WSJ: “E-Book Sales Fall After New Amazon Contracts”…but…

WSJ: “E-Book Sales Fall After New Amazon Contracts”…but…

I’ve mentioned several times before in this blog that I think Jeffrey Trachtenberg is the best mainstream reporter covering e-books.

I’ve been pleased with the reporter’s depth of knowledge and understanding on what can be a complex issue. Many mainstreamers have sometimes lacked that.

The latest article is getting a lot of play:

E-Book Sales Fall After New Amazon Contracts

Note that this could be behind a paywall…it took a couple of shots at it for me to be able to read it.

The thrust of the article is the possibility that tradpubs (traditional publishers), which have recently raised e-book prices with the return of the Agency Model through new deals with Amazon have seen a decline in e-book revenues.

The latter is true for the ones which have reported…they’ve all seen at the least a lack of growth.

However…

Even though one event followed the other, that doesn’t necessarily mean cause and effect.

It’s often hard to prove specific cause and effect, especially when it involves human behavior (in this case, book purchasing).

My concern with the hypothesis that raised prices following the new contracts caused consumers to buy fewer tradpub books is that this isn’t the first time prices have been raised.

I track them regularly.

The New York Times fiction hardback equivalent bestsellers are almost always going to be traditionally published.

Here are my figures on it, from my most recent reading on September 1st going back for each 1st of the month. I’ll go back to November 1st of 2014, which is right after it was announced that Simon & Schuster and Amazon…that should give us some information from before and after the price changes, since the prices don’t change right after the agreement is reached:

  • September 2015: Average: $12.84 (+$1.33) 3 titles under $10
  • Average; $11.51 (-$0.62) 6 titles under $10
  • July 2015: Average: $12.13 (+$0.16) 5 titles under $10
  • Average: $11.97 (+$1.69) 5 titles under $10
  • Average: $10.28 (-$1.40) 10 titles under $10
  • Average: $11.68 (+$0.57) 4 titles under $10
  • Average: $11.11 (+$1.34) 7 titles under $10
  • Average: $9.77 (+$0.11) 11 titles under $10
  • January 2015: Average: $9.66 (+$0.09) 9 titles under $10
  • Average: $9.57 (-$0.65) 9 titles under $10
  • Average: $10.22 (-$0.86) 6 titles under $10

As you can see, prices haven’t been rising consistently, although they have been  up.

My guess is that there are several factors at play…higher prices might be one of them, but I don’t think it’s a primary factor.

My guess is that one driver may be

Kindle Unlimited (at AmazonSmile: benefit a non-profit of your choice by shopping*)

 

While Kindle Unlimited (Amazon’s subser…subscription service, an “all you can read for a flat fee” way to borrow books to read) launched in July of 2014, it was in July of this year that Amazon did Prime Day and offered Kindle Unlimited to Prime members at a considerable discount.

Those people, in particular, are people who are willing to spend money on books. With the Prime Day deal, they paid at least $44.95 for a multiple month pre-paid plan.

As a happy KU member since the beginning, I can tell you…I feel some…duty to get KU books rather than spending additional money on new books.

I think that KU members may, to some significant degree  (I’m just speculating here) be people who bought a lot of tradpub books, and now are buying fewer.

As I mentioned recently, Simon & Schuster did put a couple of books into KU.

My guess?

Tradpubs may need to really rethink staying out of KU.

I do recommend reading Trachtenberg’s article, and it may certainly be right. Trachtenberg doesn’t say that the contracts are the cause of the change in e-book revenue for tradpubs. There might be some impact from it, of course…but my thought is that KU may be a big impact, and an increasing one in the future.

Update: I decide to add a couple of polls to this, to get a better sense of your experience. I don’t think my readers are necessarily typical of book buyers generally, but I do think we tend to represent “serious readers” (that doesn’t mean we read serious books, although we might…it’s that we read a lot of books).

In this first poll, note that the question is how many you have purchased, not how many you have read. I’m sure I’ve read more tradpubbed books than I’ve purchased in the past year…partially from reading gifts.

Update: I think this

Publishers Weekly article by Jim Milliot

will be seen by many as having significant relevance to the growth rate of tradpubbed e-book sales.

It looks at “20 Years of Amazon.com Bookselling”, and it has some interesting nuggets. First, this short excerpt:

“Books were Amazon’s largest product category as recently as 2008, but in 2015 their share of the company’s total revenue—which could hit $100 billion soon—is shrinking.”

The article also has a timeline (showing the remarkable growth, especially in the beginning), and Amazon’s twenty all-time bestselling books.

I have my own timeline which is more e-book focused:

 

What do you thank? Are slowing tradpub e-book sales do to higher prices, KU, both…or something else? Feel free to tell me and my readers what you think by commenting on this post.

Join thousands of readers and try the free ILMK magazine at Flipboard!

* I am linking to the same thing at the regular Amazon site, and at AmazonSmile. When you shop at AmazonSmile, half a percent of your purchase price on eligible items goes to a non-profit you choose. It will feel just like shopping at Amazon: you’ll be using your same account. The one thing for you that is different is that you pick a non-profit the first time you go (which you can change whenever you want)…and the good feeling you’ll get. :) Shop ’til you help! :) 

This post by Bufo Calvin originally appeared in the I Love My Kindle blog. To support this or other blogs/organizations, buy  Amazon Gift Cards from a link on the site, then use those to buy your items. There will be no cost to you, and a benefit to them.

 

4 Responses to “WSJ: “E-Book Sales Fall After New Amazon Contracts”…but…”

  1. Man in the Middle Says:

    On reading that Wall Street Journal article yesterday, my analysis in a comment on another blog was much the same as yours:

    My wife wanted to try it, so we bought a 2 year subscription on the Prime Day sale in July. Since then, we’ve both been reading a lot more than usual, making it a good buy.

    I’m sure I’m not the only Kindle Unlimited subscriber who sees no reason to even think about paying more than Amazon’s traditional top $9.99 price with plenty of great reading available to borrow for free via Kindle Unlimited. These days, the only books I pay for separately are by authors I whose work I know (such as Sarah’s), regularly priced under $3, or are books I want in my permanent Kindle library, and even then, I wait for them to go on sale below $10.

  2. Lady Galaxy Says:

    For me, price is the major factor. I read approximately 10 books a month from KU. I always pick up a Kindle first, but I have to admit I’ve only ready a couple of them. I’m waiting for price drops on recent books by Sue Grafton, Kathy Reichs, and Sara Paretsky. I’d also like to read Kate Mulgrew’s memoir, but all are in the $13.99 to $14.99 range, and I just won’t go there! For now, $12.99 is my upper limit. The wish list shows price drops but not price increases, but several of the books on the list have shown jumps in price since I added them. One book has gone up to $19.99. I’m currently reading my way through Juliet Blackwell’s “Witchcraft mystery” series. Those books are priced at $7.99. I try to pick up interesting daily or monthly deals.

    • Bufo Calvin Says:

      Thanks for writing, Lady!

      Are you using eReaderIQ to track the books? That’s an easy way to get a notification when a book drops in price.

      Do you think that if you didn’t have KU, you’d buy more Big 5 books?

      • Lady Galaxy Says:

        Good question. I’d probably be buying many of the same books I’ve been reading through KU. For example, I bought the first book in the Witching Savannah series by J. D. Horn, but I was able to borrow the next two through KU. Same goes for the Scarlett Bernard Books by Melissa Olson. If I remember right, the first book in that series was a daily deal. If I hadn’t read the remainder of the books through KU, I would have purchased them.

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