1) So, is it your opinion that the 70% estimates I'd made on both counts are too high, too low? I know you'd stated the numbers are up for speculation and so they're probably not explicitly knowable or willingly being shared by places like Amazon, but I thought maybe you might have an insight into what the actual numbers might be ballpark-wise?
2) In terms of the convention analogy, I think I follow the math, however isn't it best to be at the place with the highest total attendance regardless of how many booths there are set up? I understand the attendee per booth average and that seems to make sense, but since people are milling about, don't you stand to potentially gain the most amount of passersby simply by virtue of the size of the convention's overall attendance, as it's unlikely attendees would apportion out in the manner you describe? Or am I thinking about this in the wrong way?
I guess, what I'm getting at is, perhaps the number of other vendors in that market place don't matter as much as does the concentration of those who will potentially buy what you're selling. Does that make sense? I might be in need of more caffeine.
Then again, it is true that as the number of booths increase, the amount you'd have to invest to have your booth attract more foot-traffic versus others would also need to increase to a commensurate amount. Though, admittedly, some of that would come down to the overall floor plan or layout of the place, architecture of the venue would be a factor as well as other considerations, including the habits of crowds and psycho-social aspects of consumer behavior/human action. I'm not sure what the comparables would be in the digital realm, and the more I think about that, the more my head hurts.
1) It's so variable by genre and niche that using those numbers is actually worse than using no numbers at all. A stopped clock is right twice a day, but tells you nothing about what time it is.
Also, there are so many other factors, such as price and competition, that it defies precise analysis. You really have to experiment. And in fact, whole careers in marketing are made and lost trying to figure this stuff out at the big corporate level.
I'd suggest you need to check your own niches against all the info you can, such as the Author Earnings reports. Smashwords has also released some data on their website blog. Beyond that, you need to ask around in your genre niche and see what others are saying. Some niches seem to work great in KU, others do better retailing on non-Amazon sites.
The problem for most people is that experimenting with wide seems very risky and involved--and it is. So, they stick with KU as long as it's working--which is fine, but I liken it to staying in a high-paying job with an unreliable and erratic boss, where you never know for sure if they aren't going to screw you over, intentionally or not. Quitting that job may result in loss of overall income, or it may not, but it's definitely risky. But so is sticking with that erratic boss. And, sometimes more money means less peace of mind and less career survivability in the long run. And, there's inertia. Better the devil you know than the ones you don't...but frankly, none of the other big vendors has ever treated authors the way Amazon has.
2) I think you're making some incorrect assumptions about the customers and you as a vendor. Using the convention analogy further, there are other factors than merely raw traffic. There's the customer's mental overload that may lead them to simply give up shopping. There's the difficulty of standing out among many other stellar offerings of the same product you have. There's the fact that not everyone will see every booth. There's the fact that customers have limited money to spend, and they may never get to your booth because they spend all their money on the first thing they found that meets their needs.
In fact, there's probably some perfect sweet spot out there (a moving target) between too many and too few offerings, vs. how likely a customer is to buy a particular product.
If you think about presence at a big vs. small convention or big (Amazon) vs. smaller (e.g., Apple) as marketing, not sales (sales only come as the result of your marketing, and your marketing comes from your visibility among vendors), then it's rather like the decision to blow your ad budget on a Super Bowl ad that might hit zillions but might also fall flat among the other offerings, or spread that same budget around in other ad venues.
Or, do you want to be a big fish in a smaller pond, or a small fish in a bigger pond? The former (BF in a SP) is much more sure and stable, but the potential upside is technically more limited than the SF in a BP. I say technically because functionally, most fish will never use the whole ocean or grow big enough to exploit it.
Here's another way of thinking about it. Say you sell potato chips. Do you want to be ONLY in the huge grocery where your chips are lost in a sea of other offerings on the snack aisle? (I say only because we're talking about KU exclusivity here). Or, would you rather be wide with your chips, still present in the big grocery, but also in many smaller stores where the customers are much more likely to see you? And where the ratio of traffic might be much higher?
Bottom line, there are different approaches. The fact that the intuitive approach is to go for the low-hanging fruit (Amazon KU) also means a bunch of people thinking only intuitively are all crowded onto the same hill trying to pick the same orchard, whereas circulating among different hills and different orchards may yield more and better fruit. Where do you put your effort? And, do you want a fallback position if that one main orchard gets blighted, or is over-harvested?
If the #1 problem of indie authors, especially those starting out, is visibility and discoverability, is going to Times Square on New Year's Eve really the best way to be seen? Or will you simply get lost in the crowd?
On the other hand, if you've got a great thing going in that one place, that one orchard, and your Super Bowl ads are knocking it out of the park, sure, why change?
But I suggest everyone who's all-in with KU should be mentally ready to change and go wide if Amazon kills your income with one of its shenanigans. And, if that happens, you'll be competing with a flood of others going wide--so it may behoove you to at least establish one series (if you have more than one) outside of KU, just to have a presence and start building a following.