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Reports of the Death of the Ebook Are Greatly Exaggerated

Last month The Publishers Association (a UK industry group for publishers) reported ebook sales in the UK dropped by 17% in 2016. This report created a firestorm of reports claiming that ebooks are dead, people are losing interest and going back to print, yadda, yadda, yadda. None of the major media outlets (that I could find) understood what they were reporting. They almost universally claim that people are losing interest in ebooks.
First, and foremost, the figures released by the Publishers Association only include numbers from their members. What this report explicitly excluded is numbers from independent authors, who continue to increase their market share. I’ve read that the UK PA only covers 62% of the market.
The next thing the reports miss is that 2016 was the first full year of Amazon’s agency pricing deal with the big publishers that allows the publishers to set the ebook price. The result of that deal was the increase in the price of ebooks, in many cases to match the print book price. Many consumers purchase ebooks over print because they cost less. If they aren’t saving anything, they buy the print book. Basic economics is in play here: increase the price, sales go down.
The third big issue with the reports is that they ignore the growth of ebook borrowing services like Kindle Unlimited. These services allow subscribers to read as much as they want of books included with the service for a fixed monthly fee. Amazon Prime members have access to a similar service that allows them to read books included in the Prime Reading service for free. Most of these services compensate the publisher by paying full price for the book if the subscriber reads more than some percentage of the book (typically 30%).
Even CNN jumped on the bandwagon, trying to include reports from US publishers showing a similar trend.
I’ve been amused by the theories that have been thrown out: screen fatigue, less leisure time, eReaders are ugly, to name a few.
You can find the real story at Author Earnings. The TLDR version: in 2016 US trade print sales grew 3.3% over 2015. Amazon (which represents 82% of total ebook sales) saw an increase of 4% in ebook sales.
What does this all mean? It means that the traditional publishers are trying to change public opinion by manipulating the news. Is it working? Early indications for 2017 say no. We’ll see next February when Author Earnings releases the 2017 numbers, but I’m inclined to think that the decline in ebook sales was a market correction rather than the beginning of a trend.