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Book Store Statistics – Part 3

Today we’ll match up Census Bureau statistics on the U.S. retail book industry with the sales reported by the top three booksellers—Barnes & Noble, Amazon, and Borders—in their respective Annual Reports.

Top Bookseller Stats

In order to try and capture the rising importance of eBooks in the overall book selling business, we have used Census Bureau data on the Retail Book Store industry and combined it with the book portion of the Electronic Shopping and Mail-Order House industry. Census data is not broken out by product except in Census years and therefore we extrapolated the book portion of the Electronic Shopping industry for non census years based on their percentage of the industry in census years. These extrapolations are shown in detail in the table at the bottom of this post.

We thought it was particularly interesting that the top three booksellers, together, grew to represent 55% of book sales in the United States in 2008, up from 46% of the market in 2001. Thus, all other booksellers have seen their combined market share fall to 45%.

The experience of each of the top three booksellers between 2001 and 2008 has, of course, differed greatly. While Barnes & Noble’s market share has held steady at approximately 20% from 2001 to 2008, Borders saw its share shrink from 16.7% to 12.6%. Over the same period, Amazon has more than doubled its market share, from 9.6% in 2001 to 21.7% in 2008.

Here are the detailed figures used in the graph above:

Top Bookseller Stat Table

Note on age of data.

In a day and age when we are all quite accustomed to being able to get almost instant satisfaction to any question we may have—just check the global brain, the Internet—it is understandable that many people find it very hard to appreciate that when it comes to national economic statistics, real data takes several years to collect and compile. Thus, in this world, 2008 data is, actually, quite current. During 2010, the 2009 data are being collected from thousands of entities, compiled, standardized and checked. They’ll be reported on, at the earliest, in December 2010 and more likely in early 2011. Educated guesses on what happened in 2009, based on surveys, for example, can, of course, be made. But, do not mistake those guesses with actual census data! Patience… the picture will become clearer in time.

Source Note:

2002 Census data:
here

2007 Census data:
here

Annual Retail Sales data 1992 – 2008
here

Barnes & Noble Annual Reports:
here

Borders Annual Reports:
here

Amazon Annual Reports:
here

Book Store Statistics – Part 2

We pick up again on the topic we started way back on June 30, namely, how are books sold these days? In our first look at the economic statistics available on U.S. book stores we saw three very interesting things.

1. That while book store sales between 1997 and 2007 rose by 35.4% the sale of actual books rose by far less (25.1%).

2. That sales of things other than books grew fastest, increasing 71.7% between 1997 and 2007.

3. That within the book category, textbooks by far outpaced all other books in terms of dollar sales growth, in fact, text book sales grew by 123.2% while the sale of all non textbook books actually declined by 0.9%.

Now, because these data do not include coverage of eBooks, we decided to try and look into those as well. What we found is that they are still very, very hard to track through any reliable, national level statistics, yet. The U.S. Census Bureau has begun to track eBooks but it will take a few years before their survey data provides us with the sort of detail we need in order to make sense of this crazy time of transition.

In the meantime, we can take a look at books sold electronically and add those to the overall sale of books through book stores.

Book Sales by Outlet

Books have long been sold by book stores as well as outlets other than book stores, like catalog companies, book clubs and since the mid-1990 electronically through the Internet. The bar chart above shows the dollar value of books sold through book stores (including text books) and books sold electronically and through mail order houses. The U.S. Census Bureau has been tracking retail sales through these different outlets for some time now. What is not clear yet is how much of the eBook market is being captured by these Census Bureau categories. We suspect that it does not yet capture eBook sales reliably.

Nonetheless, what is abundantly clear from these data already—and is hardly surprising to anyone following this subject—is the fact that more and more of the books we buy we are buying electronically, online.

Worth noting is the fact that some of the electronic sales measured in the data graphed here are, in fact, electronic sales made by companies that also operate physical book stores. The gorilla in the market is, however, Amazon which has overtaken Barnes & Noble to become the largest book retailer in the United States. This occurred in each company’s fiscal 2009 when Amazon had net, North American “media” sales of $5.96 billion and Barnes & Noble’s sales totaled $5.12 billon (figures come from each company’s SEC filing for 2009).

Perhaps we should try charting some of these corporate sales figures against some of the Census data in our next post.

Source Note:

1997 Census Data here

2002 Census Data here

2007 Census Data here

PubUpRoar

In recent days a head-on collision between Amazon.com and Macmillan has mesmerized the publishing world and sent storms of e-mails and tweets flying. Those in the biz are aware of the matter, but not everyone in our audience may be. We mentioned Amazon The Giant two days ago and e-books yesterday—just as the conflict was nearing resolution. We wish at least to note the event here—to weave it into our own modest fabric. Here the essence:

Macmillan  Publishing worked out an agreement with Apple, evidently in the period leading up to the introduction of the iPad, under which Macmillan would raise its price for e-books from the Amazon-established $9.99 to $15.00 a book. The New York Times reported Macmillan’s rash break-out from the reservation three days ago. Amazon responded by suspending sales of Macmillan publications, electronic and other. Today’s NYT brings news that the uproar is over—but that feelings are still smarting. Amazon has accepted Macmillan’s decision. Macmillan is a large enough factor in publishing so that it could get its way. Some e-books, therefore will now cost more.

Where this whole business is ultimately headed is difficult to say. At present, it seems, the logic favors low pricing if you happen to be the leading seller of the e-book reader, which is where Amazon is at. But we suspect that in the future the razor/razor-blade logic may  prevail.  If so, in the foreseeable future e-readers will be virtually given away but the price of the content will begin to rise above the current bargain-basement level—and the more popular the product, the higher the price.

Other models are also possible. Apple has certainly made hay issuing the same functionality over and over again, to the same customers, with slight improvements, at high prices, ever since it went into business. The reader may follow the same pattern. In that case, a downward pressure on the price of content may be anticipated. Small publishers, we suspect, will favor the razor/razor-blade outcome.

Retailing Books: A Brief Look

The recent news story on the resignation of Ron Marshall, CEO of the Borders Group (the NYT story is here), suggests that this major retailer had and still is having troubles. Marshall, who just arrived at Borders a year ago, did what turn-around experts do best. He cut costs and eliminated many of the smaller and less profitable Borders outlets. Evidently not enough.

How big is book retailing? Manufacturing and Distribution USA (one of our books) tells us that the industry (technically NAICS 451211 – Book Stores) had nearly 10,600 establishments in 2009, sold $19.9 billion in merchandise (not all of that books), about $1.8 million per establishment. This sector also employed nearly 162,000 people. Establishment counts are down from 11,700 in 1990 but employment is up from the 86,000 in that year—suggesting that in this period stores have become bigger. Ron Marshall was just following a trend. This period also saw the rise, from a flat horizon, of a giant, Amazon.com. Amazon’s sales (per its most recent 10K filing with the SEC) had net sales in 2009 of $24.5 billion—up from $8.5 billion in 2005: that’s growth, folks). Borders Group? $2.63 billion, up from $2.59 billion in 2005. Barnes & Noble? $4.53 billion (2008), up from $4.12 billion (2004). There are also other smaller chains.

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