Ebook Market Exploding, Says New IDPF Survey

The ebook market is growing faster as it grows larger.

The International Digital Publishing Forum (IDPF) on Friday reported U.S. wholesale ebook sales for January, 2010 were $31.9 million, up 261 percent from the same month a year earlier.

To put this in perspective, I created the chart at left. The chart compiles annual ebook sales data from the Association of American Publishers. For 2010, I took the latest IDPF January data and annualized it.

The data is collected from only 12-15 U.S. trade publishers. This means it dramatically understates what's really happening in ebooks, because thousands of large and small publishers, as well as tens of thousands of independent authors, aren't reporting their data. The data also doesn't capture ebooks sold outside traditional retail channels.

The above omissions in no way invalidate the data, because as an indicator of direction and momentum, the AAP/IDPF data provides the best publicly available trending information I'm aware of.

What you see from my chart is that ebook sales grew nicely between 2002 and 2007, but were really too small to register on the radar screens of most industry watchers. Starting in 2008, however, the growth rate started to accelerate, and then this acceleration continued throughout 2009 and into the first month of 2010.

According to the AAP, in 2009 ebooks accounted for 3.31% of all trade book sales, up from only 1.19% in 2008. Even if sales stay flat from January onward in 2010, we're looking at ebooks accounting for 6-8% of U.S. book sales in 2010. If sales accelerate further, a 10% monthly run rate is certainly likely by the end of this year. These numbers are dramatically higher than most reasonably-minded industry watchers predicted even a few months ago.

The rosy numbers above still dramatically underestimate the impact ebooks are having on the bottom line of authors, publishers and retailers. In January, during Amazon's quarterly earnings conference call, Jeff Bezos announced that for books it sells in both Kindle and print formats, ebooks were then accounting for 60% of unit sales.

What's driving the torrid growth of the U.S. ebook market?

Amazon deserves most of the credit. In January, Rory Maher of TBI Research reported that his publishing industry contacts were telling him that Amazon was accounting for 90% of all ebook sales. Other analysts have since confirmed those estimates.

The upcoming April 3 launch of Apple's iPad, along with more aggressive moves by Google, Barnes & Noble, Sony and scores of other new ebook device makers and indie retailers, will no doubt try to chip away at Amazon's purported 90% share.

The real story is not how or if these competitors take share from Amazon. It doesn't matter. What matters is that an ever-growing pro-ebook crowd of powerful consumer-facing companies are pulling out all the stops to help spread the joy of ebooks to every corner of this book-hungry globe.

Why are consumers going ga ga over ebooks? Back in October, I blogged some of the reasons in my Huffington Post piece, Why Ebooks are Hot and Getting Hotter. I listed several reasons, such as the proliferation of exciting new e-reading devices; screen reading rivaling paper; content selection; free ebooks as the gateway drug; lower prices; and great selection.

If we boil it all down to what really matters, it's about customer experience. People who try ebooks are loving ebooks.

Lest we think ebook reading is all about pricey jet set devices like the iPad, Kindle, Sony Reader and B&N nook, it's worth considering some telling data that came out of the latest Book Industry Study Group survey. As I reported in my Tools of Change conference wrap-up, BISG found that 47% of all ebook reading is happening not on these new-fangled devices, but on ordinary computer screens.

The Rise of Ebooks - IDPF Reports Ebook Sales Up 108%

The IDPF today reported ebook sales were up 108% for the month of November, 2008 compared to the same period a year ago. The data is provided in conjunction with surveys conducted by the American Association of Publishers, and represent wholesale sales from only 13 US-based ebook publishers, so total reported sales figures understate actual sales.

For the first eleven months of 2008, ebook sales were up about 64%, according to the IDPF.

Dig beneath the surface, and the numbers are striking. Ebook sales are surging while the entire trade book industry suffers a decline. Are print sales suffering at the hands of ebook sales? Unlikely. Something else is happening.

For the five years between 2002 and 2007 (Click here for data, opens a PDF), overall trade book sales averaged an annual increase of 2.5% (lower than inflation, which means unit sales probably decreased), while ebooks for the same period turned in a 55.7% average annualized increase.

Granted, the robust sales growth for ebooks was off of a tiny base to begin with. But...fast forward to October of 2008, the date for which year-to-date sales are reported on the AAP web site , and you see overall trade book sales for the first 9 months of the year were down 3.4% while ebook sales were up about 58%. So the rate of ebook sales accelerated during the first 9 months of 2008 compared to the previous five years.

More interesting, for the month of October the AAP reported overall trade book sales suffered a 20% drop in the year over year monthly comparison, while ebook sales accelerated to 73% growth.

Numbers for November and December aren't yet published on the AAP site, though today's numbers from the IDPF, which are supplied by the AAP, indicated that ebook sales have accelerated yet again, up 108% for November.

As any numbers guy or gal will tell you, it's easy to show great sales growth when you're growing off of a small base. But when sales show sequential acceleration off of sequentially increasing bases (meaning, you grow faster as you grow larger), then something really interesting is taking place.

If we conservatively estimate that overall trade sales for 2008 declined 3%, and ebooks sales increased 70%, then wholesale ebook sales will rise to $114 million and overall trade book sales will decline to $24.21 billion. In other words, ebooks will still only represent 1/2 of 1% of book industry sales, at least here in the US.

If you extrapolate the 70% growth for five more years (and I would argue 70% is a relatively conservative number), then ebooks rise to $1.6 billion, and assuming a 2% growth rate of the overall trade book sales to $26.7 billion (generous), ebooks would then represent a respectable 6% of sales.

If you're attending the Tools of Change conference February 9-11, I invite you to attend a panel I'm moderating titled, "The Rise of ebooks," where we'll explore the past, present and future of ebooks and try to understand the implications of these numbers for publishers and authors alike.

In the meantime, if you're an author, you need to start exposing your books to the digital realm. Clearly, as the numbers above indicate, you should continue to publish in print because ebook sales will account for only a small percentage of your overall sales. In the years ahead, however, ebooks will become an increasingly important format for book consumption.

Ebooks also give authors the opportunity to dramatically increase their available audience in a short period of time. With our Smashwords ebook distribution deal with Lexcyle the other week, for example, the books of Smashwords authors are now available in the native Stanza catalog. Stanza has been downloaded by approximately one million people to read ebooks on the iPhone and iPod Touch.

As physical book shelves disappear due to bookseller consolidation, authors and publishers need to expand their distribution to digital shelves.

IDPF: eBook Sales Surge in Q2 2008

The International Digital Publishing Forum (IDPF) today published its latest trade ebook sales figures for the quarter ending June 2008. Wholesale trade ebook revenues for the month of June surged 43% to $11.6 million compared to $8.1 million in the same period a year ago, while sales for the first six months of 2008 grew 43% compared to the same period a year ago.

Trade eBook sales were $4,900,000 for June 2008 alone, an 87.4% increase over June 2007.

Bottom line, folks, ebook sales are accelerating in the marketplace, yet they still represent a small piece of the overall book publishing industry pie.

Some notes about the data above: 1. The data is US-only. 2. The data reflects wholesale sales as reported by 12-15 leading publishers, so actual sales figures to customers were probably approximately twice those reported here.

For self-published indie authors, the data above sends a clear message that if your book isn't available in ebook form, you could be missing out on an important sales channel. If you haven't yet published your book on Smashwords, go ahead and do it. It takes 5 minutes or less and you control all aspects of marketing, pricing and sampling.

IDPF Reports April ebook Sales for April up 19.9%

The IDPF, in conjunction with the AAP, has announced trade ebook sales for the month of April were $3.4 million, up 19.9% over the same month a year ago.

As always, they note, "Retail numbers may be as much as double the above figures due to industry wholesale discounts." The data is collected from 12-15 publishers and covers the US market only.

While ebook sales remain paltry compared to the overall book market, we continue to view such growth as further validation that ebooks are are on the rise and will continue to account for an ever-increasing percentage of the book market.

I believe the sales figures *do not* include sales of Amazon Kindle titles. Can anyone confirm this?

IDPF Reports Wholesale Ebook Sales Up 35%

The International Digital Publishing Forum (IDPF), a non-profit industry group, reported this week that U.S. wholesale ebook revenues grew to $10.1 million in the first quarter of 2008, up 35% over the same period a year ago and up an impressive 23% sequentially over the fourth quarter of 2007. Since these are wholesale numbers, actual retail sales could be up to twice the reported figures.

Are we starting to see the impact of ebook sales through the Amazon Kindle?

Separately today, Barnes & Noble, the country's largest book seller, announced a 1.1 % decline in same store sales and lowered revenue forecasts for the remainder of the year. See the press release here and read the earnings conference call transcript here.