Amazon's Kindle hit an important and startling milestone yesterday: On Christmas, the company sold more Kindle books than physical books.
Yes, this is obviously the result of everyone who got a Kindle for Christmas (lots of folks) firing it up and ordering a bunch of eBooks on a day in which most physical-book readers weren't shopping. But it's still important and impressive.
The Kindle's economics are still lousy for Amazon: The company loses money on new releases and makes only a modest amount on older titles, thus losing an estimated $1 per Kindle book.
That said, Amazon's strategy is clearly to drive "ubiquity," and based on stats like those above, it is succeeding. The more Kindle books Amazon sells, the more leverage it will have over publishers when it tries to force them to cut wholesale prices. If Amazon's Kindle momentum continues, the day publishers have to capitulate will come sooner rather than later.
And, despite publishers' cries, this is not necessarily bad for publishers: If publishers cut wholesale prices, Amazon will be able to cut retail prices. If the retail prices are cut to nominal levels—$2.99 or $3.99 per copy—sales velocity should soar. Publishers and writers will make less per unit, but the increased volume should make up a lot of the difference.
Amazon's release below.
Amazon Kindle is the Most Gifted Item Ever on Amazon.comOn Christmas Day, for the First Time Ever, Customers Purchased More Kindle Books Than Physical BooksSEATTLE, Dec 26, 2009 (BUSINESS WIRE) — Amazon.com, Inc. (NASDAQ:AMZN) today announced that Kindle has become the most gifted item in Amazon's history. On Christmas Day, for the first time ever, customers purchased more Kindle books than physical books. The Kindle Store now includes over 390,000 books and the largest selection of the most popular books people want to read, including New York TimesBestsellersand New Releases.
"We are grateful to our customers for making Kindle the most gifted item ever in our history," said Jeff Bezos, founder and CEO of Amazon.com. "On behalf of Amazon.com employees around the world, we wish everyone happy holidays and happy reading!"
On Amazon's peak day, Dec. 14, 2009, customers ordered over 9.5 million items worldwide, which is a record-breaking 110 items per second.
Amazon.com 2009 Holiday Facts (www.amazon.com only):
Amazon.com's Hot Holiday Bestsellers (Nov. 15 through Dec. 19, based on units ordered):