Apr 162011

Well, that was fast.

This is big.

I’ve been writing monthly updates on industry e-book sales for a year now. Recently, I predicted that January 2011 e-book sales would overtake mass-market paperbacks. They did. But even I didn’t see this coming.

E-books, which have roughly doubled or tripled in sales each of the past several years, not only blew past mass-market paperback sales, not only passed adult hardcover sales, but have now overtaken adult trade paperback sales to become the largest single category of book sales in February. The numbers:

  1. E-Books: $90.3 M
  2. Adult Trade Paperbacks: $81.2 M
  3. Adult Hardcover: $46.2 M
  4. Mass-Market Paperbacks: $29.3 M

According to the release from the Association of American Publishers:

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).

Even including the children’s / young adult categories, printed books totaled $215.2 M for the month, giving e-books a staggering 29.56% share of total trade book sales. (Note: this total includes “trade” print books, but excludes educational, scholarly, and religious categories.)

E-Book sales, which accounted for about 8.2% of trade book sales in 2010, hit nearly 30% in February.

The trends are even worse for print, as e-book sales are up 202.3% (more than triple) from February of 2010, while adult trade categories are down a combined 34.4%.

A recap of the past 14 months of e-book sales:

  • Jan 2010: $31.9 M
  • Feb 2010: $28.9 M
  • Mar 2010: $28.5 M
  • Apr 2010: $27.4 M
  • May 2010: $29.3 M
  • June 2010: $29.8 M
  • July 2010: $40.8 M
  • Aug 2010: $39.0 M
  • Sep 2010: $39.9 M
  • Oct 2010: $40.7 M
  • Nov 2010: $46.6 M
  • Dec 2010: $49.5 M
  • Jan 2011: $69.9 M
  • Feb 2011: $90.3 M

It’s hard not to be blown away by these numbers. I expected e-book sales to increase, and predicted a nice bump after the 2010 holiday season (when millions of readers unwrapped Kindles and Nooks and Kobos and Sonys under their trees), but e-book sales for February are over triple what they were just 8 months prior, and nearly double what they were just two months before! February 2011 sales exceeded the (at the time very strong) post-holiday sales of the entire first quarter (Jan, Feb, Mar) of 2010. Amazing.

The two questions I have now are: (1) when will e-books get over 50% of trade book sales, and (2) will e-books stay on the pace from the first two months of the year and hit $1 billion in sales in 2011? (For the record, my predictions are: the first quarter of 2012, and yes.)

 e-books  Comments Off on February E-Book Sales Overtake Trade Paperbacks
Apr 052011

As an e-book and e-reader evangelist, and someone who really enjoys reading on my Kindle 3 and can’t imagine going back to printed books, I hear lots of arguments as to why people don’t want to give e-books a try. While some of these are valid concerns, some are (IMHO) unfounded. I’ll try to separate which is which.

“But I’ll miss the smell and feel of paper books.”

This is probably the #1 reason I hear from book-lovers who don’t want to try an e-reader. They talk about the “feel” of printed books or the “smell” of them. They often conflate fond memories of reading books in their childhood with fondling the physical pages. But what do we really enjoy about reading? Smelling paper and glue? Feeling pages? Would we have as much fun buying a ream of printer paper and just holding it in our hands? No, it’s the words that we enjoy; it’s the stories that make the book. That’s what makes the reading experience special and memorable. And all the words are still there on an e-reader — better than ever, because you can adjust the font size, look up meanings in a built-in dictionary, and take literally millions of those words with you wherever you go.

I’ve always loved books. I’ve read hundreds. I loved them so much, I wrote three of them. But I can state with 100% certainty that I do not miss the paper that books were printed on even one iota. I get just as engrossed in the words, and enjoy the story just as much on my e-reader. In fact, I find myself reading more on my Kindle, and I enjoy the reading experience more. I have it with me more often, and it’s just more comfortable to read one-handed. Believe it or not, when I switch back to paper, I find turning pages (instead of just pressing a button) slows me down!

While I hear “But I’ll miss the smell & feel of paper” quite often, I have literally never heard it from even one person who actually tried an e-reader.

“But I want to keep books on my shelf.”

I can understand this sentiment somewhat. After all, some of us enjoy keeping a particularly treasured book, or even displaying it for others to see. (On the other hand, some people like e-readers because they make it tougher to see what you’re reading — so you can catch up on that trashy romance novel during lunch without your co-workers snickering.) However, I’ve found that there are only a small handful of really great books I want to keep on my shelf (The Hitchhiker’s Guide to the Galaxy and Lamb come to mind) — and I still do. But for the vast majority of my reading — which I would have bought in paperback and not hardcover anyway — getting stuck with books once I’m through reading them is more annoyance than asset. Some avid readers run out of shelf space and rent storage space for their books! An e-reader solves that problem nicely.

“But I can’t re-sell or lend e-books.”

On a similar note, some people complain that they aren’t able to re-sell e-books like they can with printed books, which is true. However, I’ve found that it’s very rare that I’ve been able to sell used books, especially paperbacks. If you’re lucky, you might get 10 cents for them at a garage sale or a quarter from a used book store. Big deal — it’s not worth the hassle. Most e-books I buy are less expensive than print books anyway, and I’d much rather save a couple bucks up front than hope I can try to sell a used paperback for more than a pittance.

As for lending, both Amazon (Kindle) and Barnes & Noble (Nook) now allow one-time lending of some e-books (where the publisher allows it). While you can theoretically lend a print book as often as you want, e-book lending has some nice advantages as well: you don’t have to physically meet up or mail the e-book, and you get it back automatically, without having to bug your friend, and without any of the pages dog-earned or damaged. Also, Amazon allows you to share most e-books with up to 6 different people on your account — so you, your wife, your 2 kids, and your parents can all read the same e-book at the same time for one purchase price — try that with a printed book. With all these advantages, you can understand why there are some limitations on the feature — with unlimited e-book lending by email, who would buy books anymore? (Well, beyond the first copy that would then get lent millions of times!)

“But I don’t read.”

OK, this one is 100% legitimate. If you don’t like reading, you won’t magically like reading on an e-reader. (I stand behind the corollary, though: if you like reading, you will almost certainly like reading on an e-reader.)

“But an iPad (or some other multi-function LCD device) is better.”

Define “better.” Yes, an iPad, Nook Color, or other tablet computer can do many more things than an e-reader. It can play “Angry Birds” and other games, surf the Internet, watch movies, do email, etc. (While the Kindle can play some games and access the Internet, it doesn’t do those things nearly as well.)

But, which one is better for reading? The Kindle 3, hands-down. The e-Ink screen, which isn’t very good for games or Internet surfing or movies, is much easier on the eyes than an LCD screen, especially when reading for long periods or reading in sunlight. Compared to the iPad, the Kindle is also roughly 1/3rd the weight, 1/3rd the price, and the battery lasts a month instead of 10 hours.

As mentioned above, if you don’t like to read (or you only read very rarely), a multi-function tablet computer might be a better choice. But any serious reader will easily get $139 worth of value out of a Kindle 3.

“But I can’t actually own e-books, they won’t be around in 5 years, and DRM sucks.”

I’ve posted about DRM before, and it is a strike against some e-books — those e-books released by publishers who use DRM (many smaller publishers, independent authors, and public domain books don’t use DRM). And it is true that most e-book sales are actually licenses — and you should understand what that means. The two issues are related, and are admittedly more complicated than the rules surrounding printed books, which most people understand pretty well already (you can lend or re-sell, but not copy and distribute). Personally, since I stick with DRM-free e-books, and I back everything up on my computer, my e-books are much more likely to be around in 5, 15, or 50 years than a paperback I buy today and will probably donate next time I move.

“But the books I want aren’t available as e-books.”

There are some gaps in e-book availability. Some blockbusters, notably the Harry Potter series, aren’t available in electronic form due to the wishes of the author (although Rowling has recently said she might be open to e-book versions). (UPDATE: The Harry Potter e-books are available now.) Some series will maddeningly have some books available and other books in the same series not available yet (often because different publishers own the rights to different books in the series). And some e-books have geographic restrictions, where (again, for legal reasons) they’re available in certain countries and not others.

No, it’s not ideal. But there are already over 900,000 e-books available in the Amazon Kindle store, plus literally millions of public-domain e-books available from multiple sources. Over 1,000 more are added every day. E-books are still a relatively new technology, and the industry is still catching up. But I am confident that these growing pains are temporary, and become less of an issue every day. (Keep in mind, owning an e-reader doesn’t prevent you from buying that one book in print — you just won’t like it as much as your e-books. 😉 )

“But e-books are formatted poorly.”

This is sometimes true, but pretty rarely in my experience. Some publishers cut corners and scan printed books, then use OCR (optical character recognition) to convert them into e-books. You end up with missing periods, “tum” instead of “turn,” the numeral “1” instead of the letter “l,” and so on. E-book formatting ranges from pristine, to easily readable with a couple of quirks, to really annoying. This is another “growing pain,” and I think this is improving every day as well. If these sorts of issues bother you, my recommendation is to sample the e-book before you purchase and see if the formatting is up to par. If readers demand good formatting, no DRM, reasonable prices, etc., publishers will have no choice but to cooperate, or be replaced by someone who will.

“But e-books are too expensive.”

Another popular complaint. And, some of them are. (Of course, some print book prices are way too high as well.) But, on the whole, e-books are significantly less expensive than printed books. Even bestsellers usually sell for $9.99 – $12.99, which is cheaper than the average hardcover. Most older e-books range from $4.99 to $7.99, which is cheaper than most paperbacks. There are thousands of really inexpensive e-books as well (including my own for $2.99 each), and special deals for 99 cents or even free. And the millions of public domain works (including great classics) are free — that’s enough to pay for the cost of the e-reader right there, especially if you’re taking a Literature course. All in all, e-books really are pretty cheap. I mean, what else can you get for $2.99?

 e-books  Comments Off on Arguments Against E-Books: Facts & Myths
Mar 192011

January 2011 e-book sales stats are in, and they are a whopping $69.9 million, easily shattering December’s then-record $49.5 M (exceeding it by 41.2%), and more than doubling the strong January 2010 post-holiday e-book sales (an increase of 115.8%).

Jan 2011 e-book sales: this is what "off the chart" looks like.

Here’s the monthly rundown:

  • Jan 2010: $31.9 M
  • Feb 2010: $28.9 M
  • Mar 2010: $28.5 M
  • Apr 2010: $27.4 M
  • May 2010: $29.3 M
  • June 2010: $29.8 M
  • July 2010: $40.8 M
  • Aug 2010: $39.0 M
  • Sep 2010: $39.9 M
  • Oct 2010: $40.7 M
  • Nov 2010: $46.6 M
  • Dec 2010: $49.5 M
  • Jan 2011: $69.9 M

Even more impressive, e-book sales not only surpassed, but thoroughly trounced both adult mass-market paperback sales ($39.0 M) and hardcover sales ($49.1 M) for the first time ever. I would say this is a shocker, except I predicted it in my post on last month’s sales stats report, where I predicted that e-book sales would overtake mass-market paperback sales in January. Even adult trade paperback sales are looking vulnerable, at $83.6 M (although they’re probably safe until next January). Also interesting: while e-books more than doubled from last January’s sales numbers, mass market paperbacks (-30.9%), trade paperbacks (-19.7%), and hardcovers (-11.3%) all suffered double-digit percentage point drops from last year. Ouch.

One other point: these sales figures come only from large publishers; independent authors aren’t counted in these figures. For a while, we could safely be ignored as a rounding error, but considering that two separate indie authors have now hit not only #2 in the overall Kindle store, but one has now hit the #1 spot (and indies control a fair portion of the Top 100), including those sales would skew the numbers even more heavily in favor of e-books.

Just to keep things in perspective, the figures above only cover the adult book category, meaning that children’s books and educational books aren’t included. Looking at the overall numbers, total print book, e-book, and audiobook sales in January were $805.7 M (down 1.9% from last January’s $821.5 M). That makes e-books about 8.7% of all book sales by dollar amount (with lower average sale prices, they’re surely a higher percentage by number of books sold).

Another interesting note: total adult print sales declined by $44.3 M from last year, while e-books made up most of the difference, increasing $38.0 M.

I expected a large increase after what I believed would be a very successful 2010 holiday season for e-reader sales. I think a lot of people got Kindles and Nooks in December and started really buying e-books in January (perhaps with Amazon gift cards they also got for Christmas). But this much of an increase was a surprise even to me. However, I would not be shocked to see sales in February (and perhaps the next few months) dip a bit from the January peak, perhaps settling in around $60 M for the next couple of months. But I believe the overall trend will continue to see e-book sales continue their rapid growth.

 e-books  Comments Off on January E-Book Sales Overtake MMP, Hardcover

December 2010 E-Book Sales: $49.5M

 Posted by at 5:22 PM  Tagged with: ,
Feb 172011

Dec 2010 e-book sales: $49.5M

As I predicted last month, December 2010 e-book sales set another record, at $49.5M for the month, up from a then-record $46.6M in November, and $18.7M in Dec 2009. Year-over-year, Dec 2010 sales are up 164.8% from Dec 2009 numbers.

Here is a rundown of the monthly totals:

  • Jan 2010: $31.9 M
  • Feb 2010: $28.9 M
  • Mar 2010: $28.5 M
  • Apr 2010: $27.4 M
  • May 2010: $29.3 M
  • June 2010: $29.8 M
  • July 2010: $40.8 M
  • Aug 2010: $39.0 M
  • Sep 2010: $39.9 M
  • Oct 2010: $40.7 M
  • Nov 2010: $46.6 M
  • Dec 2010: $49.5 M

Q4, 2010 e-book sales: $136.8M

That puts the Q4 2010 total at a record $136.8M, up from $119.7M in Q3 2010 and $55.9M in Q4 2009. The 2010 year-end total is reported as $441.3M (which differs slightly from the $432.3M I get from summing the monthly totals, but maybe they include some extra sales figures that trickle in for their year-end calculation). Either way, it’s well above the 2009 year-end total of $166.9M, an increase of 164.4%, in fact.

Monthly e-book sales ($49.5M) haven’t quite caught mass market paperback sales ($57.1M) yet, but they’re getting ever closer as e-book sales increase dramatically and print book sales decline from 2009 levels. Mass market paperback sales were $60.2M in October 2010, and $673.5M for 2010 in total, a decrease of 6.3% from 2009 figures ($718.9M). Back in March 2010, I was amazed that e-book sales were 53% of mass-market paperback sales; in December, they were up to 86.7%. Considering how we saw a surge in e-book sales in January 2010 (after millions of people received Kindles in late December for Christmas) and a decline in print book sales (due to snow and poor winter weather), I’m still predicting e-book sales to catch or overtake mass market print sales as soon as January 2011 (which means it would have already happened, we just haven’t gotten the statistics to confirm or deny it yet). UPDATE: January results are in, with e-books easily overtaking MMP sales.

E-books continue to increase dramatically as a percentage of total book sales.

Looking at the overall picture, e-book sales constituted 3.2% of trade book sales in 2009, and that number nearly tripled, up to 8.32% in 2010. This number has more than doubled (and nearly tripled) for 3 years in a row. Of course, that kind of explosive growth can’t last forever, but what percentage of all book sales will e-books constitute in 2011? 15%? 20%? 25%? I wouldn’t bet on a number lower than 12-15%.

 e-books  Comments Off on December 2010 E-Book Sales: $49.5M

Apple vs. Amazon

 Posted by at 7:57 PM  Tagged with: , , , , ,
Feb 162011

You didn't really think they could just get along, did you?

It was only a matter of time.

Once Apple entered the e-book business back in April with the launch of the iPad and the iBook Store — and partnered with publishers to cram the agency pricing model down Amazon’s throat — a collision like this was probably inevitable. After all, Apple has been selling e-books to be read on iDevices through the iBook store, while Amazon has been selling e-books for those same iDevices through the Kindle for iPhone/iPad apps. And, it’s pretty clear which of those two e-book retailers has been more successful: Amazon still commands the strong majority of e-book sales, while Apple’s iBook Store has floundered. So, is Apple OK with Amazon moving in and selling all those e-books to iDevice owners?

Apparently not. In the past week, Apple has started “clarifying” its position on e-book stores (and magazine and newspaper publishers) selling content through iOS apps to (what Apple sees as) Apple’s customers. The first salvo was when Apple denied the Sony E-Reader app, claiming that it violated guidelines related to in-app purchases. Over the ensuing week, Apple’s position became more clear, as it is apparently gearing up to require vendors who sell content to do so through in-app purchases. At issue is the current practice of many current apps (like Kindle for iPhone) that take users to Safari to purchase e-books over the Internet, bypassing Apple’s app store and its 30% cut of all app and in-app purchase proceeds. And Apple has given existing apps until June 30 to comply with the new requirement, which is that any app offering out-of-app purchases (like those over the Internet), must also offer an in-app option (at the same price). Of course, the in-app option (which will just be a click, attached to your existing Apple account and payment method) will be much more convenient for most users than launching a website and signing in. (Crazy side-note: Apple licenses Amazon’s patented 1-Click purchasing system.) Even worse, it appears from Apple’s latest statements that apps can’t even link to outside stores (like Amazon), but only offer the in-app purchase!

“Our philosophy is simple — when Apple brings a new subscriber to the app, Apple earns a 30% share,” said CEO Steve Jobs in a statement Tuesday. “When the publisher brings an existing or new subscriber to the app, the publisher keeps 100% and Apple earns nothing.”

“Apple does require that if a publisher chooses to sell a digital subscription separately outside of the app, that same subscription offer must be made available, at the same price or less, to customers who wish to subscribe from within the app.”

Think about that for a minute: Apple will now require e-book vendors (Amazon, B&N, Sony), magazine publishers, streaming video apps, and anyone else who sells anything that can be accessed through an App Store app to remove external Internet “buy links” and instead offer an in-app purchase option. And Apple will get 30% of all of those sales. In the case of e-books, the agency model agreements already specify that e-book retailers only get 30% of the sale price, which means that Apple would get all of the profit (and then some, since Amazon has some costs) from e-book sales: 70% would go to publishers, and 30% to Apple, with Amazon getting nothing. And while it currently appears that customers could choose to bypass the one-click in-app purchase and buy directly from Amazon’s website instead (from their computer, or by going to Safari themselves), how many will? And what is to stop Apple from preventing external purchases from being usable inside an app?

Obviously, Amazon can’t let this stand. There’s no way they’re going to agree to create the world’s largest e-book store, write an iOS app, deliver e-books to customers, and provide tech support for purchases, yet give all the revenue from Kindle app users to Apple. But, Amazon has promoted the “Buy Once, Read Anywhere” tagline, as it lets users read e-books purchased from the Kindle Store on Kindles, Macs, PCs, smartphones, Android, and Apple iOS devices. Yes, pulling the Kindle for iPad app would hurt Apple and the iPad’s already-damaged reputation as an “e-reader” and would tick off customers who bought an iPad thinking they could unify their Amazon, B&N, Sony, Kobo, and Apple e-book libraries on one device, but it would also tick off Amazon customers and Kindle owners who like to read from time to time on their iPhones. It’s pretty much a lose-lose situation, but Apple seems to be forcing the issue.

What’s the upshot of all this for iDevice owners? Will their iPhones and iPads become less useful overnight? I think being able to access Kindle e-books on the iPad was an important selling feature for Apple. How much other content will iDevice users lose access to? What other apps will this new policy affect? Would you want to develop an iOS app right now?

Even more disturbing are the future ramifications of such a move by Apple. If Apple considers iOS users as its customers for third-party goods (in a way that Dell, for example, never does when you use one of their computers to buy something online), what else will they try to “tax”? Now that Apple has earned a dominant position in the mobile app field (the Apple App Store is far ahead of the Android Marketplace or any competitors), how long until it starts changing the terms on developers? Although those developers provided a large portion of the value of Apple’s “platform” (the iDevice + wide variety of cool apps in the App Store) and helped make it #1, now that Apple is the dominant smartphone and tablet computer platform, it doesn’t need any one developer nearly as much as that developer needs Apple. What’s Apple’s next move here? Perhaps requiring exclusivity from its apps to prevent Android from becoming a threat?

This new Apple policy is a pretty disturbing move (that is almost certain to hurt consumers, however it shakes out), but even more disturbing is how Apple has morphed from the plucky underdog to the ruthless, monopolistic giant corporation that uses its power to squash competition. To complete the irony, perhaps the best hope to tame the Apple juggernaut is a partnership between Nokia and a plucky upstart in the mobile operating system field: Microsoft.

 e-books  Comments Off on Apple vs. Amazon
Feb 132011

It may surprise you to know that when you buy an e-book from Amazon, B&N, or pretty much any other e-book retailer, you’re not really buying the e-book in the same sense that you’d buy a printed book or, say, a tomato. You’re actually paying for a license to do certain things with the e-book, such as download it to a certain device, read it, lend it one time for 14 days, perhaps listen to it with text-to-speech (or perhaps not), etc. But it’s quite confusing for a couple of reasons: first, it feels like a sale (not a license) because you pay money, then download the e-book, then it sits on your e-reader or computer and it certainly seems like you own it. Second, neither the publishers nor the retailers have really gone out of their way to explain or market these transactions as mere licenses instead of sales, since they know people are unwilling to pay as much for a license as for full ownership of something (note that the button on Amazon says “Buy Now,” not “Rent Now” or “Lease Now” or “Click Here to Enter into a Complicated Licensing Arrangement”).

But this ambiguity leads to certain problems and misunderstandings. For example, the infamous case of Amazon removing the book 1984 from people’s Kindles — which was actually pretty reasonable when you understand that those e-books were licensed, and not sold. (You know those 50 pages of legal crap you skip over when you create an Amazon account or update your iTunes or iPhone software? It’s in there somewhere … I think — I didn’t read it.) Since Amazon was merely licensing those e-books to you, under their own license from a publisher (who only licensed the right to distribute the book — and did not buy the copyright — from the author), once Amazon realized that one of those licenses was invalid (in this case, the publisher did not properly license the right to distribute the work), the subsequent licenses down the chain became invalid. And since it was a license, not a sale, you never legally owned that copy of 1984, so Amazon did what they thought was right at the time, and removed it.

In the physical book world, you’ve probably heard about the “first sale doctrine.” That means that, once you lawfully purchase or acquire a printed book, you can then lend or re-sell it as you see fit. (You can not make additional copies, but you can sell the one copy you have.) But this is where the confusion comes in — people understand they have those rights with a physical book, even if they’ve never heard of the first sale doctrine. They still know they can lend the book to their sister. And they expect the same with an e-book, because they assume they bought the e-book and didn’t just rent or license it. Of course, to be reasonable, lending or selling a physical book means you lose access to it, and the same is not true of a digital file (which you can keep and email to a friend), so perhaps it’s not fair for the same rules to apply.

Where it gets confusing is that, while no one is going out of their way to point out that you just plunked down $12.99 to only license that new e-book, Amazon is going out of their way to assure customers that they will never remove purchased e-books from customers’ Kindles again. When you buy an e-book from Amazon, you can download it to your Kindle, and it will stay there, whether you’re connected to Amazon or not, whether Amazon even continues to exist or not. You don’t have to log in or authenticate or anything to keep reading it. You can even download a copy of the e-book to your computer and back it up with the rest of your computer data. And if Amazon disappeared tomorrow, you’d keep right on reading whatever e-books you had already downloaded. In short, it sure feels like you bought and own the e-book.

Even those of us who understand that e-books we buy are actually licensed are generally OK with the situation, because of all the safeguards I’ve described above. I own the file, it sits on my Kindle, on my computer, and backed up on an external hard drive, and there’s no way for Amazon to reach into my computer and remove it or stop it from working. I can turn my Kindle’s wireless off and they can’t touch that either. So I’m OK with paying for an e-book under the current system. But I don’t think readers will accept full-on e-book licenses — not without certain guarantees that make those “licenses” act more like traditional sales. For the same reasons, I don’t think customers will accept reading “in the cloud” — e-books you read only while connected to the Internet and don’t download anywhere — since we understand our access to those titles could be cut off at any time.

I know readers are willing to give up owning a physical object, and I even think they’re willing to give up the traditional “first sale” print rights of lending and resale, so long as the e-book prices are lower than physical. This is a key point: whether it’s called a license or a sale, readers do understand that they don’t get all the rights they get with print books, and don’t think they should pay the full print price (also, of course, we understand e-books cost less to produce). But I don’t think readers are willing to give up ownership of the digital file (at least not now or anytime soon). People want to build digital libraries and own those files forever — they don’t want to re-buy them in some other format for some new e-reader / tablet / smartphone / laptop device 5 years from now, and they don’t want to somehow lose access to them. So, call it a license, call it a sale, call it whatever you want, so long as I can download the file to my computer and back it up and keep reading it even if Amazon disappeared from the face of the Earth or wanted to stop all Kindle operations tomorrow.

Of course, publishers would like nothing more than to sell you an e-book today, and in 5 years, when some new e-book format magically appears, sell you that same e-book again in that new format. After all, it worked for the music and movie industries, which made you buy cassette tapes, then CDs, then MP3s (and VHS tapes, then DVDs, then Blu-Ray DVDs). Will they get away with it? I don’t think so. The file is already digital, and there’s no issue of higher quality or resolution — words are words are words. (Of course, “enhanced” e-books, with video and such, would be a different story if anyone wanted to buy such things.) And, there’s no reason why the Kindle 8 or iPad generation 17 can’t read MOBI or ePub e-book files — and even if they can’t, software will exist to convert them into the new file formats. Of course, this is where DRM comes in, and where things get messy. This is why a lot of people are so strongly against DRM, and where the issue of ownership comes to a head: we understand publishers want to prevent copying, but if I own the e-book file, I should be able to convert it and read it on some new device 5 or 10 years from now. And, if I can’t, if this isn’t an e-book sale, but just a strictly-controlled rental that will expire in a few years, then forget $9.99 — people aren’t going to be willing to pay anywhere near print book prices for e-books, nor should they, if they’ll just have to keep re-buying them every few years. And I think the publishers are intentionally refusing to clarify the issue, because they don’t want customers to think about that possibility. But what I think they overlook is that, if they try to get us to re-purchase the same e-books in a different format, people will start removing the DRM from their legally purchased e-books and wonder why they’re paying for them in the first place. Yes, readers have the ultimate trump card here, so long as we are able to download the files.

So I think we need a little more clarity from the publishers and retailers on the licensing vs. ownership thing. We give them our $9.99, and they can do whatever they want with it. It’s theirs. What do we get in return? What rights do we have? What do we own, if anything? And what can we do with it 5 years from now? And if readers don’t like the answers they get, I don’t think publishers will like the readers’ response.

So, how about a new e-book sale/licensing doctrine, one to replace the first sale doctrine from the print book world? OK, we can give up lending and re-selling, so long as we own the digital files and have the right to convert them into whatever formats we need, now or in the future. No copying, no pirating, just me reading the e-book I bought today 10 years from now. Sound fair?

Jan 272011

The behemoth known as Amazon

Six months ago, Amazon announced that e-books were outselling hardcovers at the world’s largest bookseller; now, Amazon announced that e-books are outselling paperbacks (for Amazon U.S. sales). From the press release:

  • Amazon.com is now selling more Kindle books than paperback books. Since the beginning of the year, for every 100 paperback books Amazon has sold, the Company has sold 115 Kindle books. Additionally, during this same time period the Company has sold three times as many Kindle books as hardcover books. This is across Amazon.com’s entire U.S. book business and includes sales of books where there is no Kindle edition. Free Kindle books are excluded and if included would make the numbers even higher.
  • The Company sold millions of third-generation Kindle devices with the new advanced paper-like Pearl e-ink display in the fourth quarter and the third-generation Kindle eclipsed “Harry Potter and the Deathly Hallows” as the bestselling product in Amazon’s history.
  • The U.S. Kindle Store now has more than 810,000 books including New Releases and 107 of 112 New York Times Bestsellers. Over 670,000 of these books are $9.99 or less, including 74 New York Times Bestsellers. Millions of free, out-of-copyright, pre-1923 books are also available to read on Kindle.

Wow, for every 100 paperbacks sold, Amazon is selling 115 Kindle e-books. Playing with the numbers a little more, for every 100 Kindle e-books, Amazon is selling 87 paperbacks and 33 hardcovers. So, for Amazon’s U.S. sales:

  1. E-Books: 45.5%
  2. Paperbacks: 39.5%
  3. Hardcovers: 15.0%

Very impressive, especially since Amazon makes clear that it does not count free e-book downloads and does count printed books without e-book equivalents. I suppose the next milestone will be when e-books overtake combined print (paperback + hardcover) sales, which can’t be too far away now.

 Amazon, e-books  Comments Off on E-Books Outselling Paperbacks at Amazon

November 2010 E-Book Sales: $46.6M

 Posted by at 4:51 PM  Tagged with: ,
Jan 142011

November 2010 E-Book sales: $46.6M

Another month, another record for e-book sales, as November 2010 e-book sales clock in at $46.6M, above October’s $40.7M and July’s record $40.8M. Sales in November are up 129.7% from last November, slightly less than the overall year-to-year increase of 165.6%, but ahead of October’s 112.4%.

The post from Publishers Weekly goes on to say that sales for the first 11 months of 2010 total $391.9M, which is slightly higher than the total of the monthly numbers they’ve provided (listed below, which add up to $382.2M). Either way, it’s well above 2009’s year-end total of $165.8M, and that doesn’t even include the numbers from December, which I’d expect to be a new record, based on reports of several million people unwrapping new e-readers this holiday season.

  • Jan 2010: $31.9 M
  • Feb 2010: $28.9 M
  • Mar 2010: $28.5 M
  • Apr 2010: $27.4 M
  • May 2010: $29.3 M
  • June 2010: $29.8 M
  • July 2010: $40.8 M
  • Aug 2010: $39.0 M
  • Sep 2010: $39.9 M
  • Oct 2010: $40.7 M
  • Nov 2010: $46.6 M

I haven’t seen the numbers yet for mass-market paperback sales for November (the post merely said they were decreasing the fastest of all categories, at -14%), but they were $60.2M in October. Could we see $60M monthly e-book sales in December 2010? If not, how about Jan 2011 (when the effect of all those new e-readers may really be felt)? I don’t think it will be long before e-book sales catch or overtake mass-market.

UPDATE: The full numbers are in, and mass-market paperback sales for November are down 9.5% for the month and 14.0% year-to-date, at only $47.7M, just a couple percent higher than e-book sales for the month.

 e-books  Comments Off on November 2010 E-Book Sales: $46.6M

Oct 2010 E-Book Sales Stats: $40.7 M

 Posted by at 5:25 PM  Tagged with: ,
Dec 092010

October 2010 e-book sales: $40.7 M

Continuing last quarter’s trend, e-book sales in October 2010 reached $40,700,000, just below the record $40,800,00 in July, but trending upward from the last couple of months. This figure represents a 112.4% increase over October 2009, when sales were $19.2 M. year to date, January – October 2010 e-book sales ($345.3 M) increased 171.3% over the same period in 2009 ($127.3 M).

In comparison, print book sales were down across the board. Adult hardcover sales were down 6.5% to $242.9 M (down 7.7% year-to-date), adult paperback sales were down 11.8% to $115 M (no change year-to-date), and adult mass market paperback sales were down 1.1% to $60.2 M (down 14.3% year-to-date).

Of note, e-book sales for October were more than 2/3rds as much (67.6%) as mass market paperback sales ($40.7 M compared to $60.2 M).

For review, the monthly sales figures so far this year:

  • Jan 2010: $31.9 M
  • Feb 2010: $28.9 M
  • Mar 2010: $28.5 M
  • Apr 2010: $27.4 M
  • May 2010: $29.3 M
  • June 2010: $29.8 M
  • July 2010: $40.8 M
  • Aug 2010: $39.0 M
  • Sep 2010: $39.9 M
  • Oct 2010: $40.7 M

E-book sales so far in 2010 are 8.7% of trade book sales

So far this year, e-book sales figures are 8.7% that of printed trade book sales ($345.3 M compared to $3,969.7 M). This number is down slightly from a couple of months ago, when year-to-date e-book sales were 9.03% of print’s figures, but is still up dramatically from previous years (0.58% in 2007, 1.19% in 2008, and 3.31% in 2009).

It will be interesting to see the holiday sales in December 2010, and maybe even more so, the post-holiday sales in January 2011, when millions of people unwrap their Kindles and other e-readers and go looking for new e-books to buy.

 e-books  Comments Off on Oct 2010 E-Book Sales Stats: $40.7 M

Google E-Books Launches

 Posted by at 11:27 PM  Tagged with: ,
Dec 062010

Google E-Books joins the e-book party

Finally, after announcing its intent over a year ago, Google arrived on the e-book scene today with Google E-Books (formerly “Google Editions,” formerly the “Google Partner Program”). Before today, Google’s book service (“Google Books”) existed as a place to locate books and search the text therein, where Google would merely provide links to other retailers that sold the books you found, but now Google is selling e-books itself. So, how does Google compare with the existing e-book retailers (Amazon, B&N, Sony, Kobo, Apple, etc.)?

Google E-Books probably fields the world’s largest single e-book library, of 3 million titles or so. Perhaps you’ve heard about the ongoing Google Books class-action lawsuit and settlement? Essentially, Google grabbed up a bunch of library books and scanned them into its archives, where users could find them using Google’s search engine tools (search results could find not only book titles and author names and other metadata, but could actually find passages from within books). In collecting books for its archives, Google essentially grabbed every book it could find unless the rights-holder (the publisher or author) learned about it and complained to opt out. So, Google captured large numbers of out-of-copyright public domain books, in-copyright books where publishers explicitly gave permission, and a whole gray area of books of indeterminate copyright status. This enabled Google to scan and have access to about 3 million texts, more than any other platform; however, over 2.5 million of those titles are public domain, leaving only a few hundred thousand modern, in-copyright titles (for comparison, Amazon has over 750,000 mostly in-copyright titles available in the Kindle Store, and Apple has only 30,000 in the Apple iBooks Store).

Another interesting feature of Google E-Books is that it is device-independent: Google doesn’t make an e-reader (like a Kindle or Nook), but allows you to read e-books purchased from Google in multiple ways. First, you can read e-books online, through a web browser (accessed through your computer or smartphone). Second, you can download PDFs to read on your computer or tablet computer. Third, you can use the Google for Android or Google for iOS (iPhone, iPod, iPad) apps to read from your smartphone or tablet. Finally, you can use Adobe Digital Editions to read e-books in DRM-protected ePub format on compatible e-readers, including the Nook and Nook Color, Sony E-Readers, and Kobo E-Readers — but notably not the Kindle (which uses the MOBI file format and does not support Adobe DRM). Google E-Books has a “buy once, read anywhere” focus, and touts how you can read e-books purchased from Google without downloading anything — just start reading right in your browser. Personally, I prefer to download and own the e-book files I purchase, but the simplicity may appeal to some people who enjoy reading on LCD computer or smartphone screens.

The ability to download and read purchased Google e-books (some public domain titles remain free) on various e-reader devices is the most interesting feature to me — I have no interest in reading novels off my computer screen (let alone a tiny smartphone screen). But being able to use Google E-Books as a source for content, and reading that content on an e-Ink based e-reader has a certain appeal, especially since you can switch from a Nook to a Sony to a Kobo and keep reading from your same e-book library. Of course, Amazon and all the other e-book retailers already offer apps for various platforms (PCs, Macs, iOS, and Android), allowing you to read your e-books in multiple ways and sync your progress in each of them, but this adds another level of interoperability.

So what does this mean for readers? Well, if you have a compatible e-reader, or feel like reading off a computer screen, you may want to give Google E-Books a try. A quick check showed that most books are similar in price to Amazon and B&N, but a few are slightly more or less expensive. On the plus side, you’d be able to read any e-books you purchase on almost any e-reader you eventually decide to buy (other than a Kindle — although Google says they “are open to” eventually being compatible with Kindles). There haven’t been many details yet, so we’ll have to wait and see how well the e-books are formatted, if they allow returns, or how many new releases show up for sale through Google. (I uploaded my books months ago, and they are now available through Google E-Books at launch.)

Google also eventually plans to allow third parties (other websites, or independent bookstores) to sell Google e-books and keep a cut of the revenue. That might be an interesting twist, and forward-thinking independent bookstores might jump at the opportunity to suddenly have a full-fledged e-book store through their own websites.

As for the balance of power in the e-reading world, it remains to be seen if Google will make crossroads into the market. While the interoperability is impressive, it doesn’t include Amazon, which owns roughly 75% of the market. That cuts both ways, of course — but I think it hurts Google more than Amazon. Amazon doesn’t have much incentive to make it easier for its millions of Kindle users to start buying all their e-books from Google instead of Amazon.

On the one hand, Google is a well-known brand with lots of money and talent, they have a huge library of e-books, and they offer unprecedented interoperability amongst multiple e-book devices (for anyone out there who happens to own a Nook Color, a Kobo, and an old Sony E-Reader, you’re probably off buying e-books from Google already). On the other hand, Google is very late to the e-book game (which started way back in the late 1990s, and really took off in earnest with Sony and Amazon in 2007), and I can’t help but think that a whole lot of avid e-book readers have already started building an e-book library and have allegiance to someone else. Not having a dedicated device may also hurt Google, as it’s definitely easier to shop on Amazon from a Kindle, or on Barnes & Noble from a Nook. Another demerit: while Google search and Maps are pretty user-friendly, every other Google service I’ve used (especially Google AdWords, AdSense, Analytics, and the Partner Program set-up) are incredibly difficult to use and the help documentation is confusing and contradictory — they have a long way to go to match Amazon’s ease of use and customer service.

I also wonder how seriously Google will take the e-book business: they still can’t even seem to figure out their own name (the website will bounce you from Google E-Books to Google Books to the Google Partner Program with a tab for Google Editions), they haven’t yet announced lots of details (like how rights-holders will get paid), and you have to wonder what took them so long and why they don’t have their own e-reader. My advice: keep an eye on them, but I’d take a wait-and-see approach on this one for a while.