Have e-book sales gone exponential?

Trade Stats_09_03The trend line for e-book sales has hit an inflection point, a glance at the IDPF graphic (right) and other data at the IDPF site suggests. The graph represents wholesale e-book revenue by quarter and, as you can see, Q1 sales leaped substantially beyond earlier quarters. Bookselling has always been extremely seasonal, with most revenue falling in the last half of the year, so the rest of the year may, if the increase continues, represent the beginning of a steep rise in revenue for e-books.

A certain perspective is needed with these numbers, however. They represent “wholesale” sales, rather than retail sales. For example, if you add up the 2008 sales by quarter provided here ($53.5 million) and compare them against the annual sales reported by the Association of American Publishers, which were $113 million in 2008, these figures only represent 47 percent of the total revenue from e-books reported. Moreover, they are slightly counter-cyclical, with later quarters in the year growing less than Q1 and Q2. In fact, these numbers are only U.S. e-book revenues for a small sample of “wholesale channels.”

I think, because of the absence of inventories with e-books, that a different word than “wholesale” is needed. It’s a small but useful sample that can be helpful in understanding sales.

In any case, the question still remains, does Q1 2009 represent an inflection point at which sales will increase on an exponential curve, the Continue reading

PW to host Google Settlement webinar

I’ll be listening in when Publishers Weekly‘s Jim Milliot, AAP board members Richard Sarnoff (Bertelsmann) and John Sargeant (MacMillan), and the Authors Guild talk turkey about the Google Books Settlement on July 29 at 2 PM Eastern time. The conference call will be held online, you can sign up here.

Feds digging into Google Books settlement

GbookslogoThe U.S. Department of Justice will investigate the Google/Authors Guild/Association of American Publishers book settlement to determine if it violates federal antitrust laws. I suspect that the result will be a compromise that allows future negotiations of royalties by rights holders (authors and publishers) with Google. The current agreement, which rights holders must decide to conform with, or opt out of, by Septmeber 15, 2009, locks in all participating authors to a 63 percent share of revenue generated by Google.

The BBC provides quotes from Google’s response:

“The Department of Justice and several state attorneys general have contacted us to learn more about the impact of the settlement, and we are happy to answer their questions,” Google said in a statement.

“It is important to note that this agreement is non-exclusive and if approved by the court stands to expand access to millions of books in the US.”

The settlement applies only to books published before the agreement was announced on January 5, 2009 and stems from Google’s scanning of hundreds of thousands of books without the rights holders explicit permission.

The preemptive royalty agreement, I believe, will be the focus on the federal interdiction, since it has the primary material impact on rights holders after the close of the opt-out window. The scanning will go forward under a different agreement.

Locking participants into terms of business is similar to the behavior of a cartel, which is why that will become the fulcrum of any change demanded by the DOJ.

Here is the Google-sponsored FAQ on the agreement.