I may not have previously mentioned how poor and frustrated I am. But while I'm on the subject, let me share the fact that I like to spend a lot of time with hobbies to alleviate frustration, and a favorite of mine is reading. However, when your cashflow is a trickle, some calculated risks are in order.
As I recently learned from Amazon.com (NYSE: AMZN), sometimes you have to give something to get something. Amazon's 73% drop in profits in Q3 (as well as the profit loss Amazon expects to have in Q4) is not attributed to decreased sales. It's blamed on the company's heavy investment in its digital content business, as well as the opening of numerous fulfillment centers and the development of three new, lower-priced Kindle models.
The Kindle, just in case you somehow don't know, is an e-book reader developed by Amazon.com subsidiary Lab126. It uses wireless connectivity to enable users to shop for, download, browse, and read e-books, newspapers, magazines, blogs, and other digital media. Amazon.com sells a basic Kindle for $79, a Kindle Touch for $99, and a Kindle Touch 3G for $149. It's also preparing for the November 15 launch of the Kindle Fire, its first tablet.
So in the spirit of Amazon.com CEO/founder Jeff Bezos, I sunk a disproportionate amount of my wealth into a Kindle (the $79 model, which, by the way, is plastered with advertisements) in the hopes that it would allow me greater returns on the book front.
Two weeks have passed since the big purchase, and my stroke of genius has panned out beautifully. I've gleefully exploited Amazon's massive selection of books at sub-flea-market prices (Harvard Classics complete shelf of 200 fiction books for $2.99? That's, like, a cent and a half per book!), and taken full advantage of the free downloads of those books that have fallen into the public domain over the years. There's also a host of books by self-published authors, who typically price their works below $5.
However, despite my penchant for the free and cheap, there are plenty of people spending actual money on e-books, making Amazon's investment into its line of e-readers appear to be a good one. With Kindles, the free Kindle apps available through Amazon for most major operating systems (mobile or otherwise), and various e-book readers of different makes, e-book sales have been skyrocketing.
As of July, e-book sales totaled $389.7 million, marking a 160.1% growth in sales over the same time last year. Amazon reported in May that e-book sales had surpassed paperbacks for the first time by a margin of 105 to 100. And while print still outearns e-books, that gap seems to be quickly closing, with paperbacks grossing less than $100 million more than e-books as of July, as opposed to the over $400 million it grossed the year before at the same time.
The company also stands to increase its profits with the release of the Kindle Fire, which enables access to the worlds of comic books, streaming media, and mobile apps in addition to color magazines and novels.
If the success of my personal investment into a Kindle is any indication, Amazon should rebound strongly in the near future. More scientific data seems to have similar implications, as e-book sales are expected to continue growing, accounting for 13% of book revenue in 2014. E-readers themselves are expected to experience continued sales growth, with pundits expecting sales to fall anywhere between 30 million and 45 million units in 2014 (sales totaled 9.7 million in 2010).