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eBooks On the Decline in Canada? Now Only 12.9% of the Market

BookNet_Canada[1]BookNet Canada has just announced the release of a new report on the Canadian book market. While I don’t have the funds to buy a copy, the press release does share a few details about what the Canadian book buyer is doing.

According to BookNet Canada, Kobo is continuing to lead the pack as the preferred reading device, with 25% consumers picking that native Canadian ereader maker. They also report that the iPad comes in third (14%) with the Kindle in second place (18%).

There’s no publicly available info on ebookstore marketshare, but the report does note that the ebook market seems to have declined in Canada. eBooks made up just 15% of the market last year, and that is down from the first quarter of 2012 when ebooks made up 17.6% of the market. eBook market share declined for the rest of the year, hitting a low point of 12.9% in the fourth quarter.

Were you as surprised by the last figure as I was? I frankly don’t understand it why ebook sales declined after Kobo announced new gadgets. Canada was about the only country where they were available, and new ereader launches have usually resulted in increased ebook sales, not a decline.

The press release explains the decline thusly:

The 5% decline is likely due to heightened sales in Q1 after receiving new devices over the holidays followed by declining interest or having enough titles banked after the Q1 spike, as well as a preference for giving physical books as gifts. Further proof is that paperback sales had an inverse trend throughout the year and steadily increased in market share over the course of the year. Hardcovers also had their strongest quarter in Q4. 16% of book purchases were gifts in the holiday quarter.

So readers were choosing to go back to paper books? That could be true but I have trouble believing it.

The US ebook market may have fluctuated in 2012, but the general trend was a positive growth, not a decline. The US ebook market ended the year with ebooks making up 21.67% of AAP members reported sales, and a slightly higher percentage of the overall estimated book market. Given that Canada is the closest market I would have thought that it would have shown a similar growth pattern.

If any Canadians would care to chime in with an explanation, I’m all ears.

Update: A reader has pointed out a detail I missed (Thanks, FBone!). This isn’t a market report but a survey report. It’s based on monthly surveys of 4,000 Canadian consumers, with much of the data extrapolated from there. So that means that one possible reason for the decline in ebook market share is that the methodology was bad.

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Cookie May 21, 2013 um 5:01 pm

maybe pirated ebooks are eating into digital sales, which aren´t factored into the study.

Peter May 21, 2013 um 5:22 pm

Downloading is certainly a potential factor, and nobody should be surprised if significantly higher prices and limited legal availability of books results in an increase in downloading.

Cookie May 21, 2013 um 5:27 pm

I factor in human nature before those other things you mention.

Peter May 21, 2013 um 5:33 pm

Well, human nature is (presumably) a constant, so if it were purely down to "people like to get stuff for free" the market would be shrinking everywhere. If the market is shrinking in Canada but growing right next door, it makes sense to look at what differentiates the Canadian and US markets.

Peter May 21, 2013 um 5:18 pm

I’d put it down to two factors:

– Apple’s price-fixing agreement is still in full force in Canada, so ebook prices are higher at base;

– Canadians pay a "being Canadian" tax on books (all books, including treebooks, which are 20-30% more expensive in Canada after taking exchange rates into account).

This results in ebooks being anywhere from 30-50% more expensive when purchased from than from (same applies to buying from Kobo or Sony with a Canadian IP address). The icing on the cake is that a lot of books simply aren’t available for sale in Canada despite the publisher having both Canadian and US rights – actually looking would require a token effort, and a lot of the time publishers just push the "for sale only in the US" button.

End result? A lot of Canadians using VPNs to buy from US ebookstores – even if you only buy a few books a year you can easily recoup the cost of a VPN in the savings on books.

fjtorres May 21, 2013 um 5:23 pm

It would take a lot of people using VPNs to buy out of country to produce such an effect…
If that is the cause (and not just a crappy survey 😉 ) one would expect a political effect shortly, no?

Peter May 21, 2013 um 5:27 pm

Well, the number of people using VPNs required to produce the effect would depend on the size of the market 🙂 I suspect a lot of people just stopped buying ebooks due to price-gouging.

As far as political effect goes…not with the current Canadian government. Certainly there’s been zero movement on treebook prices, which have been tremendously inflated in Canada for years.

Ana May 21, 2013 um 6:07 pm

And you don’t even need VPN’s to buy as an American, I’m Spanish and I’ve been practicing my English for years since I discovered e-books. Thanks to some selected bookstores I’ve never needed a VPN.

fjtorres May 21, 2013 um 10:35 pm

I wasn’t thinking of the government relaxing the policies but rather lobbying from the outside.

Peter May 22, 2013 um 6:11 am

Oh, there’s been plenty (especially in regards to treebook pricing, not so much with ebook pricing), but it’s fallen on deaf ears.

Ironically I found myself buying a lot *more* ebooks from Canadian stores after the Apple price-fixing agreement went into effect, since it hadn’t taken root in Canada yet, so ebooks were significantly cheaper here for a while (although the selection was smaller). Now the situation has changed, the cartel’s been broken in the US, but it’s still doing its best to strangle the Canadian market in its crib.

Fbone May 21, 2013 um 6:19 pm

The survey asked a total of 4,000 English speaking people who purchased at least one book the previous month. They may excluding a certain type of buy-hold-read-buy individuals.

AH May 21, 2013 um 8:49 pm

In Canada ebooks are expensive. I can usually buy a paperback for less which makes absolutely no sense to me. So I continue to buy paperbacks, used books, and I check out the local Chapters/Indigo bargain bin where I can find some hardcover books for about $5. Go online and that same book will be $14 as an ebook. Go figure.

Bob W May 21, 2013 um 9:05 pm

It’s obviously our lax copyright laws. Only life plus 50 years. Pffff Canadians are just sitting around reading Hemingway instead of buying new ebooks ;^)

PD May 22, 2013 um 8:52 am

Speaking of declining sales, as an ebook author there’s been a lot of discussion over on the B&N author boards about a huge drop in sales a lot of us have been experiencing (, . A lot of us cite the recent platform switch as the technical culprit, but it could be seasonal, or the Q1 effect referenced in the above article (my hopes are that it’s just a one-time technical issue).

Samantha Francis – BookNet Canada May 22, 2013 um 9:37 am

Hi Nate,

I think it’s important to note what our CEO said in the press release. Our data for Q1 of 2013 mirrors Q1 in 2012. This is why the press release calls it a plateau. We’re seeing a repeating pattern so far that suggests that ebook sales will be highest in the early part of the year. It’s not a year-over-year decline at this point. (The 2013 data is only mentioned in the press release for now but will be in our next report once we’re further into the year.)

It’s hard to say why Canadians aren’t adopting ebooks at the same rate as Americans, though. But broader market research by companies like ComScore and Ipsos Reid suggest that Canadians haven’t adopted all digital channels in the same way as Americans. They were slower to shop online in general but until recently watched more online videos than any other population in the world.

There are cultural and demographic differences between the populations and I can say with certainty (since we handle book sales tracking in Canada) that book subject categories don’t have the same market share in the US and Canada so there are different tastes and readers in these markets.

Definitely more room for research, though. It will be interesting to see if the plateau extends or if a boost will come shortly. Stay tuned!

Nate Hoffelder May 22, 2013 um 10:00 am

But do you have any hard numbers to back that up? Impressions of what the data might say in the future matters less to me than what it actually says right now.

Samantha Francis – BookNet Canada May 22, 2013 um 10:52 am

We can only provide hard numbers on the market research already fielded, which includes Q1 2013 and all of 2012. So at this point, we can say that a pattern is emerging and Q1 in 2012 and 2013 are in line with each other. The rest of the year has no comparable year-over-year data yet but we’ll release it as it becomes available.

Jayne May 22, 2013 um 12:47 pm

I’m work in a border town, US side. I would estimate that 99% of the Canadian residents I know have-

1. A US mailing address
2. A US credit card
3. Access to US based internet

My Canadian co-workers have a variety of kindles, nooks and one kobo. All say they do their book buying at lunch time and never at home.

Jackie June 19, 2013 um 4:54 pm

I have stopped purchasing e books, I have purchased over 100 books in a year, however now all the bestsellers are 15.99, 14.99 so due to the pricing I have to go back to paperback

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