Apple, Amazon and B&N: Adds up to 125%?
The DOJ suit against Apple has been a lot of fun to watch. The coverage is complete and being able to see ‘behind the scenes’ of it all is very cool. Most of the time discussions at this level are not public. Apple and Amazon are so secretive. They almost live in their own universes.
Most of the testimony is opinion, conjecture and nuanced. But the numbers behind eBook sales have always been held tight. Few of the players release full data and we must piece together various statements to build a true view of the market.
A trip back in time to 2010:
- Amazon started the year with 93% of the eBook market. They had control over pricing and had a tremendous “first-mover advantage.”
- B&N brought out the Nook in Fall 2009, released wi-fi Nook in Spring 2010 and Nook Color in Fall 2010. They were aggressively going after Kindle.
- Apple released the first iPad in April 2010 and it had the iBookstore on it. It also had apps for Kindle and Nook.
Apple iBookstore – 20%: Apple executive Keith Moerer testified that Apple’s market share was around 20% within the first few months after the iBookstore opened. It is remarkable that Apple could achieve 20% of the market given they didn’t have a full selection of titles.
Some of what was missing:
- Every Random House title was not in the iBookstore. Random House was the largest publisher in the USA and had almost 1/5 of the market.
- Knopf (RH) was in the middle of the phenomenal selling Millennium trilogy (GIRL WITH THE DRAGON TATTOO) from Stieg Larsson.
- Scholastic was not in the iBookstore. To this day they still are not included. In Fall 2010, the sales of Suzanne Collins’ The Hunger Games trilogy were blowing out. The third book, MOCKINGJAY came out in September.
Maybe Moerer was including app sales as part of the number? Most of the best-selling book apps were branded children’s titles including Dr. Seuss. Although Random House had always published Seuss’ physical books, the apps for classics like GREEN EGGS AND HAM and THE CAT IN THE HAT were sold by start-up Oceanhouse Media.
Barnes & Noble NOOK – 27%: B&N was very bullish on the Nook in 2010.
- In chairman Len Riggio’s Shareholders letter from their annual report, he wrote, “The numbers speak for themselves as our share of the US eBook market grew to 27%.”
- B&N had carved out Nook showrooms in their almost 700 stores and the initial strategy converted many readers. The Nook sections looked like mini-Apple stores.
Subsequent reports have not been as positive. 2010 appears to be the high point of the Nook’s market share as recent reports have them closer to 20%.
Amazon Kindle – 70-80%: Amazon has always been secretive with their sales information. The most common understanding is they had over 90% of the market prior to the iPad and it fell to 60-65% today.
- In an interview for CNET in August 2010, Amazon VP – Kindle Ian Ford said, “Honestly, something doesn’t add up because we’re pretty sure we’re 70-80% of the market.”
- Given most agree that Amazon had over 90% market share before Apple entered the game, dropping 10-20% in less than a year makes sense.
- He may have included the self-published books. Amazon was instrumental in the self-publishing success of Amanda Hocking, John Locke and many others.
- Amazon owned their own publishers and the romance and mystery genres have been very successful. Hard numbers have been elusive though.
To recap -125%:
For Fall 2010, the key eBook retailers made these claims regarding market share:
- Amazon claimed 70-80%.
- B&N claimed 27%.
- Apple claimed 20%.
Add them up and it comes to between 117-127%. This doesn’t include the sales from Kobo, Sony, Google, Overdrive, Blio, Copia and dozens of others. Assume all those accounts were 3%, and then the total is approximately 125%.
All have their own ways of calculating their share of the market. In the emerging digital book world, the perception can drive the reality. It’s like on 2012 election night when FoxNews’ Megyn Kelly asked political expert Karl Rove, “Is this just math that you do as a Republican to make yourself feel better, or is this real?”
In the end it probably doesn’t matter what market share Apple or anyone had in 2010. What matters is what the share is in 2013 and beyond.
We should take all numbers with a grain of salt.