eBook Sales – Weighing up the Digital Impact

Phil Groom was kind enough to invite me to cross-post from my personal blog where I have taken a periodic interest in the rise of the eBook. I’m fascinated by the explosive potential of their impact in our small niche within the wider book trade. Digital is clearly not going away but somehow it doesn’t quite feel real to us yet! It soon will. I contend that we all – publishers and retailers alike – need urgently to better understand what’s happening around us.

Retail as we’ve known it is under threat like never before. Major market forces are changing the High Street before our very eyes. Even since Christmas we’ve had news of Waterstones closing branches in order to meet their banking covenants and British Bookshops continues to trade but now under the watchful gaze of the administrator. Today HMV – the last major entertainment retailer apart from WH Smith – has brought in KPMG for advice on external banking and debt concerns. Content remains but format and delivery are all over the place. If you want to look at another industry under even greater pressure, just look at what’s happening to newspapers!

So here’s the post I ran several days ago;

Having castigated The Bookseller recently for poor journalism, I draw your attention to a superb and in-depth reporting piece looking at what life for the trade could look like in 2011. Bringing together the opinions of a wide range of UK book industry leaders it looks at, amongst other things, the likely impact of digital sales on the industry.

You can read the full article here but I want to highlight the main points of interest to High Street book retailers as they face the imminent digital challenge.

Amongst the key points of the article;

  • Industry chiefs unanimously earmark digital as a key area of opportunity in 2011
  • Digital sales have reached a tipping point and will grow further next year
  • Those booksellers not getting a good share of e-book sales are going to find business tougher than ever
  • The main challenge lies in supporting retailers in an uncertain economic environment
  • However, nearly 95% of all books sold in the UK in 2011 will still be in print format

To my mind, here is the killer statement; ‘Growing e-book sales could lead to the Total UK Consumer Market being negative in 2011 as they hit 7% of the adult trade market’.

Print may no longer be capable of ongoing growth. Fiction – in particular – and mass market publishing in general, is highly susceptible to this drift. How are High Street shops to deal with this change in their market? If print is dropping away, what steps do they need to take to get a bigger slice of the digital cake? If the High Street trade is not careful, it will be the publishers and not retailers that will benefit from an inevitable sales shift to digital.

Gardners’ respected commercial director, Bob Jackson, is quoted in the article as saying:

I think that the retailers who continue to focus on customer service and manage overheads will be doing the best they can. They need to stay very consumer focused. It won’t get any easier in 2011. We launched our digital service three years ago, so it’s available to every single retailer. I think the challenge might come more as retailers using e-books as part of their retail offering, I’m sure they [retailers] can be as creative as they have been to date. That’s the challenge’.

Faber Publisher, Stephen Page, said:

‘The big question is how retailers fared at the end of last year and how they will fare in 2011. Looking around the world I can see the retail environment changing and that change is not complete. Retailers have to adapt to a world with very powerful mass market retailing and online retailing and now there is a digital component too. Look at the REDGroup in Australia, Borders in the US. Here we have had a narrowing of the specialist chains to Waterstone’s and W H Smith, and it’s a question of how they adapt. Waterstone’s over the last nine months have been pursuing quite a different tack and it’s a question of where that gets them to. We all want a healthy retail environment. In 2011 we will see a hardening of the e-book market and a lot of people becoming habitual about reading electronically. We will catch up quickly with America – I’m estimating e-books will be 3-5% of the [UK] market in a year’s time’.

The long-serving chief executive of the Booksellers Association, Tim Godfray, stated:

‘This Millennium has seen a huge amount of change in the way books are sold and in the formats available. As ever, booksellers have shown great resilience and those who have adapted have survived. As we enter a new decade, only further change is on the cards. We face in particular three challenges. First, the Government cutbacks and the state of the economy; secondly, the digital economy; thirdly, the consumer having fewer leisure pounds to spend. But with challenges, there are opportunities. The tipping point concerning e-books has been reached and digital content is coming of age. The popularity of e-book readers demonstrates this. The selling of digital content is a threat to traditional booksellers, but it is also an opportunity. A lot has been written about the death of the printed book and the bookshop. Not far short of 95% of all books sold in the UK in 2011 will be in print format and booksellers will develop their offers, customer service and specialisations’.

Victoria Barnsley, chief executive of HarperCollins is quoted as saying:

Digital developments continue to present both the challenges and the opportunities for our industry. E-book sales more than trebled over the Christmas period as people rushed to buy e-books for their new gift devices. And, unlike some, I really do think the growth of the digital market is a huge opportunity for bookshops—not only to provide a unique and personal service to book lovers, which is hard to replicate online, but to capitalise on the new readers these devices are creating. …  finally, I believe that we should all fight vigorously to support and encourage a broad range of retail options on the high street and online which hugely benefits consumers, retailers and our own industry’.

Well done, The Bookseller – some fascinating opinions and really insightful reporting. I cannot help but think that we continue to be in very uncertain territory with even the most able minds in the trade pretty unclear as to how that future may turn out.

However, I am beginning to think that the tipping point for eBooks is beginning to tilt – albeit slowly but surely.

POSTSCRIPT – If all this gloom and uncertainty is getting you down then read these recent comments by the Editor of The Irish Times;

‘Yet there are opportunities for the retail sector. Barnes and Noble in the US have really got on top of things with their own device and have encouraged their customers to become digital readers. They’re looking at sales of about $400 million (€308 million) for digital content in a 12-month period – and that’s impressive’.  He believes, though, that there will always be a market for print books. ‘It might not be huge. It might be down to 30 per cent of the market in 10 years’ time, but there will still be a demand for physical books and the browsing experience that you can’t get from Amazon or the Book Depository’.

Update, 23/01/2011

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26 thoughts on “eBook Sales – Weighing up the Digital Impact

  1. Thanks, Eddie, and a very warm welcome.

    Everyone else reading: time to get ready, people! Your customers are moving to the cloud: will you meet them in the air or get left behind?

  2. Thanks Eddie & Phil
    ebooks are now coming of age and I am sure Christian publishers will want to jump on the back of digital consumers with many ebook offerings. As an independant bookseller I am not too sure what we can do yet. I have looked at the Gardners ebook offer but there is virtually no Christian titles to choose from.
    Most Christian book store managers will be scratching their heads on what to do with digital books. Until a publisher or distributor comes up with an effective option for retailers we will be held to ransom. Sure, there will be a hard core of customers who want the physical book but I am sure alot of people will be switching over to ebooks once they experiment and try out Kindle, Sony ereaders or ipad devices.

    Interesting times ahead, one thing to keep in mind: the LORD is sovereign and as we serve the church & serve Him we shall be in His hands as He guides us and leads us in an ever changing world. We need to pray, think and be willing to change/adapt to how things change in our marketplace.

    • I suspect that that it is going to have to be the retailer who comes up with the solution. I wonder if any retailer has looked at the cost of producing an iPad app for reading ebooks branded with their name and using their own in-app purchase system. For anyone with the money (I know – I can hear the bitter laughter!) this would surely be a better investment than a refit, for example.

    • Has to works both ways, I think, retailers and publishers working together. No one’s being ‘held to ransom’ — it’s more a case of no one here in the UK Christian trade seems to be taking a lead.

      Perhaps if a consortium of retailers approached a few key publishers then between them a way forward could be worked out?

      In the meantime it might be worth making contact with novoink.com (twitter: @novoink, blog: christian-ebooks.net), who seem to be leading the way across the pond…

      • Phil. I think it SHOULD work like you suggest. The realist in me wonders why it the publisher would do it. I think that a publisher is probably going to think “most ebooks are being sold through Amazon and iTunes (iBookstore), why would I bother with all this effort for just a few percent of the market share (outside of these outlets). ”

        For that to change, readers other than the Kindle and iPad need to develop a system that is as easy to use, but with a wider distribution system. That is where music is finally going, after a decade. Initially, the iPod won because using it was easy, with little technical knowledge needed. The Kindle and iPad work the same – just press a button and the book is on your device.

        I also have a Sony Reader, and it has never been as easy to use and it rarely comes out now. I love that with the Kindle I can browse Amazon, choose an ebook, buy it with one click and then it is wirelessly on my device in a few seconds. If I want to, I can then also have the same book on my iPad with the Kindle App for no extra cost.

        When a system that easy is developed – and it is worth noting that both were developed by retailers (if iTunes can be described as such), not publishers, the market will open up.

        The ideal system is one that can use multiple devices as simply as the system above and is available on a franchise/agency basis for any retailer to use.

        I could see a distributor such as Gardners doing that.

        • Ian,

          I’m thinking that this is certainly something for the ‘stronger together, weaker apart’ initiative to really get behind and start endorsing and truly working on.
          After all isn’t this the proof of the pudding as it were – if Christian publishers and retailers truly think collaboratively then this is easily achievable and certainly from all that is said essential to the health of the whole trade and mission and that surely is the reason for them/us to build the platform. Indeed a collaborative download shop for all downloads/digital media – music, books & more! – akin to the Crown Model as Andrew suggests or even an Amazon A-shop type model is certainly a fantastic idea and one that should be feasible – however if ‘stronger together, weaker apart’ is more an exercise in spin and feel good then this could well be the teller. I think it’s not just words though and I do think we are stronger together and weaker apart, even in the digital age!

          As to having to re-invent the wheel and design another ebook reader, I’m not convinced that is necessary although it would be cool (I can just see the little fishy designs and cool black with celtic cross silver logo’s now!)- however what is necessary is to have a site that will enable small/medium retailers to undertake sales of christian ebooks across a breadth of platforms or on multi-platforms that most ereaders can use, and Eddie is right, this needs to be soon.

          Actually, Jonathan you there? I see 10ofThose offers church and christian group affiliate shops – are you up for entering into affiliate schemes with brick’n’mortar christian bookshops who would like an online presence and ability? just a thought 😉

  3. Thought I was being smart a few months ago & approached Ingrams to see if we could integrate their e-book offering into our website, on the assumption that a US distributor was bound to carry many more Christian titles. The principle was good- the price was eye-watering- we politely declined.

    It will need one of the larger distributors to work this out- perhaps along the lines of the now defunct ‘Crown’ customisable websites? Any suppliers out there willing to take this on?

  4. Just offering a side note here, as I have discussed this subject in detail elsewhere and am a bit pushed for time right now!
    But what is worth considering perhaps as a low cost stop gap measure is to look at an affiliate venture with others offering ebooks – Kobo and other ebook sites do offer affiliate schemes – this is not a perfect match up but it does allow some sort of potential to keep the shop website from completely loosing out and enabling you to encourage people to still help out the local community whilst playing in the global and digital market arena.

    However may I say, and please note that I’m not a luddite and wholeheartedly love technology and the ability to read on the move and be globally interconnected, I still believe we must educate and point out the impact this type of move will have on local community, jobs and economics – something everyone studiously ignores it seems.

      • Hi Eddie,

        Sorry not very clear there was I, have to admit that it’s not been all in one place and not totally a direct response to your great piece but still dealing with the subject being addressed.

        So here are a few links (perhaps I should probably set them out in some sort of cohesive fashion someday – lol)

        http://bit.ly/ffUrp9 ebook hype consideration.

        http://bit.ly/gt7RZN – my take on fair trade and the ethical community considerations

        small considerations from 2009
        http://bit.ly/dUDWy3 – on the economic costs
        http://on.fb.me/ghK4En
        facebook comments on an Eddie O post!

        erm these are the blog ones I can remember – there’s also a lot of other places (blogs & forums) where i’ve made mentions and considerations, but I can’t remember where right now – lol.

  5. Interesting press release received 21/01/2011 from Jonathan Carswell at 10ofthose.com:

    PRESS RELEASE

    21/01/11
    For Immediate Release

    10ofThose.com launch new site with Ebooks

    When 10ofThose.com launched their new website this month they became the first online Christian retailer in the UK to offer Ebooks. The list, though small at present is set to rapidly increase in the coming weeks as 10ofthose finalise deals with both UK and American Publishers.

    The new site also comes with:
    • Increased range of price breaks for multiple copies, making resources cheaper
    • A generous loyalty scheme, so for every £100 you spend you receive £5 back!
    • A gift-wrapping service
    • There is free postage on many items
    • Opportunities to support our Bible project in the Middle East.
    • A ‘wish list’ option.

    Jonathan Carswell, Managing Director, said, “We have taken this step for two reasons: to develop wider distribution of trusted resources; and as well as a response to growing demand from our customer base for digital editions.”

    Download pdf (258kb)

  6. Haha that would be v cleaver!

    As you’ll notice the gift wrapping is available on ‘solid’ items only the same way the multiple price breaks don’t apply for ebooks.

    • ahh now that’s a shame, you’ve gone and ruined my illusions (yes illusions not delusions despite what some might think!) now Jonathan!
      I thought maybe it could be done with some sort of fancy download page – you know like those full page moving music christmas email cards I seemed to get innundated with this year 😉

  7. Pingback: Book Trade; eBook and Digital Reader update « Eddie Olliffe's Blogspot

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  11. Raising the ebook issue again – from America…

    “Providing customers with a complete selection of Christian e-books and downloadable audiobooks is critical to the Christian products industry at this time,” said Larry Haege president of Innovative. “Now is the time we must come together to develop business models successfully embracing e-books and downloadable audiobooks for growth within our industry.”

    I second that thought.

    http://www.christianretailing.com/index.php/newsletter/latest-etailing/23028-innovative-to-offer-e-book-delivery-system

    • I’ll go along with that too – but what we also need to do, I think, is find a way forward that breaks the Amazon/Kindle model. The Kindle model concerns me on several points:

      1. ebooks aren’t owned: they’re simply licensed
      2. they can’t be loaned
      3. they can’t be given away
      4. they can’t be left behind on the bus/beach/train etc or left in a hospital waiting room
      5. they can’t be sold secondhand
      6. you can’t look around and see what people around you are reading…

      So many of the things that I love about books are lost under the emerging ebooks model: do we as readers really want to lose all of this? I suspect the vast majority of people who’ve bought into Kindle really haven’t thought it through…

      • Phil. You are right in all you say. Except that I love my Kindle. I just bought Pete Rollins excellent The Orthodox Heretic on a special offer for 68p, Seven Habits by Stephen Covey for a few quid a copy of G K Chesterton’s Orthodoxy for free! Perfect reading for my work-related trip next week. I also get a couple of newspapers and two political magazines on there.

        There is something about real books (I have an extensive library here at home) and I continue to buy them. But I also enjoy the flexibility and ease of use of the Kindle. I like both.

        Also – the license you purchase gives you unlimited rights to possess and read the book, just not pass it to someone else.

  12. ahh but the kindle/ebook owners are now campaigning to be able to resale them and to loan them out to others, they want to move3 away from licensing to owning.
    As to looking around seeing what others are reading – lol i think for some that’s a boon not a burden 😉 I remember people initially being embarrased by reading harry potter and the sale of plain opaque bookjackets increasing until the new adult covers came out.
    But on the whole I do agree with you very much, it’s a community thing in some ways – reading as a form of sharing and sometimes that includes sharing the book, music etc in a way thats viral and personal, it’s not jsut a good book I’m sharing with you, in some ways when we share a book we enjoyed (or a cd, dvd etc) we are actually entrusting a small part of us with you too that at the end of it you will return back to us and in that is also the sharing of a small part of you too!
    Now even if I lent you my digital file it wouldn’t be the same, the personal transference element would be missing, the physical aspect somehow lacking – hmm yes something worth thinking on indeed.

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