Thursday, July 23, 2009

Answering the Call of the IBPA with Our Amazon Kindle Statistics

Earlier today a ripple went through the ebook Twittersphere as the Independent Book Publishers Association put out a call for information about ebooks: "If the e-books knowledge level matched the e-books noise level, publishers could proceed with confidence, devoting resources to e-books ­ or not ­ and managing the format to maximize profitability. The fact is, though, that very little is known." True.

If you are a publisher, I hope you will follow this link, answer whatever questions you can and get your information submitted by the August 3 deadline. And, please share any data you have in a comment on this post.

Not content to wait for the survey to be published, I am going to share my answers here (in interview form to entertain myself) in hopes that if I show you mine... well, you know.

At B&H we are putting a big push on our digital publishing initiatives. For the last 13 months we've published a handful of ebooks almost exclusively for Amazon Kindle but in fewer than 8 weeks we will have 70% of our active backlist and all new releases into full distribution to ebook retail, library, and academic channels. Given our aggressive posture, I've spent a fair amount of time analyzing Kindle sales data to build the business case for the work we are doing.

E-book/p-book ratios
IBPA: How many print-on-paper titles do you have?
PM: More than 700 active titles.

IBPA: How many e-book titles?
PM: 166 as of today. We will have more than 500 by end of September.

IBPA: What percentages of your annual revenue come from p-books vs. e-books?
PM: Less than 1%, but we are conservatively projecting 1000% growth next year.

Extent of experience
IBPA: How long have you been publishing e-books?
PM: 13 months

IBPA: What trends have you noticed?
PM: I have been tracking industry news stories about ebooks and digital publishing since last October when Oprah declared the Kindle her new favorite gadget. When I started there was one or two stories a week, now it is unusual to have a day without some piece of digital publishing news, and typically three or four stories--every day!

We are very encouraged by the growth patterns we've seen with Kindle sales but market conditions are changing so rapidly it is almost impossible to attribute trends. Excluding the anomaly of our NYT bestseller (The Love Dare), in one year of Kindle sales from June 08 to June 09, copies per title sales increased: 11% Q2 over Q1, 71% Q3 over Q2, 86% Q4 over Q3, and revenue per title increased 27% Q2 over Q1, 65% Q3 over Q2, 78% Q4 over Q3.

Market factors include selection and universe. The number of our titles for Kindle grew from 2 to 135, while Amazon released the Kindle 2, the Kindle iPhone app, and Kindle DX significantly increasing the number of devices in the market in the same 12 month period.

Relationships between formats
IBPA: Are your e-books versions of your p-books? If so, sometimes or always?
PM: Always, so far. We've also released some enhanced ebooks (marrying book and Bible content) and derivatives (checklist, quotes) as iPhone apps.

IBPA: Which version usually or always appears first?
PM: Print first or simultaneous, though we are looking at a couple of projects that may be digital first or digital only.

IBPA: What is the time period between versions? Or do you publish in both formats simultaneously?
PM: Currently we are doing simultaneous release of ebooks and print editions on new releases, though we are watching closely the current discussions related to pricing and timing.

IBPA: If your e-books are not versions of p-books, why did you decide to issue these titles only in electronic form?
PM: One product we are considering would be most used as a digital product, the other is going to be very expensive to print so we are considering digital to build the audience.

IBPA: What are your e-book pricing policies?
PM: We match what is currently available in print.

IBPA: What are your e-book prices?
PM: $5.99 and up, matching print, though we are about to test $.99 essays and $4.99 sections from a nonfiction title on our Web site. The complete book is still the best value for $31.99 in print or digital, but some readers will only be interested in specific essays that are well worth $.99, but would not pay $32 for the complete book.

IBPA: What guidelines do you use in setting prices?
PM: Honoring our commitments to our retail partners, authors, and readers (not necessarily in that order), and watching the market like a hawk.

IBPA: Have you noticed price sensitivity?
PM: Can you still have a pulse and not notice? What drives me bananas is the misconception that ebook publishing is free, or even cheap. It is true (today) that print still pays the bills and digital is incremental revenue, but there is a lot of cost in developing, distributing, and retailing ebooks--everybody takes a piece. It will be very interesting to see how the supply chain changes when there's not enough to go around at $9.99. (More on the pricing debate here.)

Reaching readers
IBPA How are your e-books distributed?
PM: Through major e-book retailers, and we currently in negotiations with more retailers and distributors.

IBPA: Which reading devices do you publish for?
PM: Kindle, MobiPocket, iPhone, B&N eReader, Sony, Adobe Digital Editions, many others to come in the very near future.

Insights, lessons, tips and plans
IBPA: What have you learned from your e-book experiences so far?
PM: Pay attention.

IBPA: What e-book plans do you have for the future?
PM: Enhancing the reader experience with the content and connectivity. We are counting on the device manufacturers to enhance the reading experience, and the retailers to enhance the shopping and purchasing experience, but we've got to deliver the content.

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