Publisher Revenues Down As Ebook Buying Slows

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Hands On With Jolla’s Sailfish Slate, The Tablet Without A U.S. OS

Publishing conglomerates Penguin Random House and Simon & Schuster are facing tough times this quarter as ebook sales fell and total profit dropped 5.6% at S&S and approximately 12% for RPH. The potential culprits? A lack of blockbuster books and low ebook sales.

While ebooks sales are still dwarfed by paperback and hardback sales, publishers are now seeing even less revenue from their recently repriced bits. Now that many ebooks are selling well above the $9.99 price that was common early in the Kindle days,

Writes Publisher’s Weekly:

One reason for the 2014 decline in revenue and earnings was also a drop in digital sales. E-books accounted for 23.2% of S&S sales last year, down from 24.4% in 2013. Total digital revenue, which includes downloadable audio, generated 26.4% of revenue, down from 27.1% in 2013.

These falling percentages don’t seem like much — what’s 1 or 2 points in a billion-dollar market?  But to publishers, they are a major threat. A number of outside influences are affecting their bottom line including Amazon‘s own publishing efforts, the rise of indie writers, and the slow but sure shrinking of the print market. The inflection point isn’t quite here yet but I’d expect it to hit in the next five years.

Reading is changing almost daily and the publishers are trying to keep up. However, as a million mobile novelists bloom around the world and it gets easier and easier to self-publish, there is little glue to spare in order to keep the publishing house of cards stable. One puff – like a 1% drop in profit – could blow it all away.

via Digital Reader