After years of explosive growth, ebook sales have leveled off according to a recent report by the Book Industry Study Group, a book trade association. Ebook industry observers are split on the meaning of the leveling off of sales and what it means for the future of ebooks, with some saying that a new Netflix-like rental model is needed while others claim that the decline in sales growth is a blip in the technology's adoption due to tablet usage trends and favorable demographics.
The BISG report said that ebook sales have leveled off at 30% of units sold and a bit less than 15% of dollar volume, reflecting a maturing market that is clearly out of the early adopter phase of rapid growth. "As we look at when respondents acquired their first device, we can see that there are fewer respondents that have recently acquired their devices," according to the report. "Because there are fewer new owners of e-reading-enabled devices, we would expect that the growth in sales of e-books would begin to diminish."
Jeremy Greenfield, editorial director at Digital Book World, says that the slowing of ebook sales is temporary and doesn't reflect global consumption trends as the BISG study only covered the United States. "While ebook growth is slowing in the U.S., it is accelerating in almost every other country around the world," he said. "This is just a bump in the road for ebook adoption. Ebooks here will resume growth in a year or two."
One reason Greenfield is so bullish on the resumption of ebook sales growth is the continued market penetration of tablets. While e-reader growth has continued to decline, the BISG report says "it is possible to imagine that 75% of adults will own a tablet that is e-reading enabled within five or so years."
And that means many more ebook reading consumers, according to Greenfield. "Each tablet sold is another e-reading device in someone's hands. As more tablets are sold, ebook adoption will increase," he says.
Many companies and organizations are experimenting with ways to increase ebook usage and sales, yet each has its challenges:
- Amazon Kindle Owners Lending Library allows Prime memberships to borrow one free Kindle book per month.
- Scribd, a subscription ebook service similar to Netflix, offers millions of ebooks and user-contributed documents. The $8.99 a month service offers many top titles but also has glaring gaps in its catalog as many bestsellers are not available.
- Ebooks are becoming increasingly available through public libraries but still face many restrictions from publishers, like a six month lag for new titles from some publishers. Earlier this year, Hachette became the last Big Six holdout to make ebooks available to public libraries.
While the BISG reports that nonfiction readers tend to prefer print over ebooks, one company has found an ingenious way to make money from nonfiction ebooks. Knovel makes ebooks better than PDF replicas by digitizing them and making their graphs and charts usable by its engineering firm clients, which include BP, Bechtel, and Ingersoll Rand. Engineers use a Google-like predictive search engine to answer questions from engineering books that Knovel has purchased the rights to.
"We make information easily discoverable and then make that answer actionable," says Ella Balagula, who has been running Knovel since Elsevier acquired it in 2012. "That only comes from interactivity of the content. This results in significant time savings for the engineer as he doesn't have to recreate it in Excel. You found the material and your competition didn't."
While interactive ebooks seem to be a hit with engineering firms (Knovel's retention rate is more than 90%), consumers don't seem to be demanding interactivity from their ebooks, Greenfield says. "There isn't yet a huge market for what are known as ‘enhanced ebooks,' but that could change as children who are used to these kinds of reading experiences age and demand more from cookbooks and how-to books."
Another hopeful sign for ebook sales promise is the sheer number of companies that now offer them, including some non-traditional book publishers. The New York Times is selling "e-singles" (original, short-form ebooks from Times reporters) through Amazon and Apple's iBookstore.
Greenfield adds, "Soon, ebooks will be viewed as blogs once were: essential for many businesses as a way to reach new and existing customers."
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