Tuesday, December 16, 2014

Sales of Printed Books Are Growing? Impossible!

Amazon's current #1 book
For years, the pundits have been telling us that all forms of print media would steadily shrink and shrivel as consumers switch to digital media. But here are two recent indications from the U.S. book industry that reality will be a bit more complicated than the soothsayers would have us believe:

1) Unit sales of printed books are on track to increase this year. (Update: It's official: Sales were up 2.4% in 2014.)

2) During the third quarter of 2014, print books actually took market share from ebooks.

“The industry is poised to post its first increase in print sales since 2008,” Publishers Weekly reported last month, citing BookScan data showing a 2% sales bump so far this year.  That report was followed by two consecutive weeks of sales that were up 5% versus last year.

When I wrote in 2012 that U.S. sales of ebooks had apparently plateaued, I was chastised as some kind of Luddite even though I was merely reporting on industry figures. Booming iPad sales surely meant that more people would switch from print to digital for their book reading, meaning more e-books and the continuing decline of printed books, I was told.

“This is the second inning of a long ball game,” my cyber-friend BoSacks commented. “Digital will win and it won’t need extra innings.” He was not alone in thinking that printed books would soon become a niche format.

“Given the explosive growth of ebook sales since the launch of the Kindle in 2007, with increases in the triple digits for several years, many expected the paper book industry to remain in retreat for the foreseeable future,” Claire Fallon of the Huffington Post noted a couple of months ago. “Recently, however, ebook gains seem to have stabilized with hardcover and paperback books still comfortably dominant. In 2013, sales growth for ebooks slowed to single digits.” (Editor’s note: Industry data don’t always capture sales of self-published ebooks.)

Where's the fat lady?
“In mature markets, we are seeing solid growth in digital while print book sales are proving resilient,” says Jonathan Nowell, president of Nielsen Book.  (Note to BoSacks: Better call the bullpen. The starting pitchers are running out of gas, and the fat lady ain't ready to sing.)

So why did the Ebook Revolution that was supposed to have thoroughly disrupted (hate that word!) the traditional book industry apparently peter out with a U.S. market share of barely 20%? There are several reasons, with lessons for other media that are undergoing digital transformations. (Take note, fellow magazine publishers):
  • Low-hanging fruit: For the first few years after the Kindle was introduced in 2007, ebook growth was explosive but also narrowly focused on certain categories. The ebook format became most popular in genres that are read from first page to last, such as novels and biographies, but is barely a blip in photography and some types of reference books. Once most of the book-a-week romance and suspense buyers bought an e-reader or tablet, further growth of ebooks had to be based on grabbing harder-to-reach fruit. 
  • Legacy publishers adapt: The pundits tend to assume that decades-old publishers will lumber along like dinosaurs, oblivious to the digital meteor strike that will soon lead to their extinction. But book publishers didn’t just sit back and watch while ebooks lowered the barriers to entry and raised the chances of success for a new wave of self-publishers. Self-published ebooks became the new slush pile, where the big book publishers went looking for authors worth signing. The big players have also studied the most entrepreneurial self- and non-traditional publishers, adapting their methods to selling both print and ebooks. It's a bit like the magazine industry (um, magazine media industry), where the Internet Revolution has led not led to destruction of the savvy but rather their transformation into multi-media ventures. 
  • On demand: Printing technology hasn’t stood still, either. In the past couple of years, the equipment and infrastructure for print on demand have blossomed – to the detriment of traditional book printers but to the benefit of book publishers. The ability to print one book at a time economically on an as-needed basis has enabled the industry to slash its inventory costs and reduce the risks of book launches. Backlist titles that were out of print for years are suddenly available again. Using POD, self-published ebook authors can easily create print editions with virtually no upfront costs. 
  • Consumers didn’t take sides: Some proponents see ebooks in terms of a holy war that is liberating authors from the shackles of Big Print (traditional book publishers). They assumed that once people “converted,” they would never go back to print. But readers didn’t get the message; few book readers have given up print entirely. They expect ebooks when they want ebooks and print when they want print. They buy e-books to read to their children, then shell out for print editions of the kids’ favorites. The same executive who furtively read Fifty Shades of Gray on her Kindle while flying to a business meeting will proudly peruse her print edition of The Great Gatsby on the flight home. 
  • Digital is not the enemy of print: Where is it written that people will buy only a fixed number of books, so that every ebook sold means the sale of one less printed book? Ebooks have drastically lowered the barriers to entry for new titles and new authors; the best usually find their way into print. That means more choices for consumers, which tends to increase overall sales. 
What of the future? Though some of my fellow print geeks see ebooks as a passing fad that will eventually lose out to "real" books, I’m not so sure.

What happens if ebook technology becomes more suited to sharing, highlighting, Post-It Noting, attractive photo spreads, and reading on smart phones? Will Amazon uses its market power to bolster ebooks at the expense of print? What happens if Barnes & Noble collapses? (Indie bookstores will pick up all the slack? Really?) Will ebook subscription services be a game changer?

I can offer only two predictions: Anyone who blithely projects that recent trends will continue unabated into the next decade will be proven wrong. And, as Jonathan Nowell of Nielsen Book says: “For the foreseeable future, we will operate in a hybrid print and digital world.”

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Thad McIlroy said...

Excellent summary -- nice to see one that captures all sides of the issue.

For me the wild card is mobile, smartphones in particular. The eyeball shift has turned from a trend into a torrent. Ebooks play OK on smartphones -- some people use phones as their primary ereading device. And the phablets are upping the ante -- screen roughly as large as mini-tablets.

But the competition for eyeballs is fierce and books are just a tougher slog for most people than games, video and social.

An argument can be made that because the smartphone experience isn't optimized for extended reading, the merits of print books shine brighter.

Interesting times, and when all is said and done, promising times.

BoSacks said...

I stand by my original comment, but I suggest that it is only the 4th inning of the playoffs and the Guttenville Offsetters have made a nice comeback, with a few doubledays in clutch situations, but the game ain't over. Let’s review again in 5 years and see the score.


Martin Foner said...

I have been almost screaming now for years this "watch out for fads masquerading as reality" line, but to no avail in the industry. Now, as each new survey comes out showing flat ebook, or increased print, or teens choosing print over ebook, the 'new age' pundits keep saying... see us in five years...Well, as I have said now for almost a decade... I will still be HERE in five years... will your ebook business be as good? I will be anxious to see.

Charles Cooper said...

For me the key is that its obvious people want to get information in a variety of ways. Sometimes it's on paper, sometimes it's a digital print.

I see young people reading books and magazines on the subway - then they take out a phone or tablet to check on something, and go back to their dead tree book...

It's not age related (there are more young people reading books on the subway and older people reading tablets) and it's not an either/or situation, despite what some pundits (Everything must be digital! Paper is dead!) think.

Interesting and promising times, as Thad said.

newsstandpromos said...

There's still a long way to go in this and it I'm not entirely sure that we're in the 4th inning as Bo suggests. This is still spring training. That's why I find the writings of most media fabulists both amusing and infuriating.