Being the self-proclaimed nerd that I am, I have a strange fascination with IBISWorld and their industry reports. This last weekend I was doing some research into the book publishing industry for a project that I am working on with my good friend, S.M. Boyce. I found it fascinating the magnitude in which Internet and new technologies are helping, and hurting, the publishing industry.
The following are four trends in the book publishing industry that have emerged as a result of the Internet and other new technologies.
1. Revenues for book publishers are diminished.
This is primarily a result of consumer substitution to other online resources and reading materials. Since much of the content online is available at no direct cost, many readers have substituted their personal computer or tablet for the traditional book. This will be an interesting area to watch, since many online content creators will find new and innovative ways to profit from their work.
2. The industry, as a whole, is looking to cut costs.
Many publishers plan to cut costs by (1) publishing online, (2) using recycled resources and (3) relying on digital printing.
First, by publishing online, this eliminates many hard costs associated with printing, such as paper, printing equipment, ink, man-power and other indirect costs. Second, by using recycled resources publishers can lower their paper costs. Finally, by relying on digital printing, this allows publishers to print what they need, lowering their inventories, thus lowering their operating expenses and increasing profits.
3. E-books are going to be huge!*
According to IBISWorld (as of September 2011), e-books are estimated to generate 6.1% of industry revenues in 2011, but are projected to account for 19.8% of total revenues by 2016. Some estimates say that e-book revenues could be as much as 50% by then (though I think that may be a stretch). As a result, publishers are investing heavily in the Internet and other media outlets. This will allow them to interact with consumers directly and focus on rapidly increasing e-book sales.
4. Self-publishing is becoming more prominent.
New technology makes it easier for authors to self-publish and self-promote books, taking away more business from book publishers. Many writers find this method of publishing to be more beneficial, allowing them to keep around 70% of revenues. This is in comparison to the 15% that authors usually received from traditional publishers.
* This post was updated on January 18th, 2012 with the most recent e-book revenue estimates for 2011 and 2016.