Publishing Trends

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1. 

   Nov 28, 201412:57 pm
   Jack McKeown

   Here we go again. Price Waterhouse and Tech Crunch predicting that ebook revenues will surpass print, this time by 2018. Don’t believe a word of it. Since 2009 we at Verso Advertising have predicted that ebook sales would peak at 25-30% of the market and stay there for as long as any on us needs to be concerned about. This plateau was reached in 2012. Since then adult ebook sales have flattened and even declined, while the only ebook growth has been on the YA side, driven by strong series and movie tie-in performance in late 2013-2014.

   The reasons are identical to what they were in our first 2009 Survey, and repeated in survey after survey thereafter through 2012. (We finally stopped conducting these surveys as we kept getting the same results.) First, 60% of the market is resistant to reading long-form narrative on screen. That number has not budged, and it spans all age groups and income demographics. Secondly, even among devoted ereader-device owners, split-purchasing behavior (print and ebook) is the norm, with over 80% reporting they buy an equal number of print and ebooks. Third, only 5% of the market says they read exclusively digitally. Finally, the displacemnt of dedicated ereaders by tablets is creating further drag on ebook penetration as tablet owners become too easily distracted by their devices’ other uses (games, video streaming, email, etc.)to use them effectively as ereaders. Run the numbers and you get to maximum ebook penetration of 25-30%. To these factors you can now add the downward pricing pressure on ebook prices to be brought on by the AMZN settlement with S&S, Hachette, etc. AMZN says that these publishers have agreed to financial “incentives” to keep ebook prices at $9.99 or lower under these modified agency terms. We all know that in reality they are disincentivized to raise prices by these new terms. The net result will be more ebooks priced at $9.99 and lower, particularly among bestselling authors. And as we all should know, unit bestseller sales are not price elastic in any meaningful way. Thus ebook revenues share of the total pie will not increase as a result of the new AMZN terms with the leading houses. The industry could have saved itself a lot of distraction and hundreds of millions, if not billions in squandered investment (read Nook, Sony, etc.)if only they had paid attention to readers’ real preferences. Let’s not repeat that mistake by continuing to trust these pundits who keep waiting for that elusive ebook tipping point.

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