[Ed.: Commenters have noted how hard it can be to get a handle on the current state of ebook sales from the shifting and volatile information available to us. Digital Book World is pleased to offer reports from Dan Lubart’s eBook MarketView, to help us see what stories the actual data has to tell. Using a proprietary market analysis tool, Dan pairs publicly available data from multiple ebook retailer bestseller lists with analysis and visual presentation to help publishers identify and understand emerging patterns.]
On June 1, Amazon launched a new promotion called “Sunshine Deals.” It was reminiscent of what they’ve done in the digital music space, where they offer lists such as “Top Albums for $4.99 or Less,” only in this case it’s “Over 600 Books On Sale for $0.99, $1.99, and $2.99.” It’s a great promotion and surely has exposed many titles to a wide audience seeking a bargain. In fact, it has catapulted a number of these titles to the top of the Kindle Bestseller list. What’s interesting to us is the prominent effect this promotion had on the landscape of their e-book marketplace.
Consider that positioning on the Kindle Bestseller list is very important for sales. It provides visibility as many customers scan the list, and we’ve established over time that position on the list tends to be self-sustaining. In other words, titles that make the list tend to stay on the list (i.e., they continue to sell well). So, for every new title that makes the list, another title already on the list must drop off.
First, let’s look at the effect Sunshine Deals had on the average price of titles in the Bestseller list.
Chart 1 – Daily Average Price – Kindle Bestseller List
The average price of the titles on the list dropped from $7.75 on early June 1, to $7.19 a day later, and continued to decline to $6.43 on June 4 – a decline of 17%. As you can see from the chart of the average daily price since January 1, this was an unprecedented change.
Let’s look at the impact another way now.
Chart 2 – Daily Price Band Splits – Kindle Bestseller List
Note the rise of titles on the list priced below $3 from 32 to 47 in those same four days. Initially, those slots on the list were occupied by books priced above $8.
But in the last few days, something interesting happened on the list. The number of books priced below $3 started to decline. And most interestingly, the number of titles priced over $8 grew, but the number of titles between $3 and $7.99 did not.
Perhaps the customers who normally are comfortable buying “full-priced” eBooks tried out the “cheap seats” for a few days, perhaps a week, but did not necessarily become customers that consistently went for that price zone, even as the promotion continued. Perhaps the Sunshine Deals promotion encouraged new, but limited-time bargain hunters: more likely, the promotion encouraged a rush of customers who were already accustomed to buying low-priced Kindle eBooks (now easier to find both because of the promotion itself and because more of them had crept into the Kindle Bestseller list).
Although the data cannot illustrate individual purchase behaviors over time, it does suggest certain things about the entire Kindle eBook market. So what may we have learned from this?
- Amazon has tremendous power to change peoples’ purchasing habits in the short term (perhaps a week if we go by this example), but not necessarily in the long term.
- The premium segment of the market is at least somewhat resilient, which is great news for the agency publishers.
- Meanwhile, customers who are more bargain-conscious and used to shopping in the $3-to-$7.99 band (think mass-market paperbacks) more easily find titles they will like in the promotion.
We can expect more experimentation of this type and others from Amazon, and agency publishers have taken note. (They could hardly miss this one.) The battle over the value of published content in the digital space has reached a new phase, and it will be interesting to see where it goes from here.
Dan Lubart is the principal at Iobyte Solutions, an IT strategy firm with a specialty in publishing and entertainment media. Iobyte’s eBook MarketView tool enables publishers, authors, agents and others to study the dynamics of the ebook retail marketplace in various ways. Dan blogs at eBook MarketView.