From The Ottawa Business Journal:

Kobo and Kindle have grown to become familiar brands in Canada but ebook sales now appear to plateauing, suggests a report by the industry organization BookNet Canada.

. . . .

Based on surveys with 4,000 book-buying consumers, BookNet Canada pegged paperback sales in 2012 at about 58 per cent of the market, while hardcovers accounted for 24 per cent and e-book sales made up 15 per cent.

BookNet Canada president and CEO Noah Genner says early sales data from this year shows e-book sales are steady and no longer growing.

. . . .

The report found most consumers still preferred to buy their books in stores rather than shopping online.

Link to the rest at Ottawa Business Journal

PG can’t remember if there were news stories saying MP3 sales had plateaued and that most consumers preferred to purchase their CD’s in music stores.

From Digital Book World:

Accounting for $995 million in net new dollars, ebooks single-handedly drove trade sales in 2012, according to the first data to come out the AAP and BISG BookStats report this morning at the Making Information Pay conference in New York City. Total U.S. net book sales for the year were $27.1 billion.

Ebooks made up 20% of trade publishing net sales in 2012. That’s an increase from 2011 when ebooks were only 15% of trade net sales.

Link to the rest at Digital Book World

From Publishers Weekly:

Carl Kulo, U.S. director of Bowker Market Research, highlighted the major shifts that took place in 2012 in such key areas as sales by format and by channel.

E-books captured 11% of all book spending last year, up from 7% in 2011, Kulo reported, while e-books accounted for 22% of units in 2012, up from 14% the prior year. In 2010, e-books accounted for only 2% of spending. Despite the gains made by digital, paperback remained the most popular format last year, accounting for 43% of spending, down one percentage point from 2011, while hardcovers represented 37% of dollar sales, down from 39%.

The growth in the e-book format last year was one of the factors that increased e-commerce’s lead as the largest channel for book sales, Kulo noted. Online retailers, led by Amazon, accounted for 44% of sales in 2012, up from 39% in 2011. The gains made by online retailers came at the expense of bookstore chains, whose market share fell to 19%, from 26% in 2011. As consumers buy more e-books they also tend to buy more print books from the same outlet—a trend that has cemented Amazon’s position as the country’s largest booksellers, Kulo said. According to the Bowker data, Amazon captured 31% of dollars spent on all books last year, up from 26% in 2011.

Link to the rest at Publishers Weekly

These are numbers for the US only. However, if these figures are accurate, they represent an enormous one-year decline in chain bookstore market share – more than 25%. Note that Borders filed for bankruptcy in February, 2011.

From TechCrunch:

Microsoft is offering to pay $1 billion to buy the digital assets of Nook Media LLC, the digital book and college book joint venture with Barnes & Noble and other investors, according to internal documents we’ve obtained. In this plan, Microsoft would redeem preferred units in Nook Media, which also includes a college book division, leaving it with the digital operation — e-books, as well as Nook e-readers and tablets.

The documents also reveal that Nook Media plans to discontinue its Android-based tablet business by the end of its 2014 fiscal year as it transitions to a model where Nook content is distributed through apps on “third-party partner” devices.

. . . .

A deal to buy the digital assets of Nook Media is the natural next step for Microsoft, which first announced a plan to work with Barnes & Noble on its Nook devices and content in April 2012, ponying up $300 million at the time to help. That plan included an additional $180 million advance to develop content for its Windows 8 devices — which Nook has been doing.

To date, there have been 10 million Nook devices sold, including both tablets and e-readers, with more than 7 million active subscribers.

. . . .

Nook’s decline seems to have helped alter company strategy. Barnes & Noble founder Leonard Riggio proposed buying back the whole of the company’s retail operation.

The documents TC has seen values B&N at $1.66 billion. When Nook Media was first formed, the valuation of that division alone was $1.7 billion. When Pearson invested $85 million at a 5 percent stake in January, it was valued at $1.8 billion.

Link to the rest at TechCrunch and thanks to Barb for the tip.

Passive Guy has no idea whether this is true or not or, if true, whether an acquisition will ever come to pass.

If this news is true, PG expects Big Publishing to hail the arrival of someone to save them from Amazon. Unfortunately for this hope, Microsoft has a terrible track record with acquisitions and, other than Xbox, hasn’t had a successful new product launch for a very long time (PG doesn’t think a new version of Windows or Office qualifies as a new product).

Additionally, PG has participated in partnerships with Microsoft in the past and doubts Big Publishing has what it takes to do that.

Nook is undoubtedly being considered as a way of  trying to spark some sort of sales for the Microsoft Surface (MS’s tablet in case you haven’t heard of it). If Nook doesn’t do that in a big way and a big hurry, expect it to sink beneath the Redmond waves where most past acquisitions lie.

For indie authors, PG thinks dealing with them is not in Microsoft’s DNA. The best outcome for indies would be if MS ignores Nook Press for a long while.

From The Digital Reader:

Today Sony continued to confuse everyone watching the ebook market. They’ve just formally launched the Sony Reader Store in Australia, their 8th local ebookstore (US, Canada, and Europe) and their first antipodal ebookstore.

“We are proud to bring our Reader Store eBook offering to customers in Australia,” said Tad Kitsukawa, managing director Sony Digital Reading Services.”With the widely accepted, open ePUB format and our focus on local Australian eBook selections, we believe Australians will be excited to choose Reader Store for any book they want to read.”

This is good albeit belated news for Sony, but that’s not the part that makes no sense.

No, I’m scratching my head this morning because Sony launched their ereaders in Australia and New Zealand in September 2010. And now, 2 and a half years later, Sony is launching the ebookstore to go with the ereaders.

Link to the rest at The Digital Reader

From Computerworld:

Amazon.com has updated its mobile app store to include support for its Chinese customers, in a sign that the U.S. company could be preparing to sell its Kindle e-readers and tablets in the country.

The update effectively launches a new version of Amazon’s app store built in the Chinese language.

. . . .

The arrival of the new store comes just months after Amazon launched its Kindle e-book service in China last December. Both are key platforms for bringing content to the company’s Kindle devices in the U.S. market. But in China, Amazon has yet to start selling its tablet and e-reader hardware.

. . . .

Despite the absence of official sales, the Chinese market is showing some “pent-up demand” for Amazon’s e-readers, said Mark Natkin, managing director of Beijing-based Marbridge Consulting. Research data from last year showed that Chinese consumers were increasingly buying the e-readers from overseas markets, he added.

Link to the rest at Computerworld

From Paid Content:

With more than 20 percent of Americans over the age of 16 having read an ebook in the past year, and publishers seeing more than 20 percent of revenues come from ebook sales, there’s no question the future of ebooks is bright, and the industry has a lot of potential customers.

But how exactly ebook publishers reach that audience and how the industry tracks who’s interested in reading what is less clear.

. . . .

“The old eveolution of the book publishers used to be very allergic to data. And what you just heard is a very different approach from that. For us it’s about metadata and surfacing. And then rinse and repeat,” said Dominique Raccah, the publisher and CEO of Sourcebooks. “Metadata is a new term in our industry, but it really is the key.”

Raccah pointed out that unless publishers know who is reading the content, it’s hard to craft specific marketing messages or know what people respond to:

“It’s really important to know that book publishers know a lot about what touches readers,” she said. “So it’s important to help craft those messages in interesting ways.”

Link to the rest at Paid Content

PG understands that an industry run by English majors might not be cutting edge on consumer data analysis, but these people are talking Digital Marketing 101 stuff. And they’re the experts on the panel.

From publishing consultatant Mike Shatzkin:

There are three overarching realities that are determining the future course of book publishing. They are clear and they are inexorable:

Scale, and its close cousin “critical mass”, is the ability to use size as a competitive advantage in any endeavor;

Verticalization, or being in sync with the inherent capability of the Internet to deliver anything of interest in an audience-specific way; and

Atomization, or the ability for any person or entity to perform the most critical component of publishing — making content available and accessible to anybody anywhere — without capital and without an organization dedicated to distribution.

. . . .

In the 20th century, scale in publishing was really an internal concept. Big publishers had more resources to sign books, get to bookstores, and roll out marketing than smaller ones. Barnes & Noble and Borders had supply chain and cost advantages over independent bookstores, except that Ingram and other wholesalers lent their scale to provide partial compensation. Bigger literary agencies had negotiated more boilerplate agreements than smaller ones and often had helpful relationships that went beyond publishing, but a single operator could still cultivate enough editors to make a legitimate case that he or she could place a book as effectively as the giants.

But that’s changed entirely in the past 10 years. Now publishing operates in a world increasingly controlled by Amazon, Apple, and Google, all companies that make far more money outside of books than through books. One Big Six CEO observed to me about five years ago that the time had passed when s/he could call all the biggest trading partners of their company and reach the CEO instantly. Penguin Random House has merged into a publishing company that will control about half the most commercial titles in the marketplace, but any suggestion that their size will enable them to dictate much to Amazon, Apple, or Google is deluded.

What Random House can do is apply scale against other publisher competitors. And they will.

Critical mass is a scale-related concept but it is also a component of verticalization. When a publisher, or any aggregator, has enough material to allow it to ignore competition in a consumer offer, it has achieved the effective barrier to entry that scale also provides. For example: subscription models for general books are a very difficult commercial proposition because the biggest agents for the biggest authors wouldn’t want their titles included. But Amazon might just have so many titles they can make available through a subscription offering that they can do it successfully even without the top of the bestseller list.

. . . .

The barrier to entry for book publishing was always relatively low compared to other media: magazines, newspapers, radio, TV, and movies would all require much more of a financial and organizational commitment than was required to publish a book. But there definitely was a fence around the book publishing world, and the position of “gatekeeper” was both well-earned and well-rewarded.

But those days are gone too.

As of this writing in April 2013, sales of any book of narrative reading will, depending on topic or genre, be 20% to 60% in ebooks, which requires no inventory investment and minimal distribution infrastructure. Sales of the printed books — the other 40% to 80% — will be anywhere from 25% to 50% through online channels. Those sales can also be achieved (largely through Amazon) without an investment in inventory, printed at the moment they’re ordered.

Link to the rest at The Shatzkin Files

PG will observe that large organizations dealing with disruptive changes to their businesses have a number of very challenging problems:

+ They don’t have the right employees. The employees necessary for the old business are probably not the right employees for the new business. This is a particularly acute problem in the executive suite.

Hiring a bunch of new employees doesn’t work for a variety of reasons. For one thing, there is typically an age difference. The old business has older employees, including a lot of lifers. The old business doesn’t realize how weird its corporate culture feels to employees necessary to operate the new business. Ultimately, regardless of what the CEO says, the culture doesn’t want to change. The old employees are masters of the politics of dealing with current management and know how to shoot down or slow down new initiatives.

New employees and what seem to the old organization to be radical new ideas are treated like bacteria invading a human body. The immune response of the old organization is powerful and manifests itself in many ways. Instead of focusing solely on building the new, valuable time of the new employees is involved in dealing with the immune response. If the organization has hired really talented new employees, those employees will leave for greener pastures where there aren’t any immune responses, leaving the big new thing left half-done. If the organization tries to tie talented new employees down with employment contracts, they’ll responde with low morale, start leaving early and spend their evenings and weekends working on independent projects.

+ The size and resources that give organizations access to scale in the old business slow them way down as they try to adjust to the rapidly-changing new business. Yes, they can eliminate departments and fire people who are no longer needed, but that requires time and places a tremendous drag on the morale of the survivors. Having a billion dollars invested in people and infrastructure necessary for the old business and irrelevant for the new one is a big management problem and a boat anchor for a company that needs to move quickly.

+ Finances preclude dumping the old business model as quickly as is strategically desirable. What CEO is going to give up a billion dollar revenue stream that exists today but will be a $50 million dollar revenue stream in five years?

Current revenue is the shiniest of shiny objects for a typical financially-oriented executive. Instead of putting all resources into the potential five billion dollar revenue stream of five years into the future, the executive deludes him/herself that the organization can do two things well, one entrenched in the past while the other pioneers the future.

When the real (as opposed to perceived) competition is 100% focused on the future, this strategy almost never works.

The tech world is littered with the corpses of highly-impressive companies with really smart CEO’s who failed when they tried to ride two horses at the same time. Yes, some companies are able to be successful in lots of different businesses, but none of those businesses are typically facing a serious technology disruption.

From David Gaughran:

The Kindle’s share of the US market is far larger – with most observers pegging it at between 60% and 65% (most of the rest is split between Apple and Barnes & Noble, with Google, Sony, and Kobo combined perhaps getting around 5%). But how much of that have self-publishers grabbed?

Amazon is famously tight-lipped about such matters, so we have to put the pieces together ourselves. As such, the method is necessarily crude, but it’s the best I’ve got.

. . . .

In August 2011, Amazon launched the Kindle Indie Store, which showcases hand-picked work in a variety of genres from KDP authors. It also has a Top 100 list, ordered by Sales Rank, just like the regular Kindle Store Top 100.

By comparing the position of self-published work in the Kindle Indie Store Top 100 with it’s overall Sales Rank, we can get a pretty accurate idea of what proportion of the top-selling books are self-published.

When the Kindle Indie Store first launched, I tracked the Indie Top 100 for a few weeks. Invariably, the book that was #100 in the Indie chart was around #400 to #500 in the overall Kindle Store – meaning that, at the time, roughly 20% to 25% of the top-selling items in the Kindle Store were self-published e-books (and those numbers held up throughout the list).

. . . .

Today, you’ll see that the book at #100 in the Indie chart is #346 in the overall Kindle Store – meaning that 29% of the top-selling items in the Kindle Store are self-published e-books – and that proportion has been stable enough recently.

The Kindle Store contains more than just e-books, with things like digital subscriptions to the New York Times, magazines, blog subscriptions, and games regularly appearing in the Top 100. If you were to subtract all of those, and try and isolate e-books, that figure (easily) goes north of 30%.

This staggers me. 30% of the top-selling e-books on Amazon are self-published, beating out the biggest authors from the largest publishing houses in the world – as well as titles from Amazon’s own imprints (which aren’t included in the Indie Top 100).

This roughly tallies with the limited data we do have from Amazon, who recently announced the top-selling Kindle Books of 2013 (January to March). Seven of the Top 20 were self-published (and that’s not counting formerly self-published work, or Amazon imprint books).

. . . .

Now we can start putting the pieces together. When we factor in the respective market share of Amazon and Barnes & Noble (and Kobo), that leads to the following estimate (which might be conservative): self-publishers have captured 25% of the US e-book market.

Link to the rest at Let’s Get Digital

From Digital Book World:

The books are closed on 2012, so to speak, when it comes to tracking book sales; and ebooks made big gains, according to the latest data from the Association of American Publishers. At the same time, Dec. was not a month of strong ebook growth.

The format accounted for nearly 23% of publisher net revenues in 2012, up from 17% in 2011 and, astoundingly, 1% in 2008.

. . . .

For adult fiction and nonfiction, ebooks were up to nearly $1.3 billion in revenue, a 33% gain from the previous year. While the overall size of the market is impressive and dwarfs the entire publishing business in all but a few of the largest economies worldwide, growth has slowed to an earthly rate compared to the otherworldly numbers posted in previous years.

Children’s ebooks were up 120% in 2012 to $233 million, driven by huge gains in the beginning of the year, perhaps due in part to the success of titles like The Hunger Games. Religious ebooks closed out the year up 20% to $57 million, a disappointing finish to what had been a red-hot start.

Link to the rest at Digital Book World