One of my favorite social media activities is collecting charts and visual data related to book publishing and other media, which come in handy for speaking at conferences and providing insight into how the industry is changing.
I use Pinterest to save them; view or follow the board here. Here are 5 of my favorite charts pointing to the evolution of the industry.
Source: Bowker’s Books & Consumers US; find out more about this report at Digital Book World. If anyone has seen 2013 figures, please let me know in the comments.
Key takeaway: By the end of 2012, nearly half of US book sales (print + ebook) were happening online (eCommerce), which is primarily driven by Amazon. Notice how the large chain bookstore retail share drops from 31.5% to 18.7%, driven in part by the bankruptcy of Borders. While many people focus on the percentage of ebook sales (currently averaging about 30%), I’d argue it’s more important to keep tabs on where the majority of sales are happening, regardless of format. This directly affects the value proposition of traditional publishers (at least for now) and how books get discovered and/or purchased—increasingly online through tech giants such as Amazon, Google, Apple, etc.
Source: Nielsen Bookscan, 2004–2013, reported on by Publishers Marketplace (subscription required).
Key takeaway: This chart shows print sales (in units) in the US print book market, which peaked in 2008-2009. In a 2014 presentation, Nielsen discussed how nonfiction adult sales peaked earlier, in 2007—but that children’s book sales are still ahead of their 2007 levels and comprise a larger part of the print market, meaning physical stores are important to that market (more so than adult books), and/or haven’t as successfully transitioned to digital.
Source: Pew Internet Surveys, 2006–2013
Key takeaway: Mobile- and tablet-based reading environments already play—and will continue to play—an increasingly important role in how people discover, purchase, and consume content. Also notice that ebook readers are the least popular “gadget” on this chart; many people disagree on whether this will remain stable or decline. (Some say avid readers will always prefer a dedicated device; my personal opinion is that most reading behavior will shift to tablets or phones). Whether you have a website, e-mail newsletter, book, magazine—anything—to be successful for the longterm, you must consider the growing percentage of mobile- and tablet-based users. (Obviously, this is a much bigger trend affecting every business and organization.)
Source: HarperCollins presentation to News Corp.; reproduced at Publishers Marketplace
Key takeaway: E-books are significantly more profitable for publishers than print books, primarily because Big Five ebook royalties remain at 25%. Publishers Marketplace comments, “On a hardcover, the author earns 30% of the publisher’s gross revenue, and 42.5% of the total margin (what the author and publisher together earn). For now, on the ebook, the author earns 25%.” Read more (subscription required). The big question, of course, is how long can publishers keep the royalty rate at 25%? Hugh Howey has been asking this question, very publicly, over at AuthorEarnings.com.
Source: Nielsen white paper from January 2012
Key takeaway: There is an unsurprising link between good metadata and sales. This particular report shows how complete metadata gives a sales boost to all book categories, but especially fiction, probably because fiction titles benefit from additional contextualization to aid searches. (If you’re looking for a nonfiction book on rose gardening, you can probably find it based on title and category; if you enjoy novels that take place in Europe in the 19th century, you’ll have a harder time unless that context is included in the metadata.) At BEA 2013, I listened to a panel on metadata, and the most memorable quote was from Phil Madans of Hachette: “If you don’t want your books to be found ever, use the Fiction: General category as your BISAC code.” For authors, this means: Don’t ever publish and distribute a book categorized as “general fiction.”
Do you have interesting charts or graphs to share about what’s happening in the publishing industry? Share links in the comments.
If you enjoyed this post, you’ll love my Pinterest board devoted to media industry stats.
Great information, Jane. Thanks for sharing.
This is EXCELLENT! Thank you for posting, particularly the key takeaways.
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Fantastic! About a year and a half ago, I’d wondered about the eCommerce vs. brick-and-mortar sales percentages. Thanks for finally answering that question! 🙂
I’d love to see even more updated numbers on that aspect, so if you happen to see them, let us know!
I was interested to see that the “independent bookstores” category increased and held steady as a percentage over the three years in the first chart. The increase in e-commerce sales wasn’t on their backs, as many people fear, but rather on the giant bookstores’ sales among a very few categories. (I am curious what might have happened with book clubs two years ago that cut their share in half ….)
Book clubs have been declining for a looooong time (think Book of the Month Club, Quality Paperback Club, etc). The publishing company I used to work for shut down their numerous clubs at least 5-6 years ago. “Clubs” have morphed into something else: websites, blogs, e-mail newsletters, Goodreads communities, membership and loyalty programs, etc.
Good point. I hadn’t thought about how Goodreads communities in particular might step on those kinds of “selected by genre” clubs.
Good graphs, thanks!
The reason ebooks are so much more profitable for those intermediating (not writing the books) between authors and readers is because they take more than in the format where they actually have substantial manufacturing costs. Doesn’t that sound suspiciously like acting as a cartel to use an unfair royalty rate established when ebooks were an afterthought (if 25% was fair, that’s what they’d be paying in hardcover, too) and as an industry, stiffing authors on ebooks when the value of the publisher (printing presses, ink, paper, trucks, shelf-spacing returns policy) is limited to cover design, editing and pressing upload? Am… Read more »
There should be a Business 101 plaque posted at the start of all these discussions: Publishers, like all businesses, have overhead and costs that go far beyond what you continue to state as simply “manufacturing costs.” Please educate yourself. Publishers, whether as mega companies or running a small ebook press that has a 50-title list, do *not* make large profits, period. And by the way, falling in love with those mega corporations that control every penny you make (if you make any) sell ebooks as a so-called “independent” author is a very very unwise thing to do.
Deborah, perhaps you can explain to me, in simple language an obvious neophyte like me can understand, why the publishers, whose models did just fine with their fixed costs when it was just hard copy, suddenly require 25% more gross profit on ebooks to cover those identical fixed costs (actually fewer if you think it through)? And while doing so, perhaps you can also help me apprehend what book vendors, which are a channel (you know, B&N, Amazon, Kobo, Google +, Apple…), have to do with manufacturers/publishers? Beyond that one manufactures ebooks and sells them through the store, and the… Read more »
As a hybrid author who sold through Big 6 for years and now runs a small press that sells mostly ebooks while still maintaining print sales, my point is: the statement that “traditional publishers have nothing to offer except the manufacturing of print books” was the discussion here. Not an accurate statement even for authors who are solely competing in ebooks and who, like yourself, are very capable of handling the publishing side of their own ebook business. If trad publishing had nothing to offer ebook indies, then the Hugh Howeys of the world would not be in partnership with… Read more »
None of which answers my direct question: Why is it reasonable for trad pubs to get significantly more of the net on ebooks as opposed to paper? Simple question. Very long non-answer. A follow-on: I never said “trad pubs have nothing to offer, blah, blah”. See my above actual question to you. To clarify, Trad pubs have value for authors who can’t or won’t manage their own publishing business, and are willing to give away 75% of the net for someone else to do it. They also have value for authors who favor the advance over the actual book profits.… Read more »
Proofreaders hired by publishing companies? Really? I’m skeptical, since I constantly stumble across typos that could only be missed by Microsoft Word’s spell check.
Well, what publishers have to offer to new authors today has little to no interest. Their standard contracts are impossible to sign. Talking from personal experience.
Times changed. The moment when a publisher offers you a contract and makes you jump to the roof with joy is over. You read it, you look at the clauses and you go “These guys are crazy” and use the contract to fill the garbage bin.
Interesting information. Thanks, Jane. Must click on your Pinterest link.
Fascinating, thanks for sharing these visuals. I was suprised to see how tiny the share of independent bookstores is… and I wonder why book clubs have lost so much ground– or rather, why some savvy entrepreneur(s) have not revived them. As a long-time blogger and blog reader I do not see how book blogs have quite filled that old niche. My own sense of things is that too many corporate players (large publishers and chain stores) have tried to treat books as a commodity. They are, of course, but they aren’t, of course.
As far as I understand the chart, “book clubs” refers to the old-style clubs where you received a monthly mailer and would receive the book of the month unless you took action NOT to receive it. That’s not a model that’s very practical (or profitable) in the digital age. As someone who used to oversee one of these book clubs and manage the financials, the profit margin was very, very slim, and was based on sending people books who couldn’t be bothered to return them. Digital-age book clubs (if you can call them that), look more like this (I hesitate… Read more »
Thanks, Jane, this is very interesting to know… if depressing, the idea of selling books to people who cannot be bothered to return them (!) P.S. Sometimes I think a good business would be a personal off-site personal book storage service, as for wine storage.
I think that would be a great business, and I’d like to sign up my partner as the first customer! 🙂
Thanks, Jane, excellent information. The big question for me is where we will be in five years. Will ebooks reach 50% of the market? Will indie published books reach 40%? If that happens a tipping point will be reached, IMO, and what we know today as a publishing industry will be radically different.
The challenge ahead for writers is real too. We must create books that compete well with apps and TV series.
I’d be willing to bet 50% ebooks in five years; for genre fiction bestsellers, many Big five are already seeing 50% ebook sales. The average is brought down to 30% by other categories that don’t sell well so far in digital formats, such as illustrated works and children’s books. I think it would be wise for the larger writing/publishing community to focus less on competition among each other (e.g., indie v.s traditional), and look for ways to be competitive (and/or collaborative) with all other media, as you well point out. I’m 1 year behind on my New Yorkers and the… Read more »
The big question for me is whether we’re already there. Just looking at that first chart, from Bowker–I’m trying to figure out what they’re measuring by. I know Bowker issues ISBNs, so that’s my first guess, but even after following links and clicking around the Nielsen Market Research site I can’t figure it out. If it is by ISBN, it’s incomplete (and if it’s self-reported it’s likely even more so). While corporate publishers generally use them, none of the digital retailers require them for distribution when authors go through them directly. Most of the indie ebooks sold on Kindle don’t… Read more »
Yes, that first graph is representative of sales in the traditional book publishing market. I wouldn’t be surprised if, looking only at the indie market, if it was seeing 95%+ online retail sales (of either print/digital formats), and 75%+ ebook format.
[…] Each of these five charts from industry respected sources provide critical insight into the change underway in book publishing. (Some #publishing industry trends all #writers & #authors should be aware of (similar in Cda). […]
Great series of charts. One question I have about ebook royalties is that we are looking at simply the physical cost of book production, but we are not looking at other costs in the chain–I assume editors and designers should be paid, hopefully well enough to make a living. Then there are things like rent and investing in equipment, etc. Are ebooks just making up for shrinking margins? The editing and design work is part a parcel of the ebook cost. I am not sure separating print books and ebooks of the same title is a useful way of looking… Read more »
William, You bring up an interesting point, which is that margins on print are indeed likely shrinking, partly because of higher co-op costs from booksellers (including B&N and Amazon), and lower print run volumes, which drive up unit cost. That said, in a kind of acknowledgment of lower ebook royalties, publishers are paying higher advances (or agents are able to extract higher advances because of it). As ebooks become a larger sales base (and print smaller), it seems like authors ought to earn a lesser royalty on *print* (because of the higher costs that will be associated with it—the luxury… Read more »
The actual business end of the publishing business is far from transparent. Thomas Woll wrote a book called Publishing for Profit in which he tries to break down the numbers of publishing titles. He does this in reference to the employees ended for a publisher. For example, he recommends $150,000 in net sales per employee of the company. This does not mean each employ generates that sales, but if you are going to hire a full-time employee, the total net sales has to reflect that. I really should read this book again, it has been a while. It is a… Read more »
Sorry, that should be 2b and 2c…
[…] Each of these five charts from industry respected sources provide critical insight into the change underway in book publishing. […]
Some good points but also makes a few assumptions that miss some of the facts. A good article but needs to be a bit more rigorous in its logic in order to be more accurate in its conclusions.
Was this an article? It seemed to be a sting of comments based of some industry data. The author seems to be clear that this is a random set of information that she found interesting and wanted to share. It is not complete. It certain has no conclusion.
[…] 5 Valuable Charts That Show How Publishing Is Changing, a blog post published on JaneFriedman.com, offers some fascinating information about how people buy books. I’ll attach my favourite chart here (if you click on the image you can see it on Jane’s site where it is easier to read): […]
Daily, I still hear resistance from authors and their use of Amazon due to the “discounting” and cost of getting books to the warehouse when Amazon emails an order to the author/publisher. eCommerce will only continue to grow–a huge majority of the population uses it. Amazon as a primary distributor for we authors in a variety of ways and there are ways to simply contact Amazon with a “stock up” request of at least 5 or 10 books vs the one or two at a time which is its MO. The shipping cost to them is reduced. Thanks Jane… I… Read more »
I miss the Book Club power. As someone who has had several of my own books featured in clubs in the past, including as the feature of the month and even the “gift” to new members–the exposure, and sales, were terrific.
It reinforces what I suspected. These will continue to change and one doesn’t need much imagination to see where things are going.
Great! All those self-published e-books flooding the market, filled with typos, poor grammar and syntax, a lack of integrity. Just a big pile of crap–destroying books and publishing!
So, over half of “adults” have tablets or ebook readers. Considering how only around half of adults read for pleasure, I’d say the ebook readers have penetrated quite well into the readers’ world. P1 readers, in my experience, often have a ereading device, but still read print books. P2s and 3s are often the ones who don’t have a dedicated ereader, since they’re not frequent users of the written word.
[…] https://janefriedman.com/2014/03/21/5-valuable-charts/ […]
[…] https://janefriedman.com/2014/03/21/5-valuable-charts/ […]
This has proven to be not only a great article, with some really relevant, interesting information and key take-aways (which I love), but also as fodder for some great conversation here. I’ve learned as much from other reader’s comments as I have from the article itself. Thanks Jane and everyone else who has contributed. I’ll be sharing this with my circles. 🙂
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Thanks for sharing Jane. The door is still wide open for self-publishers. eCommerce is the place to be.
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[…] Bowker chart, copied from Jane Friedman’s blog post “5 valuable charts that show how publishing is changing” highlights the trends in retailing. How long does it have to go on before the column is all pale […]
[…] 5 Valuable Charts That Show How Publishing is Changing – Jane Friedmann zeigt mit Hilfe von 5 Statistiken auf, wie sich der Buchmarkt in den USA verändert. Sehr interessant. […]
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[…] I don’t have a lot to offer today – This is quite a good set of charts to look at. It certainly show how large retailer bookstores are suffering and how print itself is […]
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[…] 5 Valuable Charts that Show How Publishing is Changing https://janefriedman.com/2014/03/21/5-valuable-charts/ […]
I am both a numbers geek and entrepreneurial author, this article and information is very helpful. Thanks so much!
[…] is what makes this book awesome. Obviously, the whole book industry is changing and has changed drastically in the past decade, and will probably continue to change forever. But it’s been a somewhat reluctant change, I […]
[…] Over on my Pinterest account, I keep tabs on data, charts, and infographics related to the media industry—and every so often, I reflect on what the most recent stats are telling us. (My last roundup was in March 2014.) […]
[…] 5 Valuable Charts That Show How Publishing Is Changing […]
[…] It’s “the more, the merrier.” And, thanks to eBooks, reading habits are actually on the rise: print sales are gradually declining, but the difference is vastly outpaced by the number of people using e-readers. Until conclusive […]