The E-book Sky is Falling… Right?

by August Wainwright on August 15, 2013

Over the past few days, articles have popped up on the Washington Post and LA Times websites (which I’m sorry but I refuse to link to as a sign of respect to real journalists) where the authors of the articles lay out why e-book sales are “leveling-off” and “flattening”.

I thought I’d take a moment to shine a little light on the not-so-true and flat-out-wrong statistics that these various articles present.

First, I find it honorable that in most circles where writers are hanging out, when the news of Nicholas Carr’s original article started to make its rounds, a vast majority of authors took roughly 3 seconds to completely dismiss the bent statistics and get back to their writing. I commend every single one of you who are keeping your heads down and focusing on what matters: your own career. It made me proud to call you my peers.

That being said, for those authors that believe they’ve somehow missed the boat and that they’re in the midst of a “surprisingly rapid decline in e-book sales growth” as Mr. Carr puts it, or for those people who are just interested in the conversation, I’d like to take a few minutes to put your mind at ease.

In the original article, Mr. Carr “calls into question the so-called “digital revolution” in the book business” by presenting a few numbers taken way out of context. For instance, here is the growth rate graph chart he presents:

 

 

Now, this is most likely what caused the staff writers over at the Washington Post and LA Times to jump on board and declare the digital revolution all but over. It’s a compelling image, right?

But if you’re using Google Analytics (or any other analytics software), I’d like you to do me a favor. Log in to your account, go through the dashboard, and find a graph that shows your numbers going up and to the right. Because here’s the thing: no matter how awful your traffic data, no matter how bad your conversion rate, there is ALWAYS a graph that tracks up and to the right. It’s a joke among business investors – it never fails that when someone comes to them asking for more money to help a failing business, they’ll have some sort of chart showing how they’re trending up and to the right.

This is what Nicholas Carr has done. He’s taken whatever numbers fit his narrative and bent them in a way that shows decline (even though the numbers don’t do that).

Those same numbers can be shown in a different way. For this, I’m going to steal a line from Nathan Bransford and an article he wrote back in April of this year.

Here’s what that looks like in chart form

That doesn’t look like a decline to me.

 

Same data, much different image. And it only gets better from there.

In doing some research of my own, I shared a few emails with Andi Sporkin, Vice President of Communications at The Association of American Publishers (AAP). Andi is the one who collected the data that Mr. Carr’s article was based off of.

Andi immediately pointed me to an article by a blogger named Nate Hoffelder who writes over at The Digital Reader where he established that he was the original source of information for Mr. Carr’s article, and thus the articles at the Post and LA Times as well.

Here’s what Nate Hoffelder had to say about Mr. Carr’s take on the anemic growth rate:

Mr. Carr carefully neglected to factor in certain details like the fact that this data doesn’t include all publishers much less the self-published, and thus it doesn’t reflect the actual US book market.

For all we know the ebook and book sales not included in the AAP figures might have seen a surge in that quarter.

And that’s not the only problem. There’s also an anomaly in the AAP data.

The sales data for that quarter, both for ebooks and the overall market, is skewed thanks to an unexplained drop in the YA/children’s market. YA ebooks dropped by 30% and YA hardcover dropped by 35%.

It has since been pointed out that the unexplained drop in YA was actually due to the absolutely massive growth in YA this time last year which coincides with the March 2012 film release of The Hunger Games.

 

And, yet, it gets better still…

 

In a back and forth with Andi Sporkin, she sent me this:

Here’s what he (Nicholas Carr) did:

– he did a search and found data from the old AAP monthly survey, put out to pasture in 2011.  That survey took data from about 70 publishers and had no consistent method to track what they’d tagged as eBook revenue.  He used those figures for 2009, 2010 and 2011.

– he then took data from an entirely different survey, new methodology and with more than 1190+ publishers contributing monthly.  This has very distinct format definitions.  It also cannot be compared in any way whatsoever with pre-2011 figures.

 

So, first, we had a growth chart which was the equivalent of saying “growing at a slower rate than a comparatively rapid rate might as well be not growing at all. In fact, it’s the same thing as a surprisingly rapid decline.” We were essentially being sold the idea that if you were in a foot-race race against a cheetah and a wolf that, since the cheetah was beating the wolf, then the wolf was obviously the slowest… just ignore the part where the wolf was still trouncing you.

Now it comes out that the growth chart was the data equivalent of comparing apples and elephants, as Andi so eloquently put it.

All this to get to what I really wanted to discuss and what I believe is so often glazed over when it comes to the notion of digital e-book adoption.

 

My grandmother is in her 80’s. A few years ago, my mom and aunts bought her a computer. At first she was hesitant to use it, but after a while, she was exploring Facebook and “the Google”. I remember a conversation where she leaned over and asked me, “If I want to get one of these MP3’s, how does my computer know which ones I want? Does it just grab them out of cyberspace somewhere?” I explained, but it never really sunk in.

The point, though, is that she was asking about “MP3’s” about a decade after the iPod took off in the mainstream. She wasn’t a part of the groups who were watching those colorfully silhouetted Apple commercials and rushing out to buy the state-of-the-art 10 gig model. She lagged the technology.

As a visual representation, she would be on the far right of this graph:

But what Mr. Carr, and every other legacy voice, is trying to sell is the idea that when you get to the “laggard” stage of the digital book adoption graph, that we’ll somehow be losing ground. When, in reality, it couldn’t be further from the truth.

When the last group of people come to a technology, after it’s been fully adopted by the rest of the population, the numbers would still be going up. If my grandmother ever adopts e-books, she’ll be a part of the demographic that pushes total sales from $15 Billion to $15.2 Billion. Either way, it’s still A LOT more than where we’re at today.

E-books are still young. If I had to guess, we’re probably somewhere near, or just on the other side of, that “Big Scary Chasm in Question”. And places like Canada, the UK, Australia, and Germany are still in the very early adopters phase.

This revolution isn’t going away. And it isn’t slowing down. To be honest, if B&N keeps closing bookstores and publishers don’t start evolving their business models, I wouldn’t be surprised to see an uptick in the rate of change.

So my advice to writers would be to follow the lead set by your peers who give these articles and the bent statistics they throw out no more than a passing glance and get back to the writing.

 

Let me know your thoughts. Anything to add? Leave a comment below.

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4 comments

Even journalists usually are required to take a business statistics course, and to pass it. Some just don’t get reading charts. That explains all the noise about nothing. I loved your explanation. In this type of expose there is usually a comparative chart. That would be one showing just the publishers hard cover growth rates over the same period. Most of us would expect three or four other lines on the chart such as various genre.
The articles would be closer to conveying something close to an accurate picture of the market if they included the other two charts you put up for view.
Thanks, but did these dolts really think this up alone? I doubt it.

by john d m myer on August 16, 2013 at 3:31 pm. Reply #

Exactly, John.

To paint an even more accurate picture, the actual numbers for the specific section of “Adult Fiction/Non-Fiction”, which I would have to say constitutes a large chunk of the data MOST authors are interested in, are as follows:

E-books: UP 13.6% over 2012 Q1
Audiobooks: UP 14.4% over 2012 Q1
Paperbacks: UP 1.7% over 2012 Q1
Hardcover: Down, but only 0.4% below 2012 Q1

Now it seems to me that those numbers portray a much different situation than the one laid out by the original bloggers.

I tend to believe that most people who write things like this are doing so to fit an agenda – whatever that may be. Either that, or to attract eyeballs by taking on the roll of a large-scale troll.

by August Wainwright on August 17, 2013 at 8:33 am. Reply #

“Rate of growth” is usually the stat people turn to when they want to deceive others. The stat is totally meaningless and only refers to a snapshot rate rather than actual numbers, whether they’re talking about ebooks or national economies.

If I sell one ebook this month, then ten next month, my “rate of growth” is 1000%. If I sell 90 books in month #3, my “rate of growth” plunges to 90% (see graph going down and to the right), but I’m clearly going gangbusters for the three months.

by Mike Dennis on August 26, 2013 at 10:37 am. Reply #

And, yet, we’d probably both be blown away by the number of people who see those exact same numbers and say that you’re doing something wrong. I’ll take gangbusters any day of the week.

Thanks for stopping by Mike.

by August Wainwright on August 26, 2013 at 11:12 am. Reply #

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