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Digital parity and you

08.05.12 | Neill Denny

Digital crossover is the biggest issue facing the book trade now, and will be for the rest of the decade. Guessing what the industry will look like by 2020 is a risky exercise, but the Publishing Association’s 2011 Yearbook, just out, provides some handy pointers.

Last year, according to the PA, digital accounted for 8% of book sales by value, up from 5% in 2010. That doesn’t sound like a vast shift, but it represents a growth in digital of some 54% to a cash value of £243m last year. It’s not quite enough to cancel out a 5% fall in physical sales, meaning the market as a whole contracted by 2%. The areas of print in the British market that saw the steepest declines were fiction (down 10%) and children’s (down 7%, post-Twilight).

A clue to what is going on in fiction, as if it were needed, is provided by the telling statistic that publishers’ e-book fiction sales shot up from £16m in 2010 to £70m in 2011. Fiction print sales, meanwhile, fell by £40m. If the YouGov finding that a million e-readers were given as Christmas presents is broadly accurate, then digital has no doubt leapt upward again.

Digital uptake is starting to resemble the classic S-shaped adoption curve: slow to start, then accelerating fast, then tailing off. Hard to say what (or when) the end point will be, but a digital share of 50% by 2020 seems about right, with ingress most evident in the fiction field.

Various questions arise from that scenario to which the trade needs to find answers. How many indie and chain bookshops remain? Perhaps a few hundred, unless they can find compelling ways of selling e-books instore. The pressure on the indies and Waterstones to establish e-reader partnerships is now immense. Certainly there seems to be an inverse relationship between digital sales and the number of shops selling books. Or perhaps the digital winners will realise it is in their vested interest to retain a “zombie” physical sector to aid discoverability.

As digital builds in importance, so does the vexed issue of DRM. Let the content flow free, argue some, so that all e-readers can access everything. Drop DRM and risk copyright itself, argue others. A middle-ground involving watermarking may emerge here, but low pricing looks a bigger threat. Digital revenues are currently offsetting most of the print decline, but what if the 99p e-book takes hold? And what does that do to the price of the print edition?