Guest Column: Keeping Pace With Today’s Consumer
3. The migration of product formats. According to Association of American Publishers' statistics, hardcover, paperback and mass market sales are all down, but e-book sales are sharply increasing, offsetting declines in other formats.
Of these three crucial factors facing publishers in the fast-changing consumer demand chain, the one that book publishers have the best ability to influence and adjust their business practices to accommodate is the seismic shift in consumer book buying away from traditional print formats and toward digital.
The Rise of E-Books
The rise of e-books is clearly the loudest and most prominent conversation underway in our industry today. Amazon.com's Kindle has blazed the trail for e-book reading devices and driven e-book sales higher (not without its share of controversy, of course), and the Jan. 27 announcement of Apple's iPad created a full-scale, national conversation about e-books' future.
A recently published study by the Book Industry Study Group using the PubTrack Consumer data confirms that consumer product selection is indeed changing substantially from the early e-books adopters. Although e-book sales still account for a tiny fraction of overall unit sales (approximately 3 percent to 4 percent of all trade book purchases in 2009, according to Bowker's PubTrack Consumer survey data), the trend line is startling. As the graphic above (based on BISG's survey of those who purchased e-books in the past year) indicates, while print unit sales declining, 50 percent of today's e-book consumers said their e-book purchases increased last year while they bought a third fewer hardcover and paperback books.
Additional PubTrack data indicates that some serious business issues are going to become more challenging for publishers to confront if this trend holds and e-books continue to gain market share.
For instance, the most recent purchase price differential between hardcovers and e-books was roughly $6.25 per unit (based on an average price of $14.55 for hardcovers versus $8.30 for e-books). This data illustrates that, as e-book sales gain and other formats decline, book publishers are going to be facing a fundamental "top-line" problem: how to determine the tipping point and what to do when the per-unit cost of printing a hardback will be cost-prohibitive due to fewer units being printed as e-books gain market share.