Worldwide ebook sales are drastically climbing and the big five publishing companies are now seeing 22% of their revenue stem from digital sales. Today we have a bit of insight on the global business of ebooks by Scott Devitt, an analyst at Morgan Stanley. In 2012, the global ebook market saw $859 million in confirmed sales, up from the original estimate of $567 million made earlier last year.
Amazon accounts for over 45% of global ebook sales and is said to have earned $383 million dollars in sales last year. Kindle sales are big business and the revenue they earn accounts for 11% of the entire profit. People who end up buying a Kindle e-Reader are statistically 4.6% more likely to read more books, on average, in the 12 months following their gadget purchase, compared with the 12 months before getting the device, the analyst noted.
One of the big reasons Amazon captures a large segment of the market is because the company sells its hardware at cost. This allows users to buy a Kindle e-Reader for $79.99 and the high profile Android tablets for $199. Being able to discount hardware allows Amazon to market its devices cheaper than the competition, which is often a deciding factor with the public.
When this news broke yesterday, Amazon shares rose 4.1 percent to $269.30 in afternoon trading. Investors strongly reacted to this news because it is not very often that exact figures are released to the public. All too often, Amazon is very coy with releasing financial data to the public.