In an article featured in Forbes magazine (2/10/14), “Amazon Vs. Book Publishers, By The Numbers,” Jeff Bercovici cites an important article by George Packer for The New Yorker and then provides information of special interest to me concerning major trends in book publishing. For example:
o $5.25 billion: Amazon’s current annual revenue from book sales, according to one of Packer’s sources. That means books account for 7% of the company’s $75 billion in total yearly revenue.
o 19.5%: The proportion of all books sold in the U.S. that are Kindle titles. E-books now make up around 30% of all book sales, and Amazon has a 65% share within that category, with Apple AAPL -0.05% and Barnes & Noble NE -0.83%accounting for most of the balance.*
o 53%: The effective discount Amazon receives from Random House on its books. Part of that discount comes in the form of “marketing development funds,” which Amazon requires publishers to pay if they want to receive promotion on the site. Big publishers typically pay 5% to 7% of the previous year’s gross sales, while smaller houses have to pay proportionately more, with the result that they can end up being forced to give their books to Amazon at a 60%-plus discount.
o 50%: The decrease in the number of independent bookstores over the past 20 years. There used to be about 4,000 in the U.S.; now there are fewer than 2,000. Amazon’s arrival on the scene is only part of the story here, of course; the decline of the indies started with the debut of big-box stores like B&N and Borders.
o 10%: The proportion of books now sold through independent bookstores.
o 14: The number of workers Amazon employs for every $10 million in revenue it generates. For brick-and-mortar retailers, the average is 47 employees per $10 million of revenue.
o $47: The amount Amazon Publishing paid “Laverne & Shirley” star Penny Marshall for every print copy it sold of her memoir, “My Mother Was Nuts.” Marshall received an $800,000 advance, but the title only sold 17,000 copies. With competing retailers refusing to sell Amazon Publishing titles, other authors choosing to publish through its imprint, including Tim Ferriss and James Franco, have encountered similar problems.
o Million: The total number of copies — print, e-book and audio — sold by author Helen Bryan, whose two historical novels, War Brides and The Sisterhood, were put out by Amazon Publishing. Amazon announced this morning that Bryan is its second author, following Oliver Pötzsch, to reach the million-copy mark.
What’s my take?
1. Within 1-5 years, digital editions of fiction and non-fiction will outsell bound editions.
2. There will always be a need for bound edition but that need will steadily decrease.
3. Most revised and updated editions will be in digital format only.
4. Meanwhile, revisions of digital versions or translations into another language can be completed anytime, immediately.
5. Most independent bookstores (other than at the largest universities) will either close or become fulfillment centers for Amazon or Barnes & Noble.
6. Bookstores now owned by the largest universities will either create a federation or become affiliates of Amazon or Barnes & Noble.
7. Amazon Publishing will either revise its business model or be shut down.
Here’s a direct link to the complete article.
Jeff Bercovici covers technology for Forbes with an emphasis on social and digital media. Please click here to check out more of his brilliant work.