Nature’s greatest mystery is anything to do with books: who reads them, how many there are, how much of them we read, what they cost, where we buy them, who makes money on their sale. Every day I step through a wormhole to try to keep up with attempts to probe this mystery and am happy to report that we are chipping away at this great unknown, but there is much work left to do. A recent piece by Dan Cohen, who is the head of the Digital Public Library of America, sheds some light on the puzzle of why sales of ebooks seem to have flattened out. A controversial article by Elisabeth Jones and Paul Courant argues that sales of university press monographs to academic libraries have not fallen off, a direct rebuke to every university press director in the country, who study their sales figures every day. I am skeptical of Jones and Courant’s claims, but we will have to wait for the results of a much more detailed project that has come to my attention—let’s call it the Large Hadron Collider of book data—are made public later this year before we can definitively dismiss Jones and Courant. I am myself participating in a project with my fellow Chef Roger Schonfeld on a study of how many books Amazon sells to libraries, for which we should have some preliminary data by June. And then there is the market research report from Simba, Scholarly & Professional E-Book Publishing 2015-2019, which describes in great detail just what is going on with ebooks in academic and professional markets. Taken together we have a picture of an industry that is changing but mature, a picture that is somewhat at odds with popular perception.
I owe the metaphor of physics in this post to Cohen, who coined the phrase “dark reading” (dark matter/dark reading: get it?) to describe all the user engagement with ebooks that is not captured in sales figures. As for the sales figures that most often find their way into the popular press (that is, the ones Cohen is critiquing), almost always they concern trade books (understandably), and what those figures are telling us is that after the initial explosion of ebooks brought about by the introduction of the Amazon Kindle in 2007, the rate of adoption of ebooks by the general public has more or less leveled off. Now, just what that “level” percentage is today is itself a matter of debate, in part because ebook vendors are notoriously tight-lipped, but also because it’s hard to know when the studies are referring to American sales, global sales, sales in languages other than English, sales at retail or net sales to publishers, and whether the huge number of self-published books is included in the count. My best guess is that about 25% of the U.S. book market, measured in sales dollars to publishers, is for ebooks. You will sometimes see figures for sales through retailers and sometimes figures quoted for units, not dollars. Not even a high-energy physicist can add apples and oranges, but when it comes to book data, all the fruits are often mixed in a salad of competing flavors.
What Cohen makes us aware of is that there is a tremendous amount of usage for ebooks in libraries. We should add to this that libraries often make more of the ebooks under their stewardship than we are likely to find with ebooks sold to the trade—for example, integration into library discovery systems. So are ebooks leveling off or are they just getting started? It does appear probable that at worst the ebook market is just taking a breather before another jump in usage and, eventually, sales. What could trigger that jump would be enhanced feature sets (better annotation tools, better built-in dictionaries and other reference works) and superior hardware (longer battery life for tablets, say). What I would most like to see in the meantime is a comprehensive service that publishes fully anonymized library circulation data. Dark reading could become bright reading if librarians stopped hoarding this information.
Although Cohen is mostly focused on the fact that dark reading demonstrates that ebooks are still making headway against print, I suspect publishers will read his piece from another perspective, as a spur to find new ways to monetize ebooks. This is not a trivial point, though it certainly is controversial. Book publishers, unlike journal publishers, create far more value than they capture (think of the network TV shows on Sunday, where books are discussed at length but not directly monetized). With publishers becoming disenchanted with demand-driven acquisitions programs in libraries, we should look for new efforts to capture more margin in the near-term future. Cohen’s piece inadvertently will serve as part of the case for the prosecution.
By focusing exclusively on the academic and professional book market and by the net receipts of the publishers and aggregators, Simba is able to come up with some highly persuasive conclusions. First, academic and professional ebook sales grew by about 7.7% in 2014, making it a $2.86 billion market (net to publishers) and is forecast to grow at a CAGR of 6.4% through 2019. Those are not blockbuster numbers, but it shows that this segment of the ebook market is anything but mature. The catch is that the print market is declining faster than the ebook market is growing, so book publishers are continuing to wrestle with shrinking circumstances. (The Simba figures are not perfectly apposite Jones and Courant’s, but the Simba report is nonetheless a partial rebuttal of the Jones and Courant paper.) Now, we all know or should know by now that in a mature market, consolidation is the order of the day. This is happening in the academic and professional sector, where the biggest players are buying up smaller players and when outright purchase is not possible, the smaller players are aggregated on the larger publishers’ digital platforms. This is true for not-for-profit publishers as well as for-profits; a case in point is the ebook collections of university press titles now marketed by Project Muse.
One important point that the Simba report underscores is just how hard the book business is. To combat this, book publishers are taking advantages of the properties of digital media and are making books look more and more like journals. Journals, of course, are a great, if mature business. A book is made into a journal not editorially but in the marketing department. A book in the print era was a stand-alone object that was sold “firm”—that is, once purchased it belonged to the customer and the publisher could derive no additional revenue from it. A book in the digital world, however, can be bundled with other books and sold as part of a collection on a subscription business, which makes ongoing revenue possible and serves to lock up library collection dollars. This in turn leads to the big getting bigger and the smaller players getting squeezed out, precisely what happens in the journals market. It is no surprise to run one’s eye down Simba’s list of the largest academic and professional ebook publishers and find the usual suspects: Elsevier, Wiley, Springer, et al. Oxford University Press is the only not-for-profit publisher to make the top ten.
As I read the Simba report I heard in my mind the crescendo toward the end of the Beatles’ “A Day in the Life.” What will the climax be? The whole world is conspiring to put more and more pressure on the budgets of institutional libraries, but does this strategy eventually blow up? When? Who picks up the pieces when they fall to the ground?