Friday, November 6, 2009

Some Kindle (and related) figures and quotes

I've been working on tracking down data regarding print book sales, e-book sales, e-reader sales, and related figures and quotes for an article I am working on. I thought I would go ahead and share the highlights of this information, in the hopes that someone else won't need to spend several days tracking down, reading, analyzing, and collocating this information again. :)

Wholesale E-book sales in US, 2008/2009

  • 2002: 5,794,180
  • 2003: 7,343,885
  • 2004: 9,619,503
  • 2005: 10,828,970
  • 2006: 20,000,000
  • 2007: 31,800,000
  • 2008: 53,500,000
  • 2009 (Jan-August): 94,000,000

The IDPF notes "The data… represent only trade eBook sales via wholesale channels. Retail numbers may be as much as double the above figures due to industry wholesale discount… The data… represent only data submitted from approx. 12 to 15 trade publishers… The data does not include library, educational or professional electronic sales… The numbers reflect the wholesale revenues of publishers."13

It's a bit hard to make comparisons between these sales numbers and overall sales, since collecting statistics on e-books is a relatively new practice that's still being worked out (not just for libraries, apparently :) Over the years, it's likely that e-book sales reporting will become more standardized and consistent. Still, even if some of the growth in numbers might be attributed to new data collection methods (and even sources) one can see a clear and growing trend in e-book sales. It's not a huge leap to at least partially attribute this new increase in sales (2008-2009) to the comparatively successful current wave of e-readers (in light of previous e-book reader "rounds"), most notably the Amazon Kindle. But just how "good" are these numbers? Take a look at the next section, but here's a quick preview to put things in comparison: The AAP estimates that August 2009 wholesale e-book sales in the US (the biggest single month for e-book sales ever) totaled $14.4 million, while print books, although only seeing a small month to month increase in sales, and still slightly lower than August of 2008, were at 1.55 billion (yes billion with a B). Even if we consider that there's as much as 50% underreporting on e-books in the industry right now (that's the AAPs own estimate) that means that in the US, August 2009 saw about $28.8 million in e-book sales, and 1.55 billion in print book sales. In August 2009, e-books only accounted for 1.88% ($28,800,000/$1,528,800,000) of the entire wholesale book market (e-book plus print book). Clearly, e-books have a long way to go to becoming ubiquitous- let alone becoming the dominant method of delivery - but what about a few years from now? Let's consider the significant growth in e-book sales from September to August, 189.1 percent, to be sustainable (which is questionable, an annual growth rate that nearly doubles sales will eventually start to taper off). Extrapolating that out (as an average annual growth rate of 189.1%), some time in 2013 annual e-book sales would be close to monthly print book sales (in the $1 billion+ range). Keep in mind that U.S. publishers had net sales of $25.0 billion in 2007, and a slightly less rosy 24.3 billion in 2008 (n.b. for the last six years, "the industry had a compound annual growth rate of 1.6%").16,18 Let's assume that print book sales remain flat, on average, for the foreseeable future (possible, since at some point increased sales of e-books, if they are on the way to becoming the dominant consumption format, will start to have a direct correlation with a decrease in print book sales). Given that, the earliest we are likely to hit the tipping point, where the default mode of consumption is electronic, will be sometime in late 2016 or early 2017. Of course, this very simple analysis doesn't account for a wide range of factors: is the growth in the e-book sales rate sustainable (if not, then it will take longer), is there a new development on the horizon that will place more digital consumption devices into the hand of more consumers (not just dedicated e-readers, but netbooks, smart phones, and any number of tiny devices, now that several new flexible/foldable screen technologies are popping up, removing the portable device size from being the limiting factor on screen size). Well, you get the picture. There are far too many "what ifs" and unknowns in the area of e-books to make any solid predictions. So, please keep that in mind as you read on; these numbers I am running are not predictions, merely extrapolations. I personally think 2016/2017 is a bit early for the start of e-books reign supreme.

Wholesale E-book Sales (in dollars), the "Rosy" extrapolation

2008 entry is actual data from the AAP, but 2009 on is all extrapolation based on an annual growth rate of 189.1%. Print book wholesale for the US in 2008 was $24,300,000,000.

  • 2008: 53,500,000
  • 2009: 101,168,500
  • 2010: 191,309,633
  • 2011: 336,132,814
  • 2012: 684,100,484
  • 2013: 1,293,634,014
  • 2014: 2,446,261,921
  • 2015: 4,625,881,293
  • 2016: 8,747,541,525
  • 2017: 16,541,601,023
  • 2018: 31,280,167,536
  • 2019: 59,150,796,811
  • 2020: 111,854,156,769

Book (print) Sales

"Book sales tracked by the Association of American Publishers (AAP) for the month of August increased by 0.9 percent at $1.55 billion and were up by 2.0 percent for the year… Audio Book sales posted a decrease of 12.5 percent in August with sales totaling $12.9 million; sales to-date decreased by 25.1 percent. E-books sales reached $14.4 million, reflecting a 189.1 percent increase for August and a 177.3 percent increase year to-date… The Association of American Publishers is the national trade association of the U.S. book publishing industry. AAP's more than 300 members include most of the major commercial publishers in the United States, as well as smaller and non-profit publishers, university presses and scholarly societies—small and large."20

Book (in general, not e-books) Market Share, 2007

  • Barnes & Noble 17%
  • Borders Books and Music 13%
  • 10%
  • Other 60% 14

"In March, 2008, The Association of American Publishers (AAP) released its annual estimate of total book sales in the United States. The report, which uses data from the Bureau of the Census as well as sales data from eighty-one publishers inclusive of all major book publishing media market holders, estimates that U.S. publishers had net sales of $24.3 billion in 2008, down from $25.0 billion in 2007, representing a 2.8% decrease. In the last six years the industry had a compound annual growth rate (CAGR) of 1.6%... The Higher Education category, which includes sales of college textbooks, fared better. Total sales reached $3.8 billion this year up 2.7% on 2007. This brought the CAGR for college textbooks to 3.8%." 18

US Reading Habits

"Forty-five percent of Americans over the age of 13 read a book last year," 17 so the majority of Americans over the age of 13, 55% didn't read even one book in 2008. T_T

Kindle by the numbers (or as close as we can get)

Kindle titles available from Amazon: 240,0001

Kindle Cumulative Revenue Estimate by 2010 (Dollar value, all models - does not include revenue from e-book titles sales from : $1.2 Billion1

Total number of Kindles sold since release (all models): 500,000 (as of Feb 2009) 4

Kindle Quotes

"Amazon does not release sales figures for its Kindle or Kindle 2 reader." 1

"According to O'Reilly research, books were the fastest-growing category in Apple's App Store in the 12 weeks ending in March 1…. current leader… is Stanza… 7 million e-books downloads since launching in mid-2008… half of [the] 100,000 available titles are free… paid books account for about 25,000 to 40,000 downloads." 1

"Perhaps the Kindle is not the iPod of books, as it was once hailed…but… Amazon may now be settling for becoming 'the iTunes of Books… and it's hoping some customers will still buy a few kindles' even if they can read those books somewhere else"1

"'We want you to read your Kindle books on laptops and smartphones, anything with an installed base,'" Mr. Bezos said. He said he was not 'in principle' against making the works available on rival devices like Sony's, but was focused on platforms with 'large installed bases'."2

"Amazon charges $11.99 for most best-sellers, but textbooks and solid non-fiction titles can cost considerably more." 3

"Yesterday, the world's largest Internet retailer unveiled its upgraded Kindle 2, hoping to expand its ownership base, which is believed to number more than 500,000 users (Amazon has refused to publicly divulge the number of Kindles it has sold)… Sales of digital books are rising, but slowly. E-books represent only about 1 per cent of sales for most publishers, many of which are scrambling to find new distribution models and pricing schemes that will attract readers… Wholesale revenue from digital book sales in the United States has shot up 183 per cent over the past two years, from $4.9-million (U.S.) in the third quarter of 2006 to $13.9-million in the third quarter of 2008, according to data from the International Digital Publishing Forum. Analysts, however, suggest the retail market for e-books could be worth as much as $100-million." 4

"Although Bezos has declined to break out exact numbers, he suggested over the summer that Kindle-related sales have brought in 35 percent of his company's book-related revenue." 5

"According to the latest research from Bowker's PubTrack Consumer service, desktop and laptop computers were the preferred way for the public to read e-books through the first seven months of 2009, but their market share has been giving way to a host of new devices… Of e-book downloads through July, 40% were made to computers, down from 48% at the end of the first quarter. Quickly gaining in market share over the summer were downloads to the Kindle. This was especially true in July, when downloads to computers plunged, while downloads to the Kindle soared. As a result, in July, for the first time in PubTrack's monthly survey of consumers, Kindle downloads topped computers, accounting for 45% of all e-book downloads in the month."
[So the Kindle is doing great as far as market share within the e-book sector, basically pushing everybody else out of that market, but does that translate into moving print book consumers over to electronic consumption as well? Only time will tell.] 6

"Forrester Research recently raised its forecast for the electronic book sales and is now expecting 3 [million] e-readers to be sold in the US in 2009, up from a previous estimate of 2 [million], with 900,000 of the devices expected to be sold in November and December …Forrester said Kindle leads the category in the US with nearly 60 per cent of market share, followed by Sony with 35 per cent, and other devices accounting for about 5 per cent. It noted that US e-book sales were up 149 per cent for the year as of June, now accounting for $14 [million] in sales per month, according to the Association of American Publishers. Amazon has not made public sales figures for Kindle… Forrester is predicting that e-reader sales could increase to at least 6 [million] units in 2010, as increasing competition lowers prices" 7

"It is an experiment that has made back-to-school a little easier on the back: gave more than 200 college students its Kindle e-reading device this fall, loaded with digital versions of their textbooks. But some students miss the decidedly low-tech conveniences of paper: highlighting, flagging pages with sticky notes, and scribbling in the margins… Becerra tried typing notes on the Kindle's small keyboard, but when she went back to reread them she found they were laden with typos and didn't make sense. After a month, she says, she takes far fewer notes and relies on the Kindle's highlighter tool instead… When the Associated Press hit five test campuses to ask students how they felt about the Kindle, the responses were lukewarm… Madeline Kraizel, a freshman at Case Western Reserve University in Cleveland, has amassed three Kindle pages of bookmarks for her chemistry textbook. That is getting unwieldy, and she is not sure whether there is a better way to organize them… Other students struggled when professors had them read documents in PDF format, which does not show well on the Kindle. Users cannot zoom in or make notes on them, and diagrams sometimes get separated from notes explaining them… it can't be backlit, disappointing one student who wants to read during dark early-morning bus commutes." 8

"Analysts are bullish over the industry's prospects. Three million e-readers will be sold in the US this year, with the Kindle taking a 60 per cent market share and the Sony Reader 35 per cent, according to Sarah Rotman Epps of Forrester. 'We expect sales in 2010 to double, bringing cumulative sales of e-readers to 10 million by year end,' she said. Mr. Weiner said 2010 would be 'the year of the e-reader'" 9

"By all accounts, e-readers are set to have a breakout year. Slightly more than one million of them were sold globally in 2008, according to the market research firm iSuppli. The firm predicts that 5.2 million will be sold this year, more than half of them in North America, driven by the popularity and promotion of the Kindle, which is available only through Amazon's Web site... One challenge for the entire digital reading market is the price of these new devices. A recent report from Forrester Research suggests most consumers will buy a digital reading device only when they cost less than $100. One way this could ultimately happen is if wireless providers like Verizon subsidize the devices and sell them in their stores, as they do with the inexpensive laptops called netbooks. Verizon says it has no plans to do this, but analysts think that could conceivably change if e-readers like the iRex sell well. ''If this becomes a revenue stream for a company like Verizon, which actually gets paid for the bandwidth required to distribute content, then it is in Verizon's benefit to promote these devices and in many cases underwrite them,'' said Allen Weiner, an analyst at Gartner." 10

"E-book readers from Amazon and Sony have gotten lots of media attention, but a recent survey shows that consumers are not yet sold on the devices. More than 40% of the more than 2,000 U.S. adults surveyed by the NPD Group said they were "somewhat uninterested or "not interested at all" in buying an e-reader. Of those respondents, nearly 70% said they preferred the feel of an actual book… NPD's findings, released Thursday, were in line with comments from analysts recently interviewed by InformationWeek. Those industry observers said the biggest hurdle faced by e-reader makers was in moving mainstream consumers away from physical books. E-readers today appeal mostly to avid readers and people who travel regularly." 11

"The Kindle is expected to generate $310 million in revenue by the end of 2009. Barron's estimates that annual sales could reach $2 billion by 2012" 12

"However, some analysts also feel that the e-reader industry will need to make fairly substantial changes if it wants to collectively make its devices as ubiquitous as possible. In a September research note, Forrester analyst Sarah Rotman Epps suggested that will need to ultimately lower its price point… The cost of the display component is high and sales volumes are still modest, yet consumers demand and expect ever-lower prices," Epps wrote. "The bottom line: E-reader product strategists will have to educate consumers and innovate to bring prices down. Even if they are entirely successful at both these feats, e-readers will never be mass-market devices like MP3 players."15

"At the start of the semester in August, the 18 students in his Human Experience course each got a Kindle DX, Amazon's newest e-reader, loaded with the syllabus, textbook and assigned readings. They'll return them when the semester ends…. 'There seems to be just a groundswell of support for these readers,' Herring said. 'It became clear this was indeed a way in which things were headed. We decided, "Why don't we get several of these and look at them?"' Winthrop spent $14,000, mostly from student fees, on the year-long test run, which put the school in the company of several universities around the country also experimenting with Kindles. About a month into the semester at Winthrop, the device has yet to garner many fans. 'There's got to be someone in here who doesn't hate it,' Herring said one morning. 'Where?' a student said. The class laughed…. In an article titled 'Kindles yet to woo University users,' the student newspaper, The Daily Princetonian, quoted several students who 'found the Kindles disappointing and difficult to use.'"19

  1. MacMilan. "Amazon's Apple Deal: Kindle Cannibal?" Business Week (Online), March 5, 2009
  2. "Amazon's Kindle wireless reader to be available worldwide." The Irish Times, October 8, 2009
  3. Frith. "Eyestrain could singe Kindle early adopters" The Australian, October 13, 2009 Tuesday
  4. Hartley. "A new chapter for digital books; Amazon is hoping to light a fire under the e-book market with its Kindle 2 - a device that has no shortage of competition" The Globe and Mail, February 10, 2009
  5. "Amazon Slashes Prices for Kindle" October 7, 2009
  6. Milliot. "Kindle Market Share on the Rise" Publishers Weekly. Aug 31, 2009. 256(35) p. 4
  7. Birchall& Bradshaw. "E-reader sales set to rise as Amazon cuts Kindle price." Financial Times. Oct 8, 2009 p. 16
  8. Mintz. "Students unready to trade texts for Kindle" The Boston Globe, Business p. 8, October 14, 2009
  9. Clark. "Amazon takes the Kindle global as e-readers soar; Device goes on sale in UK for first time but downloads to cost more than in US" The Independent (London) Business p. 42 October 8, 2009
  10. Stone. "Growing U.S. e-reader market gets a new player; New iRex and Best Buy join forces to challenge Kindle and Sony Reader" The International Herald Tribune, Finance p. 17, September 24, 2009.
  11. E-Book Readers Lack Appeal; Amazon's Kindle and Sony's Reader have gotten lots of media attention, but a survey shows that consumers are not yet sold on the devices." InformationWeek August 6, 2009
  12. Wired magazine, page 114 Sept. 2009
  14. "Leading Book Retailers, 2007." Market Share Reporter. Ed. Robert S. Lazich and Virgil L. Burton, III. 2009 ed. Detroit: Gale, 2009
  15. "Amazon Settles Kindle Suit But Will Other Issues Follow", October 3, 2009
  16. "AAP Reports Book Sales Rose to $ 25 Billion in 2007" Association of American Publishers, March 31, 2008.
  17. "Nearly One in Two Americans Read a Book Last Year, According to Bowker's 2008 PubTrack Consumer Survey" Bowker, May 29, 2009.
  18. "AAP Reports Book Sales Reached $24.3 Billion in 2008" Association of American Publishers
  19. Cetrone. "Winthrop professor uses Kindle to spark new age of learning: But response to e-reader lukewarm" McClatchy - Tribune Business News. Oct 5, 2009.
  20. Book Publishing Sales Post Small Gains in August, The Association of American Publishers, October 21, 2009