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Reading in Color, Why is this such a big deal?

Reading a New York Times article this weekend, titled “Reading E-Books in All the Colors of the Rainbow,” [available here] got us thinking about why there’s such a seeming rush to make e-reader displays colorful.

When I go to my bookshelf [that’s me, Monique, one of the editors], 99% of the books on it are black & white, no color whatsoever inside. Ok, the truth is, I’m ignoring all of my husband’s graphic novels when I estimate that 99% figure, oh, and the children’s book collection too… but, otherwise, really, they are all black & white.

Thinking about this, three things seem to explain the apparent rush to color. We should also note that Amazon has been quite content, at least publicly, with the black & white display on it’s various iterations of the Kindle. So while they too are talking about a color display in the future, they do not seem overly anxious to rush to color.

So, why the push for color displays on e-readers? Here are the three ideas we have.

First, because we’re all quite accustomed to seeing color displays when working with our electronic devices, computers for the most part. This makes it seem normal to have color display even though on paper we are still quite comfortable with black & white.

Second, because newspapers have made the transition to color and are now shying away from printing as much as they can choosing instead to push their readers towards consuming their product electronically. In going with color, newspapers have also begun to use color graphics which are designed differently than are black & white graphics and converting from color to black & white is not entirely a straightforward affair for graphics. This same issue is becoming more and more relevant in textbooks as well. Most textbooks are now produced in color and as they are converted into eBook formats the need to convert to a black & white display is an added cost. Thus, the educational arena is part of the push towards color displays for e-readers.

Third, because hybrid electronic display devices, like Apple’s iPad—designed to serve as an e-reader as well as a multi functional communications device—have color displays. These multi-functional devices are competing with more traditional e-readers [sounds almost funny to say traditional when referring to such new devices] and using their color displays as one way of distinguishing themselves from black & white e-readers.

But the real question is, do we need color displays when we’re curling up to read a novel?

We’d love to hear what you think.

The statistics on e-reader shipments quoted in the above mentioned New York Times article gave us an idea of what we’ll tackle next in terms of tracking this business through statistics. In 2009, according to iSuppli, 5 million e-readers were shipped worldwide. In 2010 the market research firm forecasts e-reader shipments will reach 11 million units. We wonder how many eBooks per e-reader are being sold annually. We’ll try and track that down next.

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Turbulence Continues in Publishing World

Troubled Skies Above

While we have been busy with our reference publishing work recently—and in all honestly, taking some time for summer fun as well—we’ve also kept an eye on the publishing business. The skies over that business seem turbulent to say the least.

While publishers struggle to figure out how to make their old contracts cover new eBook editions the Connecticut Attorney General announces that he is looking into the distribution agreements reached between Amazon and publishers, and Apple and publishers, because of their potentially anticompetitive impact on the market. Meanwhile the onslaught of ever newer and less expensive eReaders continues apace and rumors swirl about Barns & Noble exploring strategic alternatives that may include selling or going private. Indeed these are interesting times in the publishing world.

There will clearly be plenty to sort out when we do finish up this little hiatus and get back to our study of the publishing business through a careful look at industry statistics.

In hopes that you are having a wonderful summer with plenty of time for summer reading, we’ll close and promise to return with more interesting statistics very soon. 

Still Tracking the eBook Market

Distracted by our paying work, we’ve been slow to follow up our post “eBook Sales versus Download” with any real statistics to help make sense of the subject. Another reason we haven’t presented more statistics on the subject has to do with the fact that we can not find any reliable stats on the subject.

To some extent this is not surprising. It takes time for the statistics gathering organiztions—Census Bureau, industry associations, large research firms—to build the necessary structures with which to track new industries properly. eBooks are relatively new and with the arrival of new players into the game—eReader device makers—there is no industry wide structure yet for tracking eBook sales and downloads. Further complicating matters is the fact that a small number of players control much right now and have no great interest in sharing their numbers. Some of these players are, in fact, intentionally mudding the waters by way of promoting their role in the industry and building the buzz. In time, statistical collection structures will be created.

In the meantime, while we wait for real figures, we’ll have to make sense of it all by trying to read between the lines of the statistical data that track the more traditional part of the publishing business, watching for changes in patterns and trying to figure out what’s behind them.

We’ll turn next to a look at booksellers over the last two decades.

In closing, a quote from Guy LeCharles Gonzalez, “Chief Executive Optimist,” Digital Book World speaking about this very topic:

“From consumer demand, to devices and DRM schemes, to piracy concerns and reliable sales data, the nascent but undeniably booming eBook market is becoming a smoke and mirrored mess for anyone looking for straight answers.”

Sell More For Less

We’re still working on answering the question posed in our last post. In the process, we keep running into the idea of selling more for less. So, we thought we’d think that through a little bit today.

The title of this post is the sort of business “wisdom” one encounters frequently these days. It often comes in the form of analysts giving publishers advice about how they should manage the digital transition, as in “Publishers should move to a high-volume model where they sell more units for less.” (1)

This somewhat clichéd advice made us think…. is that really true for books? Are books—whether eBooks or pBooks—the sort of items that people will buy many more of if the price is lower? Just how elastic are book prices?

Price fluctuations have some impact on almost any product’s sales. However, the extent to which a product’s sales are influenced by changes in its price varies; and we refer to this phenomenon as price elasticity. For some products price elasticity is obvious. Gasoline is something we need, and, despite the price, we’ll buy it. This means the price of gasoline is relatively inelastic. Sure, when the price is really high, we’ll buy a bit less and when it’s really low, perhaps we’ll buy a bit more. Luxury items are examples of the sorts of products with very elastic prices. They aren’t necessities so we tend to buy a whole lot more of them when prices are low and a whole lot fewer when prices are high.

Which brings us to the question: Just how elastic are book prices? Your answer is likely to reflect your attitude towards books. Are they necessities or luxuries? What do you think?

There is another thing that complicates the statement in the title of this post. Just because book prices are low doesn’t mean that I suddenly have lots more time to read and will therefore run out (jump online) and buy four books a month instead of one. Unlike music, which can be enjoyed while doing other things, books tend to be a bit more demanding of their consumers, at least if the books are actually read.

So, demand for books has a different feel than does demand for something like, say, calendars. It is this difference in the market for books that makes us doubt the wisdom of “Sell More for Less.” More accurately, we don’t doubt the theoretical truth of the statement; we doubt the assumption it depends upon–that demand is unlimited.

(1) This is a quote from an interesting article by Rory Maher titled Kindle Fantasies are Running Wild – But, For Now, Amazon Is Losing It’s Shirt, available here.

eBook Sales versus Downloads

We’ve decided to use a series of posts to help us sort out the chaotic statistics that we’re finding as we try and figure out what’s going on in the publishing industry these days.

Our goal right now is to try and figure out what is really going on with eBooks. The publishing industry is clearly going through a rather significant transformation. More titles are being published each year, yet revenues from publishing are not keeping pace (covered here in an earlier post). Much is reported about eBooks downloaded, but actual numbers are hard to find, and revenues generated from eBooks are even scarcer.

Here are some figures on annual net domestic book sales from the Association of American Publishers, available in their entirety, here.

Figures from the Association of American Publishers

What makes these figures particularly useful is the fact that they span several years and that the Association of American Publishers breaks out net sales of eBooks.

The table shows how eBook sales have been growing at a very strong pace, which isn’t surprising as this is a new and emerging product category. However, that segment of book sales, in 2009, represented 1.3% of total book sales… While eBook sales have grown at an impressive rate, we’re still talking about a very small part of the market. That does not exactly match with the sense one gets when listening to publishers talk about eBooks these days.

What seems clear is that the attention on eBooks has less to do with their actual sales footprint right now and far more with (1) the potential of this market; (2) technology companies wishing to sell eReaders, (3) publishers having to deal with new distribution systems in an environment that is changing rapidly, and (4) general excitement about what’s new and shiny.

Another thing complicating any attempt to make sense of this market is the fact that the figures quoted on eBook downloads are often misunderstood to be book sales. In fact, many eBook downloads are free and thus not sales at all. And, since those promoting eReaders are anxious to have big numbers to report, the statistical landscape is littered with landmines.

We haven’t really answered the question that’s implied in the title of this post. We’ll work on that for the next post as we keep hunting for economic statistics that help us see this industry more clearly.

NOTE:
Please note that the net sales reported in the table above do not include the sale of self-published works or even some works published by small publishers that are not members of the Association of American Publishers. Also, the figures presented are based on U.S. sales.

Lost in a Circus of Book Industry Stats

As we try and gather statistical data on the book industry—on both the publishers and sellers—we find ourselve lost in a circus like enviroment. It is truly difficult to get reliable figures on this industry, particularly on eBook sales. It’s a little like finding yourself standing in front of a distorting mirror while it giggles, just a bit, and clowns dance around behind you. The figures we’re running across often vary wildly or totally contradict one another. Verifying these data, clarifying what exactly they are measuring, and putting them into some sort of orderly presentation is taking longer than we expected.

So, a little something to help tide you over. Here’s a cartoon we ran across in this hunt and thought we’d share. It’s by a cartoonist named Mazurke and appeared in the magazine Prospect. Here’s a link to their site.

Cartoon by Mazurke

We’ll share other tidbits we run across as we try and make sense of the circus of crazy statistics we’re finding on the book industry.

Bookseller, Publisher, and the Blurring Line Between

We’re still working on getting some figures together with which we’ll continue out look into the book publishing industry through an analysis of economic statistics. In fact, we have some stunning stats on numbers of new titles published annually from Bowker. The problem is they are so stunning that we’re trying to get confirmation that we are reading them accurately before we post a blog entry on the subject. It’s sort of hard to believe that in 2009 there were 300% more new titles published than were published just seven years earlier…

Book Publishing Industry Statistics – Part 4 will appear once we’re sure we have the numbers straight.

In the meantime, a quick note about Barnes & Noble’s newly announced service to help authors self publish their works in eBook format. Here is a link to their announcement of the service which is scheduled to be launched this summer. In essence, B&N is planning to offer authors a web site through which they can (1) submit manuscripts for conversion to an eBook format, (2) offer the resulting eBooks for sale, and (3) help in selling those offerings. We give a nod to The Writer’s Spot blog which is where we first heard about the new B&N endeavor.

This move into vanity publishing by Barnes & Noble appears to be another step in the blurring of the lines between booksellers and book publishers. B&N has been publishing its own line of books for some time now so this expansion into vanity publishing is not an entirely new move for them. It is, we think, simply their way of trying to adapt to a world in flux. Plus, with an eReader of their own to promote, the Nook, helping to get more “content” onto the device is logical.

What we found interesting in reading this news from B&N is the fact that it is part of a larger restructuring in the wholesale and retail sectors generally. Those in the publishing sector are very focused on their own industry and may not be aware of just how pervasive the restructuring of all distribution networks has been since we entered the twenty-first century. Most supply chains and distribution networks have been greatly impacted over the last decade by advances in communications. The Internet and low cost computing power have totally altered how we buy and sell thing, how we get them to market. Old divisions between manufacturers, wholesalers, and retailers are blurring and not just in the publishing sector.

In some networks—think of Wal-Mart—wholesalers are being squeezed out as large retailers are going directly to the manufacturer. In others, the retail landscape is changing dramatically as incomes drop for many on the lower rungs of society, and such people—joined by a financially-squeezed middle class—turn more and more often to big box stores and large discount retailers. Trying to survive as a small, independent retailer in the shadow of these giants is getting harder.

Back to books. According to the American Booksellers Association there were 3,250 independent booksellers in the United States in 1999. By 2010 that number had fallen to less than half (1,400).