Ebook “Sales Decline?” Please…

by John Robert Marlow

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We’ve all seen the Chicken-Little headlines—some of them in quite prominent publications—lamenting the impending doom of ebooks. But is the sky really falling?

Somewhere after the clickbait headline, these articles invariably state (somewhere) something like this: “…the latest sales numbers from leading publishers show a decline in e-books…” Well, sure—because their ebooks (depicted in purple in the authorearnings graphic at left) are drastically overpriced, and the indie/self-pubbed ebooks (depicted in blue) continue to gain ground with readers, pushing Big Pub’s figures ever lower. The basic proposition—that ebook sales are declining—is false.

The truth is that Big Pub continues to impose price structures at variance with reality, in order to support resellers and their own print pricing. From the same article: “…discussions I had with the major publishers revealed largely that no one seemed to expect this dip to last…” This just shows how completely out of touch Big Pub really is. As was the case with newspapers some years back–anyone looking in from the outside can plainly see that if current practices continue, the dip will not only last—it will become a freefall.

These doomsy headlines are a bit like those equally alarming headlines (you know the ones) bemoaning Hollywood’s “declining” box office figures. Things aren’t as good as they were last year, which wasn’t as good as the year before, blah blah blah. Well, that’s not true either. When you look at the fine print, you’ll see that what these pieces actually say is that domestic figures are dropping. And this much, at least, is true. But, again—it’s not the whole story.

Which is that foreign or “international” figures continue to rise at a much faster rate. And because foreign box office now comprises (on average) some 60-80% of the total box office take for big American movies, the overall box office figures are in fact rising—and Hollywood’s coffers have never been more full. It is entirely possible to make less than the film’s budget in the U.S.—and hundreds of millions, even billions in profits overseas. This before merchandising and other revenue streams are factored into the equation.

Consider: the biggest-grossing picture of all time is Avatar, which cost a reported $450 million to make. The domestic (U.S.) box office take was $749,766,139. Because theaters keep half the box office, a movie has to make twice its budget just to break even. Therefore, Avatar lost money, right? Until you find out it pulled in $2,027,457,462 in foreign box office. For a worldwide total of nearly $3 billion (excluding merchandising, DVD sales etc.).

Which is even more impressive when you consider the fact the U.S. release came in the middle of a record-breaking blizzard that kept most of the northeast at home—and the movie was pulled from the highest-priced venues (IMAX and 3-D) early because theaters were contractually obligated to begin showing Alice in Wonderland on a particular date come hell, high water, or James Cameron. But I digress.

Foreign box office continues to rise largely because theaters continue to be built in China and India, where going to the movies is still an occasion. In America, where most people live within walking distance of three multiplexes and theatrical releases must compete with Netflix, amazon, Redbox, VOD and PPV, five gazillion cable channels, videogames, big-screen TVs and streaming media on desktops, laptops and iPhones—the market is completely saturated. But you won’t see that mentioned in these articles. In fact, most sources reporting on movie grosses cite domestic figures only, which are (by themselves) completely meaningless.

Doom-and-gloom makes for good headlines, and promotes the existing industry narrative—but in the case of both movies and ebooks it is (shall we say) at considerable variance with observable reality. Simply put: it’s hogwash. Don’t believe it.

Now, back to ebooks. Thanks to the magnificent website authorearnings.com and its stat-genius-in-residence Data Guy, we now have a wonderful analysis of the much-ballyhooed and so-called decline of ebooks. The graphic accompanying this post tells part of the story: indie-published ebooks are up, Big Pub ebooks are down. More to the point: Big Pub ebook authors now make less than 25% of the money going to ebook authors. To be blunt: when it comes to ebooks, Big Pub is having its ass handed to it, and the situation is (for them) only getting worse.

But don’t take my word for it. Check out the February 2016 Author Earnings Report: Amazon’s Ebook, Print, and Audio Sales

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