The Stupendous Growth of E-Books in 2011; Will It Continue?
According to numbers released today, e-book revenue for U.S. publishers doubled to over $2 billion in 2011, a number that means big changes have already occurred in the book publishing industry and that more are on the way.
I know 2011 seems like a million years ago considering what has happened in 2012 so far, but these are the first comprehensive numbers that show just how big e-books grew last year. The report comes from BookStats, a joint venture of the Association of American Publishers and the Book Industry Study Group; BookStats gets its data from nearly 2,000U.S.publishers across the four major branches of publishing: trade (all the books directed toward regular consumers), K-12, higher education, and professional and scholarly publishing.
I generally focus on what’s going on in trade publishing. Let me put it into perspective for you:
– In 2010, the trade publishing industry had $13.90 billion in revenues and of that, $869 million was from e-books, or about 6% of the total
– In 2011, overall trade revenues barely moved to $13.97 billion, an increase of 0.5%, while e-book revenues jumped to $2.07 billion, or about 15% of the total
That means that while the trade publishing industry was basically flat in 2011, over $1 billion in revenue ($1.2 billion, to be exact) shifted from print books to e-books.
The number $2 billion in and of itself is not a significant figure any more than its already huge size indicates. What will be significant is when the e-book revenue is high enough to force fundamental changes in the business (more than it already has). Once e-book revenue reaches, say, 50% of total trade publishing revenue, that will mean that a lot of support businesses like packagers, distributors and, of course, bricks-and-mortar retailers will have a different paradigm under which to operate — not to mention the publishers themselves.
How We Lost Bookshops Thanks to Amazon and Publishers
Why does Amazon rule supreme in book sales? Bookseller Tim Waterstone recounts the story of how his eponymous chain was ruined by a short-term business mindset and publishers giving in to the internet behemoth.
The tragedy for Waterstones under HMV’s ownership and underinvestment, was that our most precious possession—the loyalty and affection of our customers—fast eroded as the quality of the bookshops deteriorated. It was not just their physical appearance, dire as many of them became, but the quality and expertise of the inventory, the lifeblood of what Waterstones was always about.
Research had shown for years that we were catering for a consumer market of barely twenty per cent of the population. What HMV found impossible to understand was how we—the managers—knew these numbers, and yet accepted them. More than accepted them—embraced them. We knew that the one person in five who used our stores trusted and loved them. Successive Readers Digest surveys of the time, taken across a huge sample of 14,500 British families, ranked Waterstones as the fourth (out of more than eighty nominated) most admired retail group in the country, beaten by only the cherished Marks & Spencer, John Lewis, and Waitrose. For a bookseller, it was astonishing stuff. The key to it all was this; that the 20% of the population were heavy, committed book buyers. They purchased at least fifty books a year, and with Waterstones now across the country, they bought them from us. We fitted the profile of what they wanted a “real” bookshop to be. Rocket science it wasn’t. Effective retailing it was. Our £ sales per square foot across nearly 200 stores reached over £340. This was the highest of any multi-store bookseller in the world, though UK book readership was relatively high, it is true (eg to take 2007—just before the ebook revolution, the US market only aggregated $12.3bn, against the UK’s $5.8bn—around two times, despite a population at least five times greater).
Publishers get ready to go to war withPoland’s version of MegaUpload
A group of book publishing companies are filing a suit in Polandagainst Chomikuj.pl, a popular file-sharing service. The publishers are planning to take the website to court after the summer break, according to Polish newspaper Rzeczpospolita.
Poland’s publishing industry trade body, the Polish Chamber of Books, has been looking into legal action against Chomikuj (which means ‘to hamster’ in Polish) for a couple of years now, but has failed to get backing from enough publishers to bring a class action lawsuit.
With a sufficient number of publishers now on board, and the publishers – including legal publisher C.H. Beck and scientific publisher PWN – are ready to demand the portal’s closure, the paper reports.
The Polish market for books is worth close to a $1bn a year, according to the Polish Chamber of Books.
For those outsidePoland, the Chomikuj.pl site might not be a familiar one, but the service (which is akin to MegaUpload in both function and use) is massively popular in the country, drawing around 6 million unique users every month.
Officially, the service is for storing content online. Unofficially, the content is often pirated, and shared illegally between multiple users and it’s drawn the ire of publishers for being used to share their books as PDFs.
Like its cousins, Chomikuj defends itself by saying that it’s only offering a vehicle for users to back-up the content they own, and that it can do nothing about those individuals who choose to misuse it.
Chomikuj also claims it has tried on several occasions to negotiate with content producers. However, it says, the publishers aren’t interested and only want the service shut down.
Guardian publisher reports losses of £44m
Operating losses at Guardian News & Media, the publisher of The Guardian and the Observer, deepened from £31.1m to £44.2m in the year to April as investment in digital publishing more than offset double-digit revenue growth from its digital operations.
Alan Rusbridger, editor-in-chief, told staff in a meeting that the newspapers would look to save £7m from the editorial budget this year and reduce headcount by up to 100, out of a total of 650 staff, through a voluntary redundancy programme.
GNM said it was on track to make savings of £25m by the 2016-17 financial year. The decision followed a series of ineffectual attempts by The Guardian to stem the tide of falling advertising.
GNM reported revenues of £196.2m in the year to April 1, down slightly from £198.2m the year before as cover price rises and an increase in digital revenues helped counter falling print revenues.
The Guardian and Observer saw a 16.3 per cent rise in digital revenues to £45.7m on 38 per cent growth in its online audience. The September 2011 launch of aUSnews site led to an 80 per cent rise in itsUSaudience to more than 20m unique monthly users, it said.
Mr Rusbridger told staff GNM would become “smaller” and its newspapers would do “less of what’s called commodity journalism, so that we can do more on our core purpose and the type of journalism that we’re here to do”.
He has already said GNM aims to shift focus from print to online journalism and to make its newspaper coverage, “more Newsnight than News at Ten” – in other words, focused on analysis rather than reporting.
GNM’s cash balance and investment fund stood at £225.8m on April 1, up from £197.4m a year earlier, on the back of income from Auto Trader, theUK’s leading motoring website in which it has a 50.1 per cent stake.
Publishing Looks for S&M
Publishing goes looking for S&M on the heels of the ’50 Shades’ craze that shows no sign of dying.
With more than 20 million copies sold in four months in the U.S., the erotic Fifty Shades trilogy seems to be giving mouth-to-mouth to the barely breathing book industry—and slipping in some tongue for good measure. The series accounted for one in five adult print books sold this spring, so it makes sense that publishers are scrambling to reproduce its success.
“E.L. James has opened up these genres to a whole new subset of readers who might not have previously been familiar with them,” said Paul Bogaards, executive vice president of Knopf, whose imprint, Vintage, publishes Fifty Shades. Sylvia Day’s Bared to You, an erotic romance with Grey-like themes (emotionally burdened characters and rough sex), has climbed to the top 10 on several bestseller lists. Originally self-published in April, Bared to You was picked up a month later by Berkley Books and marketed as a Fifty Shades clone, down to its gray book jacket featuring a pair of cuff links and the tagline: “He possessed me and obsessed me.”
Day insists Bared to You is different from Fifty Shades because it’s not a Cinderella story, but she didn’t fightBerkley’s marketing strategy and even thanked E.L. James in the back of the book.
“Fifty Shades has absolutely contributed to sales,” said Day, whose previous bestselling book, Bad Boys Ahoy!, sold about 9,000 copies. Bared to You has already sold roughly 10 times that number.
Memo to DOJ: Drop the Apple E-Books Suit
Restoring Amazon’s monopoly in digital publishing is not in the public interest.
Recently the Department of Justice filed suit against Apple and major publishers, alleging that they colluded to raise prices in the digital books market. While the claim sounds plausible on its face, the suit could wipe out the publishing industry as we know it, making it much harder for young authors to get published.
The suit will restore Amazon to the dominant position atop the e-books market it occupied for years before competition arrived in the form of Apple. If that happens, consumers will be forced to accept whatever prices Amazon sets.
All of us will lose the vibrant resources a diverse publishing universe provides. As Scott Turow, president of the Author’s Guild, has explained, the Justice Department’s suit is “grim news for everyone who cherishes a rich literary culture.” These losses will be particularly felt inNew York, which is home not only to many publishers, but also to a burgeoning digital innovation industry.
The e-books marketplace provides a perfect example of the challenges traditional industries face in adapting to the Internet economy. Amazon took an early lead in e-book sales, capturing 90% of the retail market. Because of its large product catalog, Amazon could afford to sell e-books below cost.
This model may have served Amazon well, but it put publishers and authors at a distinct disadvantage as they continued to try to market paper books and pave a way forward for a digital future. Without viable retail competitors, publishers were forced to make a Hobson’s choice. They could allow their books to be sold at the prices Amazon set, thus undercutting their own current hardcopy sales and the future pricing expectations for digital books—or stay out of the e-books market entirely. In an increasingly digital age, the latter was simply not an option.
Amazon to focus on same-day delivery?
(CNN) – One of Amazon’s biggest advantages over local stores and mega-chains like Walmart is its lack of sales tax in most states.
People can hop in a car and go buy a product from a local store immediately; or they can pay less, make the purchase quickly from a computer or smartphone and wait for the product to be shipped to their doorstep as soon as the next morning.
Amazon has fought hard to avoid collecting sales tax during its 18-year history by setting up distribution centers in select tax-friendly states. But a new report in the Financial Times says the company is changing its strategy, setting up distribution centers across theUnited Statesin locations that insist on collecting sales tax.
Why would the company want to give up its price advantage? A spokeswoman for Amazon wouldn’t comment on the report when contacted by CNN. But the Financial Times thinks it’s so it can start making same-day deliveries.