The Relentless March of E-books

The AAP released their monthly figures (for May) on Thursday, and the same trends that we have seen all year have continued. Print is in freefall.

Adult hardback dropped 38.2% year-on-year, adult trade paperback fell 14.3%, and adult mass-market paperback plunged 39.4%. By contrast, e-books grew 146.9% year-on-year.

Children’s YA paperback bucked the trend by growing in May 2011 by 4.7% year-on-year. However, when we look at how all categories are performing in the first five months of 2011, these kind of spikes tend to flatten out.

Print is being hammered. Adult hardback is down 23.4% from the same period in 2010. Adult trade paperback is down 17.9%. Adult mass-market paperback is down 30.1%. Children’s/YA hardback is down 6.3%. Children’s YA/Paperback is down 15.1%.

The only category showing growth in this time-frame – aside from religious books and audiobooks – is e-books, which grew a stunning 160.1%.

For the first five months of 2011, e-books are the #2 selling format (ahead of hardback and mass market paperback, but a little off trade paperback).

The AAP figures should always come with a few caveats. They only track the sales of a limited amount of publishers – usually the larger ones. They don’t include most smaller, independent publishers, e-publishers, or any self-publishers.

However, the trends are clear. The phenomenal growth of e-books shows no signs of abating. And print can’t seem to find the bottom. Since April, Amazon has been selling more e-books than all print categories combined, despite the fact that their e-book market share is falling and their print market share is rising.

The remaining 399 Borders stores will close between now and September (with the loss of 10,700 jobs).

There was talk of Books-A-Million making a late play for 30 to 35 stores. And while anything that keeps stores open (and keeps workers employed) should be applauded, this won’t do much to lessen the huge negative effect the Borders liquidation will have on publishers, their authors, and offline print sales.

Mike Shatzkin estimates that Borders accounted for around 10% of the average publisher’s business. He guesses that half of this business will go to Barnes & Noble and the rest will be split between online and independents (tilted towards the former).

Those who switch to online stores such as Amazon will face wall-to-wall advertisements for the Kindle. Every time they purchase a print book, they will be shown the price difference with the e-book. Every time they wait for a delivery, they will know they could have had it instantly by downloading. And they will also be exposed – for the first time – to a range of titles that are only available in digital format.

And what about all the Borders customers that will switch to Barnes & Noble? Kris Rusch has written before about the changes taking place in her branch: increased floor space for toys and games and Nook reader displays, more titles “face out” than “spine out”, and more midlisters and former bestsellers being warehoused.

On Thursday she wrote about a copy of an internal Barnes & Noble memo she received from a staffer. It announced plans to further reduce floor space for books to make way for increased amounts of toys and games, and enlarged Nook reader display areas. It also intimated that there would be a massive return of books to publishers.

So, while all those Borders stores will close, permanently reducing the amount of books on display (and ordered from publishers), their main competitor, the one who is expected to siphon off most of the Borders customers, is planning to reduce the amount of books they display and order, and return lots of the books they already have.

One more thing. While an accurate picture of the industry is always hard to come by, this situation is only going to get worse.

As mentioned above, there are severe limitations to the AAP figures. They are useful for spotting trends, but only show us self-reported data from a small number of publishers.

Neilsen Bookscan gives us a far more comprehensive picture – covering around 60% to 70% of the print market. But they don’t measure e-books. At all.

The only companies that have an idea of up-to-date, accurate, and comprehensive e-book numbers are the retailers themselves – Amazon, Barnes & Noble, Apple etc. But they only know their own figures, and they aren’t obliged (or inclined) to divulge them.

In addition, most publishers (and many self-publishers) also sell through their own sites. Even if all the retailers started posting numbers, they would still be incomplete.

The Book Industry Survey Group (in association with the AAP) will release a report in August (pushed back from July) which promises to be a comprehensive survey of the industry.

While this report will contain lots of interesting information, drawn from 1,100 publishers, it will only cover 2008, 2009, and 2010, and obviously won’t contain any information about self-publishers.

The market has changed in the last five months. That much is clear. But nobody really has any idea how much of the market has been captured by self-publishers (who predominantly sell e-books), and as such nobody has any idea of the actual market share of e-books.

With every step forward that e-books take, with every writer that switches to self-publishing, those already imperfect monthly AAP figures become even less representative of the industry as a whole.

I would argue that this affects publishing houses more than self-publishers. Essentially, we have gone “all in” with online and e-books. Some of us may produce print versions of some books, but would usually restrict the sale of those to online venues such as Amazon.

We don’t expend a lot of effort getting those print versions into bricks-and-mortar stores and, as such, we don’t really have to make strategic decisions about how to allocate our time and resources.

We have already placed our bets.

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Martin Lake has posted the second part of an interview with me about why I wrote Let’s Get Digital and my plans for the future (first part here). And Marcin Wrona has posted a chat about writing in general. Thanks to both of them.