The NY Times Article

In a surprise twist, the mad dash of e-book sales – up 1,260 percent between 2008 and 2010 – finally slowed down in 2015. Or at least, that’s what NY Times recently claimed, in a controversial article.

According to the newspaper, e-book adopters are returning to print, or becoming hybrid readers, who juggle devices and paper. E-book sales fell by 10 percent in the first five months of 2015, it said, while digital books accounted last year for around 20 percent of the market, roughly the same as they did a few years ago.

Publishing, while not immune to technological upheaval, may weather digital technology better than other forms of media, like music and television, after all. With the recent end of Oyster, it looks like e-book subscription services, modeled on companies like Netflix and Pandora, will struggle to convert book lovers into digital binge readers. Meanwhile, sales of dedicated e-reading devices have dropped as consumers migrated to tablets and smartphones. And, according to some surveys, young readers who are digital natives still prefer reading on paper.

The surprising resilience of print has provided a lift to many booksellers. Independent bookstores, in particular, which were battered by the recession and competition from Amazon, are showing strong signs of resurgence. The American Booksellers Association counted 1,712 member stores in 2,227 locations in 2015, up from 1,410 in 1,660 locations five years ago.

“We’ve seen people coming back,” said a book buyer. “They were reading more on their Kindle and now they’re not, or they’re reading both ways.”

Higher e-book prices may also be driving readers back to paper

The NY Times suggested some possible explanations. As publishers renegotiated new terms with Amazon in the past year and demanded the ability to set their own e-book prices, many have started charging more. Paperback sales rose by 8.4 percent in the first five months of this year, the Association of American Publishers reported.

It is also possible that a growing number of people are still buying and reading e-books, just not from traditional publishers. The declining e-book sales reported by publishers do not account for the millions of readers who have migrated to cheap and plentiful self-published e-books, which often cost less than a dollar.

This is supported by the fact that at Amazon, digital book sales have maintained their upward trajectory.

A Caveat. A big one.

Almost immediately, the NY Times’ claim came under heavy criticism. Most pointed out that the article only includes data from The Association of American Publishers, which include the Big Five. These are primarily companies that publish both traditional and digital formats, and they’ve been aggressively raising digital prices on bestsellers.

Some examples:

  • Lee Child’s “Make Me”: $14.99 ebook, $16.28 paperback.
  • David Lagercrantz’s “The Girl in the Spider’s Web”: $13.99 ebook, $16.77 hardback. 
  • Elizabeth’s Gilbert’s “Big Magic”: $11.99 ebook, $13.72 hardcover.
  • Jonathan Franzen’s “Purity”: $14.99 ebook, $16.80 hardback.

When you reduce the price incentive to go digital, some people will opt for a hardback or paperback. Remember that the digital-only generation – those growing up with tablets instead of a pile of textbooks – is still a small (but growing) percentage of the book-buying public. The rest of us read in both formats: price will be a key factor in our decision.

How large a sample?

The biggest problem in this story is the fact that the ebook numbers of the Association of American Publishers account for only 32% of all Kindle ebooks sold by Amazon. You can’t draw conclusions about the state of an industry while ignoring two-thirds of it!

As Author Earnings points out,

“When we first started analyzing Kindle sales in February 2014, traditionally-published authors were taking home nearly 60% of the ebook royalties earned in the largest bookstore in the world. Not anymore. Today, traditionally-published authors are barely earning 40% of all Kindle ebook royalties paid, while self-published indie authors and those published by Amazon’s imprints are taking home almost 60%. From an author-earnings perspective, in 18 short months, the U.S. ebook market has flipped upside down.”

If you look at all books sales, eBooks outnumbered physical books sales 53% to 47%. Most of the ebooks sales were inexpensive downloads-which has really decimated revenue from commissions on book sales-but that is another story.

While the article makes no mention of this, Indie Black booksellers, online and off, have been pretty hard-pressed for years.

The Author Earnings Findings

To see what happens when one adds the missing two thirds of the sample, we turn to the September 15 Author Earnings report.

The first report dramatically highlights the rapid growth of “Non-ISBN” Indie books:

From the blog of Nicholas C. Rossis, author of science fiction, the Pearseus epic fantasy series and children's books

From the September 15 Author Earnings report

Now, let’s examine the daily revenue of authors: Indie published have a massive 43% of that pie.

From the blog of Nicholas C. Rossis, author of science fiction, the Pearseus epic fantasy series and children's books

From the September 15 Author Earnings report

However, because of the higher prices commanded by trad-pubs, the Indies’ superior market share does not necessarily translate into high profits for individual authors:

From the blog of Nicholas C. Rossis, author of science fiction, the Pearseus epic fantasy series and children's books

From the September 15 Author Earnings report

The same picture emerges when one examines trends: Between February 2014 and September 2015, the market share of Indies and trad-pubs has swapped places. Also, notice the new kid in the block; Amazon itself (in green). One can only assume its market share will grow in the future.

From the blog of Nicholas C. Rossis, author of science fiction, the Pearseus epic fantasy series and children's books

From the September 15 Author Earnings report

However, due to the vast price difference between traditionally published titles and Indies, there is a huge gap between the two in actual earnings.

From the blog of Nicholas C. Rossis, author of science fiction, the Pearseus epic fantasy series and children's books

From the September 15 Author Earnings report

E-Books vs. Print Books: An Infographic

Teaching Degree provides a lighter side to the argument, by examining the relative strengths and weaknesses of ebooks and print books to conclude: they can coexist.

From the blog of Nicholas C. Rossis, author of science fiction, the Pearseus epic fantasy series and children's books

My take? Reading in any format is good, as people who have learned to read will do so in any medium available to them, from stones to tablets to paper.

Musiville, my second children’s book, will be published shortly. When it does, I will only leave a sample of Runaway Smile online. If you wanted to read it in its entirety for free, you only have a few days to do so!