Juno Books

Been looking for something concise on this and, thanks to Shelf Wisdom and further comments from publishing veteran Jack McKeown (director of business development for Verso Advertising and president of Conemarra Partners), here’s some interesting information from last week’s Digital Book World, plus further news and opinion from McKeown (and some remarks from moi). The primary focus is a Verso survey of 5,600 consumers weighted to mirror the U.S. adult population and conducted late last year.

Among the findings:

• Nearly half of avid readers prefer to shop in bookstores, even though their purchases don’t reflect that.
• A hybrid market is developing, whereby many people will buy and read both e-books and printed books, not exclusively e-books.
• E-readers will likely represent 12%-15% of the market in the next two years and have not reached a near-term tipping point.
• Amazon’s “hissy fit” of the past week settled some important pricing issues.
• Baby boomers and older Americans who are avid readers number 41 million, and, given the proper attention, these readers could buy more books. [Personal Comment: But, she wonders, what do we aging hipsters read/buy? No one knows.]
• Because of demographic issues, the music industry’s difficulties are not an accurate model for the book business. [Personal Comment: This is a big “duh”, but really involves a lot more than demographics. I highly recommend that everyone in publishing read Appetite for Self-Destruction: The Spectacular Crash of the Record Industry in the Digital Age by Steve Knopper in order to understand just how screwed-up the music industry became.]
• Book buyers’ preferred shopping locations are local independents (21.5%) and chain bookstores (21.4%), followed by online retailers (20%), book clubs and others (10.7%), and big box retailers (10.5%). [Comment: with a 1.6 +/- margin of error, I’s say this means that the top three are equal. Further, how many readers HAVE a local bookstore that can supply all their needs?]
• Avid readers (defined as the 28% of the US population 18+ years old who read more than 5 hours per week) skew older: 35% of respondents 65 and older are avid readers while just 20% of respondents age 25-34 are avid readers. McKeown noted: “Older Americans represent 41 million, or two-thirds, of the country’s 62 million avid readers.” They are even more likely than less-frequent readers to prefer shopping in an independent bookstore.

  He said that while he is not sure whether this is a generational or chronological phenomenon–”will younger Americans read and buy more books as they age?”–the book industry can at least try to sell more books to older readers and seek to convert younger more casual readers.

  If booksellers target avid reader baby boomers and convince them to buy two more books a year, “that would be $1 billion topline growth for the industry,” McKeown said. And because baby boomers will be around for a while yet, “this could be a decades-long opportunity, not a near-term one…the older market could be the cash cow that drives the industry’s efforts in digital marketing and digital publishing.” [Comment: Not sure I agree with this given we do not know what they buy. The market might already have more than can be consumed.]

• The most important marketing tools for selling books in bricks-and-mortar stores are author publicity and in-store events, staff recommendations and bestseller sections, while for online sales, search engine results are most important.
• Online and in the “real world,” the final purchase decision is driven by the author’s reputation, personal recommendations, and price. [Comment: So, “brand name” wins. But — will readers try a NEW author for a reduced price?]
E-Reader Trends
• Fully 49% of respondents said they will not buy an e-reader in the next year and only 25% said they are very likely or somewhat likely to buy one, and much of the resistance comes from older, avid readers. Approximately 3.5 million-4.5 million e-readers have been sold in the past few years, and “the data suggests that trajectory will flatten out,” McKeown said. “E-reader penetration could be 12%-15% of the market over two years. There is no near-term tipping point for e-reader.”
• Data also showed that “avid readers who own e-readers are splitting purchases between paper and e-books,” McKeown continued. “They are not buying fewer books than other avid readers. This speaks to me about the evolving hybrid market. Avid readers have preferences about paper and e-books, but the two are not mutually exclusive. Readers will move between both realms at their own pace.”
• Many respondents, particularly men 55 and older, are likely to buy hardcover books with a digital version for a modest extra charge. Among all respondents, 42.9% would consider such a bundled purchase.
• Data about where e-readers are used showed that reading at home for leisure is most popular (27%), followed by traveling or commuting (24%), reading in bed (14%), during breaks at work (9%), and studying or school reading (6%). The low figure for school “bears out the failure of eInk devices to win a beachhold with students,” McKeown said. He noted the
  failure of Amazon’s program that provided Kindles to college students at a select group of colleges. [Comment: My highly academic son despises ebooks because you cannot highlight, write notes, and easily flip trough an e-book to study. Further, you are yoked to a powered device that can run down or be tethered to electric socket. Etc.]

• There was a major split among respondents over appropriate pricing for e-books: Fully 28% favor prices under $10; 28% accept prices between $10 and $20; while 37% are undecided. Only 7.5% are open to paying “hardcover-like prices” of more than $20 for an e-book.[Comment: Again, there is no differentiation made in what type of books. My theory is that readers of mass market paperbacks already feel ripped off at $8 a book. Price makes a big difference to them. Price makes a big difference to genre readers who buy a lot of books. If you buy fiction in hardcover, then you want a reasonable discount…etc.]
• Even before the recent Amazon-St Martins showdown, McKeown said, “we sensed the pundits and $9.99 fanatics did not reflect the avid reader consumer mindset.” He called the grades of price acceptance similar to traditional hardcover, trade paperback and mass market segmentation. “It seems that the $10 crowd is motivated by price,” he continued, but others who truly want to read a book and are engaged with authors will accept somewhat higher prices.
• Already 28% of e-reader owners have downloaded pirated editions of books, and 45% of males under 35 have done so. McKeown suggested that in response to piracy, the book business needs “to avoid the knee-jerk approach of the music industry, which made things only worse.” A carrot approach that includes trying to encourage pirates to pay–as well as DRM controls–should be part of the equation. [Comment: Read the Knopper book. More importantly, how many of those pirates would have bought the books at all? Just because you pick up something free doesn’t mean you’d pay money for it. As for DRM: Doctorow’s Law: Any time someone puts a lock on something you own, against your wishes, and doesn’t give you the key, it’s not being done to your benefit.]

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