The rise of e-books: IDPF reports November e-book sales up 108 percentâ€”and hereâ€™s some analysis
By Mark Coker, founder of Smashwords
Mark Coker is founder of Smashwords and Dovetail Public Relations, as well as moderator of a February 10 panel at Tools of Change on â€œThe Rise of E-Book.â€ See a San Jose Mercury News Q & A on Smashwords (a publisher for independent writers), which recently signed a Stanza-related distribution deal. – D.R.
The IDPF says e-book sales were up 108 percent for the month of November 2008 compared to the same period a year ago. The data is provided in conjunction with surveys conducted by the American Association of Publishers, and represents wholesale sales from only 13 U.S.-based e-book publishers, so total reported sales figures understate actual sales.
For the first eleven months of 2008, e-book sales were up about 64 percent, according to the IDPF.
Dig beneath the surface, and the numbers are striking. E-book sales are surging while the entire trade book industry suffers a decline. Are print sales suffering at the hands of e-book sales? Unlikely. Something else is happening.
For the five years between 2002 and 2007 (click here for data; opens a PDF), overall trade book sales averaged an annual increase of 2.5 percent. Thatâ€™s lower than inflation, which means unit sales probably decreased.
By contrast, e-books for the same period turned in a 55.7 percent average annualized increase in sales revenue.
Tiny baseâ€”but still an accelerating growth rate
Granted, the robust sales growth for e-books was off of a tiny base to begin with. But fast forward to October of 2008, the date for which year-to-date sales are reported on the AAP web site , and you see overall trade book sales for the first 9 months of the year were down 3.4 percent while e-book sales were up about 58 percent. So the rate of e-book sales accelerated during the first 9 months of 2008 compared to the previous five years.
More interesting, for the month of October the AAP reported overall trade book sales suffered a 20 percent drop in the year over year monthly comparison, while e-book sales accelerated to 73 percent growth.
Numbers for November and December arenâ€™t yet published on the AAP site, though todayâ€™s numbers from the IDPF, which are supplied by the AAP, indicated that e-book sales have accelerated yet again, up 108 percent for November.
As any numbers guy or gal will tell you, itâ€™s easy to show great sales growth when youâ€™re growing off of a small base. But when sales show sequential acceleration off of sequentially increasing bases (meaning, you grow faster as you grow larger), then something really interesting is taking place.
If we conservatively estimate that overall trade sales for 2008 declined 3 percent, and e-books sales increased 70 percent, then wholesale e-book sales will rise to $114 million and overall trade book sales will decline to $24.21 billion. In other words, e-books will still only represent 1/2 of 1 percent of book industry sales, at least here in the US.
If you extrapolate the 70 percent growth for five more years (and I would argue that 70 percent is a relatively conservative number), then e-books rise to $1.6 billion, and assuming a 2 percent growth rate of the overall trade book sales to $26.7 billion (generous), e-books would then represent a respectable 6 percent of sales.
If youâ€™re attending the Tools of Change conference February 9-11, I invite you to attend a panel Iâ€™m moderating entitled, â€œThe Rise of E-Books,â€ where weâ€™ll explore the past, present and future of e-books and try to understand the implications of these numbers for publishers and authors alike.
In the meantime, if youâ€™re an author, you need to start exposing your books to the digital realm. Clearly, as the numbers above indicate, you should continue to publish in print because e-book sales will account for only a small percentage of your overall sales. In the years ahead, however, e-books will become an increasingly important format for book consumption.