A humble attempt to rein in some of the more, *exuberant*, e-book predictions.
Primary Source: publishers.org – AAP Reports Publisher Book Sales for August Year to Date, E-Book Sales Comprise 9.0% of Trade Book Sales
Repeated by:
Publisher’s Weekly, Shelf Awareness, mediabistro.com, Mashable, Authorlink.com, and by digitalbookworld.com whose headline asks, Does Ebook Growth Mask Market Share Declines?
digitalbookworld.com also links to this article at the Los Angeles Times
Turns out the iPad has actually helped Amazon. Not only are sales of the Kindle device expected to grow 140% this year to nearly 5 million units from 2009, but digital book sales via the Kindle store are on track to grow 195% to $701 million in 2010, according to Cowen and Co., which released a report Monday on the digital book market.
I have no idea who Cowen & Co. are, and where they get their numbers — but $701 Million would be an average of $58 Million a month (just for Amazon, while the AAP reports to date show a record breaking high of ebook sales in July of $40.8 Million) and that seems, um, optimistic? There aren’t enough smaller publishers & independents/self publishers selling (even collectively) the millions required to make up that gap. The L.A. Times also calls Cowen on this point:
Cowen estimates Amazon currently having 76% of the ebook market, which would put the overall market at approximately $922 million, while the AAP/IDPF sales data is only tracking sales of $259.5 million year-to-date. Ebook sales of the twelve publishers they track would have to average $132.5 million/month through the end of the year to match Cowen’s projections, a highly unlikely occurrence.
My independent analysis of Amazon (based on things like Amazon’s own annual reports and a quartet of industry trade associations & tracking sites) points toward Amazon having at least $2 billion (and perhaps as much as $5 Billion, though that seems unlikely as Amazon reports total ‘media’ sales of $5.9 Billion, and that includes CDs, digital music downloads, DVDs, Blu-Ray, video on demand, and PC & console games — which in a nutshell is why my estimate of Amazon was only, only $2 Billion in books.)
I don’t know how much of Amazon’s book business is e-book downloads, but I doubt it’s anywhere near 50% yet — no matter how popular the Kindle is. 5 Million Kindles is still only one Kindle for every 60 Americans (and the Kindle is sold not just in the US, but internationally) and out of the other 59 Americans, I bet at least 2 (just 4% of the population) buy physical books through Amazon, and do so in enough numbers to make e-books (even those bought by gonzo, insane early adopters) only a fraction of the total.
It’s a growing business, sure. And that’s why it gets all this press, and the high expectations and the inflated reporting and all the rest.
Triple Digit Growth! It’s New! It’s E! It’s Digital!
Yeah… about that. I mean, sure, it’s early days yet – so of course there’s massive growth. But does no one remember the tech bubble, just 10 years past? Don’t bet the farm on ebooks.
Here’s what it looks like, to scale:
That’s for the past 30 months. Publishing is a huge industry, and ebooks are new and flash and doubling in sales each year —
and are still hardly a blip.
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I hate to do it. I mean, I really hate to drop actual math on top of what MBAs and financial analysts do for a living; but I know books and I like to kid myself that I know numbers.
And there isn’t any money to be made telling folks that trends may be going up, but not by as much as you think. (commissions are made by making hay off of things that seem significant in the short term but which don’t pan out.)
So far, using the numbers actually reported by publishers, e-book sales are growing – in fact they are growing geometrically, but not exponentially.
Here, let me run some projections:
Given sales to date and apparent trends, I predict e-books will constitute at least $100 Million in sales and may account for as much as $180 Million each month in 2½ years time — but compared to an industry that manages $500 Million in sales per month, and often much more, and even making a comparison to only trade books and assuming any e-book sale cannibalizes other retail book sales — retail of actual books will be at least twice and more often triple e-book sales.
E-books are here, and the segment is growing. but the business isn’t all-E, all the time yet. If anything: e-books represent the growth of the industry while older formats and business models continue, and continue to be profitable — it isn’t e- versus book, but both, and both at the same time.
Book retail looks bad, for now, but we’re in a recession. After a couple years of recovery, ask me again what I think about the future of bookstores.
