Amazon Announces It Sold More Kindle Books Than Physical Books On Christmas... But Doesn't It Mean Rented?

from the it-ain't-a-purchase-if-you-don't-own-it dept

Lots of folks have sent in various versions of Amazon's hyped up press release about how it sold more ebooks on Christmas than physical books. While this ought to make some publishers reconsider their hatred of ebooks, there are two points that make this rather meaningless. First, how many physical books are usually sold on Amazon on Christmas day? My guess is not very many. Books are purchased before Christmas day. However, I'm sure plenty of people did get new Kindles on Christmas, and quite a few then went and "purchased" an ebook or two to test it out.

But, again, since this is the Kindle we're talking about, shouldn't Amazon make the distinction between purchased and rented? When someone buys a physical book from Amazon, they then own that book and can do pretty much what they want with it, including reselling it or giving it away. When they "purchase" an ebook from Amazon, that's not the case at all. They're quite limited in what they can do with it. They can't resell it. They can't share it with a friend (unless they give up their entire Kindle and all the books on it). And, of course, Amazon can make the ebook disappear at will -- though, it insists it will never do this again. Even though it can. So, congrats to Amazon, for renting more books on a day when such rentals are to be expected and when physical book sales are probably at their very lowest.

Filed Under: books, christmas, ebooks, kindle, rentals, sales
Companies: amazon

David Pogue Weighs In On Ebook DRM: Non-DRM'd Ebook Increased His Sales

from the but-on-the-other-other-hand dept

Mark Rosedale (an employee of O'Reilly) was the first of a few to send in David Pogue's recent column in which he discusses the question of ebook DRM. Remember, just recently a Sony exec claimed that you couldn't make money on ebooks without DRM. Yet, Pogue relates his own experience in running a test with his publisher (which is O'Reilly) in putting out a non-DRM'd ebook, and he found that sales increased:

As an author myself, I, too, am terrified by the thought of piracy. I can't stand seeing my books, which are the primary source of my income, posted on all these piracy Web sites, available for anyone to download free.

When I wrote about my concerns a year ago, my readers took me to task. "For all you know," went their counterargument, "the illegal copies are just advertising for you; people will download them, try them out, then go by the physical book. Either that, or they're being downloaded by people who would not have bought your book anyway. Why don't you try a controlled experiment and see?"

Well, it sounded like it could be a very costly experiment. But I agreed. My publisher, O'Reilly, decided to try an experiment, offering one of my Windows books for sale as an unprotected PDF file.

After a year, we could compare the results with the previous year's sales.

The results? It was true. The thing was pirated to the skies. It's all over the Web now, ridiculously easy to download without paying.

The crazy thing was, sales of the book did not fall. In fact, sales rose slightly during that year.

Now, it's worth noting that it really was just last year that Pogue insisted that publishing digital versions of his books was a terrible idea, because he had tried it twice and they were pirated all over the web. So it's really nice to see that he's actually come to his senses and realized that piracy does not automatically mean lost sales, and he was willing to run an experiment and actually look at the empirical data.

He's still not totally convinced however -- as he notes that the reason his experiment worked was because it drove sales of the physical (paper) book. But he's worried that when more people have ebook readers, then things might change. Of course, at the time of that last column, we used it to point out that the mistake was in thinking that "give it away and pray" is a business model. It's not. Instead, you have to give people a reason to buy, and "hey, because I want you to" isn't a particularly good one. Instead, the focus should be on adding real value. Again, this is a situation where O'Reilly is pretty good. We were just discussing how one of the "reasons to buy" it offers is the ability to buy into "living books" that keep updating, so your copy isn't out of date. In that case, what they're really selling isn't the content, so much as the convenience and the knowledge that the information will always be the latest, without requiring any additional work or checking. There are lots of ways to compete with piracy that don't involve locking the content down in a customer-unfriendly way.

Filed Under: david pogue, drm, ebooks, sales

Advertising As Content: Newspaper Raising Newsstand Prices For Thanksgiving Papers With Black Friday Ads

from the gotta-do-something dept

With newspapers struggling with declining sales and subscriptions, it seems that a few of the major newspaper chains have realized that when they have a newspaper with something of real value to a lot more people than usual, perhaps it makes sense to bump up the prices. Both Tribune Co. and E.W. Scripps are planning to raise the newsstand price of Thursday's paper, treating it like a standard Sunday paper, recognizing that many people want the paper just for the ad circulars that detail "Black Friday" sales. In some ways, it's yet another point of evidence that ads (relevant ones) represent content -- in this case, content that a lot of people are apparently willing to pay for.

Filed Under: ads, advertising is content, black friday, content is advertising, newspapers, sales

EMI Sues Music Site Offering Beatles MP3s

from the no-surprise-there dept

Last last week, a bunch of music blogs started noticing that a previously unknown site called Bluebeat.com was selling MP3s for $0.25, including numerous acts that still haven't officially authorized online sales -- such as The Beatles and AC/DC. There was a lot of headscratching among bloggers and reporters who wondered how this could possibly be legal. The answer, of course, is that it wasn't. The site didn't even make any attempt whatsoever to claim that they had licensed this music. They just said they thought that $0.25 was a better price for music. Not surprisingly, it took just a few days before EMI sued the site, and I'd imagine other lawsuits will quickly follow as well. It's not clear what the folks at Bluebeat were thinking -- other than that they were about to get a ton of publicity in the form of lawsuits, but it's hard to see what good that publicity is if the site is forced out of business.

Filed Under: mp3s, sales, the beatles
Companies: bluebeat, emi

Songs Used In Promotions Get A Ton Of Sales... So Why Does The Music Industry Try To Make It Harder?

from the short-term-thinking dept

Ethorad was the first of a few to write in pointing to an article over at the BBC, highlighting how old songs are finding new life and new sales after showing up in a commercial -- or being used on TV during a popular event. In other words, getting your music more widely heard leads to more ways to make money. That, of course, should be obvious. And yet, why is it that so many in the industry are trying to make it so much harder to get music heard by putting up tollbooths at every stop? You have the RIAA/Soundexchange working overtime to put an additional tax on radio play and you have ASCAP/BMI trying to get fees for everything, from the 30 second previews online to ringtones. Of course, the more you put a toll on such things, the less the songs are used, the less they're promoted and the less opportunity there is to increase sales. It's really amazing sometimes that these big organizations don't seem to comprehend the basic idea of a "promotion" and how that helps sales.

Filed Under: promotions, sales, songs

Dear Hollywood: Don't Be Idiots; Don't Delay Movie Rentals

from the seriously dept

Sometimes you just shake your head at ideas that come out of some executives that are just so incredibly dumb, it makes you wonder how anyone ever took them seriously. There have been some hints about this latest one, though. Just last week, in discussing the latest IP Colloquium podcast, we noted (with surprise) that Paramount's top lawyer thought the solution to business model problems in the entertainment industry was "more windows." Windows, of course, are the different time periods in which movies are released solely for different formats/media. So, it starts with the theater (the first window), followed by video, pay per view, cable and network TV -- each representing another window, and another chance to squeeze more money out of the same content.

Yet, with the industry facing some challenges, rather than actually looking at what users want, its top brains seem to think that the answer is more windows. It's hard to explain how incredibly short-sighted this is, because it's so monumentally backwards that it makes you wonder what they're thinking. At best, my guess is that the execs are extrapolating out in the simplest form that with the launch of each "window" they make more money, so the way to make even more money must be to offer more windows. Of course, this assumes two rather basic things that are totally wrong. One, is that these windows won't piss off users and two, that those users have no alternatives.

But, apparently not realizing that, these execs have hit upon a few different attempts to add more windows. First, they've been pushing for the permission to break your TV or DVR with selectable output control barring your ability to tape movies. This way, they can create a new "window" of movies on TV that you can't record, that they can offer before the movies even get out on video. Of course, this will (a) piss people off and (b) drive them to more piracy. Brilliant.

The other attempt, is to get video rental places to stop renting movies when the DVDs first come out. The LA Times had an entire article explaining this plan, whereby the studios would force all rental services, including Netflix and Blockbuster to not rent certain films -- but only offer them for sale. The idea (short-sighted as it is), is that this would somehow force people to buy more DVDs, which gives the studios a higher margin than rentals. We actually heard about this earlier this year with the contract terms that the studios tried to put on Redbox, but it's apparently trying to do the same with Netflix and Blockbuster as well.

This idea is so bad that even the LA Times, who tends to support its hometown industry more often than go against it, put out a separate opinion piece with the original article, calling this new idea "crazy" and "absurd."

In the meantime, what do customers actually want? Well, there's pretty good evidence they prefer choice not being limited by windows. They've been clamoring for so-called "day-and-date" release, whereby all these windows are compressed. If you don't want to see a movie in the theater, why not be able to get the DVD? It's as if the studios don't realize that part of what they're selling is the social experience of "going out" to the theater. Even better, if the DVD comes out at the same time as the theater version of the film, less marketing money needs to be spent to sell more DVDs, and you can do nice tie-ins, like having the ability to buy the DVD as you walk out of the theater. Giving people more value and more choice is what the market is asking for.

Instead, Hollywood execs are trying to take away choice and limit value. Incredible.

Filed Under: dvds, hollywood, movies, rentals, sales, windows

There Are Numbers Less Than 1%

from the reasons-to-buy... dept

I've pointed out in the past, that any time you hear a company talk about their business model in terms of "if we only get 1% of that market... we'll still be huge," you should run away (and, it's even more ridiculous when you hear some talk about 10% or 15% of a market). This is top down thinking, but it's not how businesses work. There's no guarantee of any percent. Instead, any business needs to focus on bottom up reasoning -- explaining why the very first person will buy. Then the second. Then the third, and so on. Taking the top down approach is wishful thinking. It's making a huge assumption that people will just buy. Taking the bottom up approach is actually building a business. It's recognizing who the customer is, what they want and how to best get it to them. It's tempting to do the top down approach, because it looks so tantalizing and easy. But business isn't easy. It's hard work.

I'm reminded of this, with a submission from JohnForDummies about a Derek Sivers blog post, discussing a musician friend who took out an ad in a magazine with 1 million subscribers, repeatedly saying:

"If only one percent of the people reading this magazine buy my CD... that'll be 10,000 copies! And that's only one percent!"

But, as the musician learned there are numbers much smaller than 1%, as he ended up selling just 4 copies of the CD.

This is, in some ways, similar to the give it away and pray business models that we sometimes see people trying. Giving stuff away for free is a good part of a business model, but it's not an entire business model by a longshot. Anyone looking to use free as a part of a business model also needs to go further and do the hard part, the bottom up part, where they figure out how they're going to get anyone (not a percentage, but specific people) to actually find something worth paying for on its own. Because $0 from a million people is still $0. But, reaching 1,000 people with something of value that they want and can't get any other way... that's the start of a business model.

Filed Under: bottom up, sales, top down

Court Refuses To Dismiss Allman Bros. Lawsuit Against UMG; iTunes Royalties At Stake

from the a-license-or-a-sale? dept

There have been a number of lawsuits over the past few years from artists who are complaining about how the major record labels account for iTunes sales. The question is whether or not a song sold on iTunes is the same as a CD sale (a tiny tiny royalty) or more like licensing a song for a commercial (more like a 50% royalty). Obviously, the record labels want iTunes treated like a CD. But musicians have a reasonable argument that an iTunes sale may be a lot more like a typical license, as a big part of the reason in the discrepancy in the royalty rates is that there's no (expensive) physical packaging and distribution to handle. The Allman Brothers were one of the first to file lawsuits on this issue suing both Sony Music, and then a couple years later, Universal Music Group (I'm still not clear why they sued the two separately, years apart). Eminem also had sued UMG over this issue and lost, as a jury said iTunes was more like a CD sale.

UMG tried to get the case from the Allmans dismissed, but davebarnes alerts us to the news that the court has refused to dismiss the case, and it will proceed to a full trial. Of course, like Eminem, the Allmans may lose the trial, but it's better than having the case dismissed outright. Of course, if the Allmans win, it will create a bunch of similar lawsuits in short order, as pretty much every artist will be demanding a lot more iTunes revenue.

Filed Under: allman brothers, itunes, licensing, royalties, sales
Companies: universal music

The Death Of The Album Has Been Exaggerated

from the if-you-market-properly dept

The common wisdom you hear these days is that the concept of the "album" is dying thanks mainly to the ability to obtain single songs (whether through legal means or not). However, some are beginning to challenge that thinking. Bandcamp, a fantastic service for musicians we've discussed before notes that their sales data bucks the trend: full albums outsell single song downloads on the site. There are a few reasons why:

• Most Bandcamp artists are indie and attract fans more interested in complete works than the average Hannah Montana/Lady Gaga flavor of the moment consumer
• You can listen before you buy via Bandcamp. Not just 30 second samples, but rather the whole album.
• iTunes and others price most CD's at $10. Bandcamp artists have found that name your own price with a $5 minimum is a real sweet spot.
• iTunes and others encourage single track purchases with page layouts, buy buttons and featured tracks

This is definitely interesting. I know that I'm in the camp of folks who never buy single tracks, but always look to buy the full albums of bands I like, so that makes sense. But the really interesting point is the third bullet: if albums were priced closer to $5, people would likely be a lot more interested in buying. Again, this shouldn't be a surprise. When the old Allofmp3.com let people buy albums for sums between $2 and $5, it seemed to be quite popular -- even compared to the ability to just download albums. It certainly adds a lot of credence to the idea that one of the big problems the recording industry faced was really the super high prices of CDs.

Filed Under: album, music, pricing, sales
Companies: bandcamp

Video Game Companies Still Bitching About Used Game Sales

from the give-it-up dept

This has been discussed before, but apparently one of the big topics at E3 last week was video game publishers again being upset about the fact that they don't get a cut of used game sales. What they never seem to mention, however, is that there's simply no reason for them to get a cut of those sales. When you sell your house, do you get a cut of every sale after that? When you sell a book do you get a cut of every sale after that? Of course not. And for a very good reason. Studies have shown that an active used goods market increases the value of a product. This makes sense. If I know I can resell this widget for $10, I'm more willing to pay $20 for it in the first place. But rather than focus on ways to make it worthwhile for people to buy new video games, the execs want to sit around, complain and scheme for ways to wipe out the used video game market... or at least get a cut of any sale. Once again, we're seeing companies with a sense of entitlement to something they have no rights over.

Filed Under: markets, sales, used games, video games