Home » Big Publishing, Ebooks » Major Publishers ebook Revenue Continues to Plummet

Major Publishers ebook Revenue Continues to Plummet

14 February 2016

From GoodEreader:

Over the course of the last twelve months major publishers have all reported that e-book revenue has begun to plummet.  This downward trend has continued into 2016, as HarperCollins, Simon & Schuster, and Hachette have all reported diminished revenue.

Simon & Schuster has just released their quarterly financial results and e-book sales accounted for just 21% of total publishing revenues in the fourth quarter, down from the 24% they accounted for in the same quarter a year earlier. The publisher also acknowledged that digital might be down, but they have seen an 8%  increase in sales, due to print.

HarperCollins on the other hand mentioned that e-book revenue dropped by  5%, compared to the same quarter last year. Digital sales now represent 16% of HC’s consumer revenues in the quarter, which has a 1% drop from the same period last year.

Link to the rest at GoodEreader

Big Publishing, Ebooks

60 Comments to “Major Publishers ebook Revenue Continues to Plummet”

  1. They’re obviously not counting their ‘Pulse Tuesday’ sales, Lee needs to point that out to them …

    • *snicker* You’re so bad, Allen.

    • @ Allen

      “This bird has no pulse. It has expired.”

      “No, it’s merely sleeping.” 🙂

      • Or it never had a ‘pulse’, a dead thing having been made up to impress others that fails to even look real when brought out into the light …

        • @ Allen

          (Hope you got that Monty Python reference.)

          There was a movie, Matilda, out back in 1978 with Elliot Gould as a promoter of a boxing kangaroo. The kangaroo was played by a guy in a kangaroo outfit, which was so obvious and unlike a real kangaroo that it was ludicrous!

          The movie bombed, BTW.

          Note: not the movie with Mara Wilson based on Roald Dahl’s book.

          • No, but it sounded like them. 😉

            Though maybe that’s the joke I (and maybe others) am not getting. We have someone we think is is Lee saying things Lee should know better than to spout — especially to a crowd that looks up and figures things out.

            So this might be a ‘Lee’ puppet someone made to mess with us — your ‘guy in a kangaroo outfit’, it is ‘Lee’ and he’s having a little laugh at us — seeing if we’ll fall for his joke, or it’s ‘Lee’ and he’s really that badly informed on things …

  2. Agency pricing is working as intended. Print monopoly maintained, for the moment. I’m sure those traditionally published authors are all delighted by this opportunity to take one for the “team.”

    • This is exactly why I walked away from my NY publisher. I’m no one’s sacrificial lamb.

    • Smart Debut Author

      $9.99 Big Five ebook: author nets $1.75
      $19.99 Big Five trade paperback: author only nets $1.60

      Even if Amazon discounts that paperback down to $14.99, which price do you think will sell more copies? Gain the author more new readers, more word-of-mouth?

      Any traditionally-published author who cheers the Big Five’s shrinking ebook market share is an innumerate idiot, pure and simple.

      Either that, or planning some indie books ASAP. 😉

      • Any traditionally-published author who cheers the Big Five’s shrinking ebook market share is an innumerate idiot, pure and simple.

        Given all the people who want to follow the trad path, I think we have to accept they value the associated intangibles more than the expected money.

        It’s no longer innumeracy or ignorance. It’s choice.

        I respect their choice. It’s not my choice, but why should they give a rip what I choose?

        • Smart Debut Author

          Choice is fine. If you reread my comment, you’ll see I didn’t criticize their choice of publication route–only the stupidity of cheering of an ebook decline that hurts their income and shrinks their reader base.

  3. The KU-pocalypse is being felt all over…

    • No, they’re pricing themselves out of the market. Plus, I don’t think most trad pub books are available in KU.

      • Actually many trad pubbed books are in KU, and they’re paid full royalty, but that wasn’t my point. My point is that the readers who were buying a lot of books are now getting many of them ‘free’. When you have a reading habit, KU looks pretty dang attractive. Many big-selling indies reported a big dropoff in income/sales when KU came along and that hasn’t changed.

        • Authorearnings and Amazon both report that overall ebook sales in dollars are going up. So while individual indie authors and big-5 publishers may be seeing less income, the whole pie is still getting bigger. And Indie authors as an entire group are getting a bigger and bigger slice of that pie. However, there are more and more individual indie authors sharing that slice of the pie, but again the pie is also getting bigger even after KU.

          Interesting to me is how small and medium publishers are keeping their relative share of the pie. But then, maybe they are not raising their ebook prices like the Big5 are.

          • Last I heard (and it was a long while back) Amazon insists on wholesale for the smaller publishers not going through KDP.

          • Available fiction is increasing at a faster rate than spending on fiction. Total sales go up, while individual book sales go down.

            If we pretend it’s widgets, it all makes sense.

        • I didn’t know that, Elle. However, while ebook sales might go down, KU2 pays about the same as a sale for novel-length work, although granted, I know it’s not as good a deal for short-form writers. On the other hand, KU1 was totally not worth it for a novel writer. What I like better about a KU read as opposed to a sale, is that I can see whether or not my books are getting a read-through.

          Still, I think the drop in tradpub ebook sales is price-based. How many people are willing to pay $14 for an ebook? Not me.

          • I’d rather have straight sales and no one feeling like they’re getting free books all day long. That way, the idea that books have value remains instead of this attitude that all books should be free. I don’t make this crap up … it’s on my Facebook feed put there by readers (KU fans and pirates both). Some indies are actively fighting this trend, but unfortunately many have caved and gone exclusive KU. I’m a long-term player, and I see going to KU as a short term solution that will only make things worse in the end. Try giving your books away ‘free’ for a while and then charging for those same books later; you’ll have some very angry readers on your hands. Again, I’ve seen this happen, I’m not making it up or guessing. Have you ever paid full price for something and then seen it go on sale? That ticks me off when that happens to me. Or when I find out people got something free or cheap that I paid a pretty penny for. That ticks me off too. I had readers who were spending hundreds of dollars a month for books before, who are now happily paying $10 a month and downloading ‘free’ books every day, books they used to pay $4.99 and up for. That’s where the big loss in income is happening, in my humble opinion. Subscription services, especially KU, are killing the value of books. And yes, for anyone doing the research, I have a few books in KU, those that are Montlake titles. I have no control over that, but I use every opportunity I have speaking to people at Amazon, telling them that I think it’s a big mistake for readers and writers long-term.

            • I’m glad you mentioned this, Elle. It riles me up when people pretend that the KU ranking boost isn’t making a huge difference in visibility and, thus, sales. Non-KU authors/books don’t stand a chance against ghost borrows and the like. Borrows had no business at all affecting a sales chart.

              The marketplace would look a whole lot different if this unnatural selection wasn’t taking place.

              • “Borrows had no business at all affecting a sales chart.”

                But they do have a place in popularity and ‘most read’ lists which is what Amazon is interested in collecting data on.

                And those writers are getting ‘paid’ for those reads, so some of them are enjoying the benefits of those ‘borrows’.

                And it’s even voluntary, you don’t have to play if you don’t want to.

                “Non-KU authors/books don’t stand a chance against ghost borrows and the like.”

                Would you say they’d have a better chance if they were non-Amazon too?

                It’s a bit like working at a strip club and whining that the strippers make better tips and get more notice from the clientele than the non-stripping dancers or the waitresses …


                “Writing is like prostitution. First you do it for the love of it, then you do it for a few friends, and finally you do it for the money.” Moliere “`

                (and what you’re willing to do/not do for that money …)

                • People who ignore the KU effect like to say they’re comparing apples to apples, but they are not. KU versus non-KU titles are like apples and oranges. KU books are deemed “free” by Amazon and readers alike. Non-KU books are deemed “pricy” if they’re over $2.99. KU titles are given boosts in rankings which non-KU titles are not … meaning non-KU titles *seem* more popular than their non-KU brethren but they are not. Quite the opposite, in fact. Getting money for borrows as an author might seem nice in the short run, but what is ultimately going to happen is incomes for every one will go down (how long do you think Amazon will keep pumping millions of dollars into a losing proposition? How far will the payout go … it’s gone down almost every month?), the number of findable good books will go down, and readers will start expecting less and less of the books they read (and have a harder and harder time paying more than 99 cents for a book) or they’ll start looking elsewhere (outside KU) to find their next book. But good luck finding that great (indie) read, because if it’s not in KU, it’s being buried behind less popular KU titles.

                • …how long do you think Amazon will keep pumping millions of dollars into a losing proposition?

                  How do we know KU is a losing proposition for Amazon?

                  Does anyone know KU membership? Monthly revenue? Consumer retention?

            • Subscription services, especially KU, are killing the value of books.

              Subscriptions may lower the value measured in price, but there is little reason to think they lower the utility value. That means consumers are getting the same utility value for less.

              If quantity, quality, and variety of goods is maintained, then the situation represents a social good.

              Amazon now knows the utility of any book, but the publisher doesn’t

              • To me it would not be a “social good” if the value of books dropped so low that people who write good ones (ones that are considered great reads by a vast number of people) can no longer afford to write full time. That means there will be fewer good books for the readers.

                This is not going to fit in your standard market economy equations, because KU is completely manipulated by Amazon via algos that give greater visibility to books not based on their merit (read quality) but by virtue of them being signed up in the program.

                • If suppliers cannot supply the market because prices are too low, then I agree it is not a social good. There would be no supply, and no benefit derived by society.

                  But that is not what we are seeing. As long as the supply keeps flowing to the market, then low prices and easy availability are a social good.

                  Not only does supply of new books keep flowing, but backlists are available in numbers never seen before.

                  We see absolutely no supply problem. Supply and availablity keep increasing.

                  Who cares if writers write full time? If the supply continues, and it meets consumer demand, it doesn’t matter how the suppliers allocate their time.

                  Economics certainly considers that retailers have different selection standards for what they carry. Distribution channels always affect what gets to the consumer.

                  Any author in KDP signs up for KDP. Any author with Harpers signs up with Harpers. Any author in Amazon Select signs up with Select. There is no process where the read quality delivers books to consumers. Publishers, retailers, and distributors do that by selecting what they want to carry. If consumers buy a given book, they get more of that book, and more of that type.

                  KU is simply another manifestation of downward price pressure from a huge supply of books. It’s authors competing with authors. We can consider it a form of price cutting. The effect it has on some independents is similar to the effect those independents had on traditionals when they started selling their books at $2.99.

                • In reply to Elle: the problem I’m seeing isn’t KU, but catfishers. More and more I’m seeing page after page of “hot” romance/erotica in EVERY romance category (even those you don’t expect to find hot romance) and even many fantasy categories.

                  Why do I say they’re catfishers? No author page. Title and subtitle fields loaded with keywords in a consistent fashion. Blurbs and author bios whose grammar and construction suggest they’re written by English-as-a-second-language writers. Reviews (if any) that frequently say how horrible the writing and grammar is.

                  So if you’re someone who hires a bunch of people off Fiverr or whatever to write a book for $25 or $50, say, slap on a tolerable pre-made cover for another $25, put ’em up on Amazon and let those first 30-day sales roll in (many of these titles are ranking in the four figures, so costs should be recouped in a few days)– how is an individual writer, like you or me, going to compete against that with our one book every 3 or 4 or 6 months? Even if you can write a book every month?

                  As Terrence said above, it’s authors competing with authors. Although I would say it’s widget-makers competing with authors. The rankings suggest that readers are getting what they want, but for the individual author…

                  Well, let’s just say that we’d better be content to enjoy the process, because our books are becoming increasingly buried under the widgets.

            • Since I’m making almost twice as much from KU borrows as from sales, I’m going to have to respectfully disagree that KU is killing book values. It’s (currently, at least; things may change) creating a sub-market of book lovers who are far more likely to give indie writers a try than your average ebook reader.

          • …I can see whether or not my books are getting a read-through.

            This was a thrill for me. I had books in KU for the first time this November, and I saw that my readers seem to read my stories all in one quick gulp, even the one that’s 800+ KENP. Lovely to know that they can’t put it down. 😀

            • How do you know how many pages someone has read? 800 pages could be one person reading the entire book, or 4 people reading 200 pages, or 16 people reading 50 pages each.

              • When the pages read add up to an exact multiple of the book’s KENPC, I think it is more likely that each person read the entire book than that an assortment of readers read exactly the right number of pages to yield an exact multiple.

                • I am still not sure how this works. I see daily totals and monthly totals. How likely is it for someone to read an entire book in one day? And how likely is it therefore for either the daily total or the total for the entire month to come out at an exact multiple of the book’s page count at any particular point in time?

                  Does this actually happen for you often? I guess I could see how it might happen if you only have a borrow once in a while and those readers then do finish the entire book, giving you an exact number. But if there are even a handful of readers working their way through your books, it seems unlikely the daily or monthly total would come out to be exact at any point in time…not to mention that some readers might not read the backmatter throwing the total off by just a little.

                • I just thought of a way this could happen: If someone only turns on the internet connection on their Kindle once in a while, they may have read the book “offline” and then the next time they sign on, all of the pages of the book would be added to the total for that book.

                • @ Nirmala

                  I fall into that group. I download to my netbook and sideload to my kindle, thus while Amazon may see what I buy, they have no idea what I’ve actually read (nor what other ebooks might be on my kindle from other sources …)

            • Allen, Can you do this with KU borrows?

              • To be honest, I’ve never tried. As the writer only gets paid if Amazon can see the reads in a borrow, it would have been too much like stealing from the writer in question.

                I would guess though that they have a touch of DRM (Digital Restriction Management) that wouldn’t transfer properly or would need a secondary ‘key’ file, as they use with library borrows that will ‘die’ on a date even if the kindle isn’t reconnected to the internet.(had to go in ‘side-ways’ to clear my mother’s kindle of hundreds of little files which were reminding her of all the ebooks she had read that were no longer on her kindle.)

  4. So many articles that claim the ebook market is shrinking. I refuse to believe the publishers really think this and we know that Indies aren’t fooled. Who are they trying to convince?
    Readers aren’t going to switch back to paper on the say so of some blog articles, so I really don’t see the value in writing head-in-sand pieces.

    • Oh, it’s not you or me they’re trying to convince — it’s any new writer that hasn’t heard about self publishing. Like the tobacco companies still trying to teach the kids that ‘smoking makes you look cool’, trad-pub needs to keep them from going it alone.

      And ‘everybody knows’ to go print you need a publisher.

      If trad-pub can throw a couple thousand at an up and coming new writer — and lock them down with a non-compete contract, then they no longer have to worry about that writer self-pubing and making money that they won’t get the lion’s share of.

      Trad-pub needs as many writers off the free range and in their pens as they can, to shear as they please.

      So ‘ebooks are dying, trad-pub is your only hope’ will be the call they keep shouting — even as the indie/self-pub writers laugh at them (and many are also laughing all the way to the bank!)

    • So many articles that claim the ebook market is shrinking. I refuse to believe the publishers really think this and we know that Indies aren’t fooled. Who are they trying to convince?

      Of course they know what is really happening.

      But consider the alternative:
      “We’re losing market share to the independents on Amazon because they are selling so many eBooks at much lower prices than we do, and consumers like what they write. Additionally, consumers are downloading more and more books from Kindle Ulimited for a flat monthly fee of $10. That takes many of our high yield consumers away from our offerings. This trend indicates fiction will not be a viable option for our firm into the future.”

      If that is what I believed, I sure wouldn’t tell anyone. I’d present a positive story, with just enough carefully chosen adjectives to avoid problems with the SEC. Then I’d watch as all the trad bloggers and authors drop the adjectives when they write their own stuff.

  5. Another article that provides very little information due to unclear units and inconsistent units. Not GoodEreader’s fault. GIGO. But…

    If ebook revenue is down (as stated by pubs) and ebook prices are up (as observed) then ebook unit sales must have declined by more than the stated revenue decline.

    If paperbacks are a lower margin item, the increase in paperback units sold must be greater than the decrease in ebook units sold to maintain revenue. It is also title and genre specific. Overall unit sales of The Venusian might drop with a relative increase of ebook prices while overall unit sales of The Jovian might increase with a matching increase. It is also possible that trade fiction as a whole loses sales but sales of adult colouring books increase so much they cover the loss for the company or industry as a whole.

    None of the public relations statements being released by the publishers are detailed enough or consistent enough for anyone not privy to the internal data to know what is happening. On balance it doesn’t look like wine and roses.

    Happy Valentine’s Day. 😉

  6. Hands up those of who will consistently pay $8 and upwards for a trad published ebook?

    • For a book I really want to read or have enjoyed, $8 is not really all that much. (kind of piddly really, cue obligatory comparison to a fancy concoction at Starbucks.) For an impulse buy that get pilled on top of my already intimidating TBR pile? that feels very costly very quickly. I’ll leave it to the reader to guesstimate which category I buy more books for.

    • Me. I don’t feel $8+ is too much to pay for 15+ hours of entertainment I can also enjoy again in the future.

      • On something you’re pretty sure you’ll like, sure, why not.

        But would you risk that much on a complete unknown? After all, the thing writers need is more readers — not just the ones that ‘know’ them and like their work.

        Three to five bucks — the cost of a coffee that you might take a sip of and pour the rest out in disgust? Many are willing to take a low cost risk, but the higher the cost the less risks people are willing to take. And if the reader has found good cheap ebooks they might keep looking there.

        • We were all doing just fine buying at that price before KDP, thank you very much. Almost every book in my collection is by a “complete unknown” to me. Didn’t stop me buying, and the price was never a factor.

          • But are you an ‘average’ ebook buyer — one of the ones Amazon is so closely watching to see what you will/won’t buy and for how much? Some of us have less of that ‘disposable income’ as they call it, so prices matter more on ‘want vs need’ type things.

            And it seems there are both enough readers and writers enjoying KDP that I don’t expect Amazon to kill it off tomorrow. So you can work with it, around it, or take your ball and go home — there are plenty more waiting their turn at bat …

    • I used to pay $9.99 for the few authors I followed. I think publishers are not recognizing there is some strange psychology in pricing. x.99 pricing is ubiquitous because 3.99 looks cheaper than 4.00. We know it isn’t, but it feels like it is. $10.00 vs $9.99 is even worse because there are more numbers in $10.00. It must be a lot more expensive. $12.99 isn’t merely more expensive than $9.99, it is on the far side of a psychological divide that makes it feel much more expensive.

      Many Big5 ebooks are currently more expensive than their paperback version. Let us say I am browsing Amazon.com for something to read. I find a book for $14.31 in Kindle, $13.54 in paperback, $11.95 in Audible, $14.99 on CD. (Actual prices for a randomly selected book.) There are a few benefits to an ebook (and a few to a paperback) but it doesn’t feel as valuable an artifact as a paperback. It is not a separate physical object, it is just another file on my tablet. If I’m looking for a specific title and format doesn’t matter, the paperback looks good. If I’m looking specifically to read on my tablet, or I’m looking for something to read right now, the paperback is not an option and the ebook looks overpriced in comparison.

      The publishers expected higher ebooks prices to result in lower ebook unit sales. They wanted this. They got it. I suspect they misestimated the balancing factor of higher per unit revenues and missed the fact that a print copy is not always a desirable alternative. I also think they missed the fact that non-Big5 players have enough selection and quality to be a viable alternative to Big5 titles.

      • In that particular case, I buy the hardback for $14.31, and assuming it is a newer release in the past year, I resell it on eBay for $6-7 plus shipping after I’ve finished it.

        I’ve been known to list new releases on a 10 day auction they day I get the book if I know I’m not going to stop reading it, and actually make MORE money than I spent at Amazon for the thing.

        I won’t spend $10 for an ebook. Just won’t do it, because I can’t resell it. If its a book I want to keep forever, I buy the hardback. Very few of those.

    • I think, in the last 6 months, I have gone as high as $15 for a paperback and $9.99 for an ebook. Higher for non-fiction.

    • I buy Patricia McKillip in hardcover because I want her to keep writing. Started doing that years ago. It’s my way of making sure she gets the most bang for her buck.

    • I still have a couple of authors I’ll buy in hardcover. But at this point, if the choice is between paying 8 bucks for an ebook and 9 bucks for a paperback, I’ll go for the paperback.

      I pretty much won’t spend more than 5 or maybe 6 bucks for an ebook. And I don’t really need to. There’s plenty of good stories of the types that I want to read available for less than 5 dollars.

  7. Barbara Morgenroth

    I would have paid $9.99 for the traditionally published ebook I went looking for today but it was $13.99 so I said no thank you and found the author on youtube giving a Ted Talk instead. I’m sure I’ll get most of the information that way.

  8. Because they are not keeping up with ebook pricing standards. Why pay so much when you can get print for just a little more?

  9. I’ll pay the ridiculous $13.99 for Patricia Briggs’ new book as an ebook when it comes out, because I very much prefer ebooks over either hardcover or paperback for reading fiction, and don’t want to store the physical book either.

    For something new, when I’m in between releases by my favorite authors, I’ll go as high as $5.99 to try something out, but if I’m waffling between equally interesting descriptions the cheaper option will win out – and I’m much more likely to give a series a couple of chances to hook me if the sequels are $2.99 than if they’re $9.99 or more.

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