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

JK Rowlins and Genres

I have a theory on ebooks.

First ebook adopters were the genres with 'controversial covers:'
Romance
Sci-fi
Erotica
Fantasy
etc.

JK Rowlins will bring the YA market over. That market will mature and open up every other genre to indie authors.

It amazes me how many people are getting wound up in the mechanics of how JK Rowlins is selling her ebooks. To me that misses the big picture. This brings a horde of new readers to ebooks. :) Now think of the impact once it is easier to find a Harry Potter novel in ebook form than at a bookstore...

Got Popcorn?
Neil

Just a comment on devices and Market Share

There is a bit of a 'reality distortion field' when it comes to devices that read ebooks.

The breakdown by market share (approximate):
Amazon: 50%
B&N: 26%
Sony: 8%
Apple: 8%

Everyone else is fighting over the last 8%. In other words, Kobo (Borders), Google, and others are working for a fraction of the pie that sums up to the 3rd place tie. I'm going to blog less about those participants (unless I see fast growth).

Why does this matter? New devices spike market share as those that 'waited on the sideline' buy and load up with ebooks. I'm going to avoid the discussion about readers stocking up (as I dusted off a box of pbooks form the garage to pull a few into the TBR pile), but rather talk about the impact.

While Amazon has been losing market share, they are still the top dog. If you're selling ebooks, you want Amazon to launch new devices. If Amazon doesn't launch a new device, you really want Barnes and Noble to launch a new device. I expect the new Nook simple will increase the B&N market share; I'm not sure if it will be at the expense of Amazon or the 'other' category.

The last note is Apple. Note how low their market share is despite the success of their devices. I suspect it is due to the demographic Apple sells to; their customers can afford a Kindle or Nook as the dedicated e-reader and utilize their iOS device as the 'occasional e-reader.'

Lately, I'm seeing a few trends:
1. Adult 'kids' buying their elder parents e-readers for large type access. I'm seeing about a "70% success rate." What I mean is that about 30% of those gifted an e-reader... Don't pick up their reading. :( It seems the Nook color is *not* the gift for this crowd. (Note; The Nook color is *hot* among other demographics... I think it is weight for the 70+ crowd.)
2. Nook color buying for kid books.
3. IPad for kid books.
4. Occasional (smartphone) ebook readers are buying dedicated readers. A quick survey of friends shows that they are happier with the Kindle app on the cell phone and that is driving their e-reader purchase.

Personally, I think the first 'major brand' $99 e-reader (that isn't junk) will help spike the market. But only if the 'major brand' is Amazon, B&N, Sony, or Apple; anyone else would be lacking 'cheerleaders' to help spike ebook sales and I'm not sure Sony's cheerleaders would be aggressive enough. :( (I want competition in ereaders; competition improves the breed.) :)

I rather hope for a new set of Amazon ereaders for back to school. Hopefully in multiple formats: cell phone, tablets, 'Kindle simple', and I hope for one 'neat surprise.'

I was pleasantly surprised by last month's AAP pbook sales. However, judging by comments Amazon made earlier... I'm suspecting April will favor ebooks. As I noted before, usually the later the AAP releases data, the worse the story for pbooks. We're past the tipping point. The question is how fast we tip.

Got Popcorn?
Neil

New Ereaders and "Power Buyers"

Tiss the season for everyone *but* Amazon to launch new hardware:
Kobo Touch
Nook Simple
IPad2
Large form factor Android Phones

While the "Special Offers" kindles will sell well, they are *nothing* to encourage a K2 owner to upgrade.

But we'll also see a tremendous amount of ereading on upcoming devices:
Amazon ereader tablets and phones (By Xmas?)
Other Android tablets (Sony, Asus, Acer, Dell, Motorola, Toshiba, Samsung, LG, HTC, Lenovo, etc.)
More large form factor smartphones
Heck, Microsoft might actually get in the game too (snicker)

Let’s not forget Sony is big in international ebooks. So while I haven’t heard of a new ereader from them, I expect them to update their product.

Devices equal ebook sales. :)
Link on ebook buying

““Power buyers,” who buy at least one e-book a week, represent about 18 percent of the total people buying e-books today, but they buy 61 percent of all e-books purchased.” As ebooks mature, more and more readers will not be ‘power buyers.’ Look at those numbers. In print, power buyers buy 70% of the books. It is less for ebooks; that strongly implies that ebooks are bringing in casual/convenience reader sales.

I know, by name, just over a dozen parents who ‘convenience read’ on their phones or tablets who otherwise would have dropped out of the book market. That is great! That is a few individuals who otherwise would have forgotten the ‘reading habit.’ Now they are instead utilizing tech to stay 'connected' with books. Once their kids grow up, they’ll probably drift back to being ‘power buyers’ of books instead of just being TV junkies.

If it seems like I'm being hard on Amazon, I am. Where is the new reader? Once a year product updates do not work in a fast growing market such as ebooks unless one expects to forfeit market share; as Amazon has certainly done. Certain customers have a strong preference for touchscreens; while I would want to see the K3 continue, Amazon must invest in new hardware.

My group of friends is defecting to the Nook Color or IPad for the kiddie ebooks. That means touchscreen, color, and sound. But here is the market opportunity for Amazon: these kiddie ebooks are locked onto one device and *no one* likes that. The Nook app does not play Nook color kiddie ebooks. (We tried.) Apple apps are locked onto iOS devices... If Amazon is clever and upgrades the Kindle app (when they release touchscreen) to be far more flexible, they'll take that market in under six months. For parents want mom and dad's cellphones, tablets, and computers to all play the book (as kids have zero understanding why the book isn't available).

The point of this article is to show that ebook growth is about to take off due to the excitement generated by new devices for ereading. In many ways, I'm most excited about large smartphones as those toys seem to be 'pulling back' readers into the habit thanks to 'convenience reading.' Tablets will help that trend too.

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

I love spin (Poking fun at anti-ebook titles and posts)

Sometimes one finds articles that are nothing but spin and thus just fun. It is like their method is hope that ebook adoption slows down...

33% reading ebooks was spun as "Despite the jump in both the number of digital readers and book buyers with devices, the percentage of book readers who said they only read digital books remained below 1% in February, while the percentage of readers who said they will only read print books stayed at 40%."

Oh, and 26% of readers are looking into trying e-reading or increasing the market by 75%... Why didn't the article highlight that?

eBooks lead to print sales sounds pretty pro big6 right? It then goes to say "Ebooks are not killing print." But then the small publishers come out ahead with “Especially on the non-traditional side, we’re seeing the reprint business’ internet-driven business model expand dramatically. It will be interesting to see in the coming years how well it succeeds in the long-term.”

Oh... Small publishers are using ebooks to help sell print! A totally different conclusion than the 1st paragraph leads one to believe...

A no-spin article worth reading.

I have to agree with the last article. Small business can now sell books directly to customers. It is a different world.

What if the Amazon rumors are true about Amazon launching ereading friendly tablets and possibly an ereading phone (which I've been waiting for). Or... what if the 7" tablet is also a phone, that would work for me...

Publishers are not ready for a Christmas where Amazon is a big tablet player... Not to mention a new Nook is expected later this month...

No wonder the AAP is hiding the print sales numbers. The floor is shifting.

Neil