It’s that time of year again.
Starting with Nicholas Carr in 2013, it has become a biannual tradition for someone in the media to proclaim that print isn’t dead, and that ebooks are declining.
The last publication to cheer on the revival of print was The Guardian, which proclaimed in April that paper books were opening a new chapter, and now the NYTimes has picked up the standard.
Yesterday the NYTimes announced that print was far from dead and that due to declining ebook sales, the expected digital apocalypse had been indefinitely delayed.
Or at least that is what the NYTimes would have you believe; unfortunately, it’s pretty obvious that they do not understand the ebook stats they cited:
Now, there are signs that some e-book adopters are returning to print, or becoming hybrid readers, who juggle devices and paper. E-book sales fell by 10 percent in the first five months of this year, according to the Association of American Publishers, which collects data from nearly 1,200 publishers. Digital books accounted last year for around 20 percent of the market, roughly the same as they did a few years ago.
E-books’ declining popularity may signal that publishing, while not immune to technological upheaval, will weather the tidal wave of digital technology better than other forms of media, like music and television.
Yeah, those sales stats don’t mean what you think they mean.
The NYTimes is citing the AAP’s monthly sales stats. This data is collected from some 1,200 and collated each month. The stats are good and accurate, but they also come with a huge caveat:
The 1,200 publishers represent less than half of the industry’s ebook revenues.
According to the AAP’s year-end report, the 1,200 odd publishers generated $1.58 billion in ebook revenues in 2014.
That is a lot of money, but not in comparison to the AAP’s figures for 2014 ebook revenues for the trade publishing industry.
You see, the AAP collects and releases revenue data from 1,200 publishers on a monthly basis, but they also publish an annual estimate that covers the entire trade publishing industry.
That annual estimate is called Statshot Annual. According to the figures released in June 2015, the total 2014 ebook revenues for the trade publishing industry were an estimated $3.37 billion dollars.
The share represented by the 1,200 publishers comes to 46% of that $3.37 billion, in case you were wondering.
While I’m sure some readers are thinking that you can reasonably extrapolate from a limited data set to the entire market, that will not work in this case because the 1,200 publishers are not a representative sample of the market.
There’s a fundamental difference between the AAP’s data and the non-AAP industry. While the majority of the AAP monthly data about ebook revenues comes from the Big Five US trade publishers, the majority of the non-AAP ebook revenues goes to self-published ebooks and indie published ebooks.
That difference is especially important because the Big Five are the same five publishers which negotiated agency contracts last fall and spring, giving themselves more control over their ebook prices. According to the WSJ, the new contracts resulted in higher ebook prices and fewer ebooks sold.
Edit: And here’s why those publishers pushed for higher ebook prices.
And it’s not just the WSJ; there’s independent confirmation in terms of ebook sales in the Kindle Store. According to the Author Earnings report, the share of Kindle ebook unit sales represented by AAP members has dropped from 45% to 32%.
You can find more data on average ebook prices for Amazon, indie, and self-pub ebooks over on the Author Earnings website. While you’re there you should also look at the report that the Big Five have been increasing the average price of their ebook for over a year.
The data shows that the publishers sending monthly sales data to the AAP are selling fewer ebooks, so it should come as no surprise that their sales are down.
But it does not follow that the market as a whole is down.
To look at the AAP data and say that the ebook market is down is an example of wishful thinking, confirmation bias, or what have you.
But no matter what the motivations, the simple fact is the data does not support the claim.
And as for the rest of the NYTimes piece, that is just window dressing.
image by Julian Partridge