April 2011 Ebook Sales

Quick summary (from last post):
Trade books are at 2005 levels and after inflation that isn't a good thing...
MMPB is at half the $ sales pre-ebooks
In general, print book sales were weak, but not horrid.
Ebook sales are still growing fast. Faster than the 2010 growth rate.



The first graph will deal will the fast growth. I draw lines for the sales trends of prior years. As long as 2011 sales are above the 2010 line, that tells us growth in ebook sales is accelerating.

















Now let's look at the AAP numbers, without my estimate of non-AAP ebook sales and look at the market share of ebooks. Growth is strong year over year, but we're starting to see a seasonal 'weakening' after the strong initial sales 'post unwrapping the gifts.' I'm very curious to see if this trend continues in 2012.

I also find it interesting that ebooks jump to a new market share at the start of each year, fade a little, and then recover to that market share during the hectic Christmas book selling season.





















I do an estimate on 'non-AAP' ebook sales. 10% in December 2009 and 20% in December 2010. I then just extrapolate a linear trend... I know. Two very approximate data points and then an extrapolation. That's ok, I'm certain indie ebook share is growing faster; but since I'm numbers oriented, I have to start somewhere as my basis and I prefer to be constant and conservative:


The constant is that we're about the 'tipping point.' Hence why we're hearing about JK Rowling, Harlequin backlists (ugh...), and others jumping onto the ebook bandwagon.


















Trade sales are hanging back at 2005 levels. Not a good place to be after inflation...
















Before ebooks, my favorite genre was MMPB (mass market paper backs). Sales in an 'ok year' should be over double the April 2011 sales. :( When I include my estimate of non-AAP sales, ebooks are almost (no quite) quadruple MMPB sales (94.9M vs. 28.5M). I'm very sad to say that MMPB sales have dropped below economic viability. Oh, there is an option here of POD augmented with higher production for popular titles (say to sell at airports); but mostly MMPB is doomed to fade away. :(

It isn't a question if I bought over a thousand MMPB in my life, but how many thousands... I don't have the words to express my excitement over ebooks while seeing my favorite form factor of pbooks doomed... (Note: Given a choice, I pick ebooks any day!)


















Hardcover sales are back at 2005/2006 levels. Sales aren't horrid, but they also are off too much to support as many book selling vendors as there are today.

















More of the same with Adult paperback, weak sales at 2005/2006 levels. Its a good thing there wasn't a real estate bubble with the associated rent increases...

















If Children's pbook sales being 'normal seasonal sales' is a 'semi-bright' spot for print books.

















Seasonal Charts

I'm going to take a bit more time discussing my seasonal charts as there is some nuggets to be gained by plotting the data to show seasonal variation.


If you look at the bar chart numbers for prior years, in particular 2009 and 2010, you see we can expect a nice '2nd half jump' in ebook sales. It really looks like we're following a developing seasonal trend. A developing trend with exceptional year over year sales gains. The trends in the bar chart show how dependent ebooks are upon ereader sales which will only become more and more of a 'gift item' as prices drop. Until prices drop to the point ereaders are an 'impulse buy' that is. ;)



















Plotting Hardcover sales show how deep the 7-year rut print has been in. As I watch one more year repeating as a weak version of the prior six years it shows that print had issues long before Amazon introduced the Kindle. What industry accepts a multi-year growth rut back when economic times were booming and doesn't switch strategies? Sigh... An industry that had to have its strategy change forced on it.



















If hardcover was in a rut, Adult paperback is...
















Prior year sales were double MMPB in April 2011. An old business axiom is that you grow or you rot. Unfortunately my old favorite form factor is the one rotting away...


















I'm pleasantly surprised how well Children's books are selling. I have one bit of advice: Adapt to touchscreen apps quickly, they are the future of children's books if my kids and their friends are *any* indication.

















The last chart is ebooks (AAP sales only) scaled with the same y-axis as the other scatter plots. Notice how since 2009 ebook sales are climbing? No rut.


















The 'jump and hold' trend of ebook market share each year is interesting. But more important is that first chart. It shows continued *accelerating* ebook growth. If we have a year that starts to fall below the prior year's trend line, which will happen by 2014, it tells us that we're past the mid-point of technology diffusion. Since ebook market share is already spiking > 25% at the start of the year, theory tells us ebooks will assume over half the market. Since the rate of adoption is still accelerating, ebooks will be much more than half the market.

The only question is how much? We're trending towards about 40% market share at the start of 2012 for ebooks. That implies the peak will be above 80% ebook market share by 2016.

And we're only at 12% ereader market penitration. I remain convinced that 'convenience reading' on smartphones will 'suck back' a bunch of readers to ebooks helping expand the book market...


Got Popcorn?
Neil

Ps: Edited (added spaces to correct format). Enough graphs for ya? ;)

AAP numbers to be posted soon

I missed the release of the numbers Friday (it wasn't early...)

I have graphs, but I need some time to edit.

Quick summary:
Trade books are at 2005 levels and after inflation that isn't a good thing...
MMPB is at half the $ sales pre-ebooks
In general, print book sales were weak, but not horrid.
Ebook sales are still growing fast. Faster than the 2010 growth rate.

I need to put out the graphs ASAP. Mea Culpa. Alas, it will be at least 24 hours due to more fun obligations...

But hey, even bloggers can have extended weekends. ;)

David already had had up for three days a summary of the numbers.
http://davidgaughran.wordpress.com/

Got Popcorn?
Neil

March 2011 Ebook Sales

After an amazing February (which blew away my expectations), March sales of ebooks were just very strong. Print book (pbook) sales also recovered nicely. But don't start talking about a renaissance in pbooks, the sales were on the weak end of a normal year overall.

Notice how even a 'breather month' put march ahead of the 2010 ebook growth trendline? This shows that even a month of slacking that 2011 has fast accelerating ebook market. I won't be surprised if we see some seasonality in ebooks. The market isn't small anymore. ;)















Ebooks gave back a bit of their market share.


















If I add in my assumed indie/small publisher market share growth (10% December 2009, 20% December 2010 and assume linear growth to 30% in December 2011) than we see that ebooks are still beyond the tipping point. Note: If you disagree with my assumptions that is fine, but it is too obvious a *large* fraction of ebooks are sold by indie/small pub. Probably far more than I'm assuming:
















Now let us compare ebook sales versus trade. Well... 21.62% (with indie/small pub) is a small fraction. But a growing fraction. ;)

















I'm glad to see mass market paperbacks (MMPB) made quite a sales recovery! I can take what was my favorite print format off near term death watch. But notice how MMPB is below band? That isn't healthy. I have a feeling this recovery is Borders restocking related. :( (I'd like it to be a more substantial recovery...)


















Hardcover also recovered and is 'in the band' of prior year sales. This to me is amazing! Borders? Seasonal? New bestseller books? I'll be watching in future months.















Where is the spin that adult paperbacks are once again outselling ebooks? Nice recovery and 'in band' for prior years. Another interesting trend to watch
















To get at children's sales I had to take the sales for 1st quarter 2010, multiply them by one minus the percentage change in sales and then subtract out January and February sales (why didn't they publish a straight number?). So my numbers could be off by $2 million due to how the AAP 'corrects' prior data quietly. But either way, children's book sales were weak. I suspect touchscreens have eaten into the market:

















Seasonal Graphs:

Ebooks show nice growth


















I like to use bar charts as an alternate way to show how ebooks are growing fast every month:



















Harcovers are at a normal seasonal pace:















MMPB recovered from 'death watch' to the weak end of normal:
















Adult paperbacks recovered well enough to have a 'normal March' sales level. I consider this pretty amazing:


















I hope these graphs give you a better insight into book sales versus the numbers out of context. Ebook growth is still strong. Somehow, thankfully, pbook sales had a recovery month (the shrinkage was far faster than I wanted to see).



As always, we anticipate next month's sales. I find it interesting Amazon bragged about April ebook sales outdoing their print sales by 105 to 100. Since I haven't seen that before, it implies next month we'll see ebooks recover some market share. The question though is 'how strong were pbook sales?'

For March, it was a good month for book sales (pbook+ebook). But not good enough to make up for January and February.

Got Popcorn?
Neil

February 2011 Ebook Sales

Ebook sales did *far* better in February than what I thought was going to be a good month. It was a horrid month to sell print books. The collapse in print sales dwarfs the market share of Borders; since this is two months running either:
1. Borders was more important to the business than their market share implied or...
2. We're past the tipping point for e-books

I believe the charts show the later. I had to redo the y-axis on the ebook graphs due to the large jump in sales! Judging by the comments by indie authors and the success of backlists that 'work around' the AAP... I suspect I a severely under-reporting the non-AAP portion of ebook sales:


















Take a look at the above chart again. The January to February spike in ebook sales is not seasonal. Ebook sales are skyrocketing! In fact, since 2005, ebook sales have dipped from January to Febuary, except for 2011:


















So this leads to the natural question, how did ebooks do versus all trade sales? The other press has made a big deal that ebooks outsold one form factor or another of print books. What they should note is that ebooks were HALF of print sales in February! Note that the latest total trade sales is only a little below the scatter of the last 5 years... But then again, February is a very weak print sales month:

















Or more precisely, when one does a conservative estimate of indie/small publisher sales I find ebooks were 34.87% of the February market. Note: February should be a weak print sales month, just not this weak.





















Where are ebooks getting the customers? Unfortunately, my favorite pbook format, mass market paperbacks (mmpb) is taking a huge hit. Notice that as ebooks climb mmpb sales are plummeting? At this point I consider the form factor of mmpb to be uneconomical. The form factor's sales are too low to support the production of 'cheap paper' in my opinion. Perhaps print on demand kiosks can save the form factor? I suspect the selection of mmpb available in the second half of 2011 will be poor compared to prior to 2008.
















Adult Hardcover was at about half the sales of a good year. I do not understand why this form factor was so hard hit. Borders was supposed to be dominant in paperback. So why is Hardcover so weak? Is it a lack of available hits? (Focusing on too few best sellers that were gifted already at Christmas?)
















I'm actually pleasantly surprised that adult paperback was at the 'lower end of normal sales.' Why is this though? Borders is supposed to dominate this form factor! Did Borders restock COD big in February? Or... do the numbers suggest the whole print industry is undermined and Borders is just a scapegoat everyone is hiding behind?




















Children's sales were on the weak end of normal. It wouldn't be worth noting except we're seeing a steady weakening in sales of Children's books. In my opinion, after a stellar year of tablet sales that we should expect in 2011, we'll see Children's books hit the tipping point in 2012.

Note: This won't be due to the Kindle. It is touchscreen driven. We're not buying nearly the 'teaching books' to instruct our daughters as IPad apps are far better for teaching letters, spelling, basic reading, counting, and early math. It will take a hundred million more tablets out there to really shift the market; that market shift is coming fast.



















I like bar charts as they show growth better than other forms. Notice how much the y-axis had to change to support the sales growth of ebooks in 2011:


















For completeness, I like to show seasonal graphs for all the form factors. This is a weak time of year to sell print books. Please compare to the 2nd graph. I'm not commenting further other than to say print sales are really weak:




















































There is no longer any doubt; we are well past the tipping point on ebooks! Who expected better than a third market share in February 2011? Not I, my main prediction has been 50% market share in January 2013. I didn't realize I was an ebook pessimist... ;)


Got Popcorn?
Neil

Growth of Ebooks in 2011: Spectacular!

I cannot turn around without another article on someone selling ebooks outside of the AAP14 that report their ebook sales. So everything is pointing to a near 'gold rush' to get into the ebook market. This will pull customers to ebooks.

Note: This builds on a short discussion from the last comments section.

WSJ (subscription required) is predicting a little over $1billion (per graph) in US ebook sales in 2011 and $2.0 billion in 2012.

If growth in ebooks patterns 2010... we should have about $1.25 Billion in ebook sales in 2011. (Just by the formula: 2010 total ebook sales * 2011 January ebook/2010 January ebook sales>

I think ebook growth will be even faster.

Why faster ebook growth? Bookstores are closing and cellphones and tablets have explosive growth. This is going to be more analogous to Blockbuster than the music stores. As 'high intensity' readers loose their local bookstores (which is sad), they are seriously looking at ebooks as the option.







But there are more factors that will drive customers at an accelerated pace to ebooks in 2011:
1. Indie/small publisher market share is growing and growing fast. New authors have always excited readers.
2. One big6 is at 23% 'volume' ebook or already past the tipping point.
3. Authors can earn a living writing, so this means more 'follow on' books at a pace that keeps readers engaged. (How did authors survive on 1 book a year?)
4. Backlists pulling new readers to ebooks to rediscover old favorites (one of my old favorite 'pulp fiction' books is too expensive used but will be out in ebook form. Hopefully soon!
5. Heavy ebook readers are 'losing the habit' of sharing books. (Ebooks are cheap enough to just buy.)
6. Infinite shelf life of ebooks will help 'word of mouth' marketing. This really helps smaller authors.
7. More press on ebooks.

The above were the 'positive pull' factors to ebooks. There will also be some 'push' factors that are less joyous to discuss:
8. Bookstores are closing. Kobo sees a 30% growth from the Borders BK. I know of quite a few people that bought an ereader when they found their favorite bookstore was closing.
9. Plummeting paperback sales (to wholesale). For those who mostly read paperback (like myself), the reduced selection will 'push' readers to seek alternate sources.
10. People have run out of space for 'stuff.' This includes books. Seriously, do you know anyone who isn't trying to de-clutter?

Ebooks are no longer a 'prove it to me' technology. Coworkers today were talking decorating and bookcases are now considered 'art shelves.' How quickly impressions change...

I'm not sure how big ebooks will be in 2011. Easily over $1.25billion in the US. I see the positives of ebooks growing the book revenue (at a lower unit cost). The upper bound of ebooks in 2011 would be about $2.5billion (about half the US book market). So ebook sales will be, roughly, 2.25X 2010 to 5X 2010. If I were to bet, I'd pick the middle of the range. But... why bet? I'll observe to see where we end up. :)

This was build on my comment that Forrester research predicting a $3billion ebook market in 2015 was pro-print. While I see the book market growing (in dollars and volume when ebooks are included), I see pbooks shrinking by more than a billion USD (in the US) in 2011. :( Sadly, while I think ebooks will grow the dollars in the book market *long term*, in 2011 the total book dollars could shrink. (I hope not... but that could happen.) :(

What's your prediction for ebooks and pbooks in 2011? Oh... I'm including all ebooks, not just the AAP14. ;) But when I talk pbooks, I'll use the AAP88 numbers.

Again, I'm predicting ebooks will over double sales in 2011 (in dollars) and possibly grow so fast to quintuple 2010 sales.

Got Popcorn?
Neil

January 2011 Ebook Sales

The graphs are back and they have one thing to say: January 2011 was a great month to sell ebooks and a really bad one to sell print books (pbooks). In particular, the sharp drop in paperback sales point to an industry disproportionately hit by the Borders bankruptcy. It was the first month that kid's pbooks were down (albeit, mostly paperback).

Why disproportionate? Borders was suppose to be 10% of book sales and we see paperback books hit far more than 10%. It could be that Borders was that dominate in the mmpb, adult paperback, and children's paperback... Or that ebooks are decimating that category.

I could post this image and call it a good blog post.














I've added red lines to show the prior year trends in ebook sales. Also note I try to estimate indie/small publisher sales. I'm certain I'm underestimating indie/small publisher sales, but we have to start somewhere! :)

Notice how the slopes are accelerating? That implies we *are not* at the half way point of ebook adoption. I know... obvious. But some still try to argue ebooks will end at 25% of the market... Which is my segway to the next chart. Since pbooks had such a bad month in January, its possible we won't just hit the tipping point in 2011 but that we did it in January! (Oops, talk about being off and predicting it in 2012...) If this isn't a one or two month blip due to the Borders bankruptcy (which it could be), this implies a fast acceleration from pbooks to ebooks!
















FWIW, the 20% market share as the 'tipping point' is based on moving enough vendors and customers to ebooks (or any emerging technology) to shift which product is easiest to either buy or sell. I'm very curious to see if by screaming past 20% we haven't done a 'step change' in the book industry; a step change the Borders bankruptcy and its 275 store closings might be forcing.


So let us start by putting ebook sales in perspective of their scope of the *total* trade sales. If we use my estimate of indie/small publisher sales, it is $88 million (ebook) versus $228 million. Suddenly ebooks are showing up on the chart! I calculate 27.89% of the market was ebooks (when we include indie/small pub ebooks). No... I'm not going to talk about only the sales of 14 AAP publishers versus 400+ publishers (of which 88 are in the AAP) and all of the DTP authors.

















Do note the dive in trade sales was mostly paperback. Paperback as in mmpb, adult paperback, and children's paperback. The hardcover sales did better... so more graphs to show that. Show that ebook sales, for the first month ever, exceeded hardcover sales!






















You might note that I should compare ebooks with hardcover plus other sales... yep. That is why I posted versus trade ebooks. But look at the comparison versus mmpb. Or... there is no longer a comparison. I'll keep publishing this graph. But don't ever expect to see mmpb selling better than ebooks ever again. Ebooks in January sold as well as a good month of mmpb. With all those bookstore closings and all those smartphones being sold, the tipping point for mmpb has arrived. In a negative way... :( (I love mmpb... I just prefer my Kindle over mmpb.)





















Take a good look at the above graph. If mmpb does not recover within a few months, the business of making the books will have to consolidate quickly and in a drastic manner. I've blogged before about the tipping point. If mmpb does not recover quickly, the 'old technology' will lose economy of scale. It is absolutely the wrong time of year for mmpb sales to recover too...


Adult paperback sales (to wholesale) were weak in January too. Almost dead. Almost as if a major seller of paperbacks went bankrupt. However, the story is not as ugly as mmpb. Adult paperback sales can limp along at this pace for a while before suffering economy of scale issues.
















For the first time since I started these graphs, Children's pbooks are taking a hit. It was all on the paperback side. I wonder if families buying tablet/phone apps (like us) had any impact?






















Due to the amount of hand waving I see on these data releases, I like to publish seasonal graphs that show how each type of book did versus sales in prior years. Now... January doesn't produce an exciting graph, so I'll just post without comment. Except to say, look how ebooks is the only format showing growth!

ebooks:













mmpb takes a dive:
















Paperbacks:

















Hardcover:














The quick summary is that print book sales are hurting and ebook sales are doing well. In particular, I was amazed to see how spanked paperback sales were. I'm not certain if January was more due to ebooks or Borders. We might have a false indication we've hit the tipping point.... Or we might have blown past the tipping point.


Either way, there was a substantial shift in spending on ebooks! How I wish I could know the Amazon DTP numbers...

Got Popcorn?
Neil