e-books will soon be more important than print books

The publishing industry is in the midst of a major digital transition. In July, 2010, Amazon, the leading U.S. e-book retailer, reported that in the past three months it had sold 143 Kindle e-books for every 100 hardcover books sold.[1] Amazon CEO Jeff Bezos stated, “I predict we will surpass paperback sales sometime in the next nine to 12 months.”  Despite increasing e-book competition, Kindle e-book sales grew faster than Bezos expected and surpassed paperback sales this month, only six months after surpassing hardcover sales.  E-books now account for more than a third of all Amazon’s books sold.[2]

Predictions for the growth of e-book sales relative to print book sales differ greatly.  At the recent trade press conference Digital Book World, some publishing executives predicted that by 2014, half of all books sold in the U.S. will be e-books.  Michael Hyatt, CEO of a large trade book publisher, suggests that the 50% figure reflects e-book hype, and that a more realistic projection for e-book sales in 2014 is roughly 25%.[3] The share sold of e-books relative to print books has significant implications for publishers’ costs and revenues.  The range of predictions for e-book sales highlights the new uncertainties that traditional publishers face.

Systematically collected data provide some insight into the growing significance of e-books.  The share of e-book sales has been increasing significantly within a year.  Monthly book sales, however, have considerable volatility.  Identifying the secular trend in e-book sales requires accounting for month-to-month book sales volatility.[4]  Comparing e-books to print books also benefits from considering different classes of books.[5]  The e-books sold to consumers today are probably most comparable with adult trade books.  Considering wholesale major U.S. publishers’ domestic sales, e-books amounted to about 13% of adult trade books sales from September to November of 2010. Unit shares differ from sales share because e-books currently are priced roughly a third less than print books.  That means that the corresponding book share of e-books relative to adult trade books is about 20%.

The public importance of e-books is likely to be greater than their share in total book sales.  E-books will increase in public importance through:

  1. Experimentation.  E-books offer authors and publishers the opportunity to change more than just the book format.  Digital games, including casual social games, are the focus of a large and growing industry.  Social games suggest large new possibilities for books.
  2. Entry.  The large number of small print publishers will have greater opportunities with e-books.  Publishing is likely to become more closely integrated with other businesses.
  3. Sharing.  Digital media are more easily shared than are physical artifacts.  The greater ability to share e-books means that an e-book sale has more potential public leverage than a print book sale.
  4. Leading ideas.  Many persons continue to use older media forms long after newer ones have become popular. But new ideas tend to be distributed in new formats.

The shift to networked digital works, including e-books, is a huge change, and it’s happening rapidly.

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Data: U.S. book publishers’ sales (Excel version)


[1] In September, 2010, Amazon accounted for about 60% of U.S. e-book sales.

[2] If Amazon’s paperback sales were only slightly higher than its hardcover sales, and its e-book sales just surpassed paperback sales, then its e-book sales would account for just over a third of its total book sales.  If Amazon’s paperback sales are  considerably greater than its hardcover sales (which is probably the case), then e-book sales would account for more than a third of total sales.  On the other hand, Kindles are often given as gifts.  Persons who just received a Kindle as a Christmas or Hanukkah gift probably bought more e-books in aggregate than they will in subsequent months.  These purchase time-dynamics inflate the share of e-books sold just after Christmas.

[3] PricewaterhouseCoopers’ recent study, Turning the Page: The Future of eBooks, supports Hyatt’s alternate prediction.

[4] From Dec. 2009 to Nov. 2010, U.S. monthly adult trade book wholesale sales ranged from $159 million (January) to $358 million (October). Higher education book sales had enormous various, including some months for which the Association of American Publishers reported negative total book sales.

[5] Categorization of electronic works also matters.  The U.S. Census Bureau’s Services Annual Survey shows a relatively large share of online books to print books from 2001 to 2004.  This probably reflects electronic journals included in the category “professional, technical, and scholarly books.”

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