Ebooks are hot, but are publishers making money on them?
The ebook and e-reader market has exploded this year, but a new survey shows that doesn't mean publishers are raking in huge profits from them.
Between the Kindle, Nook, Apple's iBookstore, and now Google eBooks, its clear that the era of mass market electronic reading is here. And with impressive sales of the major e-reader devices (Barnes and Noble reportedly shipping 18,000 Nook Color units a day, Apple selling millions of iPads each month, and – well no one's quite sure about the Kindle since Amazon doesn't want to release numbers, but we can assume its selling a lot of them) as well as less common options like the Sony and Kobo readers, it seems clear that the public has embraced the ebook as a viable alternative to traditional print books. And that's not even mentioning the various e-reader apps for iOS, Android, and BlackBerry devices.
While its clear that the public has embraced the concept, what about publishers? Are they embracing the concept whole-heartedly because they see at as the wave of the future – a way to sell more titles directly to users without the cost of producing a print product? Or are they grudgingly offering up titles simply because they have little choice?
The answer probably varies from one publisher to another. Certainly, Google eBooks stands to be a great option to small booksellers and small publishers as well. Likewise, small businesses and even individuals are empowered by ebook markets to reach great audiences than ever before since the tools to turn a manuscript into an ePub file and submit it to major ebook catalogs (such as Apple's iBookstore or Barnes and Noble's Nook store) are free or low-cost.
But what about the major publishers, the ones who pump out the works of Stephen King, John Grisham, and Tom Clancy? Is this a good business opportunity for them or is it something that could lead to decreased revenue over the long term? It turns out, they themselves don't really know yet.
A recent survey of 600 publishing houses cited by Publishers Weekly reveals some almost startling facts (more details available from Publishers Weekly):
- 64% are now offering ebooks (74% in trade houses)
- Of those avoiding ebooks, 71% had no particular reason to give as to why
- 66% have no clear idea if they're even making money from ebook sales
- 15% said return on investment was better than print titles
- 13% said their return was lower than print titles
One reason given for such an unclear picture is that publishers may still be modifying their existing workflows to accommodate "printing" to ebook formats in addition to their traditional processes. As an author, who's worked with a publisher in the midst of a workflow transition, I can say it is not a simple process any of the teams involved. So, I would believe that many publishers simply haven't been able to make accurate calculations – and that the current ROI during or immediately following a transition is likely to be different from the eventual numbers that will be seen a year or two down the road.
In the end, how profitable the new ebook models are may be only a limited factor in the decision-making process for publishers. At the current rate of e-reader/ebook adoption, ebook sales will probably reach a critical mass that tips the balance of sales in their favor compared to print titles. It may not be in the next year or two, but it seems likely to happen eventually. Grudgingly or not, the publishers embracing ebooks and new workflows now will probably be the best suites to thrive once that point is reached. In fact nearly half of all publishers surveyed (49%) and more than half of trade publishers (55%) indicated ebooks were of "high importance" to their growth plans.