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No, CNN, eBook Sales Have Not Plunged Nearly 20%

While many sites misinterpreted last week’s annual report from the UK Publisher Asociation, CNN went above and beyond.

CNN’s Ivana Kottasová not only misunderstood the stats from the UK PA, she also dug up and misunderstood the latest industry stats released by the Association of American Publishers.

New data suggest that the reading public is ditching e-books and returning to the old fashioned printed word.

Sales of consumer e-books plunged 17% in the U.K. in 2016, according to the Publishers Association. Sales of physical books and journals went up by 7% over the same period, while children’s books surged 16%.

The same trend is on display in the U.S., where e-book sales declined 18.7% over the first nine months of 2016, according to the Association of American Publishers. Paperback sales were up 7.5% over the same period, and hardback sales increased 4.1%.

The problem with CNN’s report is not the facts (which are correct) so much as the context and the interpretation of said facts.

While CNN and other sites are implying that the sales data reflects the entire market, the AAP and the UK PA stats only reflects a part of their respective industries.

For example, in the UK the Publisher Association said consumer ebook sales totaled £203 million, down 17%.  As I reported last week, the pseudonymous Data Guy has an independent estimate which disagrees:

Author Earnings February 2017 report had the UK market at roughly 95,000,000 units and £327 million consumer sales.

In other words, the Publishers Association missed about 38% of the market.

And I am not the only one who says the PA’s data is incomplete. As The Bookseller pointed out when they covered this story last week:

E-book specialist Bookouture sold six million e-books in 2016, yet its numbers are not recorded in the yearbook. Ditto those of Head of Zeus, Endeavour Press, Amazon Publishing or self-published writers. Were they included, our understanding of the fiction market would change fundamentally.

And as for the US market, CNN is wrong to cite AAP stats and call them "US ebook sales" because the AAP does not say their data covers the entire market.

Instead, the footnote for the AAP’s monthly reports says that "StatShot tracks revenues for 1,200 publishers", and AAP spokesperson Marisa Bluestone confirmed that the AAP’s stats reflects what the publishers are earning, and not what consumers are spending.

So not only as CNN misunderstood the scope of the AAP data; they also misinterpreted publisher revenue as ebook sales.

It is generally accepted that the AAP data only covers about half the industry. You can find a more detailed breakdown of AAP data, and what it doesn’t cover, on the Author Earnings website.

To be fair, CNN is not the first to make that mistake; it is quite common for mainstream media to misunderstand book industry stats. (Then again, CNN’s Ivana Kottasová is a _financial_ reporter so you would think she would pick up on the difference.)

And that difference matters.

It’s important to know what the data really says and what it really means because it is being used to spin a narrative that ebook sales are declining.

The Guardian, for example, published not one but two articles last Thursday which made the claim that consumers were turning away from ebooks, and yet they don’t solid data to back that up.

What the data really says is that _publisher_ ebook revenues are declining. And once we understand that, it raises the question of why these publishers are experiencing a decline in revenue?

As anyone who follows digital publishing industry can tell you, publishers have been raising their ebook prices over the past several years to the point that print books are often now cheaper than ebooks. (It’s not entirely their fault; Amazon likes to deeply discount print books.)

This has led to an entirely expected decline in sales, and does not, as The Guardian would have you believe, reflect consumer preference for one format over the other so much as consumers buying whichever format is cheapest.

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David Kudler May 1, 2017 um 4:43 pm

The AAP approach to ebook pricing bewilders me: "Oh, no! Sales are down! What shall we do? I know! Let’s jack up the price!"

Nate Hoffelder May 1, 2017 um 9:29 pm

The thing about that approach is that everyone agrees it was deliberate. The major publishers raised their ebook prices to push people from ebooks to print.

They want ebook sales to be down.

Syn May 1, 2017 um 11:47 pm

I think what really happened, instead of pushing them to print, they pushed them to Indie authors. I read more Indie authors now than I do mainstream. I have a handful on my must buy list. This happened because I didn’t want to pay more for Electronic book than the paper version, and I don’t want to store the paper version anymore. I was skeptical going in but a lot of the Indie writers are every bit as good as the traditionally published. You just have more crap to wade through to find the gems. Kindle Unlimited helps that out a lot.

Darryl May 2, 2017 um 12:59 am

More fake news!

Mark Williams – The International Indie Author May 2, 2017 um 5:05 am

"As anyone who follows digital publishing industry can tell you, publishers have been raising their ebook prices over the past several years to the point that print books are often now cheaper than ebooks."

Hold on, Nate. This is true for front list titles of the Big Five. But as you keep pointing out with the drop in ebook sales claim, this is not the full picture.

Plenty of publishers are pricing below the $9.99 value Amazon has declared desirable (for its own profit margins), and below print prices. Backlist titles from the Big 5 are often as low or lower than indie titles. I’m inundated with newsletters from Big Pub offering titles at 1.99, 0.99 or free.

Last year Data Guy confirmed what we all knew anecdotally – that Amazon indie sales were in free fall. Those sales suddenly levelled off when the Author Earnings report went public in October.

Clearly this had nothing to do with indies pricing their ebooks higher than their print books.

Data Guy himself explained it thus:

"…Between May 2016 and Oct 2016 Amazon *indie* sales dropped, not just for KU titles but for non-KU indie titles, too. (although they seem to be growing back now.)

I think what happened is that the indie share of Amazon sales was getting too ridiculous (closing in on 50% of all Amazon purchases). So Amazon decided to pull some algorithmic merchandising levers behind the scenes (in their nightly marketing emails, for instance) to start pushing traditionally published ebooks at customers more aggressively (traditional publishers would probably say, “more fairly” )

Which had the near-instantaneous effect of downshifting indies to 40% or so of Amazon US purchases in October, rather than the nearly half(!) of Amazon sales that indies had been grabbing in May.”

Source: comments section at The Passive Voice.

No doubt Big Pub pricing is acting as a brake on sales, but it may not be the only factor.

A third factor will be A-Pub titles dominating the charts (14% of Amazon market share with less than 1% of Kindle store total titles).

Again, I defer to Data Guy, who described the rise of A-Pub as "unsettling" in the February Author Earnings Report, and in comments elaborated thus:

"The reason I used the word “unsettling” is Amazon’s ability to drive, via algorithmic merchandising, which books are marketed most heavily to their customers and which aren’t. For me the question isn’t whether Amazon Imprints will continue to grow their share of ebook sales; the question is where Amazon will decide they should level off.”

tired May 2, 2017 um 8:02 am

I only see ebooks over $10 if they are new releases. I would describe current ebook pricing as fair. A good equilibrium point. They are high enough for publishers and authors to earn money, but low enough that we don’t feel ripped off.

Kevin May 2, 2017 um 8:27 pm

I recently had no choice and had to buy a textbook: paper was $13.50 and Kindle was $21.00. So of course I bought paper. But I do have a choice with fiction. Given a choice of a highly recommended Big Publisher Kindle book for $21.00 and a highly recommended Indie Kindle for $3.99, I almost always go with the Indie. Because the stats mainly deal with Big Publishers, both of my decisions would register in the stats as a decline in buying ebooks. Multipy this by a few million doing something similar and I can see how the stats would show a massive drop in ebooks.

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Avi Lehrer January 28, 2018 um 5:38 am

I have just come across your article "No, CNN, eBook Sales Have Not Plunged Nearly 20%".

Down 20% from what? Why are there no hard numbers are in the article. How many actual e-readers were sold in 2016? Was it 1000? or 20,000,000 or more. The percentage figure quoted is meaningless to me.

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