Love 'em or Hate 'em – What Amazon is doing for the e-Book Business is Phenomenal.

As far as e-readers go, I’m not a huge fan of the Kindle.  I don’t like how much Amazon controls the content of what’s on the Kindle, and the debacle a while back, when they actually pulled back copies of e-books they had sold and bewildered Kindle owners woke up to find their bookshelves raided and books missing…well, that just plain makes me uneasy.

Besides, they won’t let me buy one, anyway, just because I’m a few miles north of a virtual line on a map.  (Canadians are the only people left in the western world who aren’t allowed to buy a Kindle.  If I click on a Kindle title, I get a nasty little message that comes up informing me the title is not available to me because of my country of residence.  Me?  Pouting?  I don’t do that.)

But you can’t deny Amazon’s impact on the publishing industry, and not just in e-books.  But e-books are where Amazon took up a pioneering stance and Amazon is reaping the rewards.  I found this article, “Amazon faces a fight in new chapter for e-book,” on The Scotsman the other day, reporting on Amazon’s fight to preserve its perceived monopoly on the e-book side of publishing against newcomers Apple and their iPad and the fact that Amazon appear to have lost the first round.

The more interesting fact in that article comes early, where the reporter calmly drops the information that Amazon are currently selling six e-books for every ten paper books.

That sounds pretty impressive, stated like that.  But I don’t think the reporter really stopped to think about how truly impressive that statistic is, because it rolls off the tongue too easily.

So, anal-geek that I am, I thought I’d do some funky things with figures for you, just to show you what that statistic means.

Wikipedia reports that Amazon’s 2009 revenue was US$24.509 billion.

Now, as Amazon sell more than just books, and I couldn’t track down a 2009 financial report (yet), let’s assume for the sake of simplicity that 50% of that revenue came from book sales, and 50% came from music, videos, apparel and other revenue streams that Amazon maintain, including the sale of Kindle devices themselves.  We’re interested only in the number of books sold.  As the majority of Amazon’s profits come from book sales, I’m deliberately pitching this figure too low.  The real figure would be somewhere closer to the mid 60% range, I’m guessing.  But I don’t have hard data for this one, so slicing it down the middle seems the simplest way to demonstrate, for now.  But bear this exaggeration in mind, when we get to the end.

50% of the revenue means that Amazon made $12.254 billion just from selling books last year.  Sucks to be them, huh?

Let’s assume that they’re going to make that much this year again.  I’m not even going to give them a better year.  They’re just going to make as much again this year.

That’s $12,254,000,000 in book sales.

Now…the average price of a book.  This one is a bit trickier, because the price of books these days fluctuates wildly.  I did a search on “hardcover books only” on Amazon, then averaged out the prices of the first page of search results.  I got $17.26 as my average.  And the cheapest of skinny little category romance paperbacks sell for $4.75 (I just checked and this is the price for a Harlequin Presents February 2010 release).

So an average of those averages is $11.05.  I’m tempted to knock the five cents off the price, but when you’re talking about so many billions of dollars, five cents a copy makes a big difference, so I’m going to leave it there.

For the sake of this example, then, the average price of a book at Amazon is $11.05, regardless of format.

Divide that into $12.254 billion and you get 1,108,959,276 books or 1.109 billion books.

Remember I’m compacting the figures, too, because I’m guessing on the books/other guff ratio.  But even my conservative estimate calculates that Amazon sold 1.109 billion books last year.

That is a hell of a lot of books.

If Amazon are selling 6 ebooks for every 10 paper books right now, then their ebook sales are creeping up towards nearly half their total book revenue.  If they were to sell another 1.109 billion books this year (and they’ll probably sell more), and this 6 for 10 ratio stayed the same (but it’s likely to increase), then they will sell 665,375,565 ebooks this year.

665 million ebooks.

That’s impact, for you.

Here’s another interesting way to look at it.

A very loose figure for a best seller is 50,000 copies.  If you’d like to see a real best seller’s figures, check out L. Viehl’s post, “The Reality of a Times Bestseller” complete with royalty statements.   Her figures are higher.  I’ve heard lower figures, as the velocity at which you sell those copies is also a factor.  So 50K is a nice round number.

That means that Amazon will sell the equivalent of 13,307 best sellers this year.  A single bookstore has the capacity to create New York Times bestsellers all by itself.  Over a thousand a month, as it happens.

Just in ebooks alone.

Interesting thought, huh?

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