I have been fascinated with Infographics of late, and decided to take a shot at creating my very own Infographic. The result is a short look at current e-book costs and revenue statistics for firms that sell e-books.
A few things about the data used in the Infographic:
- The average cost of an e-book today, was determined using the average cost of the Kindle editions of the New York Times Hardcover Bestseller list.
- The 10 year average e-book price was computed by looking at the price of e-books on the bestsellers list at ebooks.com over the last 10 years
- The “payback” period was determined by using the New York Times Hardcover Bestseller list. The average price of a hardcover on that list was $27.68
- The average price of both e-readers and tablets was based on the average cost of devices announced this year
- The graph shows the average cost of e-ink based e-readers only and does not take into account other devices like tablets.
Here is a couple of things I discovered while researching data for this Infographic:
- The average cost of e-books has been pretty much steady. As such $10.00 and below seems to be a sustainable market clearing price for e-books
- Selling e-books and digital content is highly profitable for publishers. Their profit share is much higher for e-books. Some publishers such as Simon & Schuster have posted record earnings in 2011 on the back of blistering growth in the digital segment. They reported almost double the revenue over the previous quarter. Part of this growth was attributed to “lower shipping, production and returns costs”. Print sales fell across the board. All this leads me to believe that:
- the benefits publishers gain by not having to print physical books is far more than they would like us to believe
- there is still enormous scope for further reduction in prices of e-books or even scope for a new business model
- The sharp fall in e-reader prices over the last three odd years has resulted in sharp increases in overall sales. The data further lends credence to the theory that once e-reader price levels fall to below $100, the mass-adoption that will follow will give a huge boost to online e-book sales.
Sowmya says:
An interesting offshoot of this will be the impact of e-boooks on public libraries and inturn their impact on the publishers.
June 6, 2011, 2:02 pmA lot of money is invested in the develped nations in public libraries and people use it extensively unlike in India. There was a recent conversation on radio in the US about how the publishers were going to sell e-books to the libraries. There is a proposal that the library will have to repurchase the digital content after every x number of people borrow the e-book. After reading your blog about how little an e-book costs them, the proposal sounds all the more preposterous to me.
Elroy says:
Well, library based lending has been around for a long time (think overdrive … the big daddy of online book libraries). In my opinion though, publisher’s are clueless as to how to correctly price and sell digital content – in a way that’s profitable to them, the authors and the readers. If they continue in the manner that they have been behaving of late, its just a matter of time before authors start bypassing them. After all, going all digital and direct to public dramatically increases the author’s profit by 250% !!!
June 9, 2011, 7:53 am