The E-Books Explosion Will Displace Paperbacks, Hardbacks And Apps

3 Comments

Today, I published a short piece of research for Enders Analysis on ebooks. As Enders is on a subscription model I can’t paste it here, but the summary bullets capture the flavour:

  • Market data and industry anecdote point to an explosion in ebook sales in the US and UK in 2011. Leading consumer publishers are seeing ebook sales at 10-15 percent of total sales in January and February, driven by Christmas device sales.
     
  • So far ebooks had been strongest in niches: romance, business books and frequent travellers. They have now moved into the mass market: few genres will be untouched.
     
  • This shift brings with it a very different market structure, with Waterstones likely to shrink dramatically, technology companies with little stake in the health of publishing taking major roles and publishers faced with disintermediation and forced to build direct consumer relationships for the first time in their history.

I’ve reproduced the killer chart below: this is (somewhat imperfect) data from the AAP – the Association of American Publishers. Not only have ebooks exploded upwards – there is an equally dramatic decline in paperback sales. One can understand why John Makinson, CEO of Penguin, was quoted as the London Book Fair in April as saying “We are seeing in the US that the ebook may completely displace the mass-market paperback, price and convenience.”

Terrifying.

This chart also illustrates, to me, the foolishness of spending all your time playing with apps and enhanced ebooks when those will only represent a tiny proportion of the publishing business. When cheap colour printing came in that didn’t mean all novels had to be in colour, and the availability of apps doesn’t mean everything has to be an app. The $50 coffee table book is not the publishing market, and the app that cost $500k to develop won’t be either.

Ultimately, playing with apps is a form of displacement – great fun, and a good way to avoid thinking about the transformation of your entire business model…

» Benedict Evans is an analyst at Enders Analysis. This article was originally published at his blog and appears here with permission. The full report is available through Enders Analysis.

This article originally appeared in Enders Analysis.

3 Comments

Jack McKeown

It always is a great pleasure to apply a sharp prick to often inflated ebook statistics (“data from the AAP”). The problem with including ebook sales within the AAP’s monthly stats is this: ebook downloads are effectively direct-to-consumer whereas publishers’ print numbers are overwhelmingly intermediated net shipments to retailers and wholesalers. Not only are print shipments substantially discounted (45-50%), they are reduced by the number of print returns that the publisher has received in the reporting period. Also they are subject to the cyclicality of trade publishers’ calendar of new title releases. In Jan-Feb, publishers typically receive their heaviest returns (the post-holiday effect), but their frontlist releases are smaller and weaker on average. Ebook downloads spike during the same period, the result of initial downloads by those who have received ereaders as gifts over the holiday period. Conflating the two different types of sales is terribly misleading. They are apples and oranges in terms of providing an accurate measure of real consumer demand.

In the month of February, bricks-and-mortar bookstore sales as measured by the Census Bureau increased 9.3% from the preceding year, and for the two-month period are marginally down .5% to $3.33 billion. How does this square with the notion that ebook sales are destroying print numbers? It doesn’t. Numerous consumer surveys of avid readers, both print and ebooks, indicate that such buyers are purchasing more books in both categories (http://versoadvertising.com/survey). The Jan-Feb numbers, if properly combined with ebook downloads, give a truer overall impression of real consumer demand, and would seem to support the consumer survey conclusions regarding emerging reading habits.

PS. The photograph of a burning book to accompany your article is a bit unfortunate, considering the legacy of book-burining by the Nazis and the recent deplorable Koran-burning incident in Florida.

JP

Hey Benedict. Thanks for the insight.

I’d like to hear more why you don’t think there is a large market for, let’s call them, “coffee table apps.”

I think there may be tremendous opportunity for re-architecting narratives for new devices.

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