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Ebooks expected to be 17% of 2011 Revenue at Simon & Schuster

Carolyn Reidy, the CEO and resident of Simon & Schuster, sent out an email today to the S&S staff. Various copies have popped up on the web, and her estimates for ebook revenues are raising a few eyebrows.

Reidy expects digital to be the future of S&S. She is "excited about the potential for digital publishing to reshape our international business, reducing the friction of shipping physical editions overseas, improving our ability to reach readers around the world, and critically, helping us to grow the audience for our authors in the far corners of the globe in markets that are currently underserved by physical book distribution."

S&S is now selling ebooks in more than 150 markets and while the year’s not over with yet, Reidy expects that ebooks will account for 17% of the total revenue at Simon & Schuster. Last year this was around 10%, so while this isn’t a doubling it’s still a significant increase.

Of course, what I find most interesting is how ebook revenues held steady throughout the year.  I only have the first and third quarter estimates at hand, but those were reported as being 18% and 17% of revenue.  This is a huge increase over 2010, but it is also a plateau.

I used to track the month to month ebook sales – back before I learned that those monthly figures are fiction. One thing I noticed was that ebook sales seemed to alternate between jumps in revenue and plateaus. That’s more or less what we’re seeing here, isn’t it?

To be fair, the situation is more complicated. We’re looking at percentage of revenue for a single publisher, and that varies from one month to the next. Still, ebooks stayed at around the same percentage throughout the year, and that suggests that ebook sales rose and fell with the rest of the book market.

Could that mean that the core of the US ebook market is now a mature market segment?  Perhaps, but I have a different explanation and I expect to see more growth.

One of my long running theories is that ebook revenues are driven by ereader sales. Okay, that is rather obvious, but it’s still true. Any time there’s a spike in ereader sales about a month later we see a jump and a new plateau in ebook sales. This has happened several times in the past couple years.

And a heck of a lot of ereaders have been sold this Christmas season, so I expect to see a corresponding jump in ebook sales in January and February.

 

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