Thursday Midday Links: Amazon Launches a Lending Library
If you own a Kindle device (as opposed to using an App) AND you are a Prime member, you can take advantage of Kindle Owner’s Lending Library. It has about 5,000 titles in there and it’s all non agency books. While Agency publishers (and others) are balking at the potential loss of revenue, I would think that the Agency model would prevent participation in the lending library. How it works is that Kindle owners can borrow one book a month. Amazon pays the publisher either a flat fee or the wholesale price of each book when it is requested.
There are some popular titles like Hunger Games and Fast Food Nation. What’s Amazon’s goal here? To bulk up Prime Memberships and sell Kindle devices.
According to this September 2011 article at Practical eCommerce, Prime members spend a lot more at Amazon than any other customer.
- In 2009, Amazon had 2 million Prime members. In 2011, Prime has 5 million members out of a total 121 million Amazon customers. Although that represents only four percent of all customers, Prime is growing at over 20 percent year-over-year;
- Once they join Prime, Amazon’s customers’ gross merchandise volume grows from $400 a year to $900 a year in their first year of membership;
- For each one million Prime members, Amazon’s revenues increase by 1.5 percent;
- Prime members spend 130 percent more than regular Amazon customers;
- 92 percent of Prime members surveyed by Piper Jaffray plan to renew their membership.
Harlequin had a good third quarter but the forex adversely affected them:
In the quarter, reported revenue fell to C$115.7 million from C$117.5, although sales would have been up C$600,000 excluding the impact of foreign exchange. Parent company Torstar said digital sales at Harlequin rose C$7.5 million in the quarter as the publisher continues to adapted to the growing demand for e-books while profits were helped by lower book returns. In the third quarter, excluding foreign exchange, North America division sales were up C$1.2 million and overseas down C$0.6 million. Harlequin operating earnings were up C$2.0 million in the third quarter excluding the impact of foreign exchange, with North America up C$3.0 million and overseas down C$1.0 million.
Digital revenues were 15.8% in the third quarter. I was actually surprised by the 18.5%. Many other publishers are seeing 20% of their revenues from digital and Harlequin has been at the forefront of pushing digital sales. I would have expected to see Harlequin have higher digital numbers. It does appear, however, that the digital sales are growing at a faster rate than the decline in paper books which might signal that Harlequin is expanding its audience through digital. I’m unsure about this but that is what I gleaned from the reports by PW and Publishers Marketplace.
Pearson, the parent of Penguin, has announced a 6% increase in overall sales.
Pearson increased sales by 6% and operating profit by 13% in the first nine months of 2011. Our businesses once again produced strong competitive performances in generally weak market conditions, benefiting from premium content and services, digital innovation and presence in developing economies.
Specific to Penguin, the press release states:
At Penguin, sales were level with 2010. With strong publishing and the continued rise of eBook sales – which more than doubled in the first nine months of the year – Penguin offset the industry-wide decline in physical retail markets. Publishing highlights in the third quarter included the trade paperback of Kathryn Stockett’s The Help in the US and, in the UK, Jamie Oliver, Marian Keyes and Dawn French. The fourth quarter is an important selling season in consumer publishing and Penguin has a strong publishing line-up of bestselling authors including Tom Clancy, Patricia Cornwell, Sue Grafton, Daniel Yergin and Steven Pinker in the US; and Jamie Oliver, Lee Evans, Rob Brydon and Jeff Kinney in the UK.
According to PublishersMarketplace, Harpers’ revenue and profits were up for the first quarter, although no specific numbers were provided.
Instead they now say that for the fiscal year so far print books “sold through bricks and mortar retail” accounted for 77% of worldwide sales and 71% in the US.