US e-book sales only up 105% in July [ Edited ]

[Doug_Pardee Distinguished Bibliophile]

According to the Association of American Publishers, e-book sales barely doubled this July over last July. "Barely," you ask? Well, year-over-year numbers had been running about 250% (up 150%) or more since the beginning of 2009; for the first six months of this year, AAP figures had e-books sales running 260.1% (up 160.1%) from the same period 2010.

It's just one month month of data, but I must point out that sales fall-off when a market saturates can come astoundingly fast. A TV engineer named Mark Schubin used to have a weekly bloggish report on activity in the TV equipment world, and one of the things that he tracked was sales of DVD players to US dealers. Year-over-year figures had been running about +25% for a number of years. Some excerpts from Schubin's newsletters (comments are his); watch what happens in mid-April 2004:

• 2001 - May 20: my ten-week running average is up 27.8%. It continues to be amazing!
• 2002 - June 5: my ten-week running average is up 41.8%.  It continues to be amazing!
• 2003 - April 29: My ten-week running average is up 27.9%.
• 2004 - April 12: My ten-week running average was up 25.3%. The growth rate continues to amaze me!
• April 19: My ten-week running average was up 13.6%.
• April 26: My ten-week running average was up 5.9%. Is the growth rate finally slowing to something reasonable?
• May 3: My ten-week running average was up 11.6%.
• May 10: My ten-week running average was up just 5.5%.
• May 18: My ten-week running average was up 5.8%. The single-digit growth rate seems firm.
• May 26: My ten-week running average was DOWN 7.9%. The glory days of double-digit growth seem gone forever.
• June 1: My ten-week running average was up 1.3%.
• June 7: My ten-week running average was flat.
• June 16: My ten-week running average was up 0.9%.
• June 23: My ten-week running average was ... down 18.5%.
• June 30: ... down 18%. It's the end of an era. Sigh.
• July 6: My ten-week running average was down 16.8%.
• July 12: My ten-week running average was down 12.3%.
• July 19: My ten-week running average was down 19.6%.
• July 26: My ten-week running average was down 21.1%.

It took one month for the growth rate of many years' standing to flatten, and one month later the sales rate itself flattened, resulting in a poor showing against the previous year's gains.

[Desert_Brat]

The first thing that strikes me is July is smack dab in the middle of most summer vacation times. Perhaps the lag can be accounted for by people who are out traveling, enjoying time with their families and seeing the sights. For most, jet skiing, camping, Disneyland, and summer activities in general tend to reduce people to spot reading ... if they aren't too tired from everything else.

But 105% is still a big increase ... if it were 5%, I might have more cause to ponder.

[Omnigeek]

Doesn't July also come close to when ebook prices started jacking up?    Perhaps other readers are getting the message and trying to send signals to the publishers about acceptable pricing levels for ebooks.

[Doug_Pardee Distinguished Bibliophile]

Since the comparison is to last July, the month shouldn't really matter.

[Coanda-1910]

It might be that the market is nearing saturation, but it also might just be that there weren't many big releases this July, or there were some tremendous ones last July. The way to disentangle the two would be to compare with DTB book sales - if DTB book sales had an unusually sharp falloff compared to last July, maybe it was just a quiet month for the publishing industry.

I can't seem to find any published figures on that, so it's all just speculation to me.

[Doug_Pardee Distinguished Bibliophile]

The AAP statistics on e-book sales continue to show a weakening in year-over-year growth, although it's not a huge weakening.

• +112% in October 2010
• +103% in November 2010
• +165% in December 2010
• +116% in January
• +202% in February
• +146% in March
• +157% in April
• +160% in May
• +167% in June
• +105% in July
• +116% in August
• +101% in September

It'll be interesting to see what all of the new e-reader device (and pricing) announcements do to this. With serious e-readers now selling well below the $99 price-point, and the Kindle Fire and NOOK Tablet out there, this should be a big Christmas for e-readers. Which should translate into a big jump in Christmas Day and after-Christmas e-book sales. After B&N gets its servers back up again, that is.

[Doug_Pardee Distinguished Bibliophile]

The AAP statistics on e-book sales continue to show a weakening in year-over-year growth, with the first double-digit increase since the original Kindle was released.

• +112% in October 2010
• +103% in November 2010
• +165% in December 2010
• +116% in January
• +202% in February
• +146% in March
• +157% in April
• +160% in May
• +167% in June
• +105% in July
• +116% in August
• +101% in September
• +81% in October

In my opinion, we're looking at a trend. Yes, e-book sales are still expanding rapidly, but the rate of expansion is dropping. As I noted in the first posting in this thread, market saturation can occur with astonishing swiftness. I'm guessing that we'll see some reasonably good figures through January and maybe February — February 2010 set a fairly high bar — fueled by the massive numbers of relatively cheap e-readers that were sold this holiday season. But after that, watch out.

Note: these figures are based on wholesale dollars, and it's possible that this drop represents a slipping in price of the average e-book sale. Maybe people are switching to cheaper e-books.

[scott88]

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Doug_Pardee wrote:

According to the Association of American Publishers, e-book sales barely doubled this July over last July. "Barely," you ask? Well, year-over-year numbers had been running about 250% (up 150%) or more since the beginning of 2009; for the first six months of this year, AAP figures had e-books sales running 260.1% (up 160.1%) from the same period 2010.

It's just one month month of data, but I must point out that sales fall-off when a market saturates can come astoundingly fast. A TV engineer named Mark Schubin used to have a weekly bloggish report on activity in the TV equipment world, and one of the things that he tracked was sales of DVD players to US dealers. Year-over-year figures had been running about +25% for a number of years. Some excerpts from Schubin's newsletters (comments are his); watch what happens in mid-April 2004:

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Not a good comparison. You do not need to keep buying DVD players just the disks. Buying a e-book is more like buying a DVD movie. As another poster has pointed out what books are released effect the sales of all books including e books.

[GordonF]

Gods I hate liestistics ... don't rely solely on them.

If you sell 100 units, and see a 100% increase you add 100 Units.

If your next period sees a 99% increase 200 Units (or 198 More Units): You have a Lower Rate Of Increase but a Higher Number Of Units.

So, you cannot (ABSOLUTELY CAN NOT) just look at the Percentage Rate Of Increase. Basic Ecnomics will tell you about law of dminishing returns, you can't keep up a rate of increase, and especially cannot keep up an increasing rate of increase, for very long.

As long as the rate of drop is not overly large and quick what you probably actually have is a steady increase of Actual Numbers, which will look like a steady decrease in the Percentage Rate Of Increase.

So it's perfectly normal to watch a month by month decrease in Percentages.

e.g. 100% of 200 Units is Greater Than 150% of 100 Units.

Don't let statistics tell you the whole story.

[Doug_Pardee Distinguished Bibliophile]

Okay, this is a separate set of data, so it can't be compared directly to the other numbers I've been using. Furthermore, this data is market share only, which is a fairly weak number when you don't know what the total market was.

According to Publishers Weekly: "Bowker’s most startling finding of the [third] quarter—no growth in the market share of e-books. Sales of e-books accounted for 14% of all sales in the quarter, ... even with the second quarter of 2011. According to Bowker, this was the first period since it has been tracking sales by format that e-books’ share of the market failed to grow on a quarterly basis."

That article also had an interesting observation: "As Bowker points out, the third quarter, marked by the final days of Borders, is likely to be a bit of an aberration."

Could be. The selling of a lot of printed books could make it harder for e-books to gain market share that quarter. It could also mean that consumers would have printed books to read in October instead of buying e-books that month.

The November figures from AAP should be out in the next few days, and that'll be interesting. Even more interesting will be the December and January figures, driven by the activation of a ton of new e-readers. December and January figures have historically shown huge jumps over the prior months, with January running about 50-75% above the November figure. It'll be a couple of months before the January figures are in, though.

I still wonder what combination of effects I'm seeing in the wholesale numbers from AAP. It could be the e-reader market approaching saturation — B&N's problems with selling the NOOK 2e versus the NOOK Tablet this past holiday season, and the BN.com web site not crashing on Christmas, make me think that today's NOOK buyers aren't big e-book readers. Or maybe it's that people are buying less-expensive e-books, or buying from publishers other than the ones who report to AAP (quite possibly for price reasons). I suppose it could be from the reporting publishers selling their e-books less expensively, but I don't find that very credible.

[Doug_Pardee Distinguished Bibliophile]

The AAP statistics on e-book sales continue to show a weakening in year-over-year growth. We've now had two straight months of double-digit growth. Double-digit growth is still pretty impressive, but the trajectory is beginning to flatten.

At the root of this: e-book sales have essentially been flat for the past six months, running around $80 million per month. August was high at $89 million, October was low at $73 million, but overall, around $80 million per month. In recent years, November's e-book sales have run 50-100% higher than January's, but this year it's only up 10% at $77 million.

• +112% in October 2010
• +103% in November 2010
• +165% in December 2010
• +116% in January
• +202% in February
• +146% in March
• +157% in April
• +160% in May
• +167% in June
• +105% in July
• +116% in August
• +101% in September
• +81% in October
• +70% in November

Note: these figures are based on wholesale dollars, and it's possible that this drop represents a slipping in price of the average e-book sale. Maybe people are switching to cheaper e-books.

The big e-book "sales bump" is coming up: December, January, and February. I've got my doubts this year. B&N's report that the Simple Touch Reader didn't sell well — that everybody wanted the NOOK Tablet — makes me suspect that most new NOOK owners aren't looking to read e-books. And trying to match last year's sales bump is going to be a challenge: February's e-book sales were almost double November's.

By the way, the mass-market paperback market is collapsing. It used to run $60-80 million a month, but in November it was down to $20.8 million, or about 5% of all book sales for the month. Since the beginning of the year, the e-book market has been about as big as the MMPB market used to be, while the MMPB market now has slipped to where e-book sales had been just before the first NOOK was released. At that time, the publishers didn't think e-books were selling enough to matter — so I suspect many are thinking seriously about giving up on MMPB. [I'm curious how many of those MMPBs that are still selling are from publishers like Harlequin who don't sell hardcovers at all.]

[keriflur]

I would suspect that the ebook market is cannibalizing sales from the MMP market.  I know for myself I will ALWAYS by the ebook over the MMP, and I've seen news reports (not that the news industry really knows what's going on, but still) that more and more people are choosing ebooks over paperbacks in the romance genre, a genre where the books are often released in MMP and ebook only.  However, the numbers don't seem to support that.  Thoughts?

[Doug_Pardee Distinguished Bibliophile]

The AAP statistics on e-book sales continue to show a weakening in year-over-year growth. We've now had three straight months of double-digit growth. Double-digit growth is still pretty impressive, but the trajectory is beginning to flatten. E-book sales at the reporting publishers have now been essentially flat for the past seven months, running around $80 million per month.

• +112% in October 2010
• +103% in November 2010
• +165% in December 2010
• +116% in January
• +202% in February
• +146% in March
• +157% in April
• +160% in May
• +167% in June
• +105% in July
• +116% in August
• +101% in September
• +81% in October
• +70% in November
• +72% in December

Note: these figures are based on wholesale dollars, and it's possible that this drop represents a slipping in price of the average e-book sale. Maybe people are switching to cheaper e-books. Or maybe they're switching away from the AAP's reporting publishers (presumably to less-expensive publishers).

December e-book sales compared with the previous January sales in recent years:

• 2006: +100%
• 2007: +67%
• 2008: +110%
• 2009: +117%
• 2010: +55%
• 2011: +22%

The big e-book "sales bump" is coming up: January and February. I've got my doubts this year. B&N's report that the Simple Touch Reader didn't sell well — that everybody wanted the NOOK Tablet — makes me suspect that most new NOOK owners aren't looking to read e-books. According to Publishers Weekly, Simon & Schuster has reported that "while sales of e-books in January had solid gains, the increase was not as dramatic as in January 2011 and was in fact below expectations." And trying to match last year's sales bump is going to be a challenge: February's e-book sales were almost double November's.

[Doug_Pardee Distinguished Bibliophile]

If anyone cares (probably not), here's a graph of the AAP e-book wholesale US sales figures for the past three years.

This is a log-scale chart. You can see that e-book sales were going up in approximately a straight line (exponential growth) until the beginning of 2011. After that they've basically stayed flat in a straight line, with about the same month-to-month variance percentage.

Again, these figures are from the AAP's reporting publishers, which are basically the established traditional publishers.

[Sun_Cat]

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Doug_Pardee wrote:

The big e-book "sales bump" is coming up: January and February. I've got my doubts this year. B&N's report that the Simple Touch Reader didn't sell well — that everybody wanted the NOOK Tablet — makes me suspect that most new NOOK owners aren't looking to read e-books.

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It would be interesting to be able to test the validity of this notion. My own suspicion is that it may be unwarranted. That everyone wanted the NT might not mean they don't intend to read ebooks; they may just perceive it to be a brighter, shinier ereader. Maybe the size of the "bump" will hint at resolving the distinction.

[Zion21]

I am curiousto see what the rest of 2012 has in store for E-Books. They are gaining a lot of popularity but I am wondering if e-readers are here to stay.

[Hmr28]

I have to say I have certainly been buying a ton more e-books. BUT they have almost all  been in the .99 to 3.99 range rather than the 6-10 range I had been buying. I've been finding tons of great indie authors. I suspect the lower numbers may be the result of other people doing the same thing.

[Omnigeek]

The chart indicates sales by dollars rather than by paid titles. I remember a WSJ article last month indicating some publishers were realizing they could get far more sales by keeping prices lower or using gimmicks like $0.99 specials for series they hoped readers would become addicted to.

I see far more titles now listed with the ebook at or near the price of the paperback -- which many people have been clamoring for.  All of this would naturally lead to a drop in the overall increase in sales by dollars until enough reader mass had built up.  I also see the recent rise of "media tablets" as being another competing distraction consuming people's time.

I suspect (hope?) we will see a return to higher growth after people realize many of these "media tablets" aren't as satisfying but the reality is that growth just can't continue exponentially as it depends on an exponential growth of customers.  A decline in the growth curve isn't necessarily a bad thing as long as growth continues in a sustainable fashion.

[Doug_Pardee Distinguished Bibliophile]

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Doug_Pardee wrote:

The big e-book "sales bump" is coming up: January and February. I've got my doubts this year. B&N's report that the Simple Touch Reader didn't sell well — that everybody wanted the NOOK Tablet — makes me suspect that most new NOOK owners aren't looking to read e-books.

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A posting at Dead Tree Edition provides some statements from Bowker — the ISBN agency for the US and operator of the PubTrack book sales-tracking system — about recent e-book sales trends:

• went from exponential to incremental growth
• some level of saturation in the U.S. market
• will probably continue to grow incrementally
• despite the massive purchases of tablets and e-readers during the 2011 holiday season, the proportion of book buyers who bought an e-book rose from 17% late last year to only 20% in January
• recent buyers of e-reading devices are not purchasing as many e-books as the early adopters do
• power purchasers of e-books (60% of the U.S. volume comes from people who buy at least four titles per month) are buying more ink-on-paper books than previously.

It should be noted that, like the AAP statistics, this is mainly referring to e-books from "real" publishers, and doesn't include much in the way of self-published works.

The AAP statistics for January should be out in a week or two, and that will prove very interesting.

[javabird]

With all the free ebooks being offered on Amazon and B&N, I wonder if book "sales" are just flattening because people are getting so many free books. In other words, ebooks are being downloaded but not as many are being purchased.