Rocket Bomber - article - publishing - business - While the e-book market is going to explode...

[if you want a conclusion to the ellipsis in the title, skip down to the end]

I really like the numbers posted by the Association of American Publishers at publishers.org

The Association of American Publishers is the national trade association of the U.S. book publishing industry. AAP’s more than 300 members include most of the major commercial publishers in the United States, as well as smaller and non-profit publishers, university presses and scholarly societies—small and large. AAP members publish hardcover and paperback books in every field, educational materials for the elementary, secondary, postsecondary, and professional markets, scholarly journals, computer software, and electronic products and services. The protection of intellectual property rights in all media, the defense of the freedom to read and the freedom to publish at home and abroad, and the promotion of reading and literacy are among the Association’s highest priorities.

All really good stuff, that. Plus: numbers! I love numbers.

From publishers.org back in February, Year End 2009 net domestic [U.S.] sales by category

Adult Hardcover: $1,600 million, +6.9% [year-to-year]
Adult Paperback: $1,400 million, -5.2%
Adult Mass Market: $775.6 million, -4.0%
Children’s/YA Hardcover: $765.1 million, -5.0%
Children’s/YA Paperback: $577.7 million, +2.2%
Audio Book: $177.2 million, -12.9%
Religious Books: $588.7 million, -9.0%

University Press Hardcover: $58.2 million, -3.0%
University Press Paperback: $61.8 million, -0.1%.
Professional and Scholarly: $766.4 million, -2.9%
Higher Education: $4,200 million, +12.9%.
El-Hi [elementary to high school, K-12]: $3,500 million, -13.8%.

E-books: $169.5 million, +176.6% over 2008

In 2009, ebooks sold less than all other trade categories (even audio books outsold ‘em, dollar wise) and while the university presses didn’t post a stellar showing, text books [for all ages, 5-25] are totally rockin’ the hell out of the print business. Put that in your pipe and smoke it. The trade business (including e-books) is a scant $6.05 billion while text books and the scholarly set are at $8.59 billion.

[puts the acquisition by B&N proper of B&N’s college division into a whole new light]

That’s an oh-my-gods $14.6 billion dollar industry (though the U.S. Census Bureau in parallel reports bookstore sales over the same period at $16.7 billions, so I guess our gross margin is 15% or so) more than half of which are text books [which don’t have e-book versions yet] and to convert that into comparable numbers: 14.6 billions are 14,600 millions, and e-books are all of 1.14% of that.

Most [including Amazon] like to ignore textbooks and so report e-books as a percentage of trade book sales, but still were only at 2.8% — and you can exclude bibles and other religious books, to get to 3.1%, and exclude children’s books as well and inch the percentage of e-books to 4.3% [of a specified class of books, a subset only equal to two-sevenths of the total]

And duh: the segment is growing. But, um, [and it hurts me to point this out] manga was growing by double digits 3 years ago; enough to grab the attention of major retailers and publishers both. How’s that working out these days? Note: present performance is no guarantor of future growth.

numbers go up, numbers go down; for the most part though, there are trends in place and no matter what the markets or consumer demand: A billion is a billion is a billion. E-book sales might hit that mythic, mystical One Billion Sales mark in just 2 years, if current growth can be extrapolated and sales are in fact tripling year-over-year [it’s actually just a tad slower than that, and the market could saturate — with the accompanying flattening of that growth curve — faster than you can blink] but even if e-books hit their billion in December 2012 [that date sounds familiar…] that is still only 6-7% of the total market and I shouldn’t have to remind you: e-books sales are also book sales so the growth of e-books means a larger book market in general: One Billion Dollars of e-books, combined with inflation, growth of retail markets related to increasing U.S. population, e-books as an extension of the book market into populations who don’t buy [physical] books, and a massive increase in backlist sales made possible by e- editions of all kinds of books, from the popular backlist to formerly out-of-print books [nothing is out of print when it’s e-] and suddenly we could see the book market explode

up to $20 billion, or $25 billion in 10 years: and yet, with a core of $15 billion in text books, regular print hardcovers and paperbacks. That is to say, while all the growth in publishing [and it looks to be spectacular growth] is going to be an e-volution as both new books, midlist, backlist, the marginalia and the oldest of the old books all come to the new digital marketplace: there is at least one generation left that likes the feel of actual print books and so I predict not the death of publishing, and the bookstore, but a wealth of knowledge and an embarassment of books on top of the current national chain bookstores and remaining independents.

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Now let me point out that one shouldn’t conflate my use of historical numbers in the first third of the post with the conclusions presented after.

This is a common trick, where a wave of real (or real-seeming) numbers are then used to hand-wave guesswork and conclusions.

I’m not presenting investment advice, analysis, or prognostication. I’m just pointing out that $15 Billion Dollars in Book Sales is a massive number, and that my impression of e-books so far is that yes, they present the main growth potential in the industry but I don’t personally feel e-books are going to cannibalize other book sales to the degree some gloom-and-doomers [or overenthusiastic internet CEOs] would have us believe. Yes, the bestseller lists are going to get hit, and hit hard. Yes, the popular backlist will either transform or move ‘online’ wholesale. But the long tail, paperbacks from 30 years ago, used books, collectible first editions [which only get more collectible with smaller print runs], people using bookstores like libraries [with our wifi, and laissez faire attitude toward the theft of electricity and the costs of housekeeping & babysitting your ass while you camp out all day] — Amazon can’t do this and never will. The bookstore is a lot more e- and internet-proof than folks give us credit for.

A ‘revolution’ could change the whole game overnight, but so far e-books are just… books… and at the moment only 1-4% of the business anyway.