The latest Bookstats report from the Association of American Publishers (AAP) appears to confirm the rumors that dogged the book business last year: eBook sales were reaching a plateau in the US. Bookstats, which is a collaboration between AAP and Book Industry Study Group (BISG), released preliminary findings on 26 June that indicated revenue from eBooks netted publishers $3bn in 2013. The 2013 figure reported by the AAP was actually 0.7% smaller than revenues for 2012, suggesting that the overall market for digital books had leveled off following several years of meteoric growth.

The plateau over 2012 and 2013 was a stark contrast to the period between 2011 and 2012, when the eBook market in the US jumped nearly a billion dollars in size from $2.1bn to $3bn. The AAP report is careful to acknowledge that this growth was driven by a combination of unrepeatable factors. 2011 was the year of the Kindle Christmas, when e-reader sales reached their peak (they have since fallen as tablets grew in popularity) and eBook sales were driven by not just one but two stand-out titles: Fifty Shades of Grey and The Hunger Games.

As always with publishing market reports, however, we need to look beyond the headlines to get to the more interesting parts of the story. While the AAP reported that eBook revenues fell very slightly between 2012 and 2013, it stated the total number of eBooks sold grew by 10.1% to an estimated 512.7 million. This seems to indicate that while the overall demand for digital books among consumers grows, publishers are no longer able to sell them for the prices they could command in 2011.

This is no big surprise, given that the period of steepest revenue growth for eBooks also coincided with widespread adoption of the agency model for eBook pricing. Ever since the successful DoJ action against Apple and five of the largest eBook publishers, however, there has been a swing away from agency pricing towards the wholesale model. The effect has been significant downward pressure on eBook prices, which Digital Book World's Jeremy Greenfield regularly tracks on his blog. His most recent blog on the subject sees him predicting that the average price of a best-selling eBook will soon approach $6 - that's $5 lower than the $11 average for a bestseller it was tracking in 2012, just as the major publishers were re-signing wholesale model deals with Amazon.

The other factor that AAP's numbers do not seem to bear in mind is the effect that self-publishing has had on the book market. At the end of 2013 Amazon announced that 25% of its best-sellers had been published via the Kindle Direct Publishing platform, which is used by both self-published authors and small publishers. Earlier the same year Nook (which has around 20% of the US eBook market) intimated that 25% of the books it sold were self-published. There are currently no authoritative estimates for how much revenue indie authors and small presses get from engaging with self-publishing platforms. It is entirely possible that if we did factor in this activity the size and revenue of the eBook market would look a great deal healthier. But without those figures we only have traditional publishing to go on, and these numbers aren't particularly positive

Around about the time of the demise of the agency model, some industry watchers predicted that even if lower prices were to stimulate higher overall sales, the growth in unit sales would not be enough to offset lost revenue. Assuming the AAP and BISG's statistics are solid, then this is exactly what happened. The end of agency pricing has succeeded in stimulating demand for eBooks but at the expense of destroying market value.