The Changing Face Of E-Book Publishing And Subscription Services

E-books were supposed to be the death of paper tomes. And e-book subscription services were supposed to lead the way. Instead, e-book popularity has hit a wall. Why?

Source: Bigstock

During the heady days of the late Oughties, e-book devices were all the rage. In 2009, a high-water year for e-book passion, Slate editor Jacob Weisberg wrote, “printed books, the most important artifacts of human civilization, are going to join newspapers and magazines on the road to obsolescence.”

In the UK’s Telegraph, Andrew Keen wrote, “The iPhone, the Palm Pre and every other smartphone is also a de facto e-book able to store hundreds of texts. The end, therefore, is nigh for the standalone book. The single physical text simply won’t be able to survive the growing e-book storm.” 

And in actuality, e-books did grow in popularity. For a while, Nooks and Kindles and iPads were all the rage. The obvious advantages of portability, large type, and endless selection were — and still are — compelling. The percentage of readers who have read e-books is growing, as this market penetration data shows:

(Source: Pew Research via Statista)

In 2011, 17% of readers had read an e-book in the prior 12 months; in 2016, that was up to 28%. And that’s in an environment of decreasing book readership generally. Not only that, but e-book readers skew young, which speaks well for the future of the format:

(Source: Pew Research via Statista)

With 35% of readers age 18-29 reading at least one e-book a year, there is both a lot of familiarity with the format in that cohort, but also a lot of room for growth. Statista conducted its own survey of interest levels for e-book subscription services, and found a similar youth-trending result:

{IMGCAP(4)](Source: Statista Survey)

Only 16% of people under 30 were totally uninterested in e-book subscription, while 70% of seniors were not in the least interested.

So as physical book and e-book best sellers began to compete head-to-head, as the media coverage glowed, as e-book reader sales took off, the punditocracy was convinced. Consider this forecast, made in 2012, of where e-book sales would be today:

(Source: PwC via Statista)

Wow! Next year, e-book sales are going to surpass print book sales! Or so they thought in 2012. Alas, they were wrong! The graph above is an EPIC FORECAST FAIL as the kiddies might say. Today, e-book sales are still far far below print book sales. Ignore the graph above, please — and note that the units are wrong; it should be $billions, not $,millions. Here is the reality:

(Source: Association of American Publishers via Statista)

That’s total e-book revenue of $1.1 billion in 2016, not the $7.6 billion that PwC had forecast. And it’s out of a total book market of $30 billion, according to the U.S. Census Bureau.

Another way to get a look at this same history is to look at units sold. By that measure, we see this:

(Source: Nielsen via Statista)

These two graphics (from two different sources, measuring two different indicators) both tell the same story: e-book publishing has plateaued.

The advantages of e-books are well known, and they support a certain level of readership that seems to steadfastly enjoy the format. There is no need to bother with huge-size large-print books when you can adjust the type size on every e-book reading device. Genre-strength makes the e-book a favorite for the most voracious readers, such as those who love their romance novels or sci-fi epics.Travellers and students just don’t want to lug physical books all over the place. These sorts of users create a dedicated demand that suggests the death of the e-book is not a thing.

 

E-BOOK SALES PLATEAU?

But the e-book is also clearly not growing. What are the factors that have taken the sheen off the e-book market?

OLD, BORING TECH: The most common e-book formats have not been updated in years, and e-book readers have not kept pace with, say, smartphones or other gadgets. An article in The Guardian talked with a book industry insider who made the trend clear:

  • “It was new and exciting,” says Cathryn Summerhayes, a literary agent at Curtis Brown. “But now they look so clunky and unhip, don’t they? I guess everyone wants a piece of trendy tech and, unfortunately, there aren’t trendy tech reading devices

LOVE OF BOOKS: The same Guardian piece mentions another factor: the love of the heft of paper is still important to people who like physical things.

  • Once upon a time, people bought books because they liked reading. Now they buy books because they like books. “All these people are really thinking about how the books are – not just what’s in them, but what they’re like as objects.”

CONTINUED PUBLISHER FOOT-DRAGGING: Some book publishers are resisting the release of electronic editions, either insisting on high prices or simply keeping new books off the electronic shelf. According to Entrepreneur:

  • Many of the world’s top publishers don’t currently support the subscription model and won’t contribute their content to it. … The result is the many frustrated people who have signed up for a service only to find out that none of the ebooks they want are available.

HIGHER PRICES: For a long time, e-books could be bought for less than the price of a paperback, which made sense, considering that electronic media have no printing, paper, and ink costs. But in recent years, retailers have raised prices, and that has depressed sales. According to Scroll.in:

  • Following the renegotiation of pricing between major American publishers and Amazon, eBook prices rose in the US Kindle Store in late 2014 and 2015. Until then, Amazon had pushed publishers to keep prices no greater than $9.99, and buyers had become conditioned to paying less than $10 for eBooks. Publishers that increased prices above that mark subsequently recorded a fall in eBook receipts and some identified higher prices as a factor.

So e-books are boring, sales are flat, and the market has peaked. But wait, not so fast! EContent took a deep look at e-books at the start of 2017, and the report confirmed the reported sales plateau outlook, with an important caveat. Here’s Robert Springer’s article quoting an industry expert:

  • Richard Nash, an entrepreneur and digital media consultant, says that the pause in the industry’s growth could continue for the near term. “The main thing we’re seeing is a confirmation of the plateau,” he says. “Now, exactly how flat it is from a unit sales standpoint is difficult to tell.”

That “difficult to tell” is a very key point. Why is it so difficult to pin down the plateau? The graphics at the top of this column make it pretty clear. Well, what if the data is not comprehensive?

Most notably, many Amazon e-book sellers do not release their works with ISBN numbers, and Amazon has not designed to release sales data for those. We’ve heard anecdotally about Amazon millionaires like Amanda Hocking and Mark Dawson. Much to all of the money these self-publishers generate goes unreported to industry trackers like Nielsen. Add in all the indie writers who are making sales under the radar, and maybe there is something there.

Simon Rowberry at The Bookseller agrees that e-book sales being overlooked. He writes:

  • Just as the music industry needed to adapt to the rise of streaming, initiatives such as Amazon Charts are reacting to the rise of ebook subscription services and audio/ebook hybrids that don’t map to traditional metrics of publishing success.

THE FUTURE OF E-BOOK SUBSCRIPTION SERVICES

Where does a successful subscription service fit in, then? Current services are shutting down (like Oyster) while others are thriving (like Scribd).

This year, Statista polled people with a professed interest in e-books, and asked them about what they want in a subscription service:

(Source: Statista)

The poll also asked what readers are looking for in terms of e-books themselves:

(Source: Statista)

Both of these infographics reveal that the ways to please subscribers are varied and rich. Surely with this range of hungers, there are ways to meet demand even if mainstream publishers are not eager to jump on board. More and more e-book readers are willing to look to unconventional channels, and a horde of self-publishing authors are looking for ways to sell the manuscripts those same publishers rejected over the years. As the job of “author” moves beyond writer to marketer and self-publisher, successful subscription services will find ways to meet these indie authors (following Amazon’s example) and offer them better deals than they are now getting from mainstream publishers and even from Amazon.

Insider Take

E-books have a built-in advantage for a substantial audience who values portability and variety and the freedom to read as they like. However, with mainstream publishers withholding many popular titles from subscription services and charging more for the titles they do release, e-book retailers are finding alternative sources for their readers, sources that fly below the radar of the usual tracking metrics, sources that are ideally suited for a buffet delivered by subscription.

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