Does Ebook Growth Mask Market Share Declines?

IDPF Ebook Sales Chart - Drink!By Guy LeCharles Gonzalez, Chief Executive Optimist, Digital Book World

eBook sales statistics for August 2010 have been released from the Association of American Publishers (AAP) who collects these statistics in conjunction with the IDPF. Trade eBook sales were $39,000,000 for August, a 172.4% increase over August 2009 ($14,300,000). Calendar Year to Date sales show growth of + 193%.

Source: IDPF

Myriad caveats aside, the latest AAP/IDPF ebook sales data for August 2010 shows a slight leveling off from July’s record high of $40.8 million to $39 million, making it the second highest month of tracked sales ever.

While few would argue anymore that ebooks are here to stay, Forrester Vice President and Principal Analyst James McQuivey raised a more intriguing question while previewing an upcoming report at yesterday’s Digital Book World Executive Summit in New York City:

“Agency model publishers have to ask themselves: which red line best fits my eBook sales growth curve? Both look good at first blush, but one suggests long term losses in share.”

The red lines he was referring to were hypothetical views of ebook sales compared to ereader adoption, with one tracking ahead, the other behind. While both showed impressive growth, the one that lagged ereader adoption suggested a publisher might be enjoying increased sales while simultaneously losing overall market share to its competitors, many of whom are not reflected in the AAP/IDPF sales data.

Kindle 3According to a report released earlier this week by Cowen and Co., “not only are sales of the Kindle device expected to grow 140% this year to nearly 5 million units from 2009, but digital book sales via the Kindle store are on track to grow 195% to $701 million in 2010.”

Cowen estimates Amazon currently having 76% of the ebook market, which would put the overall market at approximately $922 million, while the AAP/IDPF sales data is only tracking sales of $259.5 million year-to-date. Ebook sales of the twelve publishers they track  would have to average $132.5 million/month through the end of the year to match Cowen’s projections, a highly unlikely occurrence.

More likely is that gap is being filled by the many small publishers and traditional and self-published authors who are selling ebooks via Amazon and whose sales aren’t tracked by the AAP/IDPF.

Of course, lacking anything resembling reliable, comprehensive sales data for ebooks, this is the fuzziest of fuzzy math, but there’s an undeniable gap there that needs to be defined, and within that gap lies the answer to McQuivey’s critical question.

“Does ebook growth mask market share declines?”

And if it does, how would you know?

Guy LeCharles Gonzalez is the Director of Programming & Business Development for Digital Book World, and a published poet, writer, and active blogger since 2003. An old and new media pragmatist, social media realist, and marketing strategist, he views publishing as a community service, and is optimistic about its future.

4 thoughts on “Does Ebook Growth Mask Market Share Declines?

  1. Michael Scott

    Those of us who oppose the agency model have only one effective way to show it — boycott ebooks sold under that model. I have done that since the agency model was imposed on Amazon, and as a result my ebook purchases have dropped approximately in half — since I will only buy ebooks from those who are NOT imposing the agency model on Amazon. I believe many others are doing the same. Many of the publishers whose books I am buying now are the smaller publishers, so that lends credence to your hypothesis.

  2. Pingback: E-böcker | rekommenderade artiklar – 18 October, 2010 | En blogg om e-böcker

  3. DMcCunney

    > “Does ebook growth mask market share declines?”
    > And if it does, how would you know?

    I think if I’m publisher, the question is “Do I *care*?” Market share is all very well, but revenue and profitability trump. If I have the highest market share because I’m selling below cost, is that market share a good thing? *I’d* say “No.”

    From what I’ve seen thus far, ebook pricing can be summarized as “There is lots of wishful thinking on the part of publishers on how *much* they can charge for an ebook. There is even more wishful thinking on the part of consumers on how *little* they should have to pay. The truth is somewhere in the middle, and everyone is trying to find out just where that middle is.”

    1. Guy LeCharles Gonzalez Post author

      Dennis: McQuivey’s point, and the one I’m making that extends from it, is that higher pricing for agency publishers may actually be masking a long-term problem, something Bezos suggested was in fact already happening on the Kindle when he claimed sales for non-agency ebooks were rising faster than those of agency. Unless you believe ebooks will remain on an exponential and unending growth curve, market share is a very important metric for publishers to be aware of. And right now, there’s no reliable way to measure that.



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