What is $249.2 million in the publishing industry?
It's not Stephenie Meyer's sales last year, nor J.K. Rowlings' or even Stephen King's. To the best of my knowledge, it isn't the annual profits or CEO's salary of Random House, Simon & Schuster, or HarperCollins.
No, that figure was the grand total sales of paperback and hardcover books in America last year, according to a Newsweek infographic. By contrast, the Amazon
Don't take these figures at face value just because good old Newsweek says so, of course. The Association of American Publishers reports a grand total of $8.1 billion in trade paperback and hardbound sales last year, making Newsweek's annual claim look like a monthly figure. Still, it's not a massive market in light of the ubiquity of books -- and e-books still form the hottest commodity in the AAP report with a 177% year-over-year gain to $313 million.
Publishing is not the only consumer-facing market that gets a disproportionate amount of attention from most media in comparison to their economic importance. Viacom
Whichever numbers you use, Newsweek says that you'll buy 3.3 times more books than before when you get a Kindle, and "only" 15% of e-reader users stop buying dead-tree product altogether. To me, that's not a low figure -- it's an auspicious start to a new era.
Should you stop thinking about e-readers as an investable entity because the total addressable market is so small? Well, no. Kindle is still the top seller in Amazon's entire inventory, and the hardware is worth its weight in Swiss chocolate at the very least. Content sales are accelerating at a furious pace now that the installed base has reached a tipping point, and in ten years those big, heavy paper artifacts on your shelves may look quaintly antique to your grandkids.
Just realize that the book market isn't all that big and adjust your expectations accordingly. The gold rush here is in supplying those hungry readers with the appropriate hardware to join the revolution. The next Warren Buffett will not base his empire on book royalties.
Fool contributor Anders Bylund holds no position in any of the companies discussed here. Walt Disney and Intel are Motley Fool Inside Value recommendations. Amazon.com and Walt Disney are Motley Fool Stock Advisor picks. The Fool owns shares of and has written puts on Intel. Motley Fool Options has recommended buying calls on Intel. Try any of our Foolish newsletter services free for 30 days. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.