iSuppli: e-Books & Declining Revenues for US Publishers

iSuppli:

Book revenue for U.S. publishers, including both e-books and paper books, will decrease at a compound annual growth rate (CAGR) of 3 percent from 2010 to 2014. This marks a shift from the previous period of 2005 to 2010 when revenue grew slightly.

The overall weakening will be spurred by a 5 percent decrease in the CAGR of physical book sales from 2010 to 2014. While e-book sales will soar by 40 percent during the same period, such an increase won’t be sufficient to compensate for the contraction of the larger physical book market.

Total book revenue will fall to $22.7 billion in 2014, down from $25.0 billion in 2010.

Note the scope is limited to US publishers. Maybe the decline in book revenue is limited to US publishers. I would think Chinese publishers are doing brisk business as well as those in India. These two countries are experiencing explosive growth in both population and per capita income. As more and more are educated demand for books whether printed or in electronic form should increase.

The part about a 40% growth in e-book sales not being sufficient to compensate for the overall decline in the US book market is interesting. This makes me think that maybe paper-based books in the US were overpriced and e-book prices are closer to where they should be.

Piracy is another concern. As books become digital it becomes increasingly easier to obtain books without paying for them. Piracy might be the reason why e-book revenues aren’t higher.

Whatever the reasons for the decline in US publishers there is a tectonic shift from paper-based books to e-books. And there will be kinks small and large. Will US publishers that transition with this shift toward e-books survive and thrive? Or should they limit their focus on a particular demographic, reduce operational costs, and improve the overall experience of reading a paper-based book by offering higher quality paper, typography, binding, etc.? I think there’ll be room for both. Check out Our Choice by Push Pop Press for a look into the future of e-books.