Home » Big Publishing, Bookstores, Ebook/Ereader Growth » A Mixed Blessing in Slowing E-book Sales

A Mixed Blessing in Slowing E-book Sales

18 November 2013

From Publishers Weekly:

It is rare that an industry would see the declining growth rate of its fastest-growing product as anything but bad news. But many in the book business see the slowdown in the sale of e-books as a positive.

. . . .

The positive side of slowing e-book sales is that the decline of print books has slowed, prompting many of those interviewed to hope that the industry is entering a more stable and predictable period, one that will lead to a wide number of distribution channels to facilitate book sales regardless of format. While noting that Perseus Books Group is prepared to meet consumer demand for books, no matter the format, company CEO David Steinberger observed: “A healthy, diverse marketplace with multiple format, price point, and channel choices for the consumer is generally a positive for readers, authors, and publishers overall.”

The slowing e-book sales increase of 2013 (up 5% in the first six months of the year over the same period in 2012, according to AAP’s StatShot report; sales rose 44% for all of 2012) can be traced to a couple of factors. Growth in 2012 was in part fueled by the phenomenal e-book sales of the Fifty Shades and Hunger Game trilogies, and no blockbuster of similar scope appeared in the first half of 2013. Then there are the reduced sales gains made by digital reading devices. Although the tablet market has exploded, sales of dedicated reading devices have slowed. Research conducted by the Codex Group found that consumers who use tablets to read e-books buy fewer titles than those who use dedicated e-readers such as Kindle Paperwhites or Nook GlowLights.

. . . .

What the data indicate to most industry players is that e-books have become another format, much like audiobooks and paperbacks. A more stable and rational hybrid market is one publishers could live with, and it is certainly one that would keep bricks-and mortar stores a viable channel for the industry. ABA CEO Oren Teicher said he has always thought that the predictions of digital domination were overblown. Teicher said much like television and the movies have complemented one another, he sees print and digital books living side by side. Teicher notes that one thing publishers and booksellers have learned since the debut of e-books is that certain genres sell better as e-books than others, a fact that he said booksellers need to take into account when deciding what books to sell. Sourcebooks CEO Dominique Raccah said that she hopes the decline in the e-book growth rate will give bricks-and-mortar retailers the confidence to invest in the categories that seem certain to sell best in print.

Link to the rest at Publishers Weekly

Big Publishing, Bookstores, Ebook/Ereader Growth

27 Comments to “A Mixed Blessing in Slowing E-book Sales”

  1. I almost hurt myself laughing when I first saw this one.
    They actually provide the ammunition needed to debunk their own thesis.

  2. Does anyone have a good graph to demonstrate how the decline in growth rate does not mean what they think it means?

    Like, 5 percent growth of a 40 percent share is a lot more actual books than 100 percent growth of a 2 percent share?

    I know you guys can express this better than I can. I read these articles about “stabilization” and I think they’re confused. But then again, I am too.

    • Sure. I commented on the last article like this. Basically, these folks don’t understand the difference between ratios and raw numbers. If a new company increases their business by 100 customers each year, their customer base is 0, 100, 200, 300, 400, 500, 600, etc. If you assume they were profitable at the end of year 2 (a good milestone for real businesses) with 200 customers, the growth is phenomenal. If you graph their growth as a percentage, though, you get 100%, 50%, 33%, 25%, 20%, 17%, 14%, etc.

      So, if you look at the raw growth, what you see is a company that is consistently growing at a steady rate. This is a sign of a good, solid business that’s not going away. If you look at the percentage growth, at some point you hit a “plateau”. Why? Because you’re just looking at a ratio. Ratios are relative to the situation they rise from. If I say Disease X kills 1 of 10 people who contract it, it sounds bad. If I tell you 1 of 1 billion people exposed to Disease X contract it, you wonder why I’d even bring it up.

      Basically you’re an idiot if you use percentage growth to judge the future of a new market. The percentage growth is relative to the fact that it’s a new market, not to where it’s headed.

  3. Plus, they’re missing a LARGE part of the fiction puzzle. I just went and looked at Amazon’s Top 100 Books (not Kindle, but all books) in Fiction, and counted 31 Indie titles – most of which are selling primarily in e-book format.

    Non-fiction and children’s books and blockbusters are going to be the mainstay of NY publishing. But, oh boy, that genre fiction market is slipping through their fingers, and most don’t even see it.

    • They’re always missing a large part of the market in general. It’s not even clear where they pulled data from. They just interviewed a couple of people who note publishers have only just started thinking of digital as another format like paperback or audio.

  4. What the data indicate to most industry players is that e-books have become another format, much like audiobooks and paperbacks.

    I’m glad they have data on this, because I wasn’t sold on the idea that ebooks are a format.

  5. Chapters/Indigo (in Canada) just cancelled their dividend, to reinvest in non-book items, due to contraction of paper book sales. Their stock dropped 18% when they did that (there’s a Globe and Mail Report on Business report on November 7, 2013 about this). Investors are showing a lot of uncertainty about bricks and mortar, in my opinion. I am posting a blog on it this upcoming Friday on my Dodecahedron Books blog, if anyone wants to see a bit more.

    This piece seemed like some whistling past the graveyard.

  6. It will get worse for print. I just released my debut novel, Fire Light. I had to teach some of my beta readers how to download their first ebook. Some didn’t even know Kindle had an app for iPad and iPhone.

    J. Abram Barneck

  7. Wow. Maybe I should quit my job and be a web columnist writing the same article over and over again. Seriously, how many times have we seen this exact same piece in the last 24 months?

    Casette, VHS, DVD, Mp3, the internet itself, all had explosive growth periods as they were adopted and then a leveling off occurred when a certain market saturation point had been reached. But growth and adoption continued. If you looked each one up I bet it would be around 20-30% annual vs. 200-300% whenever something took off.

    But, by all means, keep investing in the old format. Because AAP and Codex said so.

    • Everything’s going digital.

      Video games no longer have printed guides; the guides are digital and show up within the game itself.

      Same with most PC games.

      Let me say it again… EVERYTHING’S GOING DIGITAL. It’s only natural that this would include BOOKS. You cannot stop progress, no matter how much you wish you could.

      • The games themselves are moving to digital download. The console generation launching this week will likely be the last to rely on physical media as the primary distribution medium.

        • I have last-generation consoles (PS3, Wii) and I haven’t bought a physical game product for months (last one I got was Fallout 3 NV, used at Gamestop.) I download everything. I expect this to continue. (I don’t do a lot of PC gaming: if I did, I’d only use Steam.)

  8. This article in PW was naive and indicative of the mentality of traditional publishing. First, they’ve stayed alive the last couple of years by earning higher profits on eBooks with lower overhead– profit not passed on to their authors.

    Now they think things are just going to stabilize? These are the same people laughing at the 3% eBook market all of three years ago.

    I do think it’s part of math that growth slows as you go from 3% to 100%. I’m a bit mystified at the comment about three digit growth. What math did that come from?

    All in all it tells me not much has changed in NY and for that, I’m grateful.

  9. What can you say about an article that includes this line:

    The hope for many interviewed is that this new period of relative stability will encourage both publishers and booksellers to innovate.

    I’m dumbfounded. Dumbfounded that the industry thinks this is a period of relative stability. Dumbfounded that they think that stability would lead to innovation.

  10. “The sand looks mighty good from here,” said the ostrich.

  11. Most businesses would kill for sales to be 5% up on last year, especially when they say last year was an exceptionally good year.

  12. This article, lauding B&M bookstores, still doesn’t address the fact that Amazon and other etailers are kicking butt on price, availability, and ease of purchase–for both print and ebooks. And that Big Pub is still doing business as usual, selling mostly to B&M’s on “consignment” (i.e., with returns) and very little directly to readers (except through Amazon, et al). This business model must change or its adherents will perish.

    Also, Amazon is the middle man for mom ‘n’ pop businesses selling used books, which are outside Big Pub visibility and stats. (FWIW, I buy a lot of used books, and will continue to do so.)

    • I’d never really thought about it but your comment prompted me to wonder a couple things. I doubt Amazon does a lot of returns(seems inefficient for them to stock what they know they won’t use)? And publishers print 30%-50% more books in expectation of returns.

      So if a book sells 35% of its copies through Amazon that means they are saving a lot of cash on returns on that 35%?

      • I hear that returns are dropping, partially because the American Booksellers Association is encouraging smaller bookstores to order more intelligently (DWS has mentioned this a few times) and as more publishers make us of POD technology.

        The format that’s going to pretty much disappear is the genre mass market paperback, which is the genre that always saw the highest returns (50% used to be pretty standard.)

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