2010 State of the Computer Book Market, Post 3 – The Publishers

In this third installment, (see Post 1 and Post 2; Post 4 & 5 to come soon), we will look at how publishers fared in 2010, as compared to 2009. The chart below shows our dashboard view of the large publishers’ results for 2010. The most notable piece of information is that Wiley continues to hold the leading spot as the largest publisher (with 32% market share of units sold), while Pearson and O’Reilly both lost 1%, which is picked up by Cengage and McGraw Hill. (We’ll look at revenue share later in the analysis.)

2009 Pub Share	2010 Pub Share

You may not recognize the names of all the top publishers, because they are actually conglomerates of many smaller publishing imprints that they’ve acquired, created or distributed over the years. The imprints are the familiar consumer-facing brands. For instance, when you purchase a book from Peachpit or Sams, you typically see Peachpit or Sams on the spine, not Pearson, even though Pearson owns both companies. In O’Reilly’s case, all the imprints that are not branded “O’Reilly” are part of a distribution partnership and are not owned by O’Reilly. The various imprints that make up each major publisher’s share are shown in detailed pie charts later in this post.

Let’s look at the top publishers and how they performed year-over-year. The following table provides some interesting comparative data.

Publisher	2010 Units	2009 Units	2010 Title Count	2009 Title Count	2010 Efficiency	2009 Efficiency
Wiley	1,887,493	1,904,859	1,538	1,468	1.65	1.61
O’Reilly	1,404,607	1,577,838	1,145	1,185	1.65	1.65
Pearson	1,386,301	1,511,855	1,934	1,936	0.97	0.97
McGrawHill	276,439	255,667	466	454	0.80	0.70
Apress	200,267	212,614	423	389	0.64	0.68
Cengage	167,020	143,521	676	644	0.33	0.28
Reed Elsevier	140,708	128,657	384	355	0.49	0.45
Lightning Source	67,620	61,676	412	325	0.22	0.23
Sum/Avg	5,530,455	5,796,687	6,978	6,756	0.84	.82

So what is notable in this data? First, the big three publishers (more than 1 million units per year) are all down. Second, four of the top eight publishers are up: McGraw Hill, Cengage, Reed Elsevier, and Lightning Source all had modest gains in 2010. Overall, these top eight publishers collectively saw 266,232 fewer units sold in 2010, with 222 additional titles making the list.

A note on Market Share versus Title Efficiency

A typical indicator of publisher performance is market share of units sold, which is what we’ve been looking at so far. Perhaps a better measure is how many published titles it takes to get a comparable share of unit sales. This is the ratio of title share to unit market share. Think about it this way: if a publisher has 15% of the titles appearing in the Bookscan Top 3000, and gets a 15% share of units sold, they will have a ratio of 1:1, expressed as a title efficiency of 1.0. A publisher with 20% of the title share, and 10% of the unit share would have a .5 efficiency. An efficiency of 1 is the market average: 100% of the title count delivering 100% of the unit sales. A publisher that achieves its share with fewer titles will have a higher ratio. Only two publishers continue to have an efficiency of more than 1: Wiley and O’Reilly.

Publishers under the 1.0 threshold typically have many titles in the Bookscan data, but they are not selling many units. A note of caution though&#151some publishers have many evergreen titles, which can skew this data. Typically, older titles sell fewer units each subsequent year. But this is not always true, as some titles continue to sell like they are newly released. Head First Design Patterns is one example, still selling more than the majority of brand-new titles. So efficiency could be thought of as a frequency ratio rather than a true efficiency measure, because it is very efficient to publish a title and have it sell for years. A true efficiency metric would take into account all titles published by all publishers and how many make it into the top 3000. Some publishers have titles that never even make the top 3000, so we will not be able to count them (for or against an efficiency metric) because they are missing from the datasetset.

A Note on Evergreen Status

The table below shows imprints that have a percentage of evergreen titles. And how did we come up with an evergreen status? We assigned points to titles that had copyright dates older than 16+ years (most points), 10-16 years, 5-10 years, and less than 5 years (no points because they have not proved to be long-lasting yet). After assigning points for each title, we were able to see what percentage of evergreen titles each imprint had in the top 3000 between the years 2004 and 2010. It’s interesting to note, and somewhat expected, that the top three evergreen imprints have a strong academic heritage (Wiley, Addison-Wesley, and Prentice Hall).

Imprint	% Evergreen
John Wiley	11.47%
Addison-Wesley	11.07%
Prentice Hall	10.85%
O’Reilly	9.63%
For Dummies	8.43%
Sams	7.79%
Que	7.01%
Peachpit Press	5.62%
McGraw-Hill/Osborne	5.50%
Wrox	3.66%
APress	2.92%

Now that we have a basic understanding of title efficiency and evergreen status, let’s look further into the 2010 results for the imprints and drill in on the top three publishers: Wiley, Pearson, and O’Reilly. This is important because you typically see the imprint name on a book when you purchase it, but may not be aware of who the publisher is. (You’ll likely see the publisher inside the book on the copyright page, except in the case of O’Reilly because our other imprints are distribution partners. That is, O’Reilly provides some sales and distribution services to these partners, but they are not owned as is the case for Pearson and Wiley imprints.)

Click on any chart to get a bigger image.

#1 Wiley	#2 O’Reilly Media

#3 Pearson

In 2010, O’Reilly Media became the second largest publisher with all imprints aggregated under the O’Reilly partner and distribution umbrella. In this data, I have included all partners and roughly the year they were added to their respective conglomerate. For the most part, our agreement with Microsoft Press is what catapulted O’Reilly Media to become the second largest tech publisher, though only by a slight margin ahead of Pearson (less than 15,000 units). Wiley continues to dominate as the largest publisher and seems be more resilient to the market declines, chiefly due to the Dummies brand and its wide-ranging scope. The trend chart below shows the three main tech book publishers and their respective growth by year.

Now that you have an idea of the imprints that make up the largest three publishers, let’s tease out all the imprints and look at their respective market share. The following chart shows the top 20 imprints and how they stack up against each other. These ten imprints saw 422,814 fewer units sold in 2010&#151and remember that 2009 was not a strong sales year for tech books. The market was held together by the medium-to-small size publishers that you do not see on this list. From this imprint view, you’ll notice that O’Reilly has the second largest market share behind Dummies.

So what do the graphs tell us? The first notable thing is that there was very little movement in the top ten imprints. In other words, the imprints that were occupying the top slots still do. In fact, of the top 20 imprints, there were only 7 that showed a slight increase in units compared with 2009 and 8 that showed an increase in dollars (see the graph below). The only movement out of the top ten was Apress, which dropped from #10 to #11. Sybex, Wrox, and then Course Technology (in that order) showed the biggest increase in units from 2009 to 2010 and Wrox, Course Technology, and then Sybex (in that order) showed the highest growth percentage. Basically, Sybex had a larger base to grow from, so the overall share growth was not as significant for them. The other two were half the size and their unit growth made an impact on their growth percentage.

Before analyzing imprints by category, let’s revisit the data with dollars rather than units. We have a fairly easy way of calculating this: units sold * listprice = dollars. Granted there are discounts, promotions, and other things that affect the precision of this, but it is pretty close. If nothing else, you can think of this as retail value. So here are the top imprints from a revenue perspective. Again, this is at the imprint level and from a dollar perspective. As you can see, compared to the units chart above, the leaderboard quickly changes. Microsoft Press becomes the number one revenue-producing imprint, followed by O’Reilly, and then Dummies. The biggest move in the top 20 is that Addison-Wesley jumps from #8 in units to #4 in dollars, and conversely, Wiley’s Visual imprint goes from #10 in Units to #17 in Dollars.

Imprint Analysis by Category

Now that we have seen a high-level picture of what imprints did in 2010, let’s take a look at which categories each of them publishes in and where their strengths lie. Dummies and O’Reilly appear to have the most diverse publishing programs, as they are not at the bottom in any category. Dummies is clearly the leader in Business Apps and Consumer Operating Systems, while O’Reilly has climbed further ahead of Microsoft Press in the Systems and Programming category. This chart also seems to indicate that Addison-Wesley is really only publishing in the System and Programming space. That is what some publishers do: they have specific imprints publish in one or two categories only. The jury may still be out on whether that is a good or bad strategy, but Addison-Welsey’s success in revenue growth in 2010 could be because of this focus. The corollary is when there is not much new tech driving one area, a publisher/imprint may become more susceptible to market declines because of the lack of diversification.

Imprints’ Category Strength

Categories and the Publishers who Dominate Them

The following category images are for 2010, and the tables have each publishers’ count of titles and sum of units. The top titles are also listed for each area in 2010.

Category:&nbsp Systems and Programming

In this category, you can see that O’Reilly now has the largest market share among the publishers, with Pearson a close second. If we drill into the imprint level, the picture of who is driving this gets clearer. The top six imprints are O’Reilly at 13.66%, Microsoft Press at 10.26%, Addison-Wesley at 9.65%, For Dummies at 7.04%, Apress at 6.67%, and Prentice Hall at 5.48%. What is not obvious from this data is that the top publishers all have come down a couple of percentage points, which means that the market is getting its growth in the middle of the pack.

As you can see in the table below, O’Reilly has the most units and best title efficiency rating. It is a relatively healthy mix. That is, we have quite a few titles, but our efficiency is also significantly above the market average.

Sys & Prog – Publisher Market Share (01/01/2010 &#151 12/31/2010)

Publisher	Units	Title Count	Units/Title	Efficiency
O’Reilly	557,876	637	876	1.63
Pearson	525,897	960	548	1.02
Wiley	386,809	553	699	1.30
Apress	114,705	236	512	0.95
McGraw Hill	111,980	236	474	0.88
Cengage	64,580	252	256	0.48
Lightning Source	34,674	188	184	.34
Reed Elsevier	31,957	188	170	0.32

Note: This category family contains “programming languages” and “programming”, where more units were sold in 2010 than in 2009. The leading titles and publishers for Systems and Programming in 2010 were:

1. PMP Exam Prep: Rita’s Course in a Book for Passing the PMP Exam (this is the perennial leader)&nbsp(RMC)
2. MCTS Self-Paced Training Kit : Configuring Windows 7&nbsp(Microsoft Press)
3. CISSP Certification All-in-One Exam Guide, 5th Ed.&nbsp(McGraw Hill)
4. CCNA Official Exam Certification Library, 3rd Ed.&nbsp(Cisco Press)
5. Head First Java, 2nd Edition&nbsp(O’Reilly)

Category: &nbsp Web Design and Development

In this category, you can see that Wiley has the largest market share among the publishers, with Pearson second. If we drill into the imprint level, the picture changes a bit. The top six imprints are O’Reilly at 21.11%, Dummies at 13.30%, Sams at 6.25%, Wiley at 5.92%, New Riders at 5.82% and Peachpit at 5.40%.

As you can see in the table below, Pearson has the most titles and their performance is strong in this category. In Web Design and Development, it used to be that most of the top publishers were above the title efficiency average of 1.0, but now there are only three top publishers over the 1.0 efficiency threshold. (This suggests that there are a lot of second-tier publishers with lower efficiency who don’t show up in the table.) The category experienced a decline of about 25,000 fewer units, yet saw 21 additional titles make the list in 2010. This contributes to the decrease in category/publisher efficiency.

Web Des & Dev – Publisher Market Share ( 01/01/2010 &#151 12/31/2010 )

Publisher	Units	Title Count	Units/Title	Efficiency
Wiley	234,853	219	1,072	1.48
Pearson	232,547	287	810	1.11
O’Reilly	221,876	211	1,052	1.45
Apress	48,812	124	394	0.54
Lightning Source	16,345	104	157	.22

The leading titles and publishers for Web Design and Development are:

1. Don’t Make Me Think: A Common Sense Approach to Web Usability, 2nd Ed.&nbsp(New Riders’ )
2. Head First HTML with CSS & XHTML&nbsp(O’Reilly)
3. CSS: The Missing Manual&nbsp(O’Reilly)
4. HTML, XHTML, and CSS: Visual Quickstart, 6th Ed.&nbsp(Peachpit)
5. WordPress For Dummies: 2nd Ed.&nbsp(Wiley)

Category:&nbsp Business Applications

In this category you can see that Wiley has the largest market share among the publishers and O’Reilly (Apologies: the O’Reilly 21% is obscured in the graph.) has moved ahead of Pearson for second. If we drill into the imprint level, the picture changes a bit. The top six imprints are Dummies at 28.34%, Microsoft Press at 14.72%, McGraw Hill/Osborne at 7.06%, O’Reilly at 6.29%, John Wiley at 5.74%, and Que at 4.18%.

Bus Apps – Publisher Market Share ( 01/01/2010 &#151 12/31/2010 )

Publisher	Units	Title Count	Units/Title	Efficiency
Wiley	566,391	386	1,467	1.74
O’Reilly	278,058	162	1,716	2.04
Pearson	199,261	296	673	0.80
McGraw Hill	96,806	121	800	0.95
Cengage	102,034	75	1,360	1.2
Cengage	35,625	200	178	0.21
Apress	16,370	38	431	0.51

The leading titles and publishers for Business Applications are:

1. Facebook For Dummies&nbsp(Wiley)
2. Office 2007 All-in-One Desk Reference For Dummies&nbsp(Wiley)
3. Excel 2007 for Dummies&nbsp(Wiley)
4. Microsoft Office Excel 2007 Step by Step&nbsp(Microsoft)
5. QuickBooks 2010 The Official Guide &nbsp(McGraw Hill)
6. Excel 2007 All-In-One Desk Reference For Dummies&nbsp(Wiley)

Category:&nbsp Consumer Operating Systems

In this category, you can see that Wiley has the largest market share (at a whopping 46%), among the publishers with O’Reilly again in second at 22%, and Pearson comfortably in the third spot at 17%. (Apologies: the O’Reilly % is partially cut off in the graph.) If we drill into the imprint level, the picture changes a bit. The top five imprints are Dummies at 31.00%, O’Reilly at 13.15%, Que at 9.39%, Microsoft Press at 8.52%, and Wiley’s Visual at 7.10%.

As you can see in the table below, Wiley has the most titles and a relatively good efficiency rating, and O’Reilly also has a very healthy title efficiency rate. What is impressive with this category, is that it has four of the top six imprints averaging more than 1,000 units per title. To me, that means it’s a category that sustains numerous big-seller titles, not just an occasional retail success. As you can see from the best-selling titles below, it is mostly Windows 7 that is driving this category, though iPad: The Missing Manual came from virtually nowhere to be among the bestsellers in 2010.

Cons Opsys & Dev – Publisher Market Share ( 01/01/2010 &#151 12/31/2010 )

Publisher	Units	Title Count	Units/Title	Efficiency
Wiley	490,682	182	2,696	1.48
O’Reilly	237,508	62	3,831	2.11
Pearson	184,497	129	1,430	0.79
McGraw Hill	48,684	50	974	0.54
Cengage	37,679	86	438	0.24
Computer Step	37,528	24	1,564	.86

The leading titles and publishers for Consumer Operating Systems are:

1. Windows 7 For Dummies&nbsp(Wiley)
2. Windows 7 For Dummies Book + DVD Bundle&nbsp(Wiley)
3. Windows 7 Plain & Simple&nbsp(Microsoft Press)
4. Mac OS X Leopard: The Missing Manual&nbsp(O’Reilly)
5. Windows 7 Step by Step&nbsp(Microsoft Press)
6. iPad: The Missing Manual&nbsp(O’Reilly)

Category: &nbspDigital Media

In this category, you can see that Pearson has regained the top spot, with Wiley falling to second. As you can see in the table below, Pearson has the most titles and a relatively good efficiency rating. O’Reilly also has an extremely healthy efficiency rate and average units per title. This relates to my earlier comment about publishing fewer titles, while getting more out of the ones that you do publish. For instance, in the table below, Reed Elsevier has moved into third for publishers, yet this is largely due to twice as many titles as O’Reilly and hence have a much lower efficiency rating. If you factor in that Reed Elsvier also made 1/4 of their units in one title, their efficiency is a little deceiving.

If we drill into the imprint level, the picture changes a bit. The top six imprints are Peachpit Press at 18.19%, For Dummies at 15.97%, Focal Press at 12.91%, O’Reilly at 11.18%, Adobe Press at 9.91%, and New Riders at 7.73%.

Digital Media – Publisher Market Share ( 01/01/2010 &#151 12/31/2010 )

Publisher	Units	Title Count	Units/Title	Efficiency
Pearson	228,640	186	1,229	1.27
Wiley	173,616	157	1,106	1.14
Reed Elsevier	76,359	110	694	0.72
O’Reilly	74,235	36	2,062	2.13
Cengage	15,027	47	320	0.33

The leading titles and publishers for Digital Media are:

1. Adobe Photoshop CS5 for Photographers&nbsp(Focal Press)
2. The Adobe Photoshop CS5 Book for Digital Photographers&nbsp(New Riders)
3. Adobe Photoshop CS4 Classroom in a Book&nbsp(Adobe Press)
4. Adobe Photoshop CS5 Classroom in a Book &nbsp(Adobe Press)
5. Photoshop Elements 8 for Windows: The Missing Manual&nbsp(O’Reilly)

Next up, Post 4 will contain more analysis of programming languages. And Post 5 will look at digital sales.