eBook Sales Slow While Print Books Rebound, Business and Industry Trends Analysis

One of the biggest game-changers in the world of publishing is Amazon.com’s Kindle ebook reader.  Sales of this device were nothing short of phenomenal.  The inexpensive Kindle Fire, for example, features a full-color, touch-sensitive screen.  Lower-priced units are Wi-Fi only; more expensive units include 4G technology suitable for cellular service subscriptions.

Since it is able to utilize apps, download and play movies and songs, and store data on the cloud, it is more like a tablet such as the iPad than the previous models of Kindle.  Customers download ebooks, newspapers and magazines from Amazon’s online Kindle store, using a wireless cellphone network device that is built into the more expensive Kindle units, or via Wi-Fi in the entry-level model.  Amazon has agreements with major cellphone service firms that enable the units to effortlessly make a wireless Internet connection directly to Amazon.com.  (If a cellular network connection is made, it is free of charge to the user, but it is good only for browsing the Amazon bookstore.)  Once connected to Amazon.com, Kindle users can browse ebook selections, read free samples, check book reviews and purchase ebooks for instant download.  Amazon has also launched a popular app that enables the purchase and reading of Kindle book versions on iPhones and Android-based smartphones, and Kindle for PCs enables the use of Kindle books on personal computers.

Competitor Apple offers its own version of ebooks and other material from its highly successful iTunes store for the tens of millions of iPhone, iPad and iPod Touch owners worldwide.  Apple’s success with these devices is best illustrated by its sales and profits.  For fiscal 2015, the firm’s revenues were $233.7 billion, up from $182.3 billion in 2014, and only $65.2 billion in 2010.

Book publishers rapidly developed strategies for dealing with the enlarged ebook market.  Retail prices for ebooks first tended to be much lower than those of printed books.  For example, many titles on Kindle were available at $9.99 to $12.99, compared to printed editions at $24.99 or more.  Many shorter ebooks are priced at only $2.99, and thousands are available for free. 

There are a number of ebook subscription services.  Scribd, which charges $9 per month for access to 1 million titles.  Amazon launched Kindle Unlimited in mid-2014, a $10 monthly subscription with more than 1 million titles (although five of the largest U.S. publishers do not make their books available).  Kindle Unlimited also offers subscribers access to Audible, Amazon’s audio book business which offers 70,000 titles. 

New data found in late 2015 revealed falling ebook sales and an upswing in print book sales.  The Association of American Publishers reported ebook sales falling by 10% in the first five months of 2015.  They accounted for about 20% of the total book market in 2014.  Meanwhile, paperback book sales rose by 8.4% in the first five months of 2015.

Publishers are taking note, expanding their print infrastructures and finding improved methods of distribution.  For example, Hachette expanded its Indiana warehouse by 218,000 square feet in late 2014, while Simon & Schuster enlarged its New Jersey distribution center by 200,000 square feet.  Penguin Random House invested almost $100 million in expanding and updating its warehouses and distribution system.  The firm instituted a “rapid replenishment” program to restock print books more quickly, in a system modeled on the one used by Procter & Gamble to automatically restock household goods.