Taking the piss out of e-book propaganda.
I hear ebook this and ebook that so much — not only from news sources but from my corporate overlords — it makes me sick. Sure, ebooks are growing, but I feel the time and attention (not to mention resources, financial and otherwise) focused on ebooks are missing the point.
Yes, Ebooks are blowing open new holes in the publishing industry. New! Shiny! You can read ‘em on your iPad!
…but folks are still buying a lot of paper.
Let’s start off with a messy graph.
& let me break it down for you: The red line tracks adult hardcover sales, the yellow one is trade paperbacks, the green one is mass markets — this is just for those three categories as reported by publishers.org — so no kids books, no text books, no teen books [classed as Young Adult by most pubs, so part of the ‘childrens/YA’ chunk of AAP’s data] but the “Adult Trade” category is the still largest part of the trade market.
(Text books completely blow any segment of the “trade” market out of the water — which makes all kinds of sense given the price points, numbers of students, number of classes taken, and the requirement to use a text. But no one says anything about e- compared to the text book market, yet.)
(and I’ve posted these numbers before — well, most of these numbers: I’ve added data for Sep. 2010 to Feb. 2011 as they became available — which you can go see laying around here and there on this blog)
The Latest News, widely repeated, is that purple line: unit sales of ebooks.
For February 2011, ebooks ranked as the #1 format among all categories of Trade publishing (Adult Hardcover, Adult Paperback, Adult Mass Market, Children’s/Young Adult Hardcover, Children’s/Young Adult Paperback).
This one-month surge is primarily attributed to a high level of strong post-holiday e-Book buying, or “loading,” by consumers who received e-Reader devices as gifts. Experts note that the expanded selection of e-Readers introduced for the holidays and the broader availability of titles are factors.
Additionally, Trade publishing houses cite ebooks as generating fresh consumer interest in—and new revenue streams for—“backlist” titles, books that have been in print for at least a year. Many publishers report that e-Book readers who enjoy a newly-released book will frequently buy an author’s full backlist.
For the year to date (January/February 2011 vs January/February 2010), which encompasses this heavy post-holiday buying period, ebooks grew 169.4% to $164.1M while the combined categories of print books fell 24.8% to $441.7M.
I have done a bit of massaging to the AAP reported sales numbers. I divided sales for each by an average unit price to find an estimated number of units sold. It actually makes the rise of ebooks a bit more dramatic.
What the press release skips over is something I think most of us can see: January and February are awful months for publishers — among the worst (when they are not in fact the worst) two months of the whole year. This is because book retailers bought their stock back in September and now they’re running clearance sales, cutting back on displays, and recovering from the December shopping orgy.
I put a vertical gray line into the chart to point that out for you.
Sales of ebooks, though, are instantaneous. There are no physical storefronts [just online ‘shops’] and publishers get to bank that sale right away. The messy, seasonally-variable and returns-prone book business just doesn’t affect ebooks: that’s why the three trade categories wobble like an EKG, and the e-book graph just goes up and to right in ways that make MBA’s hearts skip a beat.
You tell me, based on the first graph. Which business do you want to be in?* [it’s a trick question, but you may not have figured out why yet.]
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Let me simplify things. Please allow me to add back childrens’ books, and the university presses [but not text books, yet], and the “professional” category which includes quite a few computer books & building codes and some other stuff I carry — and then add everything up to get to an honest ‘bookstore’ number. And let me take the wobble out of the graph: I’ve enough data culled from AAP press releases to compute a rolling 12-month average for this same time period.
This distributes the Christmas rush over the whole year, and makes the time delays related to shipping books to retailers moot: we can see the direction books are actually heading.
I think you’ll be surprised.
and let me re-quote one paragraph from the AAP press release:
For the year to date (January/February 2011 vs January/February 2010), which encompasses this heavy post-holiday buying period, ebooks grew 169.4% to $164.1M while the combined categories of print books fell 24.8% to $441.7M.
Dead Tree Artefacts still outsell Digital Files 3 to 1 — for the first two months following the gifting of millions of ereader devices — and for the two months of historically abysmal revenue for publishers. Ebooks are doing quite well, but are not the whole book market quite yet, even during the winter sales slump.
We’re not just comparing apples to oranges, we’re comparing apples to digital downloads: and the apples are still selling.
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For the data above I assumed an average price per print book of $15, and an average price for e-book of $10. I assumed publishers gave retailers of whichever sort the standard %40 discount off of list prices. And the AAP reports publisher revenue: all those free, public domain ebooks or sales by self-published authors aren’t included.
Please note the green line is largely flat. Please note that book sales are seasonal, and when a press release comes out saying one format (ebooks) outsell another format (hardcover, whatever) that’s because the people tracking these numbers split things into at least a dozen categories, and we can play with numbers all we like, and make them say lots of things, especially if we do a press release in March, instead of November.
Your take-away:
1. Book Sales are seasonal, but after accounting for seasonality: Actually Print Book Sales Are Flat.
2. Ebooks are growing. Obviously. And it is much too early to predict when those sales are going to level off: but I’ll tell you, ebooks can’t maintain exponential growth forever and eventually, yes, it’s going to level off. [I’ll refer you to the manga bubble, 1998 to 2007, for those with short memories: just because it’s E- doesn’t make it immune to market forces.]
Ebooks are the only segment of the industry that is growing right now. So they get a lot of attention.
However: I ran the math, and ebooks aren’t cannibalizing sales of physical books. (yet.)
3. Text Books are still the market to crack. The person or company who manages a “kindle” for elementary, secondary, and college text books is going to be rich.
7.2 Billion Dollars Annually, equal to all ebooks and trade books combined.
