Wednesday, April 27, 2011

Shift of Kindle Bestsellers Towards Price Extremes

This chart shows the number of titles on the Kindle Bestsellers list that fall within each of four selected price bands each day. The shift of the market towards premium titles (over $10) and super-discount titles (under $3) is significant of late. Even since the disruption of March 1st when Random House went agency and repriced a number of bestsellers from $9.99 to $12.99, the trend has continued. Our working hypothesis is that as the increasing number of books in the super-discount band become available, that segment of the buying market will continue to congregate there. What follows is that the remainder of buyers as a segment are less price-sensitive than the entire market was, resulting in stronger support for premium priced eBooks as opposed to value priced eBooks (under $10).
Chart 1: Daily Price Band Distribution of Kindle Bestseller List
daily price band distribution of kindle bestseller list
* Totals may be less than 100 on certain days due to exclusion of games and other non-book titles.

Today there are 35 super-discount titles (below $3) and 40 premium titles (above $10). Three months ago (1/8/11) those numbers were 26 and 19 respectively. Part of this shift is explained by the Random House change on 3/1, but the trend has been strong since then. Both of the middle bands have lost 6 titles each since 3/2.

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Tuesday, April 26, 2011

Romance Bestseller Lists Trending Away From Large Publishers

On March 1 - the day that Random House joined the Agency model for ebook pricing, the Big-6 publishers* collectively had 27 titles on the Kindle Romance Bestsellers List (total of 100 titles).

On April 25 those same Big-6 publishers collectively had 13 titles on the same list.

Big Publisher share of the Kindle Romance bestseller list fell 50% from 27 to 13 titles in roughly eight weeks.

In that same period the same group went from 39 titles to 19 titles on the Nook Romance Bestseller List.  More titles but the same 50% drop.

So that seems to be the industry-wide trend...but what are the differences between the retailers?

Well for one thing, we see that Amazon has about half as much Agency Publisher share as B&N.  What's more interesting is the distribution of agency titles across the list.

Today (4/25) there are 8 agency titles in the top-20 Nook slots.  Nearly half of the agency titles on the list are in the top-20, making it pretty top-heavy.  Top 20 slots in Kindle Romance?  Two agency titles. 

Chart 1: Price of top 20 books on Kindle and Nook Romance lists - 4/25/11

The average price of the entire lists are pretty similar ($4.13 for Kindle vs. $4.17 for Nook) but the premium-priced titles just can't crack the top of the Kindle list.  If fact, there are 12 titles in what we call the discount price band ($0-$2.99) compared to none on the Nook list.  That is probably the biggest takeaway from this analysis. 

Kindle Romance is increasingly dominated by low-cost ebooks under $3.  The trend has been strongly downward all of 2011 and shows no signs of reversing.  Barring seasonal changes, it appears that premium Romance titles are going to be harder and harder to place on the list - certainly at the top.  This is one of the most glaring differences in consumer behavior between Kindle and Nook but it's not the only one.