Ebooks make up just a fraction of today's global book market, but they are already driving dramatic changes in the publishing industry, a new Outsell, Inc. report says. "The impact can be significant even if the volume isn't," says Ned May, who is VP and lead analyst at Burlingame, Calif.-based Outsell, and one of the report's authors.
Last year, 5.2% of book sales worldwide were ebooks - $3.9 billion out of a $75.8 billion total market, according to Outsell's estimates. That represents a 64.2% increase for ebook sales over 2009. Ebook sales will continue to grow at steep rates from year to year, and will reach $12.7 billion, 16.1% of the market, in 2013, Outsell predicts. Much of that growth will be at the expense of print book sales.
Meanwhile, ebooks are affecting the overall market in a multitude of ways. For example, distribution in the new ebook era can be complicated and slowed down by licenses that are now tied to the language of a book edition. "Licenses used to be granted on a country basis and now distribution being digital can transcend that," May explained. "... With each translation, there is a cost to getting on these devices."
May also noted the "long tail" opportunity that ebooks present to publishers - the digital format making it possible to publish a greater number of new titles that reach smaller audiences - but says publishers are finding the digitization of their back catalogs more challenging. Older contracts just didn't cover ebook rights, making negotiating the backlist perilous.
As it turns out, ebooks are being embraced faster in some regions than in others. In the U.S., where a greater proportion of the population owns e-readers, tablets, and smartphones that can display ebooks, the market grew 76.2% from 2009 to 2010, double the growth rate of the rest of the world. Growth in Europe, the Middle East, and Africa has, in particular, been slower than Outsell had expected.
"It's not clear why the ingredients didn't come together" in that region sooner, May says. As devices for reading ebooks are finally becoming more popular in the EMEA region, though, "interest seems to be beginning to peak," May added. "It's just we had expected it to happen 12 months sooner than it appears to be happening."
While the U.S. will continue to dwarf other regions in the sheer size of its ebook market, the relative growth from 2010 to 2013 of the EMEA and Asia Pacific markets will be slightly greater than that in the U.S. as more people in those regions acquire e-readers and other devices.
The regional differences in when the ebook market blooms is "not a pure economic alignment," May says. The cost of a book as entertainment is relatively low, and dedicated e-readers are not required to read ebooks, particularly in the cases of education e-textbooks and professional ebooks, May added. In addition to economics, "cultural differences around adoption of gadgets" must be considered, he says.
And while the Kindle has been around for a while in North America, "a publisher will likely need an ebook champion in each market to create the right conditions while navigating local constraints," the report states. Besides showing regional differences, the report also separates the consumer, education, and professional markets for analysis.
In the education market, textbooks are falling out of favor as instruction becomes more individualized and as students and teachers expect more interactive materials. Eventually, the "paradigm of the textbook will start to ebb," the report states. "... The e-textbook market may therefore be little more than a stepping stone on the way to a truly digital and interactive future."
Outsell sees the overall book market, including all categories and regions, increasing slightly each year through 2013, with print losing ground and ebooks gaining rapidly. The failure of retail stores-such as the liquidation of Borders-is not a reflection on the book market, May says, but rather an example of how businesses whose strengths were efficiency and low costs are finding it harder to compete with the Amazons of the digital world. The report does have a little advice for retailers: "When both publishers and authors are able to sell direct, a retailer needs to add significant value to carve out a niche."