Sunday, September 19, 2010

Welcome and some book data

I've been out of the blogsphere for a bit. I've decided to switch topics; I will add data to my previous blog, but I am switching my primary focus to e-books.

I'm not in the literature business other than as a consumer. Quite the consumer of e-books. I converted over with the launch of the Kindle 2 to e-books from p-books.

I'm amused that one can clearly see the impact of major devices upon e-book sales. The Sony e-reader launch moved e-book sales off a very low floor. The Kindle (original) started a slow rise in e-book sales through 2008.

The April 2010 Ipad launch also seems to have a small impact. But far less than the Kindle 2. Considering how many people web surf and play games on Ipads, I cannot say I'm surprised to find it has a small impact. But the post Christmas slide in e-book market share was stopped right at the Ipad launch.

The real 'birth of the e-book market' came with the Kindle 2. The slope change is very perceptible.

I also notice a jump in e-book sales at the start of 2009 and 2010 year. To me, this implies that Kindles are a popular Christmas gift. So I expect the Kindle 3 to boost e-book sales on two counts:
1. Lower price. i'm a believer in the elastic nature of consumer markets.
2. That lower price makes it a low enough price gift. Above $200 is too much of a splurge.

I still recall the rush for Christmas 2008 Kindles. The backlog was extensive. To say the least, the jump in e-book sales between December 2008 and January 2009 signifies the Kindle coming of age.

To the charts:

E-book sales, in dollars:

Note the spike in sales after Christmas in January 2009 and 2010. I'm looking forward to the AAP data to catch up and show how Kindle2 price reductions and the launch of the Kindle 3 impacted sales.

There has been a theory that e-book sales have been at the expense of mass market paper backs. (MMPB). While plausible... The big drop being at the Nook launch time? I think that is a recessionary coincidence.

I do a different take on e-book market share. I take e-book sales in dollars and divide it by Adult sales (hardcover and paperback), children/youth sales, University sales, and technical book sales. I remove higher-ed and K-12 due to the volatility of those markets. (They can go from +$1 billion in a month to -$100 million due to returns.)

I'm left with one big question. It looks like Amazon feeds into the Census data (note, I am searching for confirmation). If so, the flat e-book sales of 1H2010 are an indication that it takes device sales to boost the book sales.

A bit on this blog. I'm not doing device reviews. As far as I'm concerned devices are to sell the e-books. I'm not going into the p-book vs. e-book debate. I'm an e-book enthusiast, so I'm going to celebrate e-book sales. I am curious as to how cell phones and tablets will enhance the market. Also, I'm going to remain device vendor neutral. I have my favorites, but my desire to grow the e-book market out-weights any fan loyalty I might have.

So I will delete in the comments any nasty comments. I do not care if the nasty comment is pro-Kindle/Ipad/Nook/Sony/e-book or p-book. Stay polite. Oh, be a fan, but be polite about it. And provide links. ;) I also accept many book purchases are impulse buys.

Also note, I have no patience with the 'publishers validate' argument. That was dis- proven on JA Konraths blog in the comments. Reader willingness to pay ($ sales) are what I use as validation.

I do plan to stay numbers oriented. So if you disagree with my posts, please post links to data sets. Note I ignore any one data point. The trend is what matters. Book sales data is inherently noisy (weather, holidays, school start, release of popular books or lack thereof, vacation season, etc.) There is a reason I'm not a stock day trader...

I'm excited for where e-books are going. I see tremendous growth in for the next few years. Why?
1. Lower e-reader prices. We're finally getting down to mass market gift pricing.
2. Tablets. In particular the flood of tablets predicted for January 2010. I expect these to effectively be portable laptop replacements a la the Ipad.
3. New e-readers (flexible?, dual screen?, larger cell phones that bring in the 'one book a year crowd)

I expect the 'tipping point' on e-readers to be in 2012. Due to the above three points, I expect to see e-book sales growth from now until then (with noise and seasonality in the data, of course).

Got Popcorn? ;) (Tag from the last blog)


  1. Hey Neil,

    Great post! You should join us tonight on Twitter for #ebooklitchat from 8-9 PM CST! I'd love to have you!

    Karly Kirkpatrick

  2. Thanks,

    If I can, I will (two *very* young daughters have a habit of taking my time).