A Digital World

Yesterday (April 14th) the Association of American Publishers (AAP) released their February 2011 sales report. The AAP produce such reports monthly and yearly, based on data provided to them by 84 U.S. publishing houses (major commercial, educational, professional, scholarly and independents). 16 houses provide them with eBook data. The figures for February 2011 are startling. Here are some excerpts from the report, which is ominously entitled E-books rank as the #1 format among all trade categories for the month.


According to the February results, once again e-Books have enjoyed triple-digit percentage growth, 202.3%, vs February 2010. Adult Trade categories combined (Hardcover, Paperback and Mass Market) were $156.8M, down 34.4%. E-book sales were $90.3 Million, growing 202.3% vs February 2010.

For February 2011, e-Books ranked as the #1 format among all categories of Trade publishing (Adult Hardcover, Adult Paperback, Adult Mass Market, Children’s/Young Adult Hardcover, Children’s/Young Adult Paperback). This one-month surge is primarily attributed to a high level of strong post-holiday e-Book buying, or “loading,” by consumers who received e-Reader devices as gifts. Experts note that the expanded selection of e-Readers introduced for the holidays and the broader availability of titles are factors. Additionally, Trade publishing houses cite e-Books as generating fresh consumer interest in – and new revenue streams for – “backlist” titles, books that have been in print for at least a year. Many publishers report that e-Book readers who enjoy a newly released book will frequently buy an author’s full backlist.


For the year to date (January/February 2011 vs January/February 2010), which encompasses this heavy post-holiday buying period, e-Books grew 169.4% to $164.1M while the combined categories of print books fell 24.8% to $441.7M.


Thus the total revenue for Trade and eBooks for February 2011 according to AAP was $247.1M, with eBooks accounting for 36.54% of that. The total revenue for 2011 to date is $605.8M, with eBooks accounting for 27.09%. There are several undeniable points here - a lot of money is being generated in book sales, the majority of which is still in print books, but the rise in eBook sales is nothing short of meteoric. This obviously raises a lot of issues, such as the much discussed impact on bricks and mortar bookstores, how publishers will adapt to a lower price point model, the increasing dominance of technology companies in the book market and the fundamental change in our reading habits, which in turn affects the physical makeup of our high streets and public spaces, not to mention the very furniture in our houses.


On Monday of this week (April 11th) technology research company Gartner released one of its regular prediction reports. According to them, 17.6 million tablet devices were sold in 2010 (83.9% of those were iPads, incidentally). This year they predict 69.7 million such devices will be sold. In 2012 the figure will rise to 108.2 million and by 2015 it will reach 294.3 million tablets. Gartner believe Apple's dominance will wane by then to 47% of the market as other devices find a foothold (last week Amazon began selling a 'new' cheaper Kindle with onscreen ads). If these predictions prove to be in any way accurate, the eBook sales figures AAP are currently providing will undoubtedly be the tip of a digital iceberg.


An interesting figure quoted in the AAP report is the February 2011 decline in Children's/Young Adult Hardcover and Paperback category by 16.1%. Traditionally quoted as the reason why print books will never die, it seems that even this former safe haven is now under threat. A kindergarten in Auburn, Maine made the news this week by announcing that all 300 students would receive a free iPad2, a move that Superintendent Tom Morrill called, "a revolution in education." The school board voted unanimously to approve the plan, but this is not an isolated incident. Dozens of school districts around the U.S. have taken a similar approach. Will children and young adults take to eBooks? The New York Times says it's a done deal. In this February 4 article, kids are eschewing television to bury their heads in Christmas gift ereaders, to the delight of HarperCollins and Simon & Schuster, who report significant spikes in a market that has them salivating.


The digitalisation of books receives a lot of press, understandable given it is a world populated by writers and publishers and it is certainly fascinating (and horrifying for many whose future employment is thus rendered uncertain) to watch a very old industry cope, or not as is often the case, with enormous change. Burying one's head in the sand would seem inadvisable, though what anyone can do to hold back technological progress is debatable, as indeed is the argument over whether they should even try. Bookselling and publishing are certainly not alone in facing stiff challenges to adapt to this new environment. Spare a thought for travel agents put out of business by online flight booking, or shoe retailers outmanoeuvred by online shoe seller Zappos ($1 billion sales per annum, #23 on Fortune's top 100 companies to work for, employees offered $2000 to quit after their 4-week training as a loyalty test, managers contractually required to spend 20% of their time 'goofing off' - Zappos was bought by, guess who, Amazon in 2009). Though its long-term effects on our lifestyles, employment and topography of our cities is as yet unknowable, a digital world is upon us and there can be no going back, whether we like it or not.