On the same day that the latest government GDP figures confirmed that the British economy was now in its fifth year of stagnation, research group IBIS has published a report on the UK publishing industry. Its headline findings make for sobering reading at first glance, reporting that industry-wide revenues have declined at an annual compound rate of 3.9% since the recession first began in 2008.

Yet IBIS isn’t entirely full of gloom for the future of the sector, noting that UK publishers’ strong export performance (nearly half of all their output is destined for overseas markets), which has helped to protect many businesses from the weakness of the domestic market. Another interesting point in the news stories circulating about the report is that IBIS confidently predicts that e-books will eat into physical book sales, but tells publishers not to worry about this because e-books are inherently more profitable. It’s telling that this is the only point in IBIS’s press release that isn’t supported by a data point. And that’s probably because IBIS either don’t have the data or don’t trust what they have.

I’ve blogged repeatedly about how the lack of data tracking how e-books perform in the market is inherently harmful to publishers and risks leaving them dependent on stunt marketing initiatives to drive book sales to the detriment of their profits. Nowhere is this more evident than the persistence of the 20p e-book, despite the fact it has limited value at best for everyone involved in the publishing supply chain.

Let’s take Capital by John Lanchester as an example. The book’s currently on sale on Sony’s eReader store for 20p, whereas other titles in Lanchester’s backlist sell for £6.63. This means that for every single copy of Fragrant Harbour Faber sells via Sony it would need to sell 33 copies of Capital to make the same revenue. Currently Faber doesn’t have to worry about this because Sony is still reportedly selling wholesale price on discounted e-books so the retailer rather than the publisher (or the poor author) takes the hit, but it is difficult to see how this can be a sustainable situation.

Writing on this story in The Bookseller this week, editor Philip Jones notes that at least two publishers participating in these price offers, Faber and Canongate, have done well out of e-books in the past year, reporting 260% and 240% growth respectively for their e-book businesses. There is, however, no indication that this growth has been driven by 20p e-books; and if they had, both publishers would have needed to see quadruple digit growth in sales uplifts on discounted titles. Instead it’s more likely that Canongate and Faber are just reaping the benefits of being good publishers. With new books people want to read (and are content to pay ‘full price’ for) and strong backlists to leverage, they can afford to experiment with Sony’s 20p stunt – but only as long as they keep getting wholesale price.

The question remains how long can this situation continue? Sony’s steep discounting has certainly succeeded in raising the profile of an e-book business that seemed to have lost momentum (as of last year it had sold a scant 500,000 of its latest eReader in Europe). Yet with Amazon, a business influential analyst Benedict Evans described as “manag[ing] profits to zero in the same way that Apple manages inventory to zero” determined to price-match Sony at every turn it’s impossible to say which platform has benefited most in terms of new readers, if not revenue.

The 20p e-book is the purest physical manifestation yet of the war e-reading platforms are fighting for market share into which publishers, authors and readers are being drawn. Sony is desperate to grow its share and (for the moment) has the money and will to buy some consumer attention. Amazon is determined not to let its share slip, and always seemed to have viewed profit as an objective secondary to pushing other players out of the market, so it matches the discount. Books and the commercial future of a whole industry have therefore become the lamb that technology companies are sacrificing in the hope that it will earn them millions more lovely new customers.

What no one seems to have asked or answered successfully is whether the e-book opportunity is so much bigger than the physical book market that it justifies the risk of destroying the commercial value of the book along the way. Going back to IBIS’s reports, the static if not contracting value of the total publishing market suggests that there are much fewer ‘new’ readers out there than the e-reading platforms hope. And it’s exactly this kind of data the publishing industry needs if e-books really are going to be profitable and safeguard the future of an industry that still delivers significant monetary and intellectual capital to the UK economy.