This report provides an overview of internationally evolving ebook markets, with a unique set of data from a wide array of the best available sources, a thorough analysis and a synopsis of key global developments, and a broad set of detailed references to both global and local actors, forming a resource for anyone interested in the globalization of digital (book) content production and dissemination.
The 2016 edition of the Global eBook report portrays international consumer book publishing at a critical moment. Over the past few years, a traditionally conservative industry, occupying a core position in the creative sector of today's knowledge societies, had to confront mostly declining physical sales, while the emerging digital business had caught on with force only in the English language markets, notably in the United States and in the United Kingdom, and even here was only occasionally able to compensate for the loss in print books. Since 2013, digital has shown hardly any further expansion, at least for the traditional publishing sector.
Some indicators however point to a parallel shift towards global players, primarily Amazon, and to non-traditionally (independently or self-) published authors.
In most of continental Europe, ebooks have stalled even earlier,
while the slide in physical sales was even more radical,
particularly driven by the fallout of the economic crisis of 2008.
Particularly markets like Spain or Italy have been hit hardest.
2015, remarkably, has seen a process of stabilization in many markets, with independent publishers and retailers gaining ground again. Also ebooks, while often stagnant overall, have been able to occupy significant niches.
In most of the emerging economies, such as China, Brazil, India, or Russia, the broadly admired surge of book markets has slowed down (in China, for instance), or become flat (in Brazil), or even has been reversed for several years (in Russia).
Altogether, what we currently see is most probably the "end of the digital beginning", and the beginning transition into the next, perhaps even more challenging phase, where writing, publishing and reading morph into fluid settings, where any content, in any format, is available for almost any user - yet without much stability both with regard to who is offering what, as well as how that offer is taken in by the many fickle audiences around the world.
For the 2016 edition of the Global eBook report, the challenge was to subsequently broaden our perspective, by looking at both physical and digital developments, and so with more context than in previous years, with over 50 charts and tables summarizing and visualizing complex market developments.
We chose to extend our data driven analysis in several directions:
The findings of the Global eBook report allow us to assess, on the one hand, how the main drivers of digital change in the publishing industry impact on international markets in similar ways, as self-publishing, reading platforms and distribution infrastructures become available, and as publishers in all markets have become under enormous pressure of consolidation to ever larger entities. Remarkably, this opens at the same time new opportunities for both new entrants, and smaller, independent players as well. "Ebooks" are not one thing, or format, or concept - but rather a shortcut for a wide array of options to do things differently.
Extensive references to key industry sources provide direct access and links for further reading.
We strongly encourage critical feedback and -even more enthusiastically- the input of information and data to improve the foundations of this analysis.
The Global eBook report has been initiated in fall 2011 by the Tools of Change conferences and O'Reilly Media, and has been updated on a regular basis.
Since fall 2013, the report is published by Rüdiger Wischenbart Content and Consulting (RWCC), who had developed the format and authored the reports from the beginning.
To support the Global eBook report, we offer several - highly customizable - sponsorship opportunities.
Applause to our current sponsors, Bookwire, Copyright Clearance Center, Klopotek, Publishers' Forum and Tolino!
Our work has been supported also by generously allowing us to use the advanced web analytic tools of SimilarWeb, and to produce the report with BookType.
We are furthermore grateful to our media partners for helping us to disseminate this report!
If interested in becoming a sponsor, or to advertise in the Ebook Yellow Pages, please let us know by sending an email to ebookYP (at) wischenbart.com, or use the contact form at www.global-ebook.com.
"It’s the pace of change that caught our eye this year" We are social, 2016
A truly global overview and comparison of book publishing and other content and media industry confronts multiple obstacles, from lacking definitions of what is what, blurring distinctions between content generation and content distribution, borderlines between formats and channels, new giant actors re-defining entire industries, new platforms to access this diverse content (think 'mobile'). Consequently changing habits of billions of people, who may be affluent citizens of middle class neighborhoods, in urban agglomerations anywhere on the planet, or destitute populations who, nevertheless, through a connection of their mobile phones, have started to grasp possibilities, and techniques to access content - as information, knowledge, education or entertainment, anywhere in the world, any time.
According to data compiled by the information and consultancy agency 'We are social', almost half of the world population (to be exact 46%, or 3.42 billion people) have access to the Internet today. Social media are used by some 2.31 billion people (equaling a global penetration of 31%), with 3.79 billion (or 51%) gaining access through a mobile device. In Nigeria, 82% of all web traffic is mobile, in India 66%, in Spain 32% - as compared to 28% in the UK, 27% in the US and 22% in Germany. Overall and worldwide, one third of all web traffic was mobile in 2015 (up from 17% in 2013, and 0.7% in 2009).
These, and many more similar numbers highlight one simple story: What is going on today, is not controlled, and (exclusively) shaped anymore by those old stakeholders and gatekeepers that have been used to define content, media, or format. The publishers, media moguls, or old school network captains navigate in a sea that is not theirs alone anymore. Not at all.
This must be clearly stated if, nevertheless, for the purpose of this report, we focus on books, publishing and reading, as if that rift had not really occurred already, and as if, to a degree at least, books were still that singular container and format that it had become over the past two and a half centuries.
Looking specifically at this one industry here, and how it is transformed by digital and global, and by new ecosystems claiming to pretty much replace that old industry altogether, is justified and reasonable, in our understanding, for two modest reasons:
Book-publishing accounts for worldwide revenues of ca. €114 billion, according to an estimate which we conducted for the International Publishers' Association in 2013, based on numbers for 2012 (equaling $150 billion at the exchange rate between the euro and the dollar at that time). This value includes trade and educational publishing as well as professional or scientific publications, and is roughly consistent with other estimates, e.g. from PriceWaterhouseCoopers, of slightly $100bn, yet with a much more narrow definition of publishing, with only trade and educational book-publishing included.
The recent decline in book markets in North America and Europe coincided with growth in emerging countries (notably China and India), so that the total global book market has remained flat at those levels. With the recent slump in emerging economies, this may now change.
Book-publishing occupies a central role in today's global knowledge society, encompassing books as a format relevant for education, scientific research as well as entertainment and leisure reading, and hence it comes as hardly a surprise that the overall size of it surpasses most other content media,in particular music, games, or even filmed entertainment. Only the worldwide TV market is significantly larger than books.
A comparison of selected content media industries. (Mostly data for 2013. Various sources, with mostly from sector trade organizations, compiled for this report)
However, in the digital transformation, the various segments of the content and media industries evolve very differently. The McKinsey Global Media Report is tracking for some years now how the various sectors in media and content evolve, and compare.
Performance of selected content and media industries. Chart generated for this report from numbers in the McKinsey Global Media Report 2015.
Quite drastically, the compound annual growth summary (CAGR), by sector, for 5 years, 2009 to 2014, makes it clear that those industries expand, which have found ways to get their content to their audiences successfully through those digital pipes, while the primarily paper based, physically delivering industries are losing ground. Book publishing, with general consumer sector and educational sector even represented as two separate entities, are currently in the middle, sitting right on the borderline that sets those two distinct territories apart.
The following list and chart, with a wide selection from the largest book markets, introduces just a few of the very basic parameters which however are key to defining a context for the business, and the culture of books, namely the total value of a country's book market at retail, or consumer prices. First we look at the market size, by comparison to the GDP per capita at purchasing power parity, and an indicator for a country's economic strength.
| Rank by Market Size | Country | Market Value (million) | Year | GDPpC(PPP) |
|---|---|---|---|---|
| 1 | United States | €32,105 |
2014 (est.) | $53,143 |
| 2 | China | €18,183 | 2014 | $7,590 |
| 3 | Germany | €9,322 | 2014 | $47,822 |
| 4 | Japan | €5,409 | 2013 | $36,315 |
| 5 | United Kingdom | €4,227 | 2014 | $46,332 |
| 6 | France | €3,900 | 2014 | $42,733 |
| 7 | Italy | €2,894 | 2014 | $34,909 |
| 8 | Korea | €2,974 | 2012 | $27,971 |
| 9 | Spain | €2,738 | 2014 | $29,767 |
| 10 | Brazil | €2,281 | 2014 | $11,384 |
| 12 | Turkey | €1,729 | 2013 | $10,515 |
|
13 |
India | €1,794 | 2013 | $1,582 |
| 14 | Russia | €1,582 | 2013 | $12,736 |
| 15 | Netherlands | €1,319 |
2013 | $52,172 |
| 17 | Poland | €1,025 | 2013 | $14,343 |
| 18 | Mexico | €848 | 2012 | $10,326 |
| 21 | Sweden | €665 | 2014 | $58,939 |
| 22 | Austria | €761 | 2013 | $51,191 |
| 23 | Norway | €607 | 2014 | $97,307 |
| 26 | Argentina | €517 | 2014 | $12,510 |
| 27 | South Africa | €464 | 2010 | $6,483 |
| 28 | Czech Republic | €2,014 | 2014 | $19,530 |
| 31 | Denmark | $60,000 |
||
| 36 | Hungary | €140 | 2014 | $24,029 |
| 38 | Slovenia | €100 | 2013 | $23,999 |
To contrast the economic perspective, we add a second angle, highlighting the scope of production, as seen by the number of new titles and re-editions released in a country in one year per 1 million inhabitants. This parameter illustrates not necessarily the importance attributed to books and reading, but emphasizes a mix of drivers, from the capacity to export titles beyond a country's borders (in the case of UK or Spain), but also possible public funding for book-publishing (e.g. to foster a national identity through books and literature, as in examples like Georgia, Slovenia or Norway). Also, very populous countries with only emerging economies are discriminated in an informative way against those small nations who often show a particular fondness for their creative production.
Comparing production of new titles and re-editions per 1 million inhabitants of selected large book markets. Mostly 2014 data. Various sources (mostly national trade organizations).
The global book business is strongly concentrated among a very few markets, with the six largest countries accounting for 58% of worldwide revenues. (The United Kingdom is placed in this list ahead of France, despite of its domestic market being smaller. However, we argue that the British publishers' massive exports of their publications around the world, worth £1,445 million in 2014, should be taken into account in the ranking.)
| Market value (million, 2014) |
Change against prev. year, in % in local currency |
|
| United States | €32,105 m |
4% |
| China | €15,342 m | 6% |
| Germany | €9,322 m | -2% |
| Japan (2013) | €5,409 m | -2% |
|
United Kingdom (UK domestic, excl. 1,445 m GBP exports) |
€4,227 m | -2% |
| France | €3,900 m | -1.3% |
| Rest of the world (est.) | €48,037 m | |
| World | €114,000 m |
Overall, book-publishing, in a global perspective, for a long time had been governed by an exclusive club of relatively affluent countries in North America and Western Europe, plus in Asia by Japan and Korea. Many regions in the developing parts of the planet had a - limited - relevance just as export destinations for those leading publishing companies in the United Kingdom, the United States, and in Spain (for Hispanic Latin America) and France (for the Maghreb countries of North Africa)
Most recently though, several new book countries of both sensible market size and growth, and also with ambitious domestic companies aiming at assuming a role as relevant actors have emerged. This is the case of Brazil, China, India, and to a still lesser degree Turkey, Russia (which however is now hit by a downward spiral of its overall economy), and a few others.
The economic rationale of this process is simple, as emerging economies almost automatically produce urban middle class populations aiming at providing better and more state of the art education for them and their children, while at the same time craving for reading as entertainment - which both often come in the format of books.
So at once, global book-publishing can be portrayed as it mirrors a new club of emerging book countries, next to the old, post colonial and post World War II universe run from a few long established headquarters in London, New York, Paris, Barcelona and Munich.
The Bookish Elite: Market size & new title production per capita in the 20 largest publishing markets worldwide. Bubble size = GDP per capita (PPP). (Source: Wischenbart)
A similar pattern is to be found by looking at the internationally active publishing companies. At the very top, a high, and ever growing degree of consolidation among the biggest actors is at once confronted by new contenders from emerging economies in the global market place.
On the one hand, consolidation and restructuring over the past decade has resulted in the formation of a number of huge corporations that operate on a global scale, which aim at dominating their respective sectors as paramount market leaders.
The Global Ranking of the Publishing Industry in its edition of 2014 shows, that the combined revenues of the 10 largest groups easily surpass, with 57%, those of the 40 following publishing entities. But in the ranks, new companies, notably from China, Brazil and Russia, have been seen to gain influence as major domestic actors in their respective home markets, while some, above all from China, are now reaching out to find a new role in the international arena.
But yet another split has become visible, bringing apart what for long has been considered as one largely integrated universe of books and reading, learning, knowledge and cultured pleasure. This is replaced on various levels by distinct sectors, defined by separate companies, driven by different business models, catering each to distinct audiences, and showing more and more clearly diverging economic performances.
Evolution of main sectors in the Global Ranking of the Publishing Industry, among the 10 largest publishing groups, in %. (Source: Global Ranking of the Publishing Industry)
Among the 10 largest publishing groups worldwide, and in the publishing business as a whole, three distinct sectors have taken shape, namely professional or STM (scientific, medical and technical) publishers, educational publishers, and trade, or consumer publishing, with the first, STM being the strongest, and the third, trade, showing a by now continuous downward development in terms of sales.
In the 2015 edition of that ranking, two companies from China were represented for the fist time among the top 10, Phoenix, and China South, with the former focusing on trade, and the latter with a significant stake in education.
These shifts, regarding both the distribution by geography and by sector, will accelerate in the near future even further, as new entrants like Amazon or Apple have identified notably the sector of (digital) educational publishing as attractive targets, competing now directly with the traditional publishers in that domain, too.
See The Global Ranking of the Publishing Industry 2014, initiated by Livres Hebdo, co-published by The Bookseller, buchreport, PublishNews Brazil and Publishers Weekly, and researched by Rüdiger Wischenbart Content and Consulting. For a summary, see www.wischenbart.com/publishing.
Ebooks, as we came to to know them in recent years in a growing number of markets, are basically digital versions of books as defined by UNESCO in 1964.
A book is a non-periodical printed publication of at least 49 pages, exclusive of the cover pages, published in the country and made available to the public.
Ebooks, as electronic books, have been around for some time, yet have become more popular only when Amazon had launched its Kindle e-reading device in 2007, after convincing major US publishers to make a relevant number of their new fiction titles available in digital format through the Amazon platform.
From this head-on start, ebooks have been popularized principally in three competing digital formats (Mobi for the Kindle, ePub as an open standard format, and PDF for conversions of all sorts of documents), to be read on either dedicated ebook reading devices (such as the Kindle, or similar devices from Sony, Barnes & Noble's Nook, Kobo, Tolino, or others), or from 2010 on increasingly on multi-functional tablet devices.
This evolution has not been the same in all regions. In China for instance, digital reading and writing started through hugely popular online platforms, like pioneering Qidian, which in fact was created in 2003 as a form of self-publishing community, before the term and the approach became mainstream in the West.
Digital reading has moved by now largely to mobile devices, especially smartphones, in all of Asia, and increasingly in most countries outside the Americas and Europe.
Recent studies show that even in Germany, where dedicated e-reading devices have a remarkable following among digital readers, smartphones have found their place as reading devices, too. (See a study by Bitkom, e-book.news, 1 Apr 2015)
The scope of the digital transformation, and its impact on the
very fundamentals of books, as a format, and reading as a practice,
become perceptible only now. Particularly the shift to mobile, with
the smartphone serving as today's iconic device, might have the
power to ripping off the cover from UNESCO's definition of what a
book is, and to instead create new realms for content, and media,
in which distinct separations by format become ever less relevant.
(R. Wischenbart: Ripping off the cover. Has digitization changed
what's really in the book? In Logos 19/4, 2009.)
Or, as The Economist has written about the smartphone as "the defining technology of the age": "Like the book, the clock and the internal combustion engine before it, the smartphone is changing the way people relate to each other and the world around them." And this change would obviously include the way books are conceived, and how reading these books is practiced. (The Truly Personal Computer. The Economist, 28 Feb 2015)
The ebook, as perceived and analyzed in this report, must be understood as both a current, expanding format and market segment in international digital publishing, yet also beyond this, as a concept that potentially goes far beyond the book as defined by UNESCO, and as the product commonly manufactured, traded and consumed over the past two and a half centuries.
A clear overall pattern is governing most publishing markets in North America and Europe: For several years, the market for print books, especially bookstore sales, have been declining - slowly in some markets, sharply in others -, while ebooks rose, yet at a very different pace by country. Recently, notably in the English language, the increase of digital market share has stalled, or even occasionally declined, while print seemed to rebound. What we see most importantly are significant patterns, and variations in different markets and territories, seemingly due to a complex mix of economic, cultural, and structural factors. In the following, we will attempt to provide an overview of these developments, and the shaping forces behind, for a broad selection of markets, in the Americas, Europe and Asia, with detailed breakdowns, and case studies, based on the data which we could collect from a large variety of sources.
A data based analysis across publishing markets and borders of the evolution of book markets unavoidably confronts a challenging situation with regard to available data for most markets. Even worse, inconsistent measures and definitions of parameters prevail, so that the outcome must resemble a jigsaw puzzle, with many pieces missing, and others not fitting into the overall design.
The following overview must therefore be regarded as only a rough attempt, like a working beta version, aiming at producing an incomplete map, together with the encouragement to readers to return critical feedback on possible errors.
In most of continental Europe, for the last several years, book markets went down. Some countries, with relatively robust overall economies, like Germany or France, saw a modest, yet nevertheless steady decline. In others, like Spain, or Italy (or Greece, where no reliable data are available), the crisis impacted on the book trade with full force, or, for the example of Sweden, a mix of highly specific local factors brought about the sharpest decline in decades.
In all these markets, digital change in trade (significantly in adult fiction) has only begun its transformation of trade book markets at this point, so that the loss in print has not been compensated by digital gains.
Digital growth could not nearly compensate the loss in print in any of these markets.
In the non-English speaking countries, the market share of ebooks within the trade segment of the book market, is below 10%, ranging from as little as 1% in Sweden to around 4.9% in Germany, with growth showing signs of flattening out across the board.
However it must be strongly emphasized that these figures are hardly informative, as ebooks do absolutely not develop evenly across categories and market segments, but are primarily reaching consumers with titles of fiction (notably for the biggest bestsellers), genre fiction (like fantasy, or romance), and low priced self-published works.
For some countries at least, the penetration of ebooks is reflected in a second number, portraying market share among those publishers who are actively engaging with digital for consumers, which can reach levels of around 10%, as is the case for Germany (based on a round call to publishers by the trade association Börsenverein). Thirdly, anecdotal evidence has it that in the ebook top segments, like blockbuster fiction or romance, ebooks can account for 30 to 40% of sales, or even more - and so in some specific cases even in countries with a particularly low presence of ebooks, such as France.
To narrow down this gap of understanding, and develop a more realistic and meaningful representation of ebook market evolution in markets across continental Europe, we opted for new approaches in the current edition of this report. With the help of several ebook aggregators and distributors, we produced a series of much more specific snapshots, and trending charts, highlighting trends and developments by territory, by genre, as well as by price.
These new elements, which we consider to shed some truly innovative and meaningful light on what drives the digital segments of trade, or consumer books, can be found further in this report, in the section on "Key drivers and debates", notably in the chapters on measuring ebook markets, and on pricing strategies.
Within book markets and market segments, again ebook revenues are not evenly distributed among publishers. On the contrary, available data strongly suggest that beneficiaries from ebooks sales are primarily the respective largest publishing groups, plus a few independent publishers specializing in digital exploitation (plus probably self-publishing, yet with no data available that would allow a direct comparison).
The Big Five publishing groups which are the predominant actors notably in English language markets have created a relevant market segment among themselves for the US and UK. Penguin Random House and Hachette, who have both a strong presence in their non-English home markets, in Germany and France, have in addition been successful in establishing strong digital positions in German and French ebook sales.
| Penguin Random House | Hachette Livre |
Harper Collins |
Macmillan | Simon& Schuster | |
| 2015 | 2015 | 2015 | 2015 | 2015 | |
| Group revenues from publishing (million) | €3,717 m | €2,206 m | $1667 m | n.a. | $780 m |
| Revenues from ebooks (in %) | 9% | 22% | 25% | ||
| Revenues from ebooks (details, 2015) | Audiobooks +27% |
22% in US 26% in UK |
e-sales +11% 100,000 ebook titles |
||
| 2014 | 2014 | 2014 | 2014 | 2014 | |
| Group revenues from publishing (million) | €3,324 | €2,004 | $1,434 | $778 | |
| Revenues from ebooks (in %) | 20% | 10.3% | 22% | 26% | |
| Revenues from ebooks (details, 2014) | USA 30% (romance 50%) GER 15% SP 10%; 100m ebooks sold |
26% in US; 31% in UK |
|||
| 2013 | 2013 | 2013 | 2013 | 2013 | |
| Group revenues from publishing (million) | €2,655 | €2,066 | $1,369 | €721 | $809 |
| Revenues from ebooks (in %) | 20% | 10.4% | 23% | 27% | 27% |
| Revenues from ebooks (details, 2013) |
100m ebooks sold; -9% in volume from 2012) |
30% in US; 27% in UK) |
The relatively lower share of ebook revenue at Hachette results from the French domestic market's very limited ebook penetration thus far.
Unfortunately, only very few data on ebook sales are available from independent non-Anglo-Saxon markets.
Only Germany demonstrates a good example. Penguin Random House reportedly has 15% of its domestic German trade sales coming from ebooks, slightly higher than those in the main imprints of the Holtzbrinck group's Fischer, Rowohlt and Kiepenheuer & Witsch, at 12 to 14%, and Droemer Knaur closer to Random House. Bonnier's Ullstein sees 13.5% of its revenues coming from digital. And two independent houses with strong digital ambitions, Aufbau and Lübbe, report 16.5 and 13.5% respectively. Overall, these numbers show that ebook sales in those houses are all in a corridor ranging between 12 and 16%, which is clearly higher than the 10% reported from various publishers interviewed by Börsenverein in early 2014.
This perspective not only underlines, once again, how meaningless the low one-digit values of ebooks within all of trade sales are. It also clearly emphasizes that ebook sales have started to define a segment with its own specialized actors, and specific driving forces in a target audience that may become a distinct group, different from the print readership.
All the transformation processes of recent years, which in the meantime have well reached also non-English language publishing markets, have heavily impacted on the retail landscape distinctly across continental Europe. Hardly a large book retail chain has remained untouched, and several had to either undergo severe restructuring (Fnac in France, or Thalia in Germany), or had to file for bankruptcy, yet struggling on for survival (like Weltbild in Germany), or even have disappeared as brands altogether (like Chapitre in France, or Polaris in the Netherlands, each chain being dismembered, with units sold off to become new independent bookstores).
Publishing, by comparison, so far has had not one real casualty. The largest trade houses in Germany, for instance,experienced losses of just around 1% in 2014, according to a new domestic ranking. (100 largest publishers in Germany, buchreport, 1 Apr 2015)
This seemingly solid overall impression only disguises that all across Europe the pressure to consolidate has mounted significantly in recent years, resulting in a widening list of mergers and acquisitions among trade publishers.
The merger of Bertelsmann's Random House, with Pearson's Penguin group in 2013, and the subsequent creation of a new global leader in consumer publishing under the brand of Penguin Random House (with the former accounting for 53%, and the latter 47% of the new entity) was only the tip of the iceberg. Quickly, the new group formed a massive division, Penguin Random House Grupo Editorial, to bring all its Spanish language publishing under one roof, plus the newly acquired trade arm of Santillana, formerly the third largest consumer publishing in the Spanish language (after Grupo Planeta), and consolidating also its control over the third largest Hispanic house, by acquiring Mondadori's 50% stake in Mandadori Random House.
Hachette also had some acquisitions, in Brazil, and with Quercus in the UK. A planned takeover of US Perseus in 2014 fell apart at first, but was successfully concluded in a second run, in 2016 with Hachette taking over the company's publishing activities, and wholesaler Ingram acquiring the distribution and services division of Constellation (and the British arm of Constellation, which had initially been a joint venture, being now fully taken over by that partner publishers, Faber and Faber). (See Publishers' Weekly, 1 Mar 2016 for the Hachette deal, and on 3 Mar 2016 for the Ingram acquisition.)
HarperCollins, which so far had been pretty much an English language enterprise only, took over Canadian Harlequin, for Can $455 million from its parent company Torstar in one of the more interesting consolidation moves. Harlequin had been pioneering the digitization of genre fiction, by re-inventing romance literature, turning it from a disdainful house-wife niche into a digital, community driven offer to urbanites who typically would read the serialized stories on their smartphone during a commute to work. At first, Harlequin was remarkably successful, and expanding internationally to 17 countries with books out in 33 languages. But then, revenues hit a ceiling, as the next wave of innovation, with self-published content, took over the newly created terrain. For HarperCollins, Harelequin must have appeared as the perfect prey, as it provided worldwide experience with well catered readers' communities and distribution. (Publishers Weekly, 1 Aug 2014)
In continental Europe, indebted Italian RCS handed over its French holdings of Flammarion to Gallimard, in an efford to close the gap with the two leading French groups, Hachette and Editis (the latter acquired by Spanish Planeta not long ago). With the addition of Flammarion, Gallimard is now clearly the French number three in trade.
In late 2014, rumors spread in Italy about the market leader Mondadori to be interested in acquiring RCS, and the deal was closed effectively in fall 2015, and approved, with some restrictions by Italian trade authorities in spring 2016. (See details in the country close up Italy, in this report.)
Already a few years earlier, in 2011, a complex swap between Swedish Bonnier and Finnish WSOY resulted in Bonnier acquiring all of the Finnish' partner's trade publishing in return for Bonnier's educational division. WSOY also sold off all of its book retail holdings, to streamline its portfolio.
Central Europe in return saw also several mergers, with the contrary strategy of vertical integration, as major local publishers acquired retail chains, or vice versa. Remarkably, these were all local moves, while no foreign investment in publishing has been reported recently throughout the region. (See the close up on Central and Eastern Europe in this report for details.)
In early 2015, consolidation was picking up speed also in academic publishing, as the German Holtzbrinck group, the owner of Macmillan, announced the acquisition of Springer Media, through a majority stake of 53% in a future joint venture, making the group the global number for in the sector. (For a detailed assessment, see an interview with Axel Bartholomäus in Börsenblatt, 15 Jan 2015)
All those actions from more or less traditional publishing groups must be seen in context of totally new actors who begin to walk into their vested terrain, of course. Self-publishing triggered the disruption at Harlequin. But also Amazon (through both Direct Publishing, and Kindle Unlimited's streaming offer), Apple (e.g. with iAuthor), or Google (e.g. with Classroom) all aim at replacing what used to be the core business of (trade, educational, or academic) publishing.
Adding up these developments into an estimate for
consolidation rates in at least the major European publishing
markets remains a difficult exercise. But it is more then safe to
say that in most larger countries, notably France, Italy, or Spain,
a few leading groups have gained significant control over both the
trade and the educational publishing respectively.
As we can see from many observations and the data throughout this report, digital developments are led by, and work to the advantage of the respective predominant players. And consolidation adds to the momentum in significant ways.
A good hand full of premier league international groups reach out across all borders, remarkably Penguin Random House (UK, Spain, Germany), Hachette (UK, France, Spain), HarperCollins (UK, Germany, and in early 2016 also France), Holtzbrinck (Germany, UK, plus academic and educational). In this race they are joined by two regional groups, Planeta (Spain, Latin America, and France) and Bonnier (Scandinavia, Germany).
Similar moves of expansions can be seen also in educational publishing. Amazon, for instance has created a stir among French publishers as it signed a deal with the French Ministry of Education, to encourage teachers to use tool sets and platforms from Amazon for the creation and dissemination of open educational resources (OER). (BookBusiness Magazine, March 2016) Also specialized platform organizers in the field, like Ingram, with Vital Source, or Infinitas Learning are reaching out to ever new markets and target audiences with their educational services.
All those many remaining, primarily national medium sized, usually family owned enterprises below that level of the transnational corporations, confront a steep challenge to stay afloat, to fill their traditional niches, and compete, notably in trade, directly with the transnationals - a process that will effectively transform these houses too, as they need to reach out to new sources of investment for the journey - though at significant risk.
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The ebook market as we know it today, and track it in this report, started in late 2007, as Jeff Bezos, the founder of Amazon, "unveiled the Kindle, a simple, lightweight device that—in a crucial improvement over previous e-readers—could store as many as two hundred books, downloaded from Amazon’s 3G network." (George Packer, Cheap Words, The New Yorker, 2014) The launch of the Kindle had been prepared not just by putting in place both a reading device, and a retail platform at Amazon's online store. It had also required to convince major US publishers to make their new front-list titles, and notably fiction releases, available in digital format.
From there, it took another three years, until the Christmas season in 2010, for ebooks to kick start an amazing growth curve by winning over a sufficient number of consumers to change their reading habits from print to reading on a small, black and white screen. Early adopters counted more heavy readers of a certain age, with a fair number of women, rather than techies, nerds or geeks. It was more the audiences of commuter trains and subscribers to the New York Times and its bestseller charts, than kids or young adults trying out an alternative to their gaming platforms. And even to this date, university students have been remarkably slow in trading their heavy textbook packs for lightweight digital learning devices.
The growth curve was steep at first, triggering numerous projections anticipating that soon, ebooks would top print books at least in the general consumer, or trade, segment. In fact, another three years later, by the end of 2013, the upward trend had started to flatten out, probably when ebooks had successfully reached a good majority of these heavy reading target groups who had indeed migrated for much of their day to day consumption of books.
This development, as seen in the United States at first, has been mirrored with minor differences in the United Kingdom, where again, the early expansion has stalled by 2014.
Perhaps as important as the relatively low hanging glass ceiling for ebook growth is to observe that ebooks did not penetrate all segments of reading in similar ways. Quite the opposite did happen. Ebooks produced very specific patterns of penetration in certain categories of books, by being strongest for bestselling new fiction, genre fiction (that is notably romance, erotica, fantasy) and self-published books. Nonfiction is lagging far behind, even in the US.
But also by territory, differences prevail for ebooks in the scope of their trajectory, and in the ways of being appreciated, or rejected, by readers, as will be shown in this report for much of continental Europe, and the rest of the world.
One important caveat though: The transition of reading in the digital age will undoubtedly take a longer period of time than many have anticipated. "At least 20 years", in the words of Michael Serbinis, the founder of Kobo, at a panel debate at the Frankfurt Book Fair in 2012. Hence it is largely nonsensical to pretend knowing, after just one third of this period, how exactly digital reading will be conceived by most readers in, say, 2027.
Unsurprisingly, in 2015, and also in 2016, it becomes evident that the digital transformation encompasses much more than; the addition of one more format, ebooks, to those used by publishers for bringing packaged content to the consumers. Alongside with ebooks, digital audio has recently seen a remarkable popularity with users. For authors, self-publishing has become a valid alternative to the full-service offered by traditional publishers. Subscription or flat rate offerings have started to emerge - and occasionally failed - as an alternative business model to the common sale of one copy at a time. And then, entirely new digital 'ecosystems' have emerged, in the form of largely closed, yet complete and integrated content, media and social communication universes satisfying the entire specter of consumers' information and entertainment diet. These were at first proposed by Amazon's and Apple's, and are now followed by Google and Facebook, or, notably in Asia, by their Chinese equivalents, Alibaba, Tencent, or Baidu.
In short, a first phase of digital transformation, started in the English language main markets, and largely limited to the format of ebooks as a simple digital substitution of the printed book, may now be followed, in a subsequent phase, by a much broader and deeper re-framing of how consumers and content providers interact in the digital realm.
The following market close-ups are the core section of the Global eBook report, summarizing for a number of countries and markets, and based on the - often fluid - available data, what ebooks; represent, under which specific conditions, and driven by which players and driving forces.
Instead of projections, we want to gather facts for snapshots, plus relevant context. Details, and facts on earlier developments in the surveyed markets can be found in previous editions of the Global eBook report, which will be made available at www.global-ebook.com.
"Flat is the new up" Len Vlahos
"Flat is the new up", the verdict of Len Vlahos in fall 2014, then the head of the American Book Industry Study Group (BISG), continues to apply to the US book market.
With revenues from trade publishing of $15.4bn (2014, the last year with total revenues available, up 4% in value and in volume, after a decline of -6% in 2013), trade revenues showed good strength for US publishers, with children and Young Adult driving the increase (20.9% in revenue and 13.5% in volume for 2014 over 2013, similar to the previous year). (AAP StatShot, Jun 2015)
In 2015, the big news was the rebound of bookstore sales (up 7.5% in November, year on year, and +1.8% for the period January to November 2015, after a decrease of -4.5% in 2014), with notably independent booksellers, after a particularly strong holiday season, reporting an increase of 11% in 2015 over 2014. "The shop-local movement, good weather, and a strengthening economy boosted sales at a number of stores across the country", as Publishers' Weekly reported. (8 Jan 2016; source for bookstore sales: US Census Bureau, quoted in Publishers Weekly, 12 Feb 2015)
United States, publishing key parameters 2012 to 2014. Source: AAP
Overall, for the period of January to September 2015,
trade sales were flat, with adult books slightly up (2.9%), yet
children and young adult down -7.4%, with ebooks in that category
down by a remarkable -44.8%. The fastest growing format meanwhile
continued to be downloaded audio, increasing 37.7%, to sales of
almost $160m in January to September 2015, from just $60.5m five
years earlier. (AAP StatShot, 3Q 2015)
In 2013, sales of print books had dropped by 2.5% in units, with adult fiction decreasing even by 11.2%. By format, mass trade paperbacks declined by 9.1%, while hardcover had been largely flat. (-0.2%, according to Nielsen BookScan, quoted in Publishers Weekly, 3 Jan 2014). The print book market had already declined by -5% in 2012, and -18% in 2011. (BISG) However, in volume, print sales have slightly recovered, by 2%, in 2014. (Publishers Weekly, 2 Jan 2015)
In return, ebook sales saw a remarkable slide at the big houses and overall, with PW estimating the decline of digital sales at -11.8% at HarperCollins, and to -10.7% at Simon&Schuster. (Publishers Weekly, 6 Nov 2015)
For January to October 2015, US ebook sales declined year-on-year by 12.3% overall, with young adult books hit strongest (-44.7%), followed by adult ebooks (-6.5%). Total trade revenues were up 2.5%. Downloaded digital audio books however rose 38.1% through the ten month period. (AAP StatShot, 2 March 2016)
These developments came after an already significant "plateauing" of ebook sales since 2012. Revenue from ebooks had increased by a mere 4.7% to $1,582 million, after a decline by $15m in 2013 over 2012, and account now for 27.2% of adult trade sales. Children's and YA ebook sales jumped by 33.6% to $227 million (2013: 26.6%). (AAP StatShot, 11 Mar 2015; Publishers Weekly, 11 Mar 2015)
Overall, "the days of rapidly rising e-book sales, and plunging print sales, are likely over for the trade book market", reads the similar conclusion at Publishers Weekly in an analysis of sales developments of seven big publishers between 2011 and 2013. (Publishers Weekly, 25 Apr 2014). Overall, year on year, ebook revenue growth has fallen from 356% in 2009, and 199% in 2010 to 44% in 2012 and a slight decline of -0.7% in 2013.