Friday 26 October 2012

The electronic revolution



By Peter Stuart Smith (AKA Max Adams, James Barrington, James Becker, Tom Kasey, Thomas Payne and Jack Steel)

Almost every time you open up a newspaper or magazine aimed at writers, agents or publishers, the topic which is sure to dominate is the rise of electronic publishing, normally backed up by figures which are either reassuring or alarming, depending upon exactly where you stand and which part of the market is likely to affect you.
One of the problems with reports of any kind is deciding how accurate the figures actually are, and in the case of book sales, with the huge variety of outlets and discounts and methods of purchasing, it is very difficult, perhaps impossible, to sort out exactly what is going on. Typical of this is a recent report by the Association of American Publishers and the Book Industry Study Group, which came up with the following data about publishing in the United States:

·                     Book publishing revenue fell by 2.5% in 2011, with total sales of $27.2 billion
·                     In contrast, the total number of books sold rose by just under 3.5%, to 2.77 billion books, the implication being that lower revenue on increased sales was caused by people buying more lower-priced ebooks
·                     388 million ebooks were sold in 2011, an increase of 210% over 2010, and ebook revenue doubled to $2.074 billion
·                     Most books are still sold through physical shops, but in 2011 sales declined by just over 12.5% to $8.59 billion, a loss primarily blamed on the closure of over 500 Borders’ book stores
·                     Online retail sales grew by 35% to $5.04 billion, this figure representing approximately 18% of total book revenue, and the biggest growing sector of the market was for books aimed at children and young adults, which saw a rise in revenue of 12%

In contrast, another recent report stated that in the last quarter of 2011, almost 30% of all book sales in the fiction category were ebooks, and 16% of all non-fiction sales as well, showing a marked increase over the same period in the previous year, when the respective percentages were 12% and 5%. These represent gains of approximately 250% and 300% respectively in these two categories, which proves – as if anybody still had any doubts about the reality of the situation – that ebooks are here to stay. Sales of juvenile ebook fiction tripled last year as well. The report concluded with a forecast that similar growth figures to these would probably be recorded over the next couple of years, after which growth in ebook sales would be likely to taper off slightly, but would still be very significant.
            A corresponding report, but looking at physical book sales, and drawing its data primarily from Nielsen Bookscan, stated that print sales were down significantly, with mass-market paperbacks selling over 25% less than last year, paperbacks 12% down and with hardcover books the least affected and showing a reduction sales of about 9%. Perhaps predictably, there was almost no reduction in sales of books intended for toddlers and very young children.
            The twin leaders of the ebook revolution are of course Amazon, both the world’s biggest online bookstore and the world’s largest electronic retailer, and the hugely successful Kindle ereader. However, not everything in Amazon’s garden is rosy. The company has seen a jump in sales this year, reporting gross revenue up by 29% to $12.8 billion dollars in the second quarter, and a hike in the share price on Wall Street to $223. The other side of the coin is that profits decreased by a massive 96% in the second quarter of 2012 compared to the previous year, and the company’s profit was a mere $7 million, a remarkably small amount of money considering the gross revenue.
            One reason for the greatly reduced profits is, oddly enough, the Kindle, but the Kindle Fire, which is selling in much smaller numbers than had been expected. I’ve mentioned this device before in this blog, and I’m by no means convinced that it’s a good idea, mainly because of the enormously reduced battery life it has – Amazon is only claiming about 11 hours, which probably means 8 or 9 would be more realistic – compared to the original Kindle, which you can use for weeks at a time without recharging it. The culprit, of course, is also the selling point: the colour screen which requires a constant power feed. And by launching the Kindle Fire, Amazon has to some extent stepped outside of its comfort zone and entered a world already occupied by tablet computers of one sort or another, a world dominated – for reasons I have yet to understand – by the grossly overpriced and barely adequate iPad.
            It remains to be seen if Amazon can exert the same level of dominance in this market as it has achieved in the world of electronic books and online retailing.

You can contact me at:
Twitter:          @pss_author
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Website link:  Brit Writers

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