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Customers Won’t Pay as Much for Digital Goods, Redux

3 January 2018

From The Digital Reader:

Back before Christmas the Harvard Business Review published an article on recent research that showed that people valued physical objects for the act of possession more than for the use of said object.

 Participants valued a physical copy of The Empire Strikes Back more than a digital copy, for instance, only if they considered the Star Wars series to be films with which they strongly identified. Participants who weren’t Star Wars fans valued physical and digital copies similarly.

This is essentially a nonfunctional element of ownership – valuing something just for having it rather than what you can do with it.

Aside from price, that is the only thing keeping people buying print books over ebooks, which makes it all the more amazing when digital copies supplant physical copies in the marketplace as consumers choose to make the switch.

. . . .

This in part explains why the collectibles market has waves where old toys suddenly become desirable and valuable, only to lose much of that value a decade later; it’s because the buyers for any particular wave are all of an age group that wants to recapture a memory from their childhood, so they all suddenly want to buy the same toy.

. . . .

There’s also something this research doesn’t quite get at but is worth mentioning here, and that is the impact on print book sales versus digital.

All the industry trade press is trying to convince us that ebook sales have plateaued, and that the market is stable. This research, on the other hand. shows that there is little keeping people buying print books other than the artificially inflated price of ebooks from legacy publishers.

Link to the rest at The Digital Reader

For books he plans to read, PG values the ebook more than the printed book. The ebook is lighter, easier to tote (especially for the large books PG tends to read) and always opens to the last page PG read, among other things.

Part of PG’s preference is because, despite having donated many trunkloads of books to the library, the basement at Casa PG is still jammed with bookshelves that are six feet tall and three feet wide that are jammed with books. At this point, PG is leaning towards just passing this heavy burden on to the next generation for a bookish estate sale.

In Publishers Weekly and similar publications, PG is always surprised that publishing insiders are touting the news that ebook sales have plateaued. Surely publishers are familiar with what happens to sales when they lower prices on their own ebooks.

If publishers would talk to authors who have gone indie, switching away from traditional publishing, they would quickly learn that in unit sales, most of those authors are selling substantially more books than the publisher did.

PG did a quick Google search and discovered trade articles announcing that ebook sales had plateaued in each of the following years: 2011, 2012, 2013, 2015, 2016 and 2017.

On the other hand, Penguin Random House issued a News for Authors article way back in 2013 titled “Who Reads Ebooks?” Here are a couple of excerpts from that article:

Over a fifth of American adults have read an eBook. EBook consumers are likely to be book enthusiasts who read across digital and print formats. Most eBook consumers are women, are younger than forty-five, have college degrees or have had some college education, and have upscale incomes. EBook consumers are over 20 percent more likely to have household incomes over $100,000 per year than non-eBook consumers. Preferred genres include mystery/suspense/detective fiction, general fiction, and romance.

EBook consumers stand out in a number of ways from non-eBook consumers. EBook consumers are 2.5 times more likely to own a tablet than non-eBook consumers. They also tend to be more accessible than non-eBook consumers across online touch points, and more sensitive to word-of-mouth recommendations. According to a recent survey by the Pew Research Center, Internet-savvy owners of eReading devices, when compared to the general population, are more likely to get recommendations from online bookstores or other websites (56 percent versus 34 percent for the general reading population). When compared to all Americans ages sixteen and up, they tend to rely more heavily on word-of-mouth (81 percent versus 64 percent for all Americans ages 16+) and bookstore staff (31 percent versus 23 percent for Americans ages 16+) for book recommendations.

Link to the rest at Penguin Random House


Additionally, if Amazon is the biggest bookstore in the world and if Amazon announced that its ebook unit sales exceeded its print book unit sales in January, 2011, what might that tell you about plateaus?

And what about the statistics that demonstrate only 35% of school librarians indicated they were acquiring digital content in 2010—but by 2015, that number had increased to 69%.

Of course, Author Earnings is the only reliable outside look at ebook sales by all types of pubishers, including indie authors, on Amazon. AE’s studies show:

  1. there is growth in ebook sales and
  2. a large part of that growth is from sales by indie authors, which sales aren’t tracked by any of the data sources in the traditional book business.


44 Comments to “Customers Won’t Pay as Much for Digital Goods, Redux”

  1. FYI: your commentary at the very end got stuck inside the quote tags

  2. Terrence P OBrien

    PG did a quick Google search and discovered trade articles announcing that ebook sales had plateaued in each of the following years: 2011, 2012, 2013, 2015, 2016 and 2017.

    And on the Eighth Day, God made stairs…

  3. An ebook can’t generally be resold. A physical book can. People aren’t stupid.

    • Terrence P OBrien

      My Kindle holds a thousand eBooks. My pickup holds a thousand paper books. People aren’t stupid.

    • Well, I guess I am stupid. If I expect that I will not want to own a book forever, I check it out from the library. I only buy books because I want to keep them at my fingertips forever. Ebooks, taking no shelf space, are easy to keep forever. Paper books, while I love them, take space and have to be dusted. Therefore, I avoid paper books whenever I can.

      • You still have a library with books?!

        We got a brand-new library building a few years ago, four times the size of the old one. But it seems to be mostly an internet cafe and childcare center; not many books made it over from the old building. Neither did the shelves; the few pathetic rows of cookbooks and bestsellers are apparently all we’re going to get.

        From comments elsewhere this seems to be not greatly unusual. If true, the loss of library sales is going to be another nail in the coffin of the publishing industry.

        • My local library has one long low shelf of new releases, several more standard rows of fiction, and their nonfiction is so anemic that the shelves are mostly EMPTY. I mainly look for physical books out of the nonfiction sections, so this is deeply disappointing.

        • Our rural library system has been opening up spaces in our branches by reducing the number of paper books on the shelves. The rationale has been that the public space is too valuable to waste on books that may not be read for years. We keep detailed records of how often books circulate and our branch managers and acquisitions librarians use those stats to decide which books to remove from shelves. That doesn’t mean the books are gone. The books on the public shelves are tailored to the tastes of the branch’s patrons, so a given book might be in a different branch or in non-public storage. The total number of paper books in the collection has been rising, not falling, for as long as I have been a trustee, although the public browsing collections take less public floor space. We may have gone too far, it’s under discussion, but the seats in our reading rooms seem well-used and our meeting rooms are more difficult to schedule than I would like.

          Over the past two years our total circulation has increased by about 12%. Digital (ebooks, dvds, audio books, etc.) is a little less that 20% of total circulation and has been rising steadily.

          The circulation rise of the past two years is, I hope the beginning of a trend. Since 2005 or so, total circulation had been flat or declining slightly. Paper circulation was clearly going down and digital was taking up the slack. In the last two years both paper and digital have risen, although digital is still rising faster.

          I don’t know if this is a national trend. I do know that we are doing better than the handful of similar libraries we compare ourselves with regularly to gauge our progress, but that’s too small a sample to mean much.

          One of the biggest digital-driven changes in public libraries that I don’t think people have noticed as much is the appearance of online catalogs. I check only a few books out by browsing shelves. Most of my regular reading comes from requests that I make from the online public catalog. I love this because, through Interlibrary Loan, I can check out books from anywhere and pick them up at what we call an “Express Library,” which is an unstaffed pickup point where I use my library card to unlock the door check out the books I requested.

          The express happens to be within walking distance of our house. My main reason for going to a branch is to because I like to write in libraries. It’s fun to browse and pull a book from the shelves, but that is not where I go when I have a specific book in mind. So far, the express is only an experiment. It’s too soon to decide if it will fit into enough people’s reading habits to be cost-effective and worth further pursuit. The express is not as much fun as going to a branch.

          My point is that public libraries are changing to provide services that reflect our patrons wants and the new opportunities we have to serve. Do we always get it right? No. But I intend to make sure the librarians are asking if the browsing collections should be enlarged. Public space is pricey and we are always short of money, but never hurts to check the balance.

          • > public space is pricey

            Can’t be worth all that much if most of it is unused space, like at my local library. (the county branch library is similar)

            If it was jammed with full shelves and there was no room for new acquisitions, I might change my opinion.

            • You might want to discuss it with your librarians or library board. In our case, we free up public space by putting books that are not read as often in cheaper warehouse space. We can do that and keep our circulation up because our patrons can access them by going to the online catalog and requesting them. This reduces our overall cost and has increased the number of books we place into our patron’s hands. As I said earlier, we may have gone a bit too far, but as long as our public space is fully utilized and our circulation keeps rising, we may be okay.

              Your library may be different. We’ve had to work hard to educate our patrons that they don’t have to see a book on the shelf to have it placed in their hands, and we’ve been fairly successful. But we are lucky to have a receptive citizenry. Every place is different.

              If your library is languishing, maybe they need some help from their concerned patrons. Let your board know about your concerns. You might be able to help.

      • Well, I guess I am stupid.

        People have different tastes and preferences. So they gravitate to different goods. The fact that someone prefers a good I do not prefer tells us nothing about either of us. The market has responded to lots of different tastes and preferences.

        Some check out books from libraries. Others don’t.
        Some resell books. Others don’t.
        Some value lots of books in their pocket. Others don’t.
        Some like new book aroma. Others don’t.
        Some like romances. Others don’t.

        That’s why God gave us markets.

    • But to how many people is this a significant concern. The only time I have “sold” paper books it was by weight when clearing them out after switching to ebooks. Even then it was not for cash but simply for a credit from the particular shop, which I never used. I don’t know what price I might have been able to get for a read once best seller. Maybe I could even have got a cash price. But logically it would need to be a fraction of what I paid for the book new. This of course excludes overpriced hardbacks with collectable potential and the whole collectables market, which is of concern to a tiny fraction of us. It also excludes the textbook market, but even in this market resales are becoming far less important as the academic publishers who dominate are kicked off the gravy train altogether or forced to take far lesser returns.

      I simply don’t think that this characteristic of a physical book which an ebook lacks is particularly important.

      • I agree about the ability to resell paper books being of little, if any significance for most book purchasers.

        The tiny prices you can receive from a used book store don’t (in my case) justify the time and energy required to load books into my car and drive to the used book store.

        If it’s convenient, I’d rather donate old books to a public library, but if I need space in a room being occupied by paper books, I usually tend to drop a stack of books into the trash.

        • Books in the trash?!? PG, my heart is broken. Donate them somewhere. Anywhere. There are lots of people who can’t (or think they can’t) afford an ereader.

        • Books in the trash? That’s like burning them! Let your friends descend like piranhas upon the pile and devour them. Give the rest to a charity shop. But please, please don’t throw them in the trash.

          • Sue – I think I understand your feelings about this subject, but if a bookstore doesn’t sell a book, a store employee tears the cover off and, along with lots of other books, that unsold book is pulped.

            While I don’t take Barnes & Noble’s practices as firm guidelines for my personal behavior, I don’t want to spend a lot of time and effort dealing with paper books that I no longer care about. I have no problem with people who want to handle books differently, but I have other things I would rather spend my time doing.

            • I encourage everyone to donate unwanted to public libraries. The good books get sold at Friends of the Library book sales that contribute to building upkeep. (Many of our branch buildings are owned by Friends groups, not the public and the friends pay for maintenance.) The excess goes to projects that can’t be funded with taxpayer money, like sending a few new books home with every baby born in the county.

              But I will tell you a couple unfortunate facts: although our acquisitions people scan the donations, almost none make it to the library shelves. Most donations are outdated best-sellers that the library is already donating to Friends groups.

              Second, there are a lot of donations that are unsaleable. The best of these get donated to nursing homes and shelters, but most are taken away by places that don’t say exactly what they do with them.

              The upshot: don’t feel guilty about putting books that you know no one will want into recycling. I even understand that books make fair compost.

        • I agree with Deb. Books in the trash break my heart. Look around. There are places that would be grateful for a donation. If you live near a VA hospital, contact the volunteers’ office and see what they’ll accept. (My local VA prefers paperbacks.) For those who can afford the postage, there are several sites that will tell you how to donate books for deployed troops.

        • I think PG has it right. I read somewhere recently (can’t remember where, sorry), that charities actually have to PAY MONEY to get rid of the piles and boxes and mountains of books donated. Doesn’t help the charity much.

  4. My current take on e-books and dead tree editions is it depends on what I require. For fiction, e-book all the way. If I need reference material, dead tree. Some books are better in print than on an e-reader if there are pictures and instructions involved. As well some research books don’t come in electronic format. Which works out fairly well for my needs. I started reading e-books around 2005 so guess I can say I was an early adopter.

    • Richard Hershberger

      This. The OP’s assertion about “the only thing keeping people buying print books over ebooks” is just plain stupid.

    • ” If I need reference material, dead tree. ”

      The market trends disagree with you.

      ” Some books are better in print than on an e-reader if there are pictures and instructions involved.”

      No offense, but that is because your definition of ebook is artificially narrow, not because this kind of content won’t work digitally.

      • Richard Hershberger

        “The market trends disagree with you.”

        The market trends disagree with his observation about his own lived experience? He actually is buying reference books in ebook, while mysteriously believing otherwise? Remarkable!

        “…your definition of ebook is artificially narrow, not because this kind of content won’t work digitally.”

        Note the shift. He wrote about what works on an “e-reader.” You changed this to “ebook.” You have an idiosyncratic definition of “ebook” that includes web pages. We get that. I suppose that it therefore follows that any device that can access web pages is an “e-reader” but that is now how everyone else uses the term.

      • Market trends vs. individual preference = irrelevant. If I want something in dead tree format, no statistic in the world will stop me from attempting to buy it that way. Specious argument, Nate.

        • Market trends indicate the preference of many individuals, and thus constitute stronger evidence than the preference of one individual. I’d have thought that was fairly easy to understand.

          • I replied only because Paladin’s comment was so dismissively handled. The important issue here is not what the market dictates, but the needs of the consumer. It all happens at the individual level. The aggregate data is interesting, but is never predictive for the individual.

            • True – but the needs of the consumer and the choices of the consumer do not always coincide. If the aggregate data suggest that most people find ebooks superior for reference works, perhaps those who don’t are missing out on something.

          • We determine an individual’s personal preferences by asking him, not looking at trends.

    • I’m another reader who reads ebooks for fiction but dead tree for specific reference books. Other sources for reference include Wikipedia, IMDB, and Pinterest. It depends what I’m looking for. If I buy a dead tree novel, it’s either a gift or something I’ve already read and now want a loan copy.

  5. I don’t know why the kneejerk reaction to articles like this is so often “They’re wrong, because I don’t agree with them!” and not, “Oh, hey, so there’s a market I can exploit for people who want collector’s editions and are willing to pay premiums for them!”

    *adjusts halo*


    • Kris Rusch wrote about this just last week. (Or maybe it was the week before.) WMG has decided to print premium editions of some of its books.

    • Because so many of us (self and the cat on my lap) approach the Internet with the assumption that someone is going to be wrong about [topic] in the wrong way, and we come ready to argue?

  6. Speaking of Author Earnings, does anyone have any idea when their next report will be coming out? The last report I see on the site is from almost a year ago.

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