May 2011 ebook sales

AAP May 2011 sales numbers are out in the most convoluted manner possible. So time for some graphs to elucidate. Note: This is 5 month data that I conveniently subtracted out the prior 4 months.

The quick summary:
Ebook sales are at 292% of a year ago
Children's books are selling at about 130% of normal
Adult paperback is selling about the historical normal.
Adult Hardcover is selling at 2/3rds of normal
MMPB is, at best, at 40% of normal sales.

We're approaching the mid-year spike of ebook sales. Ok, we're in it... July! Sigh... I'll have to wait 2 months for those numbers.


To the charts! Now my third and last chart will be variations of the same chart. Basically, we're seeing continued strong growth in ebook sales.


On the first chart, it shows the growth in ebook sales, by the AAP publishers, is far above an extrapolation of prior sales; that tells us the ebook market is still in a fast adoption timeframe.















Market share is something obsessed about and a bit difficult to understand with ebooks. What matters is that as long as sales (1st chart) exceed extrapolations of prior years, we know the ebook market will better than double its market share of the total book market:

















Could you have imagined plotting total trade print sales versus ebook sales a few years ago? Now that ebooks are 26% of 'trade' (by my calculation), it is exciting seeing them on the same graph. I will repeat this graph at the end for an interesting conclusion...


















Mass market paperback (MMPB) is getting creamed by ebooks. It was my favorite form factor as is the case with many (most?) 'serial fiction' readers. These are the readers that demand variety. Thus the best customers for indie authors. Thus the book form factor most reduced by ebooks to 40% of what it used to be (down from 50% last month)!













Hardcover is now being hit hard too. I wonder how much is do to "I want it now" which digital will always win and how much due to the excellent variety of fiction. Do recall these are AAP numbers... so part of the drop could be the new competition:














Adult paperback is doing ok. Not great after inflation, but not bad. Is this because so many paperback books are non-fiction?















Children's books are up! I suspect this is a snap back from a poor start of the year. Why doesn't matter. I'm happy to see this one category doing well. I do think it will be bowled over by touchscreen apps... But there is something nostalgic about kids reading. Alas, due to touchscreen apps, it isn't my family helping this category (we must have 600+ hand me down children's books):
















Seasonal Charts
I'm a big fan of looking at data graphed different ways to truly understand the data. In a seasonal industry, such as books, that means plotting each year's data as one line.



First is ebook market share. There is a definitive July and end/start of year peak with a two troughs in between. I'd like to know more about the July peak. For now I'll just report the data:


















A bar chart lets us see the trends for each month. This chart screams 'fast ebook growth' with no breaks applied:














The seasonal chart on Adult hardcovers shows they have lost their mojo. I suspect with the Borders bookstore closing this trend will be downward. :( I don't want an end to paper, I'm just much more for ebook growth!

















Paperback is plodding along. It is neither doing great nor poorly. As noted before, I suspect this is due to non-fiction sales holding out in pbook form better than novels.
















The seasonal chart shows the accelerating decline of MMPB. :( I do not wish to go into more detail of my favorite print form factor than to note sales should be two and a half times higher than they were in May just to be OK.














The seasonal Children's chart raises a question: Did May sales just steal from the mid-year? Or was their a 'hot book' I missed a la Harry Potter? (Or did the PR on the movie sell a bunch more Harry Potter books?)















While there are starting to be seasonal patterns in ebook sales, the trend is clear, fast year over year growth!





















I promised a return to this chart. I've noticed that a line drawn through December and the following May sales is the yearly trend. So what if I extrapolate ebook sales on a multi-year basis? We see the trend in trade drop below ebooks in 2013. I think the crossing will be earlier (due to continued ebook sales acceleration).




















I'm excited for the growth in ebooks. I'm also very happy to see print holding up better than I expected. Nothing would be better than a straight growth of the book market. :) I'm very curious to see the data on July (mid-year ebook peak). I also think my prediction of 50% ebooks by end of January 2013 is quite safe.


Got Popcorn?
Neil

How many authors have defected so self publishing?

Indie authors do very well in the mid-list. I blogged before on poor mmpb sales. If you write serial fiction, romance, sci-fi, erotica, and a few other genres, the door is closed for most authors in these genres to go the 'big6 route.' If your foot isn't already in the door... I just do not see where the money is going to come from to support new authors.

Harlequin's crew the author royalties, non-compete clauses,, low publisher support of new authors, and low publish royalty rates. How are the publishers gaining new authors?

Numerous old school authors are self-publishing their old works. Why wasn't this already done by the big6 (as much as legally possible)? Indie authors shouldn't fear the back list. Indie authors should cheer on the backlists coming to ebooks. Why? Further pull of readers to ebooks only grants a larger potential audience to new authors.

I do my own estimates of indie author sales... However, all indications are that I'm being too conservative. Does anyone have a good link on indie author market share?

Neil

Foxcon will be making a lot of Kindles!

Digitimes delivers another scoop


In addition to the new tablet PC orders, Foxconn currently is also likely to produce 12 million units of Kindles for Amazon,

Ok, you can read more about the tablets, for ebook enthusiasts, the important number is the quantity of Kindles being bought (to be sold to you and me).

Oh, I'm excited about the tablets and the potential for a Kindle phone. But for now, that is speculation. Knowing Amazon will keep producing Kindles in quantity is a find. :)

Got Popcorn?
Neil

10% Drop in pbook sales 1H2011

PW Blurb:

"Total unit sales of print books sold through the outlets whose sales are captured by Nielsen BookScan dropped 10.2% in the six month period ended July 3, falling to 307.1 million. Among categories, the biggest decline came in adult fiction with units off 25.7%, while mass market paperback had the steepest decline among formats with units down 26.6% in the period. BookScan totals cover about 75% of the outlets where print books are sold. For a more complete report, see Monday's issue of Publishers Weekly."

My latest charts support these numbers. But here is the deal... This isn't year one of the decline; it is year two. For MMPB, it is year #3 of the decline. So comparing YOY is a bit misleading.

I blogged before that MMPB is now below the necessary 'economies of scale' to survive as a form factor. :( I want pbooks to survive.

Besides fiction, so far ebooks have only 'gained traction' in IT related technical references and a few other non-fiction genres. But just as ebook adoption had certain genres as pathfinders, the same will be true of non-fiction. It is a question of what is the ideal hardware and some software updates (quicker access to the index and table of contents and better linking from those sources). Oh... and Search. I'm spoiled by the Chrome web browser's search. Amazon needs to improve the search on the Kindle; improvements that will probably require touchscreen.

Got Popcorn?
Neil

Bells tolling for textbooks?

Most of my friends with young kids are concerned about the weight of textbooks their children must lug around. More than a few went to the expense of buying 2nd sets of texts so there was never that panic ride back to the school locker. Now, more and more schools are putting the relevant text and homework online, at least here in Southern California.

What I post I do not post lightly. A friend of ours, through our older daughter, was laid off from a textbook related job recently.


South Korea is initiating a switch to ebook textbooks. Now, it wouldn't surprise me if South Korea is helping fund Samsung and LG to develop a better 'textbook tablet.' Oh wait, a country actually getting behind industry to help found a new industry? Wow...

I wonder how long it will take the US to follow? 2014 is a long way off...

Got Popcorn?
Neil

Future of ereaders

I've over-used this link. It comes up again to point out why ereader growth will be excellent this holiday season. If you will, a rebuttal to the publisher FUD:

With the WSJ publishing another "beware the slushpile article," (ht JA Konrath's blog comments). Here is the deal, the #1 resistance is price.

I suspect for years to come the bulk of ereaders will be given as gifts. I really have trouble seeing gifts > $100 for anyone but a parent, close sibling, spouse, or child; let's call this 'group #1.' But many won't give > $100 gifts. Hence why I think the LeapPad is $99 (but the books are $25!).

For Nephews and nieces and a few others in what I'll call 'group #2', I can see $70 being a gift limit. For this group, 'with special offers' becomes practical; while with 'group #1' I suspect it would look bad to give a discounted gift 'with offers.' For many, $50 will be the limit for this group.


See Fig. 11 of my first link. Only 46% are willing to buy ereaders at today's prices ($139 w/o offers); that doesn't mean 46% of the potential has bought an e-reader (that will take while). I suspect for gifts, the 'willing price' drops a little for anyone not special enough in group #1, we'll see more price resistance. Per Fig. 11, ereader sales open the 'potential market' by ~80% at sub< $100 (46% to 79% is about 80% market growth); don't forget not all of the current market is an early adopter.

So we *need* that $99 Kindle/Nook in 2011. :) Honestly, I suspect $70 is the true price barrier. e.g. The dash alarm clock at its normal price of almost $100 isn't a great alarm clock. But at $70, it became my father's day gift. A similar 'price resistance' will be true with e-readers.

Citibank analyst is predicting 17.5M Kindles in 2011. I think, like every other Kindle sales estimate so far, that this prediction is going to understate the market.

Note: I expect the rumored Kindle tablet to really shake up the market. I *really* would be enjoying a device where I could blog in 'glaring light' right now. Mirasol or e-ink, I'm ready for a tablet with a bluetooth keyboard that works in light LCDs are 'washed out.'

I see a market splitting in multiple markets (as all mature markets do). IMHO, e-ink or other 'glare friendly' technologies will dominate reading devices. LCD is just too much an 'office light' device.
1. Dedicated, cheap, and light e-readers. The 6" format will probably hold on. However, if the LeapPad's 5" works, I see no reason a smaller form factor won't be adopted at the lower price points. :)
2. E-reader phones at both the 5" and 7" form factor. IMHO, these devices are required for a fast boost to US e-reader adoption.
3. 7" and to a lesser extent (due to weight) 10% tablets utilized for dual purpose.

The less 'ideal' a reader, the more the device will be used for 'convenience reading' (e.g., I see this at the pediatrician and parks with smartphones) or by people who read less than 20 books per year who want a multi-purpose device.


Ereading will grow. Expect customers to be outside playing this time of year and not browsing for a new electronic toy. But as soon as the weather turns south...

Got Popcorn?
Neil

ps
Anyone else suspect that ereading was granted a 'leg up' by the unusually long winter this year in the Northeast US?

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? ;)