Kindle Turns 10: What Have E-Books Changed, and What Haven't They? | QDaily Business History

Did Jeff Bezos really do what he said he would ten years ago — change the way people read?

It was a lumpy white machine, about as thick as an exam eraser. A 6-inch gray screen took up most of the front. Below the screen sat a white rubber keyboard, split left and right, which typed numbers and English letters and supported font-size switching and word lookup. On the left were two bar-shaped buttons, marked "Next Page" and "Previous Page." In the bottom right corner was a white scroll wheel about a centimeter across; a light touch and a nudge moved you through the pages.

On November 19, 2007, Amazon launched this e-reading device called the "Kindle" (on the inside of the white box, which was as big as a volume of the Encyclopaedia Britannica, the company even printed a phonetic spelling of the word). It looked clunky, even misshapen, cluttered with buttons and a keyboard nobody needed; it could not transfer anything over WiFi, and there was no way to charge it. Even so, the $399 machine sold out in five and a half hours.

Arpita Das, co-founder of Yoda Press, recalled in an essay the first time she saw a Kindle. "In 2009, on an editorial tour hosted by a German library, I was on a train from Munich to Berlin with Ravi DeeCee, the executive partner at DC Books. That was the first time I had seen a Kindle. I kept turning the pages, back and forth, for several minutes. Ravi soon snatched it out of my hands — he thought I would damage the machine."

Turning pages does not, of course, damage the machine. Thanks to "e-ink" display technology, this kind of reader can be read in direct sunlight and draws no power at all while the screen sits still. More important, although the Kindle was not the first e-reader on the market — Amazon built it to fight the Sony Reader, released in 2006 — it was the first that could download e-books straight onto the device over a wireless connection.

That strategy is what made the Kindle historic. In the words of Amazon CEO Jeff Bezos, Amazon wanted to make money, just not at the moment people bought the device. He did not much care which Kindle you owned, only whether you were buying and reading Kindle books.

So the Kindle e-bookstore went live at almost the same moment as the first-generation device. The earliest Kindle came with all sorts of inconveniences, but Amazon — which had already spent a decade selling print books for publishers — had secured more e-book rights than anyone else. By 2013, e-books made up 30% of all US book sales, and 65% of those e-books were sold by Amazon through its Kindle platform. That is what let the Kindle truly change global publishing and the way people read, and it is also why the device has drawn more argument and debate than anyone can count over the past decade.

To mark the Kindle's 10th anniversary, Amazon released the all-new Kindle Oasis in October 2017. It is the ninth generation of Kindle hardware, with a waterproof screen, automatic backlighting, and pressure-sensitive page turns. But more important than the device are the quiet revolutions the Kindle set off: did it really do what Bezos said it would a decade ago — change how people read, and remake the world of books from the ground up?

This Intruder Holding 30% of Book Publishing Is, at Heart, an Entertainment Device

From the day the first Kindle appeared, it faced the question of what people could actually read on it. In 2007, the best-selling e-book on Amazon's platform was The Pillars of the Earth, a story that follows the building of a cathedral from beginning to end, running to roughly 800,000 characters across its two volumes.

Amazon Charts puts this example at the end of its list of the most popular books of each of the past ten years, declaring proudly, "This 927-page book is pretty tough to carry around — unless you have a Kindle." Portability is exactly the top reason people read on a Kindle. Traveling or working away from home, plenty of readers are grateful for this small box that holds several hundred fat volumes.

The QDaily Curiosity Lab once ran a survey titled "What Has the Kindle Changed About Your Reading Habits?" The top answer was "I've hoarded a pile of free files I downloaded and will never open again," at 16% of all responses; "Because buying is so easy, I've read a lot of bestsellers and novels I wouldn't have bought otherwise" came third.

That fits the data in Amazon's own reading charts over the years. On their weekly, monthly, even annual lists, the top spots always belong to books priced at 0.99 yuan. Amazon built the cheap image of e-books on an early strategy of buying rights wholesale, and that directly made some books far more popular in the e-book market than in print. An 11-volume Complete Sherlock Holmes worth several hundred yuan in print, for instance, costs you 0.99 yuan as an e-book.

From 2009 on (in 2008 the year's most popular book was The Kindle User's Guide, Complete Edition), the annual charts filled up with popular fiction: Dan Brown's The Lost Symbol, Fifty Shades of Grey, and the like.

By one count, roughly 60,000 to 75,000 English-language e-books appear on the Kindle platform every month. Nonfiction outnumbers literature and fiction by 1.5 to one, but nonfiction sells far worse than fiction. On the supply side, the most competitive category is "Religion & Spirituality," with 413,473 English titles, followed by "Romance" (339,577) and "Children's E-books" (315,105).

This month, for the Kindle's tenth birthday, Amazon also released new Amazon Charts data. Drawing on Kindle sales in fiction and nonfiction, it shared the most popular Kindle books of all time.

Every one of these most popular novels, interestingly, has been made into a film or soon will be, and 6 of the 10 belong to trilogies. The most popular nonfiction is a little more varied: a journey to the high peaks of the Pacific, stories from the Second World War, and of course guides to life such as The 7 Habits of Highly Effective People. Nonfiction though they are, they still tell strong stories — nearly a third of them have been turned into screenplays too.

People read these popular titles one after another on their e-readers, then went to the cinema or the television to revisit their fondness for the characters. In 2016, Amazon announced it was developing an 8-inch e-reader built on color screen technology, and an ad at the time cheered, "At last, a new reader device you can use to read comics!" In that sense, for all that it is called a reader, the Kindle has always been an entertainment product at heart.

Besides Shaping What Kind of "Books" People Read, This Part-Channel, Part-Publisher Device Really Did Give More People a Chance to Publish

The Kindle is not only a device for reading; it is also a tool for selling books. Its effect on the channels of publishing has in fact been far greater than its effect on reading habits.

For the Kindle's tenth anniversary, Amazon announced that the total number of Kindle e-books had passed 5 million for the first time. The figure depends on where you open Amazon.com from: from the United States the site shows 4,947,718 e-books, while from Germany and other places the number is already past 5 million.

A large share of them are books authors published themselves, without an ISBN (International Standard Book Number). According to the bibliographic company Bowker, the number of books published in the United States in all forms rose from 80,000 in 2006 to 800,000 last year, about 43% of them without an ISBN. Amazon has not released its own figures, but some estimate that about two-thirds of adult fiction in the United States is sold in digital form, and that nearly half of that is published with no traditional publisher involved.

According to AE data, 20% of the books the Kindle sold in 2015 were independently published titles with no ISBN, and that share is still climbing.

Writing on Stratechery, the author explains this shift in channels through the original aggregation theory: suppliers (authors) break out from under distributors (publishers), and resources tilt at last from the big publishers toward independents.

After the Kindle arrived in 2007, Amazon put up a self-publishing platform, the Digital Text Platform (DTP), encouraging independent authors to upload their work and set their own prices; once a book sold in the Kindle Store, the author kept 35% of the revenue. In June 2010, that share rose to 70%. In January 2011, DTP was renamed KDP.

In his 2012 letter to shareholders, Bezos spent half the text explaining what Amazon's self-publishing platform, Kindle Direct Publishing (KDP), meant for authors. "Authors who sell e-books through KDP receive 70% of sales, while an author going through a major publisher receives a royalty of only 17.5%."

In 2011, more than a thousand KDP authors sold over a thousand copies a month, and some sold hundreds of thousands. Amanda Hocking, 26, earned more than $2 million that year.

Along the way, Amazon — which had said it would wipe out publishers — turned into the largest publisher in the world, and was quickly accused of monopoly and of manipulating the market. Oren Teicher, CEO of the American Booksellers Association (ABA), said: "Amazon is holding the entire book publishing industry hostage. It started by disintermediating retailers; now it is doing it to publishers and authors."

Yet these books without an ISBN, adult titles included, coming out of the "gray factory," are all but invisible in the market as a whole. Every report from Bowker, the AAP, and Nielsen estimates market share on the basis of ISBNs, and most research firms cannot track self-published books that have none — not even with the "Amazon Standard Identification Number" (ASIN) Amazon gives them. That may have answered the dream of publishing a book, and lowered the bar to it, but it has still not brought these books inside the book publishing "industry."

Before the Disruption Arrived, the E-Book Itself Went Into Decline

What worried Amazon more was that, from 2015 on, e-book sales fell for two years running. According to the Association of American Publishers, e-book sales had held steady at around 21% of the book market since 2014.

Over the past 18 months, data from the AAP and Nielsen, along with quarterly results from the Big Five publishers, led traditional publishers and industry experts to say that the US e-book market had gone flat, or was even shrinking. Amazon, though, said in its annual report that both its revenue and the number of e-books it sold were growing. Some analysts also point out that neither the AAP nor the UK Publishers Association counts subscription platforms such as Scribd and Kindle Unlimited, and that print's rising share of sales may simply come from breakout hits like adult coloring books.

According to Bowker, about 80,000 books were published in the United States in all forms in 2006. Ten years later, though 30% of that market comes from the Kindle, the total has grown nearly tenfold. Clearly, while books without ISBNs have widened the range of what the trade puts out, the traditional big sellers still hold the mainstream of the market.

"In the past, people talked about the death of the printed book as though it were only a matter of time, but even 50 to 100 years from now, print will still be a big part of our business," said Markus Dohle, CEO of Penguin Random House. Print books still account for more than 70% of the company's US sales.

As early as 2012, Random House had bought the rights to the Fifty Shades of Grey trilogy, and The Hunger Games, also on the list of the most popular Kindle books of all time, has its rights held by the general publisher Scholastic Corporation. In print, these traditional publishers have been the big winners all along.

And after the panic of 2012, when traditional bookstores closed one after another, the number of physical bookstores ticked back up in 2015.

Love for the printed book is coming back. "We've seen people come back," said Arsen Kashkashian, book buyer at the Boulder Book Store in Boulder, Colorado. "People used to read on their Kindles a lot; now they've come back. In fact, a lot of people now read both ways at once."

Even Amazon opened a bookstore of its own. At the end of 2015, Amazon executive Jennifer Cast opened the company's first physical bookstore, Amazon Books, in Seattle, Amazon's home city. The company then unveiled a sweeping plan for as many as 400 stores, and put Kessel, the senior vice president who had once led the Kindle's development, in charge of it.

Nicholas Negroponte's most widely repeated prediction about e-books never came true — not only for the reason lovers of the printed book give, that the Kindle cannot offer the touch, the smell, and the feel of reading a real book, but far more because e-book prices went up, and consumers are very sensitive to that.

Unlike the Kindle's first three years, after 2012 traditional publishers gradually took back control of e-book prices. They set the prices themselves, which also limited how deeply retailers could discount or promote. As we have reported before, you can buy a brand-new print book on Amazon's site very cheaply — cheaper, even, than the e-book. Of the 16 books that won the Baileys Women's Prize for Fiction, 7 had print editions priced the same as the e-book or lower.

The same thing has happened in China's book market.

For publishers in China, the explosion of e-book listings between 2012 and 2014 left almost every title a publisher was willing to digitize already digitized, and the pace of digitizing new books then slowed. So, to protect print sales, they tend to push e-book prices up. When Chinese publishers license foreign titles, some rights holders write into the contract that the e-book may not be priced below 40% of the print price, while print books are often discounted to 70% of list price or lower. That leaves the e-book with only a slim price advantage.

Because the margin is so thin, e-books in China still trail print books badly in both sales and the number of titles available.

In 2015, Peter Thiel's Zero to One: Notes on Startups, or How to Build the Future was published in China. Three months after it went on sale, it had sold more than a million copies. But this book, said to be a phenomenon in the trade, sold only about 100,000 e-book copies across all platforms combined.

So while most Chinese publishers are still anxious, on the whole they are doing well enough.

In April 2017, Thinkingdom Media Group, a private publishing company 15 years old, listed on the Shanghai Stock Exchange. It had put out an e-book edition of The Miracles of the Namiya General Store back in 2014, yet what its prospectus placed front and center was still the Chinese-language rights to García Márquez, Eileen Chang, and Yu Hua.

Besides, when the hottest word in a book market is "IP," it means that what matters most in publishing there is not which books come out, but who has a grip on good content.

On Amazon China's "2016 Mid-Year Print Book Sales Chart," No. 11 in the top 100 was Zootopia, selling on the strength of the film of the same name. 84, Charing Cross Road, published in 1970, made the list too, after a brief appearance in the film Finding Mr. Right 2.

The Kindle Was Born at the Wrong Time, and Lost to the Smartphone Born the Same Year

For the first few years, people enjoyed debating how the Kindle, the disruptor, would become the enemy of traditional publishing. Once they found it was not as strong or as fearsome as they had imagined, they started worrying on its behalf about who its enemies were.

Books have never existed in a vacuum. The New York Times argues that about 20% of the fall in e-book sales is the decline of the industry itself.

According to The Business of Books 2017, published by Rüdiger Wischenbart, founder of the well-known international book-trade research and consulting firm RWCC, only half of the world's six largest book markets held on to their growth in 2017. Apart from China, an emerging book market growing fast, the United States and the United Kingdom both grew in single digits.

The Kindle drew millions of book buyers onto e-readers. Over the holidays people received e-readers as gifts, and a huge spike in digital sales followed. But as e-reading devices fell out of favor and smartphones and tablets took their place, those double- and triple-digit growth rates collapsed. A Nielsen survey found that by the first quarter of 2015, the share of readers who read mainly on e-readers had dropped to 32%, from 50% in 2012.

Clearly, in the fight over the scarce resource of human attention, books never really improved, while film, television, games — every other medium — grew more skilled and more aggressive. The smartphone most of all.

In 2007, five months before the Kindle was born, the first-generation iPhone went on sale. Four years later Apple launched the iPad, and the iBookstore with it. Steve Jobs quickly used the "agency model" to break Amazon's monopoly on the e-book market, and in the wider field of competition the Kindle was born at just as unlucky a moment.

Reading a book from start to finish is no longer how most people take in information; they are drawn more easily to whatever is fast-paced and loud in the way it says things. As bandwidth, storage, and display technology matured, video quickly filled that gap in people's attention — and that, too, happened on the phone. The feel of a book, which the Kindle imitated, lost again, as it had once lost to color television.

China also has a digital-book market called "web literature," which has little to do with book publishing yet carries the functions of "publishing," "digital payment," and "reading" all at once. Long before Amazon rolled out KDP, China's web-literature sites had begun trying out serialized uploads by authors and ways to make money from tips, revenue-sharing, and more.

Against that, the Kindle's respectable, by-the-rules publishing model looks complicated and cumbersome. Since 2011, China's General Administration of Press and Publication has required real-name online applications for e-publication numbers. An individual author applying for a Kindle e-book number has to go through a designated agent: BookDNA, the online publishing service platform under Zhejiang Publishing United Digital Media, for instance, has handled the e-book business of Zhihu and Phoenix Weekly as Amazon Kindle's long-term partner.

Besides, the world has suddenly filled up with people who will read books for you. In China that means the blunt, no-frills likes of Luoji Siwei or Ximalaya; abroad it means podcasts.

And the people on the subway with their heads down are mostly looking at phones. What is on the screen might be web fiction, might be fragments of Moments, might be an inspirational podcast, might be a Korean or American drama. None of it needs the Kindle, or its black-and-white, book-textured "e-ink" screen.

Amazon once said in an open letter that, faced with competition from other media, its answer would be to make books as cheap as those media. But people were never bothered about cheap or expensive; what they thought about was convenience. The Kindle is a little more convenient than a printed book, but the phone is more convenient still, and completely so. And people do not really care about reading books either. Scrolling Moments or listening to a podcast, and believing that counts as reading, is often enough for them.

Graphics: Feng Xiuxia

Cover image from: Shutterstock