Print Stays Strong as E-Book Revolution Marches On

by Anthony John Agnello | August 11, 2011 12:48 pm

The rumors of print’s death have been widely exaggerated. The Association of American Publishers crowed about the BookStats survey after it was published Tuesday[1]. The survey was called the “deepest, most comprehensive statistical survey ever conducted of the modern U.S. publishing industry,” covering every sector of the book business from 2008 through 2010.

Given the press discussions surrounding publishing during the past three years — the rise of e-readers like Amazon‘s (NASDAQ:AMZN[2]) Kindle, the closure of chains like Borders (PINK:BGPIQ[3]), not to mention the quagmire of contract disputes and digital store openings that make up the fledgling e-book industry — it’s shocking just how well publishers are doing. CBS‘s (NYSE:CBS[4]) Simon & Schuster, News Corp.‘s (NASDAQ:NWS[5]) Harper Collins, the Bertelsmann and Houghton Mifflin empires, and the many privately owned publishing houses operating in the U.S. have much to celebrate.

How much? Net sales revenue has grown almost 6% since 2008, totaling just under $28 billion by the end of 2010. That revenue isn’t a result of higher prices, either. More books are selling, with individual sales growing more than 4% over the same period. This growth also comes from almost every different market segment. Trade market — from old-fashioned consumer-targeted books like The Girl With the Dragon Tattoo to fad diet books like The Atkins Diet — sales revenue is up around 6% on its own. Professional and scholarly publishing grew by more than 6% and almost 5%, respectively. Most impressive, though, is higher education publishing. Even across the worst of the recession and the lumbering recovery, college textbooks are booming, with revenue coming to $4.5 billion, more than 23% growth since 2008.

It’s good news all around. For shareholders in publicly traded companies with sizable publishing subsidiaries like the aforementioned News Corp. and CBS, as well as others like Time Warner (NYSE:TWX[6]), this means print isn’t dragging business down. For investors still affixed to book retailers like Amazon, this also is great news. It’s also promising even for Barnes & Noble (NYSE:BKS[7]). Even if strong book sales won’t completely rehabilitate the company’s bleeding retail business, they should at least make the company more attractive as an acquisition (to Apple[8] (NASDAQ:AAPL[9]), perhaps?), especially given its reach as a chain of university bookstores.

What of the publishing industry’s digital future, though? Have e-books begun their reign on American readers? Not just yet. E-book revenue totaled just $878 million in 2010, a mere fraction of other publishing segments. It’s the rate at which e-book sales are growing that is most promising. That revenue figure represents nearly 1,300% growth since 2008. Individual e-book sales totaled 114 million last year, growth of more than 1,000% since 2008. E-books now represent about 6% of the overall trade market.

Should investors be pouring money into Amazon because the Kindle store is going to be raking in billions soon? No, since it’s going to take years for e-books to equal print in revenue, and that’s if the current rate of market growth stays steady. They should, however, take comfort in the fact that people are still reading. The sky is not falling — at least not in publishing.

As of this writing, Anthony John Agnello did not own a position in any of the stocks named here. Follow him on Twitter at @ajohnagnello[10] and become a fan of InvestorPlace on Facebook[11].

Source URL: https://investorplace.com/2011/08/print-books-ebooks-amzn-nws-cbs/

---