Given all the attention from mainstream media and the blogosphere, one would think that the publishing world revolved around trade books and that ebook readers, such as Amazon’s Kindle, are as ubiquitous as teenage girls at the latest “Twilight” movie. As the attendees at the recent SSP Digital Opportunities and Challenges Seminar learned, however, the trade book industry’s foray into the ebook market trails the professional and scholarly publishing (PSP) ebook market by a wide margin—and there is no evidence that will change in the foreseeable future.
Al Greco, Professor of Marketing at Fordham University’s Graduate School of Business Administration, presented data he has complied on the ebook market in the US to seminar attendees. These data are drawn from a variety of sources, including the US Department of Commerce, the US Department of Education, the Bureau of Labor Statistics, the US Department of Treasury, the Federal Reserve Bank, the Congressional Budget Office, and the National Bureau of Economic Research. Professor Greco’s data are must-read information for anyone interested in the ebook market, and are the only data I have seen that breaks out the US market by industry segment.
According to Greco, book publishing (print and electronic) in the US is a $35 billion dollar industry. This year, he forecasts that ebooks will account for 5% of that revenue, or $1.76 billion. Of that $1.76 billion, trade books account for 8.6%, or $151 million; K-12 accounts for 8.1% ($143 million); higher education accounts for 6.9% ($122 million); and university presses account for 0.4% ($7.7 million). Professional and scholarly publishing titles represent 75.9% of the US ebook market, or $1.33 billion.
In other words, professional and scholarly ebooks account for more than three times the rest of the US ebook market combined.
With the caveat that predictions are very difficult in today’s economic climate, with forecasts becoming increasing unreliable the further out they go, Greco provided forecasts for the ebook market through 2013. Despite this caveat, these forecasts are worth noting as he uses different drivers for each market segment. In other words, his financial model does not simply apply the same assumptions to the entire market, but considers the different factors that affect each industry segment. Some of the drivers Greco cited include:
- The overall steady growth in economic resources in corporate and university sectors in the last 20 years to “buy/rent” scientific, technical, and medical (STM) as well as legal, tax, and regulatory (LTR) information.
- The historical emphasis on “publish or perish” in universities and the concomitant need to publish more research in peer reviewed publications.
- The demand for Internet-based information services.
- The “branding” of professional and scholarly publishers and publications as the “coin of the realm” in professional and scholarly publishing.
- Increases in the number of professionals who need digital access to STM-LTR content, including lawyers, hedge fund managers, private equity firms, investment bankers, and government employees.
- The emergence of “inexpensive” computers (including desktops, laptops, and netbooks).
- Growth in the number of faculty members and graduate students who want and need STM-LTR content.
Over the next four years, Greco predicts these drivers, among others, will result in the US market for professional and scholarly ebooks growing by 94% to $2.60 billion. During the same period, he forecasts that the trade book sector will undergo growth of 119% to $330 million. This would mean that scholarly and professional ebooks will continue to dominate the US market, accounting for 74.7% of ebook revenue through 2013. Even with growth of over 100%, trade books are only forecast to grow to 9.5% of total US ebook revenue.
Of course, as Niels Bohr said, “prediction is very difficult, especially about the future.” But even if Greco’s forecasts for the trade sector are dramatically short and trade ebook revenues grow by as much as 200% through 2013, trade books will still account for less than 20% of the ebook market.
Which makes me wonder why the media is so fixated on the trade sector of the ebook market.