October 2011 e-book sales

October is the best month to sell print books. It used to be September, but computerization has pushed even an 'old school' industry like print to a more 'just in time' inventory system. (Good! Fewer returns will help save the industry.) So it shouldn't be a surprise that ebooks lost market share despite a small sales growth.

Sales of trade books were good in October. I speculate this is partially due to the 'Borders surplus stock' having worked its way through the channels. I submit that the recovery of adult paperback and children's books, two categories Borders was strong in, are compelling reasons to believe we are just now past the industry disruption of the Boarders close down.

Do note that data is intentionally being obscured. I had to back out these numbers, so there is more uncertainty in this month's data than prior posts.

Enough discussion, onto the graphs. Notice how ebook sales continue to climb?

















Notice how October is usually the best selling month for paper-trade books (next image). Overall, trade (paper) had a good month.

















It was not a good month for hardcover sales. The lack of a strong peak in Hardcover is one reason I speculate *some* of the strength this month was restocking post Borders liquidation. If there was an overall return to paper, we would have seen stronger recovery in Hardcovers. However, there is a good chance that 'just in time' ordering is putting this format out a month in the purchase cycle.















The dwindling of my (previous) favorite paper format, mass market paperback now has a definitive trend. A trend that shows the format will be out of production after 2014. :( I've been writing for a while how this genre requires a recovery to sustain 'economy of scale.' Its now almost too late. I expect MMPB to fold back into paperback for some publishers soon.














Borders once dominated paperback sales. I believe the absolutely spectacular spike in paperbacks can only be explained by a 'springback effect' post Borders liquidation. I'm happy to see it!
















Childrens books had a nice spike too (for a non-Harry Potter year). I speculate this isn't just Borders. I speculate that Netflix and music subscriptions are 'taking away' gifting opportunities for relatives who wish to buy physical gifts. I speculate relatives are going back to gifting books. Any thoughts?
















Seasonal Graphs

Due to the sheer amount of mis-information and obscurity on book/ebook sales, I like to plot seasonal graphs to show how the market is changing.

I start with a bar graph on ebooks. This shows how incredibly fast the year on year (YOY) growth has been for ebooks. :) It also shows how analogous the sales pattern in 2011 was to 2010. I now believe 2013 will be the last year with over doubling of ebook sales. Note: I'm not saying the market won't keep growing. Technology growth tends to slow once half the potential market has converted to the technology. That half way point for ebooks will happen in 2012, but the slowing of the growth shouldn't be obvious until 2014.





















The initial buying of Hardcovers pre-Holiday sales are weak but not horrid. I've heard rumors that hardcover buying was delayed this year. Since that is a more businesslike way to stock inventory... I could believe it. Oh, I'm skeptical, but we could see a further compression of the book season.


















The paperback spike looks less impressive when plotted versus prior years. See the June deficit? It is possible the October spike is just restocking shelves post Borders liquidation. :(

















Since the trend down in MMPB crossed the 2010/2011 year boundary, the doom of MMPB is less obvious when plotted this way, but the decline is still obvious. Hence why plotting data different ways to see trends is important.


















The spike up in Children's sales is greater than the post-Borders deficit! Hence my theory relatives are shifting gift buying back to books. :)


















I've been calculating the trend and comparing with year ago sales. I created this bar chart to emphasize change. The most interesting tidbit is plotting this way we continue to see 2nd half 2011 ebook sales grew at a slower rate than the 1st half. However, the growth was still strong.


















All the graphs show a (one month) recovery of print sales (excluding MMPB). They also show ebooks are strong. I speculate the next big splash will be November post the K4 deliveries. It will be very interesting to see the January sales data (which won't be released for about 3 months). I expect to see another start of year spike.


Got Popcorn?
Neil

August 2011 Ebook Sales

As David noted, time to dust off the charts, we have AAP numbers.

Note: Its late, kids didn't want to sleep and I have an early meeting. So I'm just going to note that ebook sales were good, trade sales show a downward trend that is in line with prior months. I'm also skipping some graphs (Mea Culpa). But the main data is here for your enjoyment:










































The only seasonal is ebooks in bar format:

AAP Sales too obscured to chart

Do I chart August sales that were YTD sales are far less than the sum of prior YTD reports?

YTD hardcover sums to $930.4M (January through July) while the AAP reports YTD sales through August of $641.7M. Ummm....

YTD paperback sums to $772.5M (January through July) while the AAP reports YTD of 772.5M.

YTD MMP $380.4M (through July) vs. $310.4 through August.

YTD Childrends $734.23 through July vs. a reported $638.4M through August.

Ebooks: $638.4M through July vs. reported $649.2M through August.

In other words, the downward revisions in sales mean August had massive negative sales for every category except ebooks. Ebooks would have puny sales... I suspect fewer vendors reported.

I hope monthly book sales come out later. August sales would normally have come out now, but the AAP is delaying, hiding, and obscuring the data as much as possible. I suspect we'll see numbers later worth graphing.

But when the sum of 8 months of sales is that much less than the sum of the previously reported 7 months of sales...

Neil

July 2011 E-book Sales

July ebook figures are finally out. We can now see that the K3/Nook Color launch put a stake in the heart of Adult paperbacks. The K2 started that job with MMPB. What will the new Kindles do? We've been waiting for sub-$100 ereaders from a big name to accelerate ebook sales...

Everyone has already told you ebooks continue to show good growth. Paper trade sales were weak, but not as weak as they were earlier in 2011. If I estimate children's sales, which weren't disclosed, trade sales were 84% of 2010. Much noise has been made of the Hardcover sales. They weren't bad. But if just some of August's hardcover sales were moved to July by 'stuffing the channel,' we could be seeing noise.

Sources:
YTD sales
July Sales

David has already posted, but I do the graphs. ;)

Or could it be due to the big6 favoring Hardcover sales at the expense of everything else, including overall profit. I can only speculate on this. But look at it this way, two of my favorite sci-fi authors just released new books. Eric Flint's is only in Hardcover and David Weber is charging $12.99 for the ebook. Oh well, I'll wait and buy other books that interest me.

To the graphs!
















Ebook sales remain at a pace faster than an extrapolation of the 2010 sales. I keep noting that that means we have not yet hit the point where ebooks are at half the market penetration they will achieve. Hold that thought for the next graph:

















Since e-books are less than half the market, approaching 29% with my estimate of Indie sales, we should expect ebooks sales to one day be over double today's market share. When we pass the mid-point, we'll see sales below the prior year's trend line (see the first chart). We are not there yet!


Print Trade is not doing well. It is below trend for July. Now, with my estimate of Children't books, it is at 84% of 2010. I suspect my estimate of Children's book sales will prove to be too optimistic.


















Am I the only one who sees a downward trend for MMPB? If one eyeballs a trendline since the K3/Nook Color launch, it looks like the end of MMPB will be in 2013. :( If one does the trendline from the K2 launch, the end of MMPB would be in 2014. MMPB was my prior favorite book form factor. The form factor has plummeted below viable economics. I suspect the espresso machines will fill the market for what MMPB customers who insist on paper.


















Hardcover books had a good month. Better than prior years trends. My question, is the channel getting stuffed? I hope I'm being a nay-sayer... So we'll have to wait and see.


















Paperback is weak too. Again, I see a trendline. From the K3's/Nook Color's launch, Paperback's have been on a declining trend. Again, a trend that shows an end to the form factor in 2013.
















There is no data on Children's books for this month. Since Childrens books have been trending at 77% of 2010 sales, I took that number. My rational is that if the numbers were any better, we would have heard them. I suspect the Sales of children's books could have been worse. :(

I assume you've seen the Youtube of the 1 year old who doesn't get magazines. My two very young daughters love touchscreen. Their Grandma is now buying them electronic book gift cards instead of print books. Good, bad, or indifferent, that is where the market will go. I've seen it with Mom's with the Nook and the iPad and the Kindle Fire will kick that trend into high gear.




















Seasonal Graphs

I do different graphs to show the trends in different ways. The bar chart shows ebook growth was spectacular in July, just not as spectacular as prior months in 2011. I read discussions of a 'lull' this summer in ebook blog comment sections. I suspect August numbers will reflect the same trend.



















The seasonal graph for Hardcovers in July helps show that July was a great July for Hardcovers, but it is September through December where the money is made. Let's see how hardcovers do during the ramp up to holiday shopping:




















The seasonal graph on paperbacks shows more of what I was discussing earlier: The K3 stared this form factor's slow death.

















MMPB has been on a downward trend since the K2 launch. The K3/Nook Color launch accelerated that trend. Anyone want to bet against the K4/Kindle Fire/Nook Color 2/iPad2/Android tablet assault?




















I had to estimate Children's sales for July. The trend for 2011 is 77% of 2010. If that was the July sales, we could have our next category breaking down. If Children's sales are going down, I wouldn't look at the prior B&W Kindles. As I noted, kids today expect touchscreen. Between the Kindle Fire/Nook Color (2?)/Android tablets and a horde of smartphones, I'm betting on touchscreen for 2012.

















I save the ebook seasonal graph for last as... ebook sales are only seasonal in two ways. First, the 2nd half sales see a jump. Usually that jump is in July, but could the excellent weather have delayed the spike up? The other 'seasonality' is that there is also a beginning of the year spike as those Christmas ereaders are loaded up. :) Otherwise, note the nice year on year growth the last few years?






















Predictions and comparison vs. Prior years

I introduced the last chart just over a month ago. I show:
1. Nominal sales from prior years (pre-2010)
2. 2010 sales for that category
3. How the sales should be following the 2011 YTD trend tweaked to be a prediction (oops, I shouldn't have tweaked children's expected sales).
4. Actual sales.

Overall trade was weak, but not as bad as it was. The big boost was Hardcover, which is doing better than pre-Kindle trends! MMPB and adult paperback are in an rapid decline with paperback's decline possibly accelerating.























Each succeeding generation of ereaders is taking down one more category of books. The K2/Nook/Sony ereaders/Kobo started the MMPB decline. The K3/Nook Color initiated the drop in adult paperbacks. I suspect we're about to see touchscreens hitting children's sales. That leaves the question, will hardcover somehow survive the onslaught of the K4/Nook color 2/iPad2? I suspect that in 7 or 8 months, we'll have the data to say hardcover sales went digital with the emerging generation of ereaders and tablets.


Neil

June 2011 Ebook sales

June was not a pretty month for print sales. I've read before that Borders represented close to half of paperback sales and judging from the cliff-fall in Adult paperback, that was indeed the case. Total print trade sales are down $120 million per month from the prior year trend. With AAP ebook sales only at $80 million, we're talking about an 11% drop in gross revenues for June.

Now, I expect this is hit of the Borders failure and shutdown. The question is, will there be a rebound after the Borders inventory has been liquidated?

I did expect Ebook sales to be slightly better in June. If Ebook sales had truly followed the 2011 growth curve, they would have been $83 million versus $80 million. Is that significant? Since more than a few indie authors report a drought and blamed the 'Sunshine Deals,' which favored AAP publishers, I suspect the real reason was we finally broke the crappy winter weather and people went out and played. Then again, growth has been so tremendous in 2011, we can take a breather.

But you come here for the charts, so here they are.

Overall, ebook growth is still faster than the 2010 growth trend by quite the margin!














I'm resurrecting an old chart format. This is by year ebook sales with 'events' that I believe helped shape AAP ebook sales. I'm rather surprised that the 'Sunshine Deals' didn't spike up sales further.


















I've noted before that ebooks jump in market share at the start of the year. We seem to be holding to the pattern but a different month to month variation over prior years:















Edit: I had bad links in the excel sheet on this chart. Mea culpa and corrected 2:30pm 9/11/2011
I've started a new chart: A comparison of how that month's sales did versus the nominal for the last few years, 2010, and a trend. Print books are slowing quickly. 80% of the prior year's sales except for kids books which are doing much better. Ebooks have fast growth and while I commented about June, graphically it looks like it is just maintaining 2011 growth with a little noise. Edit: Don't get excited about MMPB doing a little better than prediction; my once favorite format is in decline. June is MMPB's 'month to shine.' So it did better than falling off a cliff, but not by much. :(















Trade print was very weak. Adult paperback and MMPB and thrashing print sales. More on that later.


















Adult hardcover was OK. The weak side of OK, but ok.


















Adult paperback fell off a cliff. Nothing seasonal about this drop. It is the changes in the industry that are happening. The question is, will any other bookstore step into Borders space of selling high volumes of paperbacks?















My pre-ebook favorite form factor was MMPB. MMPB is on life support. It cannot survive at these low sales.
















It makes me happy to see how well kids books are doing. :)

















Seasonal Charts:


I like the bar chart to emphasize how strong, versus prior years, ebooks are doing. :)















I'll go out of order in the seasonal charts and show just how nicely childrens books are selling. :)
















Again, hardcover is OK, but weak:
















One didn't have to plot a seasonal chart to see that paperback books fell off a cliff.
















I usually comment on how poorly MMPB is doing, but adult paperback made this category look 'better than usual.' But MMPB is weak and is pulling down trade print sales.















Overall, June was a weak month for books sales. While ebooks did well, the wholesale side of the business took a hit due to the Boarders bankruptcy to the tune of about an 11% cut in revenue. I wonder if there will be a snap back after the liquidation (which is still going on in September)? Or is this just a setup to selling ereaders and tablets?


Got Popcorn?
Neil

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? ;)