Digital is integrated but innovation is difficult: insights from the 2017 FutureBook Digital Census

Digital is integrated but innovation is difficult: insights from the 2017 FutureBook Digital Census

The FutureBook census results give a positive picture of how UK publishers have fared in the past five years, and a confident but realistic picture looking to the future. This year’s census had over 500 responses, the majority coming from the UK. Here we will concentrate on responses from UK publishers.

The top-line results show growth across all formats, with audio still an untapped opportunity for many publishers. On average, nearly two-thirds of revenue comes from print, but more than 50% of publisher respondents still saw revenue growth from digital in 2017. UK publishers are confident that digital is integrated across their businesses. This is encouraging and shows that they consider themselves able to handle further disruption... 

In the last year (2017), what percentage of your sales (by value) were in digital, print, audio or other formats?

Across UK publishers, on average 63% of revenue comes from print, 32% from digital and 5% from audio. The census shows a significant number of publishers are still making no revenue from audiobooks. This is the first of several results that suggest audio is still an untapped opportunity for many. 

In the last year (2017), were your digital sales (by value) up, down or flat?

The responses from UK publishers paint a strong picture for digital revenue, with 54% experiencing growth in 2017 and only 13% seeing declining revenue (33% were flat). The publishers who saw rapid growth put this down to three key drivers: pricing strategy, marketing and a better understanding of readers.

Of the UK publishers seeing growth, there is a near-even split between those experiencing the biggest growth from print and digital. Audio is also overperforming here, with the publishers who have invested in the format reaping the rewards.

We asked publishers to look at their performance over the past five years and the new opportunities that have been opened to them.

Close to 85% recognised that digital has expanded their businesses. In particular, many UK publishers are seeing sales beyond their home markets.

In the past five years, who do you think has done well out of the digital transformation of the industry?

It is no surprise that publishers put Amazon on top; they have seen an ever-growing shift from other retailers to the online giant in the past half-decade. Also, it would be hard not to acknowledge Amazon’s relentless innovation in the book business. UK publishers also consider self-published authors and readers as the other big winners of the digital transformation. However, they do not think traditionally published authors, literary agents and bookshops have benefited from the transformation of the industry. Reflecting on how they have fared, publishers haven’t rated themselves very highly. This seems pretty modest, as publishers are still seeing growth across formats and for many profits are up year on year.

How much do you agree with the statement “digital is fully integrated across my business”?

A whopping 76% of publishers agree with this statement. This is very encouraging and puts publishers in a strong position to respond to further transformation. They are also aware that innovating within their businesses is still difficult. We asked them what the main issues holding innovation back were. The three areas publishers highlighted were financial limitations, a resistance to change and internal structures not being conducive to innovation.

We asked publishers how they could better embrace start-ups.

Publishers had a lot of ideas of how this could work better, and recognised they had plenty to learn from a more nimble, creative and iterative approach.

A little over 50% of publishers who responded to the census anticipate significant transformation in the next five years. The other 47% either see incremental transformation or think no further transformation will happen. This may fall into the wishful thinking category, of course. It certainly shows a split in views as to what comes next for the industry. 

Those who anticipate further transformation during the next five years think it will come from a start-up we have not heard of, new technology and Amazon. We asked publishers to look even further ahead and, despite strong digital sales and opportunities in audio, publishers still back print as the dominant format in 2025. That is a significant change from earlier surveys.