How many Americans read e-books?
Here’s the math:
Americans 15 and Older * Percent of Americans Who Use E-Readers = U.S. E-Book Market
Harris found 8% of Americans use e-readers. There are 307 million Americans. Only 245 million Americans are 15 or older. The Harris poll surveyed people 18 and older. But using 15 and older better measures market size.
245,267,292 * 0.08 = 19,621,383
The U.S. e-book market is 19.6 million people. What is the market in dollars?
U.S. book spending is $77.80 per capita. People who use e-readers spend more. So we’re talking about an installed base that buys more than $1.5 billion in books each year. That's today's addressable market for content. A lot of that is still print. It doesn’t have to be. The most profitable e-book growth will come from selling more e-books to people who already have devices.
People born between 1946 and 1976 read less than everybody else. They are income rich and time poor. There’s a danger they will buy devices without buying enough e-books. I’d ignore them.
Amazon (AMZN) and Barnes & Noble (BKS) should focus on selling e-books to readers who grew up in the ‘80s and ‘90s. They need to maximize the number of e-books sold per device. Whoever sells the most e-books per device will eventually turn cash profits at gross margins that will bankrupt competitors.
The way to sell more e-books per device is to sell devices by subscription.
Think Xbox Live and Costco (COST).