Back in September, The New York Times reported that eBook sales have "slowed sharply".
Now, there are signs that some e-book adopters are returning to print, or becoming hybrid readers, who juggle devices and paper. E-book sales fell by 10 percent in the first five months of this year, according to the Association of American Publishers, which collects data from nearly 1,200 publishers. Digital books accounted last year for around 20 percent of the market, roughly the same as they did a few years ago.
E-books’ declining popularity may signal that publishing, while not immune to technological upheaval, will weather the tidal wave of digital technology better than other forms of media, like music and television
I instantly pegged this story as a brazen attempt by a legacy media outlet to boost the morale of its fellow travelers in mainstream publishing, because I'd already read this report.
It turns out that the NYT's claims, based on an Association of American Publishers report, that eBook sales had fallen 10% while print showed signs of recovery, was pure wishful thinking.
Matthew Ingram at Fortune magazine interprets the data correctly.
When I first saw the story, I thought it raised two important questions, neither of which was really answered conclusively in the piece (although the second was hinted at). Namely: 1) Are e-book sales as a whole dropping, or just the sales of the publishers who are members of the AAP? And 2) Isn’t a drop in sales just a natural outcome of the publishers’ move to keep e-book prices high?
Data from the site Author Earnings, which tracks a broad spectrum of information related to digital publishing, suggests that both of those things are true. In other words, a decline in market share on the part of established publishers is being taken as evidence of a drop in e-book sales overall, and at least some of the falloff in market share that publishers have seen is likely the result of high e-book prices.The irony is sweet indeed. Last year, Hachette battled it out with Amazon for the right to set eBook prices unreasonably high. The rest of the Big 5 followed suit. They did this in a misguided effort to decrease eBook sales and push readers back into print, where the Big 5 control distribution. Now, the Big 5 are reporting decreased earnings due to falling eBook sales.
Whether the Big 5 wants to admit it or not, they are confused and, if they are smart, more than a little scared by what is happening in the business. According to a Publishers Weekly article, EBITDA (earnings before interest, taxes, depreciation and amortization) dropped last quarter and lower e-book sales were a big reason why. At HarperCollins EBITDA fell 23.6% over the same time period last year. It would have been down 33% had HC not purchased Harlequin.Like a clumsy marksman with a gun tangled up in his shoelaces, legacy publishing keeps shooting itself in the foot. The record, film, and video rental industries may have fallen to digital disintermediation, but big publishing still thinks it's a special exception to implacable market forces.
Legacy publishing's stubborn ignorance has been an open secret in self-publishing circles for years, and it's good to see awareness of their suicidal arrogance spreading. Indie authors aren't the only ones celebrating over the Author Earnings numbers, as the exodus from the Big 5 stands to benefit small publishers.
Vox Day, lead editor at small publisher Castalia House, referred to the Fortune story on his popular blog.
In other words, the share of ebook sales that belong to the major publishers have plunged from 39 percent down 26 percent due to the rise in ebooks published by Independents and Amazon itself. This is due to several factors, ranging from increasingly mediocre authors being signed by the editorial staffs to foolish pricing decisions by the business people.
I suspect the decline in the self-published category was initially due to Amazon skimming off the best of them, followed by the change in Kindle Unlimited rules that deter the publication of very short ebooks. The KU change probably also explains why Indie growth has leveled off since May.
The figures lend credence to Vox's take on events. One correction: there's been no decline in the self-published category. This misinterpretation is understandable, since Author Earnings uses the terms "indie" and "self-published" interchangeably.
Indie authors outnumber traditionally published authors in every earnings bracket but one, and the difference increases as you leave the highest-paid outliers. But even these extreme outliers are doing better with their self-published works.
It's actually self-published authors who are gaining the most from the Big 5's loss. And unless legacy publishing has a sudden epiphany and stops gouging its customers on eBooks, their share of the market will continue to shrink.