Tipping Point or Quitting Point?
by Amanda S. Green
This week has been a typical week in the industry. There’s been good news, bad news and news no one is quite sure how to interpret. All of it does, in my opinion, show the state of flux in publishing and just points out that no one knows — yet — where things will finally settle.
First up, reaction to the new line of kindles from Amazon continues, especially on the kindle boards and most especially with regard to the new Kindle Fire. For those of you who aren’t familiar with the Fire, it is Amazon’s entry into the tablet market. Whether it is the iPad killer some have forecast or not, I don’t know, but I doubt it. Amazon has taken a very clear stand that the Fire is a media tablet, built for reading, music, video and apps. It is smaller, a 7″ screen, doesn’t have a camera or 3G capabilities. It also has a much lower price than the iPad, coming in at $199.
Still, all you have to do is go to the Kindle boards and you’ll see thread after thread of people wanting to know why Amazon isn’t offering the Fire with 3G capabilities. No, not just 3G but FREE 3G. After all, some of the Kindles have free 3G. Sure, you pay a bit more for it, but it’s free. So why isn’t Amazon offering it for the Fire. They’re being mean, not giving away something that will make it easier to surf the web free and stream videos and play online games, etc., etc., etc.
What all these folks demanding free 3G seem to forget is that it isn’t free. At least not for Amazon. The company has to pay for it. Putting it onto Kindles that aren’t built to really surf the web easily and that aren’t capable of streaming videos is one thing. But to put it onto a tablet that is optimized for surfing the web and streaming video would be a potentially very costly move for Amazon.
Could they have put 3G capabilities onto the Fire, sure? But that would then be like the iPad with 3G and a data plan would be needed. Can you hear the cries of FOUL! that would have risen because now Amazon was charging for something that had been free in the previous incarnations of the Kindle? I can. All those entitled folks would have protested loud and long and just as foolishly as they are now when they complain because there is no free 3G with the Fire.
And this brings me to the latest figures from the AAP. If you read the figures one way, it looks like e-books sales are cooling, justifying certain publishers’ belief that they have merely been a flash in the pan. This is especially true if you look at the sales of hard covers with the same rose colored glasses. After all, e-book sales ONLY increased by 105.3% in July. That’s the smallest increase in e-books sales all year. At the same time, hard cover sales increased 33.9%, one of it’s best performances this year.
So let’s look at that in solid figures. E-book sales accounted for $82.6 in July. For the same month, hard cover sales accounted for $91.2 million. There are several things I believe are important in these figures. First, e-book sales continue to grow in triple digits each month. I don’t feel the fact these sales ONLY increased by a little more than 100% in July is indicative that e-book sales are cooling. July is the middle of summer vacation and most folks are not spending their free time reading. For another, one month a trend does not make. But there’s something else to look at. That mere doubling of sales has brought e-book sales to near parity with hard cover sales. That’s something traditional publishers have been fearing. So that knocking you hear right now are the knees of legacy publishers trying to figure out what they’re going to have to do to survive. Finally, it is important to keep in mind the fact that e-book sales for the year (through July) are up 152.8% while hard cover sales are down 17.8% for the same time frame. Like it or not, e-books are here to stay and, in my opinion, the tipping point is here. That will be confirmed as we see the sales figures for the rest of the year.
What would be interesting would be to see the number of units sold, and from what publishers, and not just the total dollar figure. The reason I’d like to see it is because I want to see how the legacy publishers using the agency model of pricing v. those who follow the philosophy that you don’t have to charge as much for e-books as you do for hard covers. I’d also like to see the breakdown between how many e-books are sold at the higher agency pricing v. the number of those same books sold when the price is lowered after the paperback version of the book comes out. Until we see those figures — and I’m not holding my breath — we really won’t know the full impact of e-book sales on traditional publishers.
Finally, there’s this post from Publishers Weekly about the increasing market share of e-tailers v. physical bookstores. True, part of the decline in brick and mortar sales comes from the fact Borders has gone belly up. But, as I said many times in the months leading up to Borders’ dissolution, a large part of the problem was the influx of the big box bookstores. They drove many of the mom and pop indie stores out of business. That wasn’t necessarily all bad. But the problem came from the fact that the big box stores didn’t adapt to the changing market. They kept doing things the way they always had. Worse, they started demanding concessions from publishers to help them maintain a money losing business. Now we’ve lost Borders and publishers are hurting – badly. Indie bookstores are few and far between. But, what I anticipate happening (and I’m already seeing signs of it) is that we will see a return of indies. These will be specialty stores for the most part. They will be manned by people who love books and who know their stock. These employees will interact with their customers, get to know them. Sure, there might be a coffee shop or bakery or wine bar attached. After all, readers are spoiled now. They want their triple soy latte or whatever as they browse the shelves.
But it will be more than that. These indies, if they are smart, will also work with small e-publishers and self-published authors. They’ll sell download cards or codes for these e-partners. Not only will that help service those readers who have gone digital, but it will get money in the pocket for the store owners. They’ll carry print versions, often from Lulu or Createspace or several other POD publishers, for these same digital authors because not everyone wants an e-book. Author events will be back as will partnerships with libraries where the store helps with library events.
Finally, for those who haven’t heard, an author who for a very long time was the lone voice in the forest promoting the benefits of digital self-publishing has decided to go on a blogging hiatus. Joe Konrath announced his decision to take a break from his very successful blog, A Newbie’s Guide to Publishing, a week ago. He isn’t planning on shutting the blog down permanently. He just doesn’t know how long he’ll be gone. However, his departure, for however long it might be, will be noted. Here’s hoping his blogging batteries get recharged soon.
So, have we reached the tipping point for e-books? I think so. Not only are e-book sales almost matching those of hard cover sales, but e-book readers are now very affordable. For the price of dinner for two a then a movie, you can buy a Kindle. The loss of Borders and the lack of bookstores in many areas means more and more people are having to turn to internet stores for their books. I can’t help but think that will bring about more readers buying e-books, especially when the home page of Amazon touts the new, lower priced Kindles as well as the Kindle Fire. But don’t leave B&N out either. Their homepage features the Nook models prominently. But, maybe I’m wrong. What do you think?