E-books: a twist in the tale

If the book market made sense it wouldn’t be so much fun. This week we are celebrating a 0.4% rise in physical book sales and an 11% drop in consumer e-book sales.

Today the Publishers Association releases its annual market report, The PA Statistics Yearbook that tracks the invoiced sales figures for all the major publishers in 2015. There are plenty of known knowns: physical book sales were up (just about), digital content sales were down (just about). Print fiction sales were up; digital fiction sales were down. Colouring books and vlogger books supercharged non-fiction.

The tone set by the report is upbeat. The UK publishing industry is in good health. It’s little wonder that everyone seems so cheery: print is back, digital did not kill us. The mood at the British Book Industry Awards on Monday evening was one of huge optimism and celebration. There is relief too (particularly as 2016 has got off to such a strong start) but also a sense of a sector thumbing its nose at all of those who have talked down publishing for the past half-decade.

There are still some that think traditional publishing is about to fall off a cliff: but if so they should pay particular attention to these statistics. The percentage changes may be small, but the significance is not. The digital transition has not been straightforward, but neither has it eroded sales. The digital market was in its infancy in 2009 when UK publishers recorded home sales of roughly £1,950m. In 2015 the equivalent number is £1,890m. A net loss but not a huge one, and more than made up by growth in export sales over the same period. In total UK publishers generated sales of £3.3bn in 2015, a nudge ahead of 2009’s pre-digital figure of £3.2bn.

Publishing may yet be hit by all sorts of body blows, but digital so far has not been one of them.

PA c.e.o. Stephen Lotinga notes in his intro: “Beneath the headline figures is the eye-catching fact that for the first time since the invention of the e-book, print sales are seeing a resurgence. Those who made predictions about the death of the book may have underestimated just how much people love paper. While it is too early to make claims about what this may mean in the longer term, it should be seen as indicative of an industry that is confident in its future bridging multiple formats and audiences.”

Outgoing PA president and m.d. of Penguin General Joanna Prior writes: “2015 was notable for being the first year in a long time in which the UK book trade experienced an increase in physical book sales. However, it was also the year in which digital sales growth finally went into reverse, following the slow-down in 2014. Both the increase and decrease are too small, however, for us to make any claims for big shifts in consumer behaviour or make predictions for what lies ahead. But I do think that any suggestion that the physical book is doomed can now definitively be refuted as we trade less neurotically in a more stable, multi-format world.”

But here’s the rub. While the bigger numbers are all up, there’s a significant bit of the business that is irritatingly down. For those who haven’t been paying attention these past few years: that would be the digital bit. Or as we sometimes call it, the future . . .

Overall digital digital book sales (including non-trade books, and audiobooks) were down 2% to £554m; within this consumer e-book sales dropped 11% to £245m, a figure that is closer to the £220m reported in 2012, than the £261m number recorded in 2013.

Looking at the UK alone worsens the overall picture for digital sales from traditional publishers. UK consumer e-book sales fell 13% to £183m; UK fiction e-book sales dropped 11% to £142m.

While digital sales in the non-trade areas of schools and academic/professional sectors continued to grow, and consumer audiobook rose 30% (albeit to the misleadingly low number of £12m), there was not a bit of growth in the consumer e-book market, the bit that is dominated by Kindle.

The 13% fall in UK consumer digital book sales is the most important number here: it is well ahead of the 2.4% drop in volume e-book business recorded by the “Big Five” publishers in The Bookseller's annual Review of the Year. The difference in the two figures may be put down to the shift back to full agency contracts by the bigger publishers during the year (and worsened deals), the impact of VAT of 15% on publisher revenue, and general pressure on pricing brought on my increased competition from self-publishers and Kindle Unlimited. Whereas last year I noted that publishers may be taking a hit on volume in order to maintain value; this year I’d say it looks like they’ve lost that battle—at least for now. I am told that these drops have now 'plateaued', so it could be that we look back on 2015 as a year of adjustment.

The numbers though are not reflective of the wider e-book market—though journalists will continue to report them as if they are. Both Nielsen Book and Amazon insist the e-book market is still in growth, and that this growth comes from self-published e-books.

This is broadly acknowledged in the report: self-publishing has previously only been referenced in the appendix to the PA's annual report, this year it gets two mentions in the commentary, most noticeably by Kate Elton, executive publisher at HarperCollins:

“E-book value sales - having grown by 14% in 2013 and a further 6% in 2014 - fell by 7% in 2015. E-books still accounted for more than a third of the value of the fiction market at £196m, and there were reports that sales of self-published titles (not recorded here) rose during the year.”

Publishers will be mollified that whatever is happening in the digital self-publishing market, it is not directly impacting their print book sales. Good fiction is still selling well, and in 2015 sold particularly well in the print formats of yore.

We should not, though, pretend that overall this is not a disappointing result, and indicative of a wider malaise. As I wrote in my leader column this week, publishing’s digital transition is far from over, but we may have to get more nuanced in how we interpret the numbers: this market is now developing at different rates, and a year in which many book buyers turn to colouring books or hardback copies of The Girl on the Train may simply not be a good year for digital.

But it is also suggestive of a wider, and disappointing, shift. Publishers have recently claimed that they have managed the digital shift better than any other media sector: that may be true (one need only read this piece on the Guardian for the view from another sector). No publisher has gone bust; products are still being bought and sold (and just about at decent prices); the old media hasn’t been supplanted; the new media now sits comfortably with the old; and we all live to fight another day.

But the idea, as suggested by Simon Jenkins in the Guardian that "virtual books, like virtual holidays or virtual relationships, are not real" is risible. Publishing is now multi-format: success in one format should not be seen as a victory over the other format.

Let the good times role, for I suspect there is another twist in this tale. 

Philip Jones is editor of The Bookseller.