It's holiday for some in the beachy reaches of summertime, but Enders Analysis' new take on the UK consumer book market puts chilling stress on "how important it is that the industry innovates vigorously in the next two to three years." Using data from Nielsen Book and Kantar, Enders' Douglas McCabe and Joseph Evans frame four "critical factors" in the book trade's transition to digital. As my colleague Sarah Shaffi reports, a "reduced demand for books in the face of new media" is the prime driver. And, McCabe tells us, ebooks are not the issue: "The next disruptive waves will be smaller, slower, insidious and often much harder to combat." — Porter Anderson
We note that the digital transition to ebooks gained traction in 2011 and dramatically slowed in 2013—being, therefore, a short term, highly contained narrative of disruption that other content industries such as music or news media can only dream of.
In addition, the digital transition has been limited to a number of genres, enabling publishers to develop economically efficient digital-first strategies for some types of books, while barely having to evolve the strategies for many others.
Consumer book subscriptions have not taken off (they represent about 0.5% of ebook sales), and only partly because publishers are tactically but not strategically investing in them. The main reason is reading is not a subscription activity in the way that music and video are.
The book trade has now entered a very important phase in its transition to digital.
There are four critical factors.
- One, the consumer is spending more and more time on mobile devices, and only a very small amount of that time is devoted to reading. Books are competing directly with a wide variety of entertainment and information options as never before.
- Two, service providers have content solutions that used to be solved by books. Wikipedia is the obvious example, but a range of more specific content solutions, such as recipe sites, are increasingly affecting the book sector. The dreaded unbundling is happening, to some extent.
- Three, the presence and role of Amazon are growing. It has a far greater share of the ebook marketplace than that of the physical book marketplace, creating a number of risks for the industry as a whole.
- And four, the role of specialist high street bookshops – chains and independents – remains critical for the health of the industry, because as Nielsen data demonstrates, they continue to drive discovery and impulse buying in books. The specialist book market remains fragile, even if some recent data suggests marginal market share gains from supermarkets. Publishers cannot do enough to support high street range bookselling, or to help differentiate their position in the market.
It is impossible to overstate how important it is that the industry innovates vigorously in the next two to three years.
The risk of seeing the ebook transition as the key disruptive force, and therefore to believe that the worst has passed, is extremely dangerous. Mobile consumption is reducing the amount of time consumers spend reading.
We remain optimistic about the resilience of book reading and book buying as a whole, particularly in comparison to other media such as music and printed newspapers. But books are now less immune to broader social, technology and consumption trends than in the past. The content economy has turned from a push to a pull structure, and it is impossible to envisage that books will not suffer in this process.
Every genre will experience a different manifestation of the set of issues that are thrown up. It will become harder and harder to assess which bets to place because what works for one category for one publisher will not necessarily be relevant elsewhere. Problems for £25 cookery books or £5 reference publishing will tell publishers nothing about the declines in literary fiction or paperback business books.
The ebooks challenge is now well understood, and has not been as destructive as many feared. But the next disruptive waves will be smaller, slower, insidious and often much harder to combat.
Further details on Enders Analysis’ report can be had by writing email@example.com
Enders Analysis media team research analyst Joseph Evans contributed to this report
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