Despite What You Heard, E-books Never Stopped Growing

Readers today have an enormous variety of content available to them at any time of the day, and this material is available in a number of formats and through a range of digitally connected devices. For authors, selling an e-book to a reader in a different country is just as easy as selling to a reader in your home country; all with just a click of a button. The global ebook marketplace is a seamlessly international one. Print bookselling, however, remains artificially silo’d by country even today, for variety of logistical, legal and even historical reasons.

Contrary to media accounts reporting on the shrinking e-book market, e-book sales never declined, according the data site, Author Earnings. So why is there a disconnect?

First, publishing data is elusive -- nobody really counts everything in the same way with the same time periods and methodology. However, in order to get to the bottom of this, we need to understand something called “agency pricing”.

Understanding Agency Pricing

Under the traditional “wholesale” pricing model, publishers would charge booksellers roughly around half the cover price of a book, leaving booksellers to discount the books if they wanted. To sell more of its Kindle e-readers, Amazon began offering many titles below cost, including best sellers. Publishers disliked the strategy, fearing it would make it harder for them to sell hardcovers at higher prices.

Now, around the time Apple prepared to launch the iPad in 2010, they got into an arrangement with the publishers allowing them to set their own prices. Under this arrangement, called “agency pricing”, publishers received 70% of the retail price and Apple took a 30% commission. But Apple also insisted that publishers couldn’t sell more cheaply on any rival platform, allowing the publishers to imposed the same model on Amazon. Overnight, many national best-sellers went from $9.99 on Amazon to $12.99 and $14.99. Sometime in 2015, Amazon then changed its strategy to discount print books more aggressively, resulting in a sudden growth of print sales.

Key Takeaways

We now live in a world where 69 percent of book sales — print, digital, and audio — are online and only 31% in brick-and-mortar stores.

Amazon sales in the last two years suggest that the ebook market is not flat or shrinking but in fact is still growing. Between early 2016 and early 2017, overall Amazon US ebook sales grew another 4%.

Self-published indie authors are verifiably capturing at least 24% – 34% of all ebook sales.

As of February 2017, titles published by the Big Five Publishers made up 20.8% of all Amazon US consumer ebook purchases.

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