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Book Store Statistics – Part 2b

It occured to us when considering the last post—which seemed pretty obvious, really—that books are sold by a lot of retail outlets, not just book stores, book clubs and online. Gas stations and truck stops sell books, audio books for the most part. Airport shops sell books. Office supply stores sell all sorts of computer manuals and business books. Then there are all those topic specific and how-to books sold at places such as health spas, building materials stores, and craft stores. So, before moving on to a closer look at book stores specifically, we wanted to finish the picture on where we buy books. We dug around in the rich data made available by the Census Bureau and came up with the following detailed breakdown of book sales by retail outlet.

Books Sold by Retail Outlet

Once again, this graphic reaffirms what we’ve already seen in recent posts. Book stores have lost ground in terms of the percentage of all books sold that they sell. Electronic outlets—read online sales— have gained ground but not only against book stores but also as compared to all outlets selling books, all that is other than used merchandise stores. “Electronic shopping and mail-order houses” and “used merchandise stores” are the only two categories that saw growth in their share of the total book selling market between 1997 and 2007. Granted, “used merchandise stores” only saw their book sales grow from 2.2% of the market to 2.6%, this was the only category other than electronic shoppping and mail-order houses that grew at all. And the e-commerce and mail-order category, well, it grew from 11.5% of the book selling market to 30.9% in 2007, and has only grown since then.

For the even more detailed figures, here is the table we keyed in order to produce the chart above.

Detailed Retail data on books

Source Note:

Data for 2007: “2007 Economic Census — Sector 44: EC074413: Retail Trade: Industry Series: Preliminary Product Lines Statistics by Kind of Business for the United States: 2007” available online here.

Data for 2002: “2002 Economic Census — Sector 44: Retail Trade: Industry Series: Product Lines by Kind of Business for the United States: 2002” available online here.

Data for 1997: “1997 Economic Census — Sector 44: Retail Trade: Merchanide Line Sales: Merchandise Lines by Kind of Business: 1997” available online here.

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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.

Book Publishing Industry Statistics – Part 5

Our last post may have left some wondering a bit about a seeming contradiction between the figures we report in Part 3 and those we report in Part 4. We thought we should clarify things and in the process—we hope—strengthen our growing understanding of the gloomy mood surrounding much of the book publishing industry.

In Part 3 of this little look at book publishing industry statistics we presented a chart that showed nice growth in industry receipts from 1992 to 2007. That growth was across the board, for every product category although some grew more quickly than others. Then we shifted a bit and in Part 4 we talked about receipts declining while the number of new titles soared. Well, the problem has to do with the fact that we were covering different time periods in these two posts.

Here’s the original chart as shown in Part 3.

Graphic from Part 2, again

And here it is again, with the addition of data for 2002.

Book Industry Stats with 2002 added

How different it now looks.

While the facts presented for 1992 and 2007 are identical in the two charts, the addition of data for 2002 changes one’s understanding, one’s sense of the period covered. Knowing that industry receipts had actually risen greatly during the decade 1992 to 2002 and then fallen—in the case of reference books and fiction, quite substantially—changes things. Yes, sales receipts are up since 1992 but they were much further up in 2002 and are now trending downward.

There is so much we could say here about how statistics are presented and how that presentation can skew things, even when the stats are accurate. The example here is a good one. While it is true that the industry as a whole is seeing increasing revenues over the last two decades, by looking at only two years worth of data one doesn’t see the fluctuations taking place on that trend line, fluctuations that may tell a very interesting story.

We’ll get back to the number of titles published annually in our next posts, when we start looking at the book selling industry’s statistics.

Detailed Source Note:

Data for 1992 come from Manufacturing USA, 5th edition, Gale Research, page 704, and are based on the 1992 Economic Census, Product Share Details. Data for 2007 come from the 2007 Economic Census, available online here. The Economic Census is produced every five years by the U.S. Department of Commerce, Bureau of the Census.