Nielsen says: More Dead Trees Coming

A recent blogpost by Joe Wikert, Director of Strategy and Business Development at Olive Software, recaps data from Nielsen Bookscan on the reading habits of Americans. Here is Joe’s analysis:

Self-publishing and the Big Five are crowding out everyone else – According to Nielsen’s data, from Q1 2014 to Q1 2015, self-published books have grown from 14% to 18% of the overall market. In that same period the Big Five’s share has grown from 28% to 37%. Meanwhile, the rest of the market, all the large, medium and tiny publishers, have seen their share decrease from 58% to 45%.

The print/e split is now roughly 74%/26% – Plenty of articles have been written about the plateauing ebook market. Most publishers report ebooks represent anywhere from 15% to 30% or so of total revenue. According to Nielsen, the current state of equilibrium is closer to a 74%/26% split. That ratio varies widely by genre, btw, but it’s worth looking at your own rate to see how it compares to the overall industry average.

Price drives ebook interest – According to Nielsen’s consumer survey, almost 60% of respondents said they’d choose e over p if the savings is at least $4 for the former. Additionally, approximately 50% said they’d do the same even if the ebook is only $2-3 cheaper than the print version. So as publishers wrestle back consumer pricing via the new agency model, driving ebook prices up, it’s clear they’re inadvertently (and sometimes deliberately) nudging consumers back to print.

Consumer prefer print and e, not or – 49% of consumers surveyed said they bought print and ebooks in the past 6 months vs. 42% who only bought print and a paltry 9% who only bought e. Just because a consumer buys ebooks doesn’t mean they’ve abandoned print. This is a huge opportunity most publishers are overlooking. Why aren’t there more digital products that complement print rather than assume the ebook is replacing the print one?

Amazon dominates subscriptions too – It’s been hard to find data on the all-you-can-read ebook subscription market but Nielsen is finally shining some light on the model. And just as they do pretty much everywhere else, Amazon is crushing it. First of all, according to Nielsen only 5% of consumers have signed up for any ebook subscription solution, so the market remains small. Kindle Unlimited led the way with the largest chunk of market share, jumping from approximately 40% in January 2015 to almost 60% in April. Scribd and Oyster were tiny players by comparison in that period, and they’re only getting smaller. Given their teensy share of a small segment, it’s no wonder Oyster is going away soon.

Let’s add that many e-books do not have ISBN numbers and their sales don’t count. If they were, the share of self-published would be higher, between 20-25% of all sales. The takeaway here is the squeeze smaller companies are holding, every single publisher that isn’t the Big Five or one of their imprints. This is worrying, because most publishers are not big corporations or their subsidiaries. If the trend continues, you will see a gap between the select few who get a major publishing contract, and those who self-publish. Those who pursue an indie publisher could wind up at a disadvantage down the road.

Like most people, I prefer print books, but I’m more likely to buy e-books. Why? I spend all day on screens, and print books are essentially my “escape”. With non-fiction, I like being able to physically have information I may need later. Anecdotally, most people I know who are not avid readers prefer print to e-books, though nearly all own some type of e-reader (includes smartphones).

The publishers are overpricing most e-books, and it’s pretty clear they want to protect paper sales. That’s partly why paper is still strong- most people figure for $15 they should just get the paperback. Personally, I think that’s a mistake- the e-book ought to complement the print book, not compete against it. If self-published e-books continue to rise, this model may change as publishers much charge a price comparable to an indie-published book, which means growth in e-books.

Subscription models are the new model of business for many distributors, whether or not they’re good for content creators. Increasingly, consumers expect to get a buffet at their business of choice, paying a flat rate for all the products they can consume. The problem is, not all subscription models are sustainable, and many content creators (rightfully) object to some of the practices by the distributors, namely in how little the creator gets compensated while the distributor keeps most of the money. To be fair, a lot of authors have complained about this with the traditional publishing model too, and it is a legitimate topic of discussion.

The conclusion: Continue to write e-books, but don’t stop killing those trees just yet. A lot of readers want them for their books, including yours.

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