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Books and e-books - UK - May 2016

OVERVIEW
What you need to know
Covered in this Report
EXECUTIVE SUMMARY
Print up as consumer confidence returns to book market
Figure 1: Forecast of total consumer print book market sales, 2010-20
But e-book growth hits the buffers
Figure 2: Forecast of total consumer e-book market sales, 2010-20
E-reader sales dry up but Amazon sees Oasis of opportunity
Figure 3: Household ownership of consumer technology products, January 2013-December 2015
Amazon print penetration up seven points…
Figure 4: Retailers used to buy print books in the past 12 months, April 2014 and March 2016
…and its e-book dominance remains unchecked
Figure 5: Retailers used to buy e-books in the past 12 months, April 2014 and March 2016
Readers still get physical
Figure 6: Ways of reading books in the past 12 months, April 2014 and March 2016
Millennials offer new revenue potential
Figure 7: Ways of adding value to the book buying process, March 2016
What we think
ISSUES AND INSIGHTS
Price is key but experiential factors remain a core strength for bookshops
The facts
The implications
Digital reading may be in transition but there is no mainstream challenger to e-ink on the horizon
The facts
The implications
Scope for a challenger platform and a packaged alternative for digital readers
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Print growth continuing into 2016
Market fragmented beyond leading players
Waterstone’s strategy for success on high street
Agency deals contribute to e-book stagnation
Pockets of digital growth
E-reader ownership reaches plateau at three in ten adults
Industry trying to find sustainable digital ‘sub’ model
MARKET SIZE AND FORECAST
Print revival driving market growth
Figure 8: Value of total consumer book market sales, 2010-20
Figure 9: Value of total consumer market print book sales, 2010-20
But e-books sales growth has stalled
Figure 10: Value of total consumer market e-book sales, 2010-20
Forecast
Figure 11: Forecast of total consumer book market sales, 2010-20
Figure 12: Forecast of total consumer print book market sales, 2010-20
Figure 13: Forecast of total consumer e-book market sales, 2010-20
MARKET SHARE AND SEGMENTATION
Market leader sees 9% value growth in 2015
Figure 14: Value of consumer market print book sales, by leading publishers, 2011-15
Big five see digital sales decline
Figure 15: Volume of consumer market e-book sales, by ‘big five’ publishers, 2011-15
Digital maintains large slice of fiction
Figure 16: The UK physical book market end purchase sales by category, 2010-14
Romance and graphic novels lead print revival in fiction
Figure 17: Value of consumer market print book sales, by type of book, 2015
Figure 18: Value of consumer market print book fiction sales, by genre, 2015
Colouring craze drives non-fiction growth
Figure 19: Value of consumer market print book non-fiction sales, by genre, 2015
MARKET BACKGROUND
Confidence returns to high street
But independent picture is more mixed
Role of campaigns
Impact of library closures
Instant gratification
E-reader ownership flat but no migration to mobile
Figure 20: Household ownership of consumer technology products, January 2013-December 2015
Waterstones removes Kindle but Amazon intensifies e-book domination
Upward price pressure on e-books
Digital subscriptions are a work in progress
EU investigations could affect Amazon
LAUNCH ACTIVITY AND INNOVATION – WHAT YOU NEED TO KNOW
Boutique bookshops
Events and communities
Re-inventing the book
Short and fast versus long and slow
LAUNCH ACTIVITY AND INNOVATION
Designer bookstores
Meet the author
WH Smith targeting young adult readers
Book/app hybrids
Designed for digital
THE CONSUMER – WHAT YOU NEED TO KNOW
Amazon consumer penetration up seven points
Bookshops can up their online game
Apple – The sleeping book giant?
Will digital natives embrace mobile books?
Tangibility and browsing remain key emotional factors
Communities of engagement
Beyond text
BOOK BUYING HABITS
Two thirds of adults buy books
Figure 21: Book formats bought in the past 12 months, March 2016
Audiobook potential
Figure 22: Type of books bought in the past 12 months, March 2016
Brands can help kids develop reading habit
BOOK RETAILERS USED
Amazon reaps benefit of print revival
Figure 23: Retailers used to buy print books in the past 12 months, April 2014 and March 2016
Books used to sell lifestyle brands
Amazon’s online dominance unchallenged
Virtual book shops
Figure 24: Retailers used to buy print books in the past 12 months, in-store and online, April 2014 and March 2016
Low channel-hopping
Figure 25: Number of retailers used to buy print books in the past 12 months, March 2016
Amazon still the only major digital player in town
Figure 26: Retailers used to buy e-books in the past 12 months, April 2014 and March 2016
HOW BOOKS ARE READ
E-reader declines but no tablet/smartphone growth
Figure 27: Ways of reading books in the past 12 months, April 2014 and March 2016
E-book buyers show some device diversity
Figure 28: Ways of reading books in the past 12 months, by e-book buyers, March 2016
Bookshops missing out on digital
Overall reading habits point to male problem
WHAT FACTORS ARE IMPORTANT TO BOOK BUYERS?
Price is key factor overall
But ‘pre-digital’ emotional values remain important
Figure 29: Influential factors in how people buy books, factors rated 4 or 5, March 2016
Speed of delivery also important
Beautiful books and beautiful bookshops
Experts versus algorithms
Figure 30: Influential factors in how people buy books, March 2016
Figure 31: Factors influencing how people buy books, factors rated 4 or 5, print book versus e-book buyers, March 2016
Digital books in transit
Transferability seen as key factor by digital readers
POTENTIAL WAYS OF ENGAGING BOOK BUYERS
Millennial potential
Bookshops as event venues
Figure 32: Ways of adding value to the book buying process, March 2016
Exclusive content
New horizons
Print/digital combinations
Figure 33: Ways of adding value to the book buying process, print book buyers versus digital book buyers, March 2016
Figure 34: Ways of adding value to the book buying process, by ways people read books, March 2016
APPENDIX
Definition
Abbreviations

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