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AAP Reports Sharp Decline in eBook Revenues in January 2015

aap logoThe Association of American Publishers reported on Wednesday that revenues were up by just under a percentage point.

According to the 1,200 odd publishers who submit their data to the AAP’s Statshot program, revenues for the month of January 2015 were up +0.9% to $543 million over January 2014.

Update: the AAP has revised the revenue stats for January.

Aside from that the actual details are sparse this month. The AAP didn’t release specifics, so I can’t offer much in the way of financial stats.

But the press release did tell us that the adult trade segment increased by 0.6%, and that religious presses were up 11.1% (with most of the growth in hardback books). Kids/YA segment declined by 1.6%. According to the AAP, this segment saw great paperback and board book revenues (10.9%, 34.1%, respectively)which were damped by a sharp decline in ebook sales (37.4%).

In related news, the AAP also reported that the curricula market was down 7.8% in January 2015 from the year before ($1.06 billion dollars, from $1.15 billion).

In terms of formats, paperbacks, hardbacks, and audiobooks all saw great growth in January 2015, but ebooks did not. Paperback revenues were up 10.4%, while hardbacks increased by 3.6% and audiobooks 11.5%.

Revenues from ebook sales, on the other hand, did not carry over momentum from 2014, and were down by -10.2%.

AAP reported last month that ebook revenues ended the year up 4.7%, but as anyone who followed publishing news over the past couple months that trend was not going to continue.

In the last few months of 2014 Amazon signed new contracts with several major US trade publishers. Those contracts included provisions for agency priced ebooks. This both raised the prices of ebooks published by S&S, Macmillan, and Hachette and blocked retailers from discounting.

We saw the obvious result in January: consumers switched to other formats and other segments of the industry (ones not tracked by the AAP).

How much would you bet that the trend in declining ebook revenues will continue?

I’m expecting the decline to continue in February and to get a lot worse when we get the figures for April and May 2015; those will reflect HarperCollins' new agency ebook contract.

image by e³°°°


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JC April 29, 2015 um 12:40 pm

I know the Big 5 publishers and apparently Amazon don’t give a crap about readers outside the USA, but I’d buy more ebooks from them and Amazon if they would get rid of the exhorbitant $2 surcharge Amazon adds on top of the already exhorbitant prices from 'major' publishers. I mean seriously? $11.99 and up for ebooks? And then an additional $2 on top of that? No thanks. And with my congenital eye defect which makes it almost impossible for me to read the tiny font in paperbacks and hardcovers even with corrective lenses, those formats are a no-go for me.

I’m an Audible member, and during the Spring Cleaning Sale where everything was 50% off, I bought almost $300 worth of audiobooks because they were actually cheaper than their Kindle versions. So there’s some truth to that bit of the report…

For ebooks, I’ve been mostly buying from ARe and Omnilit since they have frequent 50% rebate sales and the buy 10-Get-1-Free program. Since the Big 5 don’t participate in that program, I buy mostly ebooks from small press and indies.

Never bought anything from Google play books. I only buy from Kobo when they send me coupons (which are never ever valid for anything from the big 5). Apply and B&N don’t sell ebooks in my country.

Maria (BearMountainBooks) April 29, 2015 um 1:36 pm

Google play does run discounts now and then and I think they have a deal of the day for books and music. I don’t follow it closely though. I just see an occasional post on one of the forums I’m on.

I use the Kobo coupons and the Trivia coupons too. The trivia coupons come out once a month, but they don’t work on big 5 either.

Nate Hoffelder April 29, 2015 um 5:21 pm

If you want to get rid of that charge then the first thing you should do is give it a name.

Call it an Amazon tax. That gives it a negative connotation while still being a reasonably accurate description.

JC April 30, 2015 um 12:51 am

The Amazon Tax defies all logic and sense for me. I just don’t understand what it’s for and why no one can explain within or outside of Amazon what that USD$2.00 is for.

It’s almost as if each time I buy an ebook with that $2 Amazon tax, I’m subsidizing the discount offered to a U.S. customer.

For example, I’m looking at an ebook that’s listed for $6.99 on the publisher’s website. When I go to Amazon, they’re selling it for $5.38, but as soon as I log in, the price becomes $7.38 even though if I got to the review page, the price still shows $5.38. When I go to Kobo, logged in or not, the price is $6.16 even before applying any coupons and it remains the same after I complete my purchase (added bonus, I can use PayPal with Kobo). The ebook is also $6.99 on ARe/Omnilit and I’m sure it’ll be the same when/if Apple decides to open their stores in this region since I buy apps, musical and iTunes with my local account and debit card and get charged the same price as whatever’s in the U.S. iTunes Store because we don’t have VAT or sales tax on digital goods and services. Although I’ve never bought anything from Google Play books, I still check there from time to time and they generally just offer the same price as the publisher’s list price.

The Amazon Tax is always $2 regardless of the list price. It gets ludicrous with the serials that cost $0.99 each. Imaging buying ten of those. You’d have an Amazon tax worth $20! Imagine what else you could have bought with that.

Nate Hoffelder April 30, 2015 um 6:14 am

When Amazon first went international (almost 6 years ago) they were still heavily dependent on 3G-equipped Kindles. Maintaining a network across so many countries was expensive.

Now, though, Amazon delivers most of the ebooks via Wifi and other other networks which don’t cost Amazon anything. Now the charge is simply opportunism. Amazon can get away with charging it, so they do.

Binko Barnes April 29, 2015 um 1:19 pm

Over the last 2 or 3 years I don’t believe I’ve seen a single person other than myself reading on a kindle or other eReader. Meanwhile I’ve seen 1000s of people busily poking away at their cellphones.

The elevation of the cellphone to the status of almost a religious icon at the center of most people’s lives is the death knell of reading on electronic devices.

ucfgrad93 April 29, 2015 um 4:02 pm

I just spent a week in Hawaii and saw several Kindles around the pool and on the beach.

Mike Coville April 29, 2015 um 3:37 pm

These numbers are only interesting when you keep in mind they reflect the ebook sales of the associated publishers. They say nothing to the ebook sales of independent publishers. With that said…

I’m not surprised that over priced ebook sales are declining. No one wants to pay nearly the same amount for an ebook than a paper back. Until the big publishers learn that they no longer control the publishing industry, readers will continue to spend their money on independent authors.

Nate Hoffelder April 29, 2015 um 5:16 pm

Yep. It is very limited.

Maria (BearMountainBooks) April 29, 2015 um 6:54 pm

FWIW, I’m an indie and I have seen sales decline more than previous years in the last few months. From some of the various forums I follow some of the smaller publishers are seeing a decline as well. But that said, my sales decline actually started when Amazon started allowing indies to post their books for free (I did not try making my books free, although I did so with some short stories). I think the market for ebooks has leveled off. That’s not to say we won’t have periods of growth and the higher pricing of big 5 books will probably help indie sales overall, but the big boom/initial excitement is definitely behind us.

I do still see people with Kindles reading. When I was called in to jury duty, there were several of us with e-readers.

puzzled April 29, 2015 um 5:36 pm

The shift from ebooks to physical books, at roughly the same total revenue level, only benefits the publishers if the profits are the same. If ebook profits are greater, the publisher is disadvantaged, if the physical book profits are greater, then the publishers are advantaged.

Smart Debut Author April 30, 2015 um 4:31 am

Gross publisher dollars being nearly flat, while ebook dollars are down 10% for AAP publishers means:

1) Fewer total units sold now at that same gross revenue (because print books are several % more expensive than ebooks)

2) Lower publisher profits now from that same gross revenue (because ebooks have significantly higher profit margins than print)

Another interesting implication of agency: Amazon used to discount most Big Five ebooks down to slim-to-no profit (many in the industry claimed they were selling ’em at a loss). So the Big Publishers were once getting nearly 100% of what consumers spent on their ebooks. But no longer. Under agency, the Big Five are only getting 70% of what consumers spend on their ebooks, further reducing their ebook profits (as they no longer get subsidized by the Amazon discount).

Basically, the Big Publishers have "succeeded" in shifting *some* of their ebook sales to print (while driving another chunk of their ebook sales to indies and Amazon imprints). And in the process, they gave up a bunch of ebook profitability.

It’ll be interesting to see how their bottom lines weather 2015.

fjtorres April 30, 2015 um 8:11 am

"Be careful what you wish for. You might get it."

…and choke on it.

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Timothy Wilhoit May 2, 2015 um 7:02 am

"I’m expecting the decline to continue in February and to get a lot worse when we get the figures for April and May 2015; those will reflect HarperCollins' new agency ebook contract."

I have no doubt you’re correct. For kicks, I preordered the new Harper Lee ebook in early February. Even at $8.77, I had a bad feeling that I would feel snookered when I got it. However, I just noticed the preorder price has climbed to $15.99. HC will want this book shooting straight to #1 and stickering the ebook with a $15.99 price tag would be a great way to torpedo it, IMO. They may get some people to pay that price. I would not be part of that hypothetical (possibly mythical) group.

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