Vastly overstated: via Amazon Raises an E-Book Specter – WSJ.com.
Many publishers have long feared that Amazon would persuade a major author to write for its Kindle on an exclusive basis.
This ain’t that. It’s one book from an extremely prolific author who has a low marginal cost for committing one book to Amazon. King probably has half a dozen novellas tucked away in a box somewhere. That’s a long, long way from persuading King that he’ll make more money going with a company that has 15% of the US book market than he will if he goes with a big publisher that distributes to 100% of it.
Let’s do some simple math:
35% Kindle author and publisher royalty x 15% of US book market x Kindle’s maximum 1% of US market share = 0.5% of US revenue opportunity.
15% big publisher royalty x 100% of US book market x 99% market share for print books = 14.85% of US revenue opportunity = 30 x as much revenue as King’s maximum upside from Kindle-only sales.
What this says is that Kindle usage has to grow by at least 15x before it will be a serious threat to big publishers. Not at all impossible, but not here yet, either.
Although retailers such as Barnes & Noble Inc. have long published their own books, they have struggled to find distribution outside their own stores. But Amazon has already proven that it can sell as many Kindles as it can manufacture.
No, they haven’t. They’ve proved that they can sell Kindles to early adopters. What percentage of the total book-buying public is tech early adopters? I’m guessing 1%.
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