From No Shelf Required:
AAP has released some new numbers this week that point to the trend we saw in previous findings: that print (paperback and hardcover) and audio sales continue to grow while ebook sales continue to decline.
As always, when such reports are released, NSR zooms in on ebook numbers. They continue to go down (not up), as we can clearly see, but as we’ve noted previously on this issue, this may actually be a good thing. At least for those who advocate for more affordable access to books online, and especially for those whose advocate free access to books online (beyond libraries). Although disappointing, numbers like this do not confirm that people don’t want to read and access content in digital format. Instead, they confirm that they simply do not want to pay for ebooks, or at least not as much they’ve had to pay thusfar.
Readers are already used to consuming massive amounts of information for free in digital format, and their expectations continue to gravitate in the direction of ‘free’ even when it comes to books (including fiction and all types of nonfiction).
Link to the rest at No Shelf Required
Alternate ‘facts’ are everywhere.
There’s a wonderful little book called ‘How to lie with statistics.’
It’s rare that there is accountability with many ‘news’ sources – no one holds their feet to the fire like it used to happen, when fact checkers vetted every fact in a non-fiction book before the publisher gave its imprimatur.
Hope the pendulum swings back the other way from Holocaust remembrances that don’t include Jews, and other such ‘news’ abominations.
There is no such thing as truth, The concept is meaningless because it is subjective.
As for fact checkers being better in the past, people only saw them as objective because they didn’t know Who they were being paid bye, and which particular flavour of propaganda they were being subjected to.
I don’t think modern news sources are any better or worse, it’s just easier to tell a person biasses these days.
In some circles tbat is true.
But in the STEM world there really is such a thing as objective reality/truth. Ignore it and the bridge will come down. Lawsuits will follow. (Funerals, too.)
Numbers aren’t just opinions.
Now, the media isn’t about numbers. (WhaleMath™!) Selective quoting is their tool.
But once upon a time they were less blatant about their slanting of facts and biases about what tbey reported. Today they are both more obvious and more easily challenged.
And quicker to wrap themselves in the flag of “Woodward and Bernstein”.
@ Alicia
There’s a wonderful little book called ‘How to lie with statistics.’
Written, BTW, back in 1954. Darrell Huff, author. Great book. Well worth having. Available free on the Internet.
I think that the AAP reports provide some useful information. If I were a an AAP publisher eBook executive, I would look at the report and re-evaluate the decisions I had made over the past year. I would look at Author Earnings and note the 4% overall increase in eBook sales and my decrease in eBook sales and ask whether the discrepancy requires a course adjustment.
The decision would hinge on profitability, not absolute numbers. Profitability is tricky because the large investment in print infrastructure must require large runs to maintain profitability. If print runs drop below a certain point, my guess is that the publishers face jaw-dropping losses. POD must help, but I doubt that it is a solution.
Therefore, they will be willing to take it in the shorts over eBooks to maintain overall profitability. Somewhere in the publisher’s thinking must be a zero-sum calculation: 1 eBook less equals 1 more print book sold. I question most zero-sum arguments, including this one, but I have heard many executives in other industries argue that way.
If the AAP publishers accept the zero-sum assumption, and their print infrastructure investment works the way I suspect it does, they will continue to go for more print and less digital. Preserving sunk infrastructure investments is a favorite ploy of dying industries, but I still think AAP publisher executives read and understand what Data Guy is saying. They are benighted, but not dummies.
“If print runs drop below a certain point, my guess is that the publishers face jaw-dropping losses.”
There is indeed a tipping point where pbook sales are too low to profitably support the infrastructure. It is one of the drivers behind the BPHs buying all the smaller publishers they can get their hands on.
Each publisher has is own tipping point based on their current size. At the low end of BPH-dom, the point probably lies somewhere between the total pbook volume of HMH which has had trouble staying in the black and Hachette which has seen its profitability severely reduced by its ebook decline. Bigger publishers are still making bank, though, despite their ebook sales decline so their tipping point is still a ways off.
Hachette has been pretty frantic in trying to buy volume without great success so at some point they’ll have to merge with or sell out to a bigger player.
And then there’ll be four.
It’s so short sighted to try to favor print over ebooks. Even if the company is willing to make less profit on a print book to support their infrastructure, the simple fact is that the type of reader who is buying print these days is probably very different than the type that prefers ebooks (on average). Which means they are simply abandoning certain types of readers for others. Probably, the people who ACTUALLY READ. The clearest example of this is the ridiculous coloring book “craze.” If much of these print sales are going to the buyers of coloring books and coffee table photo collections they are getting out of the publishing business and entering the trinket, hobby and home decorating market.
The reason publishing is such a good business is because you build up a library of intellectual property. That’s the long term value. Stories that are evergreen, stories that promote authors entire backlists, series, etc. It’s worth it to ship tons of paper around and buy shelf space to own a piece of the next Harry Potter or Game of Thrones. But if you abandon a certain set of readers who prefer ebooks (often the kind of genre readers who create valuable franchises) you’re throwing away your future.
Big, old, businesses typically *are* short-sighted, with planning horizons of maybe three months, maybe three years (depending on top execs contracts).
Most of the BPHs are not only old entrenched businesses, they are appendages of old entrenched *foreign* businesses who see their empires through the lens of their native environments.
Expecting forward-looking adaptive thinking from that corporate culture isn’t the most reasonable of expectations. For just one example, remember the publicly stated rationale for the randy Penguin merger: to gain enough volume and market power to be able to bully Amazon and control the market.
The DOJ took one look at market reality and rubber-stamped the deal with a comment along the lines of “the market is big enough and there are enough other publishers that the merged entity will not have have undue power”. Which, as we’ve seen, has proven correct. The randy Penguin has managed to maintain double digit profits for its overlords (barely, most recently) but it has done so by shrinking its infrastructure, cutting overhead, cutting staff, cutting authors loose…
Those are all defensive measures which is fine because as long as they are focused on defending their shrinking empire they aren’t doing much to restrain competitors they could swamp out of the market with their backlist if they chose to.
I’m thinking the BPHs’ short-term thinking in protecting their margins and sunk costs is a healthier long-term direction for the industry than if they were focused on protecting their market share because to protect their margins and their infrastructure they are yielding market power to free and open competitors and their oligarchical power is thus fading.
I see nothing wrong with a two-tier market consisting of a high price legacy niche and a vigorously competitive low end market. Give the current trends some time to play out; time for the lack of enduring success for BPH debut authors to sink in, time for the effects of reverting MMPB to a reprint format, time for the big names to retire…
There will be bumps and shocks along the way but the likely outcome of those policies will be a net positive for readers and competitors.
Live and let die.
“… BPHs’ short-term thinking in protecting their margins and sunk costs is a healthier long-term direction for the industry…”
Possibly. I’m certainly not hoping the big guys win, and it’s terrific to see them leave market opportunities for small fry (like myself).
But it strikes me they are like a marauding army that poisons the wells and salts the farms behind them, assuming they will never have to retreat. If they want to overcharge for ebooks, fine, but they are also using their considerable influence in the media to promote an absurd message, that ebooks are dying. That not only hurts themselves long term, but doesn’t do much for indy writers in the meantime (regardless of our opportunities). Anyone interested in the long term health of publishing (creating great intellectual property) should be thrilled about ebooks and promoting them, not trying to smear them. Obviously, long term print advocates are going to look foolish, but that doesn’t help anyone either.
At the same time, their market manipulations only made Amazon much stronger, which gives everyone, from indies to the big publishers, less power over the long term direction the industry goes. Not to mention their role in destroying Borders and soon to destroy Barnes and Noble, because they insisted on filling the shops up with a lot of books no one really wants. Which only kills readership over the long term.
I know it’s too much to ask, but… if they considered that indy writers actually help create more readers and that’s a good thing, and if they focused on serving readers (including buying up indy writers when necessary) long term it might be better for everyone. But, okay, that’s not going to happen.
They’re using their influence in the media, yes. But in which media? The print media has its own economic problems and battles to fight and the rest of the mainstream media is wrapped up in trying to fight the WhiteHouse because their credibility and power is at stake.
Let’s not give these BPHs more influence than they deserve, rather let’s do as Amazon is doing and give them enough rope to hang thenselves and their apologists.
In 2010 they were powerful enough to force Amazon to give in to their collusive ways. By 2014, they’d lost half their power over Amazon and by now they’ve lost a third of that, and a total of two thirds of the ebook market. Why not wait and see how much market share they’re willing to donate?
By all means, challenge their lies and spin.
Do what you can for newbies and the unwary.
But there is no real need to castigate the BPHs for not being more aggressive predators and a bigger problem than they already are. They still are big enough to influence the market; wait another year or two and they won’t. By then Indies and the smaller tradpubs will important enough to counter and minimize the damage.
Don’t interrupt your enemy while he’s making a mistake.
Hi, Felix,
Amazon-as-the-enemy-of-the-BPHs is one common industry narrative. But I think the real numbers actually contradict that view.
An alternative point of view might be that Amazon has so far reached deep into its own pockets on at least two separate occasions to save the BPHs from their own self-destructive business choices.
The first time, the BPHs overpriced their most profitable format (ebooks) so self-destructively that Amazon had to discount those BPH ebooks down to breakeven and hand publishers ALL of the generated profits, just to keep those BPHs from collapsing under the weight of the disproportionate costs associated with their fast-contracting print-business coupled with 35%-50% brick-and-mortar bookstore returns.
The second time, after the BPHs took back control of pricing and disabled Amazon’s ebook discounting, Amazon had to move those discounts instead to print books to protect the BPHs from their collapsing brick & mortar bookstore sales by offsetting those with fast-growing print sales on Amazon.com (which also has far smaller associated returns costs for BPHs, and thus can be much more profitable).
Of course, Amazon didn’t do it out of the goodness of their hearts. They are seizing market share from retail competitors like crazy in the process. But the “enemy” narrative isn’t supported by the numbers, which say instead that Amazon is basically ongoing life support for BPHs.
It’s a wacky industry, isn’t it? 🙂
Best,
DG
My view, in case it’s not clear, is that Amazon is using the BPHs policies as a tool against their own competitors. That in 2010 they delisted the MacMillan books as a way to go on the record against the conspiracy. (It got at least one lawsuit against them laughed out of court.) Also, good PR for them.
Amazon would obviously prefer their suppliers acted more like rational partners so they could all get down to the serious business of making money but as long as they don’t they are content to leverage their irrationality to their own benefit, as you documented in the DBW presentation. (And, I suspect in the wide portion of the upcoming report.)
From where I recline, it all very Nietzsche-an; the more they try to control Amazon, the stronger they make them.
It’s really unhealthy but when cultures clash…
Wacky? Yeah. But I see it more as Looney Tunes. Elmer vs Bugs, Coyote vs Road runner, silly futility.
It’s almost funny by now. Would be funnier if tradpub authors weren’t getting clobbered. Some of them are actually “readable”.
Remember, print unit sales have been declining all century long and their revenues have only held up because of price hikes and mergers. And even then they’ve only been treading water for the last decade despite ebook revenue and margins.
They’re running out of takeover targets so they’ll next turn on themselves and on each other.
That will simplify things a bit.
@ Felix
Big, old, businesses typically *are* short-sighted, with planning horizons of maybe three months, maybe three years (depending on top execs contracts).
Thanks lots, Felix. 🙂 Wiping coffee off the keyboard and screen now. 🙁
Sorry, but I’m just trying to hang with the crew.
This is one tough crowd.
The clearest example of this is the ridiculous coloring book “craze.”
I was at the hardware store today, and in the impulse purchase aisle were a serious of the coloring books and pencils. Just sayin’.
Right now, as of February 2017, the AAP’s 1200 reporting publishers comprise less than 27% of Amazon’s US Kindle ebook unit sales.
That’s down from 32% in September 2015, and 46% back in July 2014.
The AAP is once again blindly measuring their own shrinking ebook market share and mistaking it for some sort of industry-wide ebook trend.
I haven’t similarly tracked over time the AAP-reported share of Apple, Nook, and Kobo sales, but I can tell you what they are right now (as of Feb 2017):
55% of Nook’s sales
64% of Apple’s US sales
52% of Kobo’s US sales
Put that all together, and the AAP accounts for less than a third of all ebook units sold in the US, down from the half they held three years ago.
This AE report from 18 months ago plots the AAP’s declining share over time:
http://authorearnings.com/report/september-2015-author-earnings-report/
Don’t confuse them with facts! It makes their widdle heads spin, and then they falls down! waaaaaaaahhhhhh
Thanks for the facts DG. 😀
You’re measuring the wrong data. What’s important to the major publishers is that stories about declining ebook sales are up 223% over the last six months.
Hi, Mackay,
AuthorEarnings doesn’t care what’s important to the major publishers.
We care about what’s important to authors. 😉
Well, then, smugness among authors who argued that ebooks were just a fad and readers really prefer print is up 35%.
LOL
That is a big drop from 55-64% to 27%.
KDP Select makes that much of a difference, huh?
That puts the BPH’s aggregate share of Kindle books around 20%, no? Pre-conspiracy it was in the 60% range (I vaguely remember a quote of 65%). Agency, the gift that keeps on giving…
(Sounds like a new report is incoming.) 🙂
Hi, Felix,
I suspect your comment was intended to be tongue-in-cheek, but FWIW, I personally think that the BPH’s author-damaging ebook pricing policies have a whole lot more to do with their loss of market share than KDP Select does.
And yes, there’s a new report in the works – the “Wide & International” report.
This one’s a beast, spanning every single significant ebook retailer across every significant English-language ebook market. I’m applying the more precise 2016 AE raw-sales-data calibration methodology to each retailer in each country to calculate absolute sales totals for every one of them, not just relative pie charts.
Some really interesting findings… 🙂
Best,
DG
Yay! Looking forward to slicing-n-dicing of the beast.
Carry on!
“The AAP is once again blindly measuring their own shrinking ebook market share and mistaking it for some sort of industry-wide ebook trend.”
Nope. You’re confusing AAP data for the reporting on said data.
Hi, Nate,
You are correct — my mistake.
The AAP themselves are not making any particular claims about what share of US ebook sales their 1200 publishers represent, or even what direction the broader ebook market is trending.
It’s the sloppy, ill-informed media coverage of the AAP reports that ends up conflating the two.
Best,
DG
Repeating something that isn’t true 100x doesn’t make it true.
But if you repeat it 101x then the world will bend to your will and reorder itself to fit your desired reality.
Is that the secret? Then I’ll just have to start sending out press releases announcing my record lottery win. All without buying any tickets.
According to the most recent Authors Earnings report ebook sales increased 4% I thought. I think AAP is missing some.
Jeez, do these people do ANY research before putting out articles like this? Has the author even heard of Data Guy or Author Earnings?
Funny thing but my ebook sales went up, not down. Maybe they’re looking at the wrong ebook sellers. No, readers don’t demand free but they very reasonably refuse to may the major publishers more for ebooks than for hardcover or paperback.
Same here, in the past 2 months I’ve released 4 novels, 2 of which have #1 in their categories (and the others aren’t far behind) but I’ve seen zero paperback sales.