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Saturday, 24 December 2011 - Amazon may benefit as digital goods sales jump |
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      Edition: U.S. Africa Arabic Argentina Brazil Canada China France Germany India Italy Japan Latin America Mexico Russia Spain United Kingdom Home Business Business Home Economy Davos 2012 Technology Media Small Business Legal Deals Earnings Summits Business Video Markets Markets Home U.S. Markets European Markets Asian Markets Global Market Data Indices M&A Stocks Bonds Currencies Commodities Futures Funds peHUB World World Home U.S. Brazil China Euro Zone Japan Mexico Russia India Insight World Video Politics Politics Home Election 2012 Issues 2012 Candidates 2012 Tales from the Trail Political Punchlines Supreme Court Politics Video Tech Technology Home MediaFile Science Tech Video Opinion Opinion Home Chrystia Freeland John Lloyd Felix Salmon Jack Shafer David Rohde Bernd Debusmann Gregg Easterbrook Nader Mousavizadeh James Saft Lucy P. 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Credit: Reuters/Shannon Stapleton By Alistair Barr Fri Dec 23, 2011 11:32am EST (Reuters) - Digital goods are the fastest-growing category online this holiday, led by e-books, suggesting Amazon.com Inc's strategy of blanketing the world with cheap e-readers and tablet computers may be producing some early gains. Sales of digital goods, which also include music and videos, are up about 30 percent this holiday season, compared to the same period last year, according to comScore data. That is ahead of sales of consumer electronics and jewelry and watches, which are up about 25 percent versus last year's holiday season, and apparel and accessories, which are growing in line with overall e-commerce at roughly 15 percent, comScore data show. The only other holiday season that digital goods grew the fastest was in 2006, when sales jumped 83 percent from a smaller base, according to comScore. At that time, Apple Inc's iTunes music store drove a lot of the growth of the category. "Music is a much more stable market at this point. The real new growth is coming from e-books," said Andrew Lipsman of comScore. "The increased proliferation of devices, such as tablets and e-readers, has led to more forms of digital content being downloaded," he added. "People are downloading e-books in a way they had not previously." Amazon launched its $199 Kindle Fire tablet ahead of the holidays and slashed prices on its range of Kindle e-readers. Earlier this month, Amazon said customers were buying more than one million Kindles a week and analysts at Goldman Sachs estimate the company will sell 14 million units during the fourth quarter. Amazon priced these products aggressively and many analysts estimate the company is making little or no profit on the devices. Instead, Amazon is hoping to make money from higher sales of digital goods, according to Aaron Kessler, an analyst at Raymond James. "Tablets and Kindles are selling a lot this season and that should ultimately benefit Amazon's digital sales," he said. A DIGITAL CHRISTMAS Still, a lot of these devices were bought as gifts this holiday, so the full impact on digital content sales will probably not come until Christmas Day and the weeks that follow, Kessler added. Indeed, the 30 percent growth rate of digital goods so far this holiday season will likely increase next week, comScore's Lipsman said. Christmas Day is the heaviest day of the year for digital content sales and downloads. Last year, about $10 million was spent on this category on Christmas Day. The second busiest days were Dec 26 and Dec 27, according to comScore. Spending on digital goods during the week between Christmas and New Year's last year was three times more than the average week in 2010, comScore data also show. In the past, such spikes have been caused by people using new Apple iPods, iPads and iTunes gift cards to buy and download music, videos, apps and e-books, Lipsman said. "We think it will be even bigger this year as more tablets and e-readers make it onto the market," he said. "I wouldn't be surprised if Amazon is a major beneficiary of this." Historically, Christmas Day is the largest day for digital sales on Amazon.com, followed by Dec 26. Last year, from Christmas Eve through Dec 30, Amazon's digital content sales were over three times higher than the weekly average for 2010. "With the introduction of Kindle Fire this season, millions more customers will be shopping for new digital content," said Craig Pape, director of music at Amazon.com. Amazon is planning to run discounts on digital goods, including e-books, music, video, apps and games, on Christmas Day and the days that follow. (Reporting by Alistair Barr; Editing by Phil Berlowitz) Tech Media iPad Related Quotes and News Company Price Related News Tweet this Link this Share this Digg this Email Reprints   We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/ Comments (0) Be the first to comment on reuters.com. Add yours using the box above.   Edition: U.S. Africa Arabic Argentina Brazil Canada China France Germany India Italy Japan Latin America Mexico Russia Spain United Kingdom Back to top Reuters.com Business Markets World Politics Technology Opinion Money Pictures Videos Site Index Legal Bankruptcy Law California Legal New York Legal Securities Law Support & Contact Support Corrections Advertise With Us Connect with Reuters Twitter   Facebook   LinkedIn   RSS   Podcast   Newsletters   Mobile About Privacy Policy Terms of Use Our Flagship financial information platform incorporating Reuters Insider An ultra-low latency infrastructure for electronic trading and data distribution A connected approach to governance, risk and compliance Our next generation legal research platform Our global tax workstation Thomsonreuters.com About Thomson Reuters Investor Relations Careers Contact Us   Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. Thomson Reuters journalists are subject to an Editorial Handbook which requires fair presentation and disclosure of relevant interests. NYSE and AMEX quotes delayed by at least 20 minutes. Nasdaq delayed by at least 15 minutes. For a complete list of exchanges and delays, please click here.

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