January 11, 2013

"Mostly dead is slightly alive" or How Faith Beats Math

by Alan Beatts

A recent spate of articles make much of reports from Nielson Bookscan about last years print book sales.  It seems that the rate of decline has seemingly leveled out.  At a paltry 9% per year.  Hooray!  According to Nielson, sales of all categories of books have dropped by that amount each year since 2009.

Ann Betts, who is Nielson's commercial director was quoted as saying, "In the context of a stagnant economy, challenging retail conditions and the growing adoption of ebooks [it] shows an underlying resilience in the market,"

The same news, combined with a Pew Research Center survey, was heralded by the Wall Street Journal in an article titled "Don't Burn Your Books—Print Is Here to Stay".  That article goes on to say that "The initial e-book explosion is starting to look like an aberration."  The author notes just one paragraph earlier that the annual growth rate for e-book sales fell  down to the abysmal pit of _only_ 34%.  Wow.  I wish my business could get some of that aberration action.

The Christian Science Monitor is less enthusiastic in an article titled "Print book sales fell in 2012 – but no faster than they did in 2011, says Nielsen" though they do close with, "Only time will tell exactly what roles print and e-books will play in the lives of readers."

You know, the last time I fell out of an airplane, I was deeply relived when the speed that I fell the second 1000 feet was no faster than the first 1000 feet.  And I thought to myself, "So far, so good.  Only time will tell how this will end."

Not surprisingly, Publishers Weekly was the most direct in their coverage, "Print Units Fell 9 Percent in 2012".  But even PW's tone was more like Joe Friday ("Just the facts, please") than makes sense to me.

To be clear, in the past _three_ years the total dollars spent in the United States on print books dropped _25%_.

25% goddam percent and the WSJ is saying print is here to stay?

Let's put it this way.  If your employer cut your pay by 9% each year for three years straight, would you be thinking, "This job is here to stay."?  Or perhaps, "In the context of a stagnant economy this shows an underlying resilience in my job"?

Or would you be looking for a new profession?

Just to belabor the point, let's extrapolate the figures for the next three years, now that the "decline in print book sales versus e-books has stabilized to some degree."  Continuing that 9% per year loss to 2015 gives a total sales loss of 44% compared to 2009.  Three more years?  58% loss.  Obviously, at that point Zeno's Paradox is starting to really kick in (i.e. you can keep reducing a number by 9% forever without reaching zero).

For most businesses, a 58% loss in sales means game over.

But I don't think it'll take six years to get there.  Because expecting the decline to actually remain stable at 9% per year overlooks factors that argue for an acceleration of the decline.  First, the Pew survey I cited earlier make it clear younger people are more likely to have read e-books.  As the population ages, the number of people who read e-books will increase.  Second, as fewer copies of print books are sold, the price per book will increase due to lack of economy of scale, which will make print books less attractive. Third, as print book sales decrease, stores will close and deprive buyers of convenient places to buy print books.  Their choice will be to wait for a print copy to be shipped to them (which will include a shipping charge, further increasing the price) or to buy an e-book, which they'll have instantly.  Please note, both the second and the third of these factors will accelerate all by themselves.  As they drive more e-book sales, the sales thus created drive even more e-book sales.

The print book business is in serious, serious trouble.  But people have faith that nobody wants printed books to go away.  I've been hearing that phrase for almost ten years now.  And my answer is still the same: no one really wants it but we're all heading to that point.  It's just a matter of time.

But please, don't worry about Borderlands.  First off, _we_ haven't seen that sort of sales loss.  In fact, our sales have been up (just a tiny bit) for the past two years running.  And more importantly, I've got a couple of tricks up my sleeve that should keep us going for something like another decade, assuming I'm up for it.  Want to know more about that?  Watch for next month's article where I'll talk about some of the things we are planning (and, the ways the same things can work for other bookstores).

1 comment:

  1. Terribly relieved about the 1000 foot drop not being faster than the last one...That's an immortal line.