Borders is shrinking and possibly dying, B&N is seeing major headwinds, and everyone in the book world is sweating bullets over what ebooks (and lower pricing) will mean for the future of reading. If we go by the financials of Simon and Schuster, however, it looks like ebooks are doing more than just bringing in readers; they’re bringing in plenty of cash as well.
According to Teleread, S&S was able to raise profits by lowering shipping costs. In other words, that commonly held belief that ebooks should cost less because printed books inherently are more expensive, is, in fact, true. Yes, it costs less to distribute an ebook! Amazing! Sarcasm aside, this makes complete sense. eBooks are a small but growing percentage of book sales. However, there needed to be a certain critical mass level before the shipping and distribution savings reached bottom lines. It’s not as sexy or exciting an announcement as when ebooks began outselling paperbacks, but it’s equally important in giving digital reading a great deal of legitimacy and influence.
And if your wondering what that tipping point percentage was, The Bookseller had more details on the full breakdown:
Digital sales were worth 18% of Simon & Schuster’s total global sales in its first quarter as its revenues increased 2% to $155m. Digital revenue more than doubled to $27.9m (£16.9m) from the first quarter in 2010, with e-book sales in the UK also growing fast, now 3% of revenue.
S&S’ digital figures come a day after Hachette revealed e-books accounted for 22% of sales in the US during its first quarter. In the UK, Hachette e-books were worth more than 5% of trade sales.
18%?!? Wow! And 22% for Hachette! This is huge…roughly 1/5 of the book sales from two major publishers were ebooks. Sadly, no hint that any of this will lead to lower prices. However, my hope is that as these measurable monetary gains increase, ebooks will become as much of a pillar of publishing as hardcover and paperbacks, and we won’t see as many games with delayed ebook releases to boost hardcover sales, etc. After all, if it costs less and turns more profit to sell an ebook, why NOT sell it over a hardcover that has to be printed, shipped, displayed in a store and probably destined for a return trip to the bargain bin within a few months?
