Ebook Sales Update, 2012 final.
Previously:
Original Projection : 1st update September 2012 : 2nd update December 2012
“Ebook Sales” data in this case are the numbers reported by the 1200 or so publishers who respond to the AAP surveys: The AAP no longer does their own press releases with this data but I’d like to personally thank Shelf Awareness for including the information (as it becomes available) in their excellent email newsletter. (go sign up.)
[tl;dr-math]
The formula for the sales projection curve is
ebook(t) = k * (1 + tanh(-π+((π/80)t)))
Where t is the time variable, counted by months, and k is a constant one selects out of one’s ass (a surprising number of scientific constants work that way) equal in this case to $130 Million. The constant k is also the assumed value of ebook sales at the inflection point in the graph.
Using fractions of pi — (π/80) above — is how we “stretch” the s-curve to match the observed growth over time. My first projection used (π/60), an assumed dynamic growth phase of about 120 months. To get the projected graph to match reported sales, however, I had to slow things down a bit — (π/80) translates to a “dynamic” phase of 160 months, about 13 years. For the graph below, our starting point (t=0) is the month of August, 2005.
This also means we hit the inflection point back in May 2012.
[/tl;dr-math]
My [*] on the Projected Sales is the same disclaimer as last time:
- The only data available to me are ebook sales as reported by the Association of American Publishers: so these correspond only to US ebook sales from established publishing houses and does not include self-published ebooks.
- Merely looking at a dollar sales figure (again, the only data available) glosses over the fact that ebooks are sold at lower price points: unit sales of books will be higher than the dollar figure might suggest
- My projection is not the only interpretation – but I’ve tried some other models and ebooks sure look like they’re following a fairly common sigmoid growth curve
- …however, if ebooks do not merely cannibalize sales of other formats but instead push books into new genres, new business models, new retail channels, and effectively blow up books as we know them: why sure, I guess there’s no upper limit & my projection is wrong. You can make any assumptions you like along those lines. My graph represents a fairly short future time frame (3-5 years out) and a relatively stable publishing industry. (Well, stable other than the disruption currently happening due to ebooks.)
##
Now, some new thoughts:
First, I need to see the next 4 months of data (Jan-Feb-Mar-Apr 2013) to see if there is a bounce in Early 2013, just like there was in 2011 and 2012 (corresponding to new owners of devices buying content, aka the post-Christmas-Gift Bounce)
Second,
How about we turn this around? Let’s say my projection of ebook growth was correct up through 2011 (and presumably beyond) and it’s the data in 2012 that was in some way “wrong” or skewed?
Let’s Just Guess that publishers’ reported ebook sales numbers in May-June-July-August of 2012 were affected by Fifty Shades of Grey. Random House reported profits (not sales, Profits) were up 75% year-over-year due to the 50 Shades phenomenon, and additionally, “About 50% of revenues from the trilogy were from ebooks”. It’s going to be very hard to parse that 50% number and compare it to the 70 Million ‘copies’ sold, and also to go from there to the actual number of readers: How many people bought just the first book? How many ebooks sold were the 3 volume “box set”, and do the box sets count as one book or three? How does the cost of printing figure into the calculation of “revenue” — does the lower price point mean ebooks sold More Than Half, or does the slimmer profit margin on An Actual Printed Book mean that ebooks sold Less? edit: actual number at about 15 Million. see end note “update2” and also ref the PW article here.
50 Shades was a definite outlier, though, no matter the number: the “downturn” in AAP-reported ebook sales toward the end of 2012 is at least in part an expected correction.
I want to say there is more to that story, though.
I’d say the numbers Sep-Dec 2012 also show that the established publishers are losing (additional) ground to self-publishing and authors using direct-to-e-book platforms like iBooks, KDP, and Nook Press.
Just like the ebooks-as-a-format saw steady growth before suddenly tearing off in 2010 — following the “mainstreaming” of ereaders and tablets, when there finally was a market — self-published ebooks are going to follow the same trajectory now that there is a “mainstream” market:
At least 5 Million readers (and maybe twice that or more) bought the 50 Shades ebooks — A huge chunk of readers have been turned onto a “new” genre, erotic fiction [a genre that was already fairly extensive, almost entirely online, and that predates ebooks-as-we-currently-define-them by at least a decade].
There were also stories all over the place in 2012 (in papers, in magazines, online and on TV) reporting on 50 Shades and its origin as a self-published book — the success of E. L. James has removed most (if not quite all) of the stigma of self-publishing, and other authors like John Locke and Amanda Hocking, both of whom have built readerships across multiple books and over years, are proving that it’s not just a one-time special exception: Self Publishing can work.
The gap between AAP-reported data and my projection? It was about $5-10 Million per month in the 2011 (excluding January spikes) — but now (after 50 shades) we’re looking at $25-30 Million per month in September 2012, and perhaps $40-50 Million per month by the end of the year.
I feel confident in my projection — though I’m also leaning heavily toward adjusting the projection once I get more data. And if Apple, Amazon, or B&N want to get off of their secrecy kick and could maybe just tell us how big digital self publishing is: well, that’d be just fine by me, too.
It may be a full year from now (when we have all of 2013 numbers, and no curveballs thrown) before we can know which of the data points are outliers. I plan to update the chart every 4 months, as the data comes in.
[update1, 5:45pm 13 April 2013]
An extra little bit of math for you: Monthly Sales of $50 Million in ebooks divided by an average price point of $2.99 per book, divided by 30 days in a month, would be half a million self published ebooks sold and downloaded every single day.
Question for the class: Is that number too high, or too low?
[/update1]
[update2, 9:55pm 13 April 2013]
Found a number, via Publishers Weekly, in their reporting on Random House & other publishers ebook performance in 2012:
“Fifty Shades sold over 15 million digital copies, while the Fifty Shades Trilogy Bundle sold over 850,000 e-books. RH had another 1 million–copy e-book seller in Gone Girl.”
E-book Sales Bolster Publishers’ Bottom Lines : Jim Milliot, 29 March 2013, Publishers Weekly
More math: 16 Million ebooks (rounding up) vs 54 Million print books — and as reported ebooks accounted for 50% of the revenue. If all other production costs have been covered (as I assume they were after the first half-million or so sold) then a digitally-delivered ebook is at least 3 times as profitable as An Actual Printed Book — please note that when one has to actually cover the production costs, and pay an author advance, there is going to be a much different calculus involved — and I’ll leave the question of how the differing price points affect the calculation as an exercise for the student
[/update2]
[update3]minor edits made 9:30pm 14 April 2013[/update3]
[update4]minor edits & format changes, additional links added, 7:50pm 14 April 2013[/update4]
