The flattening of e-book sales

In a post on the first day of this year, I noted the surprisingly rapid decline in e-book sales growth over the course of 2012. The trend appears to be continuing this year. The Association of American Publishers reports that in the first quarter of 2013, overall e-book sales in the U.S. trade market grew by just 5 percent over where they were in the same period in 2012. The explosive growth of the last few years has basically petered out, according to the AAP numbers*:


Looking at the major segments of the trade market, e-book sales were up 13.6 percent in the adult segment, down  30.1 percent in the children’s segment, and down 0.6 percent in the religious segment. The children’s segment accounted for a big part of e-book growth last year, thanks in large measure to the Hunger Games franchise, but that boost has proved temporary.

E-books are still taking share from printed books, as overall trade sales declined by 4.7 percent in the quarter, but the anemic growth of the electronic market calls into question the strength of the so-called “digital revolution” in the book business. E-books now represent a bit less than 25 percent of total book sales. That’s an impressive share, but it’s still a long way from dominance. Other big e-book markets also show signs of maturing. A new Nielsen Research report indicates that UK e-book sales actually declined slightly in April from year-earlier levels.

I speculated in my January post about some reasons why e-books may fall short of expectations:

1. We may be discovering that e-books are well suited to some types of books (like genre fiction)  but not well suited to other types (like nonfiction and literary fiction) and are well suited to certain reading situations (plane trips) but less well suited to others (lying on the couch at home). The e-book may turn out to be more a complement to the printed book, as audiobooks have long been, rather than an outright substitute.

2. The early adopters, who tend also to be the enthusiastic adopters, have already made their move to e-books. Further converts will be harder to come by, particularly given the fact that 59 percent of American book readers say they have “no interest” in e-books, according to the Bowker report.

3. The advantages of printed books have been underrated, while the advantages of e-books have been overrated.

4. The early buyers of e-readers quickly filled them with lots of books, most of which have not been read. The motivation to buy more e-books may be dissipating as a result. Novelty fades.

5. The shift from e-readers to tablets is putting a damper on e-book sales. With dedicated readers, pretty much the only thing you can do is buy and read books. With tablets, you have a whole lot of other options. (To put it another way: On an e-reader, the e-reading app is always running. On a tablet, it isn’t.)

6. E-book prices have not fallen the way many expected. There’s not a big price difference between an e-book and a paperback. (It’s possible, suggests one industry analyst, that Amazon is seeing a plateau in e-book sales and so is less motivated to take a loss on them for strategic reasons.)

Those still seem reasonable. Most intriguing, to me, is the possible link between the decline in dedicated e-readers (as multitasking tablets take over) and the softening of e-book sales. Are tablets less conducive to book buying and reading than e-readers were?

UPDATE: A little more confirming data: A recent report on the Canadian market, from BookNet Canada, indicates that the market share of e-books peaked in the first quarter of 2012 at 17.6% and then started falling, dropping to 12.9% in the fourth quarter of 2012. BookNet sees evidence that e-books may be “plateauing” at about 15% of the Canadian market: “‘The research suggests that the ebook market in Canada may have reached a plateau,’ says BookNet Canada President and CEO Noah Genner. ‘Early 2013 data backs this up. So far, we’re seeing the same pattern repeating itself.'”

And this from a March 2013 report on the “stalling” of e-books in the UK market: “Yet even as book sales continue to move online, ebooks are making notably slow gains, and likely slowing down the etailing book market overall. Bowker found that ebooks’ share of the UK market reached a high of 13% in July 2012, driven upward by ebook purchases of ‘Fifty Shades of Grey.’ But by November the share had fallen back down to 9%.” (Even without “Fifty Shades,” the current ebook bestseller list in the UK is “filled with erotic fiction,” reports The Guardian.)

UPDATE 2: The original version of this post described the Nielsen data as being worldwide; it actually reflects only the UK market.

*Sources of AAP data in chart: 2009 2010 2011 2012 2013. The AAP doesn’t seem to release its sales reports directly to the public, so collecting the data, from secondary sources, is a bit of a trial. In general, good information on book sales is hard to come by.

71 thoughts on “The flattening of e-book sales

  1. Steve

    Sorry to hear about your struggles. I hope things go better for you.

    I still don’t buy the case for the word piracy, and your analogy doesn’t help. If someone steals the food from your house and you starve as a result, that makes him a thief, but it still doesn’t make him a pirate.

    But I don’t suspect that piracy is the biggest thing impinging your income. The problem is that we have little good research to show whose assumptions are correct about how illicit downloading translates into dollars and lost sales (or increased sales). You assume that half of the downloaders would have paid. I tend to think it’s more likely that only one of the downloaders would have paid but two of them will introduce someone else to the book who would never have heard of it otherwise and will then buy it.

    In the pre-ebook era, there were some writers who argued that every time someone bought a book from a used bookstore, borrowed it from a friend, or checked it out of the library, they were stealing money from their pocket. And there were schemes to put taxes on photocopiers to pay into royalty funds for writers.

    I look at these historical ways that books moved around legitimately and illegitimately after their initial purchase in the predigital world and recall the photocopier wars in the 1980s, and think that most illicit downloading does not translate into lost sales and may even increase sales. You take the opposite view. And certainly the companies selling software to help solve the problem do what they can to hype the idea that piracy is robbing you blind and you should buy their software.

    We have little evidence as to whose perception is more correct, but the slight evidence we have from Tor and O’Reilly a year after removing DRM tends to favor my perception. By removing DRM, they made casual “piracy” easier, and saw no increase. This echoes what the recent history of the music recording industry: The best way to significantly reduce illicit copying is to make it easier to buy a legitimate copy that people can use on all their devices.

  2. Dana F. Blankenhorn

    Gee with Apple signing deals with publishers to keep ebook prices high, why is anyone surprised? It’s crazy to have to pay as much for an electronic file you’re going to erase as a print product you can give to a friend. The right price is much lower than what is being charged, and sales will keep going down until that right price is reached.

    HINT: It costs money to print printed books. It doesn’t cost money to deliver e-books.

  3. Nick Post author


    re: “It costs money to print printed books. It doesn’t cost money to deliver e-books.”

    I believe the physical manufacturing and distribution costs of a printed book account for about 12% of the total production costs. That’s a meaningful share, but not a huge share. And there are real costs for designing digital copies and storing and distributing the digital files, particularly with the numerous formats that digital books are sold in.

    I know we live in an age that venerates capital and treats labor as dispensable, but, really, most of the costs of producing a book go to the talented people who do the work of writing, editing, designing, copyediting, proofreading, fact-checking, indexing, and so forth.


  4. bill

    I was buying ebooks for awhile. But prices have been rising, often a used book is cheaper than eBook, and doesn’t have DRM.

    I’ve heard of several price fixing cases as well.

  5. Bill

    I prefer digital books but I switched back to paper for most purchases. That’s because I don’t like the typical licensing terms. I want to simply own the books I purchase. I also detest the annoyance and inconvenience of DRM schemes. I understand authors’ amd publishers’ issues regarding piracy, but that’s not my problem. For now, I’m sticking to paper for most reading.

  6. Aki

    As someone who has recently gotten two e-ink readers and bought my first 10 ebooks, the main issue with them is quite simply DRM. Automatic indexing of favorite highlights by social reading buddies being shown as a fractal screensaver while sharing your reading skills in the cloud doesn’t make up for the fact that you are instead of data buying a temporary license to view it on a particular company’s system, often for the same price! Luckily some publishers do sell actual non-restricted ebooks, which is the main reason for getting the other e-ink reader.

    Availability of non-fiction books is also a minor issue, but since there is now way I’d pay $50-$300 for a licence to view a reference book instead of the book itself, that has not yet had any influence on actual purchases.

  7. Richard

    I think it’s worth noting, as an early adopter myself, that I didn’t stuff my ereader full of books I never read – I stuffed it full of books I *had already read*. That is, I converted much of my physical book collection into ebooks, partially funded by trading the physical books in at a second hand book store.

    The objective was to save space in my tiny place, but I imagine the motivations could be many – in the same way that people replaced tape collections with CDs etc.

  8. Thomas

    As a long-time owner of an ebook-reader there are a couple of reasons I’m not buying a lot of e-books.
    First, its really really hard to find a legal way to buy them. Finding them for free is infinitely easier. If I *could* buy them, I would. But they are not there!
    This requires a bit of clarification. I own an onyx boox e-reader. So amazon is out. Can’t use that. Other stores do not advertise which e-book format they offer and if it will work for me. I’ve had too many times that I pay and then get offered a book that has DRM. Which in most cases means; “Don’t ever Read Me”. They don’t work.

    Second issue is a simple one; a paper book costs quite some money to produce. If you ask the same amount for an e-book then that means just one thing to me; you are stealing from me. Its not fair and I won’t enjoy reading a book I overpayed for. I also know that the publisher is typically the one getting all the money, not the author.

    Its the publishing business that is killing e-books, by making the readers feel like they are not an audience, instead that they are pure consumers to be sold products for the highest possible price.

  9. slinky

    There are several things wrong with e-books.

    Firstly, one usually cannot buy a cross-plstform format like a PDF. Instead, one gets a proprietary format, with DRM, tied into a proprietary software. You are just renting the book-like content. This is the case with e.g Google Play.

    Secondly, the prices are obscene. It is cheaper to buy a paperback (which has a very much non-zero cost of reproduction) than an e-book (which has a near-zero cost of reproduction). Furthermore, the paperback can be re-sold and some of the price recovered – this is not possible with e-books.

    In short, the situation is similar to the past where music stores insisted on using locked-down crap formats like WMA with a heavy DRM protection. Later on they caught a clue and one could buy MP3 with no DRM. The business started soaring.

    Until the e-book vendors can convince/force the publishers to behave like the music publishers in the past did, the situation will not improve.

  10. Michele

    Lisa said: To add even more HTML code as called for in referenced above, would involve even more work, either from an indexer or a coder.

    This would indeed be prohibitively time-consuming! However, it is hoped that when the standard is finalized, the major indexing software vendors will add this format to their products as an export option. So the coding would be handled by the indexing software, not done manually. You would index as you always do, using whatever your favorite indexing software is, and then simply export to EPUB format and deliver that file to the publisher, just as you now deliver rtf or whatever.

    Or, if one were doing embedded indexing in XML source files, the publisher’s automated process would produce the EPUB-encoded index from the XML files, just as it produces EPUB-encoded files for the rest of the book.

    Either way, manual encoding of an EPUB index, while possible with macros etc., isn’t the expectation, any more than one would manually encode the rest of an EPUB publication.

  11. Michele

    I don’t favor ebooks for the simple reason that when I buy something, I like to own it. I don’t want to license the right read a book — I want to own it outright, so I can do whatever I like with it: keep it forever, write in the margins, loan it to a friend, sell it to a second-hand bookstore, or cut it up and use it for a collage. Plus it just irks me to have my reading pleasure be dependent on technology. You can still read Shakespeare’s First Folio with nothing more than your eyeballs and some sunlight. Try that with a PDF in four hundred years.

    That said, the Kindle has been a godsend for my husband, who likes to read enormous doorstops by Stephen King but who only has one working arm. Holding a 500-page hardcover in one hand is quite the juggling act. So if we’re considering what is and is not “suited” to e-readers, maybe we ought to be thinking in terms of physical convenience — i.e., very large heavy books are better on an e-reader since it makes them substantially easier to carry around and read.

  12. Stephen Boulet

    Michael M. Hughes, I agree with your pricing comments and hope the industry goes that way. I’ve just purchased your book at $2.99 for example. It’s not a lot of money, and it makes it easier for me to take a chance on a new author.

  13. Darryl

    The tactile experience of reading a printed book: turning the pages, feeling the texture of the paper –the simplicity of it all, is a delight when we’re in front of screens all day surrounded by “devices”.

  14. Steve

    Nick: Thanks to the pointer on the literature review. It’s interesting, and I look forward to seeing more such reviews. It seems odd to me that they left Netflix out of the equation when talking about movies. They write: “Our interpretation of the difference between our results those in Liebowitz (2008b) is that, while music piracy was prevalent from 2000-­‐2003, movie piracy was much less developed during that period. As such increased broadband penetration from 2000-­2003 may have exposed DVD consumers to the beneficial aspects of the Internet (increased information about movies, increased product selection through online retailers, and lower prices) without being exposed to the potentially harmful aspects of the Internet (increased availability of pirated content).” So they’re looking specifically at sales. Netflix launched in the late 1990s but remained a niche service til about 2003, “when it crossed the million customer mark, at which point it really started to change rentals and to cause problems for existing movie rental companies (companies who also, unlike Netflix, sold videos). It was in 2004 when Blockbuster added its rental by mail service and the price war between the two began, along with the introduction of $1 rentals at Redbox in 2004 to further push down rental reveneus. Associating broadband penetration with increased piracy rather than increased rental by mail in that period to account for the decrease in sales, well, I’d want to look at the original paper they are glossing.

    The NBC iTunes incident was particularly interesting, and supports my contention above that the most effective way to reduce piracy is to make it easier and more convenient to get the content legally, and that removing a channel for legal access (making legal access less convenient) directly increases piracy.

  15. Steve

    I’d also be interested in seeing a study the real-world effects of the accord studios and broadcasters reached with Netflix a little over a hear ago. Does delaying access to Netflix (both disc rental and streaming) for six weeks actually increase DVD sales or simply increase piracy, as consumers who would never have bought the DVD resort to illicit filesharing to watch content they would otherwise have watched legally.

  16. Mark B

    This does not take into account ebook sales from independent authors. These sales make up a majority of the ebook market.

  17. Nick Post author

    Mark B: What are you basing that on? The latest info I’ve seen is that self-published books account for 12% of e-book sales and 2% of total book sales. You’re right that the AAP #s don’t include self-published books, hence understate total e-book share somewhat, but that probably doesn’t alter the general sales trends.

  18. Michael M. Hughes

    Stephen, first, thank you for the purchase and I hope you enjoy it.

    Secondly, the fact that it was an easy decision to purchase something by an unknown writer precisely illustrates why I think publishers are zeroing in on the “sweet spot” in pricing. Random House chose to sell my debut novel at $2.99, but they did that not arbitrarily, but after doing an enormous amount of research. I can only speak for myself and not them as a company, but it’s clear to me they’ve realized that readers of certain kinds of fiction (romance, fantasy, science fiction, and horror/thrillers like mine) buy an enormous number of ebooks. But those voracious ebook readers also do not like to pay $9.99 or, worse, the full price of a hardback or paperback book. And justifiably so. They’re more likely to purchase independently published books, too, which often sell for $1.99 or even $.99. So it only makes sense to take advantage of their appetites for new material while also pricing new books within the range that allows easy sampling and purchasing.

    I think this will help new authors, too. Publishers have expertise in cover design, marketing, promotion, and editing that is difficult to match (and very costly) when self-publishing, which is why I decided to spend years working to get a traditional publisher instead of doing it all myself. They’ve learned from the self-publishing revolution that high-quality, reasonably priced and well-written books will find an audience, so they’re creating new publisher/author models to meet the demands of the market. That can benefit authors (like me) who have met with little success in getting a traditional print contract. It is far less expensive to take a chance on a new author when going directly to digital, so publishers can take chances with edgier work, or novellas, or titles that might not fit cleanly into an empty slot on the table at B&N. There’s less up-front risk for a publisher but still the same likelihood of establishing an audience or even generating a bestseller.

    The technical quibbles about ebooks—DRM, inability to share, kludgy formatting, etc.—will be addressed as the technology matures. I do not believe ebook sales will stay flat (if indeed they really are), as just about everyone I know who starts reading digitally continues to do so, from my tech-savvy friends and their iPads to my mom and her Kindle. The important changes are in how the Big 5 publishers shift their business models to take advantage of what is clearly an enormous and challenging evolution. I’ve seen firsthand how they’re reworking the old model into something that captures the new reality, and my experience so far has been very positive.

  19. Justin Jackson

    I’d like to suggest something completely different: that perhaps, more and more ebook authors are self-publishing, and are not reported in the The Association of American Publishers’ numbers.

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