that amounts to 22% of all e-book sales. I am not sure how he calculated that given many of the e-book retailers are private and publishers are loathe to share those sorts of figures. Nonetheless, the take-away is that Apple is selling lots of e-books for the iPad.
This is important for a number of reasons, the most apparent one being that reading books on mobile, digital devices are real. The other notable revelation could be that consumers are OK with reading e-books on an LCD screen (iPad) even though it offers a less optimal (read, harder on the eyes) reading experience than e-paper devices such as the Kindle, Nook, Sony Reader, etc.. This early in the e-reader evolution, perhaps consumers are willing to trade a less optimal e-reading experience for the added bonus of video, games and other applications available for the iPad.
UPDATED: Just saw this over at Publisher’s Lunch (registration required):
In another sign of how sentiment is running on Wall Street, yesterday Bank of America-Merrill Lynch lowered their price target on Amazon.com, from $155 a share to $150. Of course that’s well above the company’s current trading price, and the day before Goldman Sachs analyst James Mitchell had raised his target to $190 a share, basd on an expectation of growing sales in China.
So there’s plenty of opinion out there–but Amazon is more than 20 percent down from a recent high of 150 a share in April and with a high price-to-earning ratio of over 51 may be more sensitive to changes in investors’ growth expectations.
As I noted two weeks ago, reflecting on the hiccup in eBooks sales growth in February and March, the second quarter of 2010 will offer a new benchmark to watch as the effects of Apple’s claim of 5 million eBook downloads (not sales, downloads) via iBooks will finally move beyond speculation and spin and into [still somewhat speculative] measurable data.
A few questions that need be answered, and fast, are:
- How much of the decline in February and March was attributable to Macmillan’s [and Penguin's, et al] eBooks being removed from Amazon during their dustup over eBook pricing and the move to the “agency model”?
- Will April sales spike upwards, and will it be thanks to iBooks or the iPad’s relatively open platform that allows Amazon, B&N, Kobo and others to play along?
- Will the Nook have any impact at all, and if so, will anyone acknowledge it?
Of course, the $100,000 $1,000,000 Question is will Amazon or any publishers come forward with hard data on their eBook sales to confirm any of the answers that are offered to the above questions?
And if not, why not?
NOTE: On Twitter, The Motley Fool responded, somewhat coyly, to my questioning their analysis: “Well, that’s why we have ‘Fool’ in the name. (: We’ve passed your observation on to the writer of the piece in question.”
Considering the writer, Rick Aristotle Munarriz, hasn’t bothered to respond to any of the comments left on the article itself, some questioning his “analysis”, I’m not holding my breath.