Reports of a Shrinking US eBook Market Have Been Greatly Exaggerated (Nielsen Pubtrack)

Reports of a Shrinking US eBook Market Have Been Greatly Exaggerated (Nielsen Pubtrack) DeBunking ebook sales About a week and a half ago I reported on and expressed doubt about a new estimate from Nielsen Pubtrack which said that 6% fewer ebooks were sold in the US in 2014. At that time I had no evidence to prove that the Pubtrack numbers were off, but since then I have been digging into the background.

Today I can report that the Pubtrack estimate of 223 million ebooks sold in the US in 2014 (as reported by The Bookseller) was not just bad, it was completely erroneous. I have two sources which say that the US ebook market is at least twice as large as Pubtrack thinks it is.

My first source is the pseudonymous Data Guy (the one behind the Author Earnings Report). His calculations suggested that around 513 million ebooks were sold in the US ebook market last year.

And for those of you who want an official figure from a named source, my second source is the Association of American Publishers. They just released their annual estimates of the US book market, and they say that 510 million ebooks were sold in the US last year (that volume also grew by a fraction of a percent).

Yes, the AAP says that the US ebook market is over twice as large as Nielsen had claimed.

It turns out that Nielsen widely over-estimated its ability to track the US ebook market, and I can tell you why.

While Nielsen reports its Bookscan estimates of the print book market based on data from several dozen retailers, the Pubtrack ebook market estimates come from unit sales data supplied by 30 US publishers.

That is not a bad information source, if you know what you're doing, but apparently Nielsen does not. Here's what they told me about Pubtrack when I followed up:

PubTrack Digital is a publisher aggregated eBook sales tool in which publishers are the data suppliers who send their complete and confirmed eBook unit sales to Nielsen every month.  This eBook measurement service gathers point-of-sale data (indirectly from 40+ retailers) through a panel of over thirty US publishers - representing about 85% of the nation’s eBook sales.

Yes, Nielsen thinks the 30 publishers it tracks represent 85% of the market, when in reality they represent around half that number.

This comes as no surprise to anyone who has read even one Author Earnings Report, and I was tempted to make that point when I first learned about Nielsen's error last week. But I held the story because I knew that the AAP would be releasing new data this week which would either confirm or disprove Nielsen's figures.

And I am glad I waited, because this shows that Nielsen's understanding of the US ebook market is about as accurate as if they had thrown darts at numbers stuck on the wall.

I reached out to Nielsen for a comment on this story. I will update this story should I receive a response.

images by Jessie PearlDavid Bergin Photography

About Nate Hoffelder (10081 Articles)
Nate Hoffelder is the founder and editor of The Digital Reader:"I've been into reading ebooks since forever, but I only got my first ereader in July 2007. Everything quickly spiraled out of control from there. Before I started this blog in January 2010 I covered ebooks, ebook readers, and digital publishing for about 2 years as a part of MobileRead Forums. It's a great community, and being a member is a joy. But I thought I could make something out of how I covered the news for MobileRead, so I started this blog."

20 Comments on Reports of a Shrinking US eBook Market Have Been Greatly Exaggerated (Nielsen Pubtrack)

  1. Owww, so Data Guy’s estimation is roughly 0.6% “out” from AAP’s. Well, if it’s bogus, AAP’s numbers are bogus too, right ?

  2. Thanks, Nate, for staying on top of this. It didn’t make sense ebook sales were slowing, as much as the print lovers wish it was true.

  3. So, is AAP still using the same methodology as they did with BISG for BookStats? It seems like it (based on the numbers). If so, they are close to correct on the ebook number completely by accident. Once I see the pbook numbers, I will be able to explain why.

    • I don’t know the answer to your question, but here’s something Data Guy told me:

      Now that I’ve spent a little time with the AAP, BookScan, and PubTrack data, I actually find both quite useful for recalibrating AE. (The BISG BookStats not so much: it’s grotesquely, laughably wrong, which is probably why the AAP publicly disassociated themselves from the BISG’s future efforts.)

      I will ask the AAP about this.

      • Here is what PubLunch says (in the only non-paywalled paragraph):

        The AAP released a second set of annual statistics for 2014, this time a new version of the modeled “guesstimates” that they had produced jointly with the BISG (Book Industry Study Group) for a few years under the name BookStats. Now they are calling it StatShot Annual — not be…

      • This latest AAP report seems to be based on a similar guesstimation method as the one the BISG formerly used. As such, it’s probably mostly coincidence that they ended up with a number so close to the AE estimate, because our methodologies are completely different.

        I find the AAP’s monthly-reported dollar data & PubTrack’s annual-reported unit-sales data far more reliable… as long as one keeps in mind what those reports really and truly do measure (i.e. the self-reported sales of the Big Five plus 1,210 other identifiable publishers for StatShot and 25 identifiable publishers for PubTrack).

        The problem with those real-data reports isn’t the numbers themselves, which are likely pretty close to those publishers’ true ebook sales. The problem is AAP’s and Nielsen’s ridiculous claim that those numbers somehow represent 80-85% of “trade” unit sales.

        In reality, AE’s data on the specific list of publishers tracked by the AAP and Nielsen shows us that their real market share was less than 45%.

        In other words, the AAP’s guesstimate number was close mainly by accident.

  4. Great reporting, as usual, Nate.

  5. I don’t know why you’re fixating on this, but I think you may be reading into a contradiction that isn’t necessarily there. None of these statements are necessarily contradictory:

    1. (Nielsen) eBook unit sales for large professional publishers (30+ US publishers) have decreased. (From your previous article.)
    2. (AAP) total eBook revenue in the US eBook market has increased. (From your previous article.)
    3. (Nielsen) 223 million eBook units were sold in the US in 2014 by 30+ of the largest US publishers.
    4. (AAP) 510 million eBook unites were sold in the total US eBook market in 2014.

    Several conclusions can be drawn from these statements that don’t necessarily result in any of these sources being wrong. For example, one can conclude that large professional publishers are selling fewer eBook units while small publishers and self published authors are earning more revenue from sales, either from increased unit sales, increased price per unit, or both. What these statements also demonstrate is that the hundreds of thousands of small publishers and self published authors not included in Nielsen’s sample are putting out in aggregate almost the same volume of eBook unit sales as Nielsen’s sample of 30+ large professional publishers.

    Also, you are again muddying the difference between unit sales and revenue when you incorrectly conclude that Nielsen’s sample doesn’t really represent 85% of US eBook sales (revenue) because the unit sales of their sample are only 43% of total US eBook unit sales. I agree Nielsen may be incorrect that their sample represents 85% of US eBook sales (revenue), but it may be that their sample once did represent 85% of US eBook sales (revenue) and that a growing self publishing segment of the market has put downward pressure on that percentage.

    • There are so many straw man arguments here that I can’t address them all, so I will simply cover the first.

      The Nielsen figure was previously presented as applying to the entire US ebook market, and not just the 30 publishers. You are wrong to suggest it was intended to be more limited.

      Go read The Bookseller if you think I am wrong.

      As for why I obsess about it, I guess you missed the detail that this is a news blog. The numbers were bad, I showed how they were bad, and that strikes me as newsworthy.

    • Okay, I’m going to take a step back and apologize for yelling at you.

      Your comment inspired me to go double check my assumptions. Now I can see I may have been wrong; that 223 million may have represented 85% of the US ebook market, and not the entire thing.

      In my defense, The Bookseller sure as hell framed the 223 million as the entire market when they reported it, and everyone used it and referred to it in that manner. (And the difference was so small that I’m fine with it.)

      And as for, confusing volume with value, go look at the quote from Nielsen. If they did not intend for the 85% to represent a share of the units sold the they were unclear.

  6. wait, so with your revision, what is the bottom line revenue growth of the ebook market–both overall and for the largest publishers?

    • I don’t know. It’s not clearly explained anywhere I can see (there are a couple conflicting explanations, actually). And since Nielsen isn’t offering any clarifications, the matter remains unresolved.

    • Smart Debut Author // 15 June, 2015 at 12:27 pm // Reply

      The best answers anyone has about the true state of the ebook market at Author Earnings… apparently, the AAP only measures half of it.

      The shrinking half.

  7. You are basing your entire conclusion on misunderstandings (which you seem to keep discovering after your articles have been published). Consider:

    1) If your misunderstandings are correct (and they are not), the story is: “Nielsen, a highly respected, publicly traded global research and information firm got the numbers wrong, and I, journalist(?) Nate Hoffelder scooped them.”

    2) If your misunderstandings are incorrect (and they are), the story is: “Nielsen published a report. And so did AAP.”

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