Consumer patterns are closely linked to the e-commerce megatrend. The book market was indisputably one of the first that experienced a drastic change in the paradigm shift towards online e-commerce in early 2000. The result is clearly present today. The number of bookstores has declined rapidly all over the world as transactions now take place on the internet (Wasserman, 2012). Even though the buying patterns for books might differ, there is an important difference in the retail sector as a whole; only a fraction of the total number of transactions takes place online.
This is however changing rapidly.“And the momentum is likely to continue for some time. In the US, the penetration of e-commerce is only 10% of the total retail market. Yet if you look at other countries, such as in the Asia, the rates can be over 20%” (Taulli, 2013).The ebook market. The new formats started to become embraced by readers in traditional early adopter markets in early 2000. In North America specifically, the competitive costs offered the consumer, together with a broad general availability, by giant online reseller Amazon is seen as a milestone. Amazon’s go-to-market strategy when releasing the e-reader tablet Kindle of focusing on prices below $10 US is by many considered as a significant reason behind the booming US ebook market.
However, Amazon's position as the driving force is at the moment unclear due to a lengthy contractual dispute with stakeholders of publishing industry (Trachtenberg, 2015). Companies or phenomena can certainly accelerate trends but seldom create them so Amazon’s impact on the market for digital formats is probably less important nowadays.Over a more extended period, sales of ebooks have grown steadily.
This trend is expected to continue according to most sources but there are bumps on the road.Ebooks in Sweden. For Sweden specifically, the signals are a mixed but promising.“The overall trend in book publishing remains clear: Digital sales are going to increase, and print is likely to become a niche market over time, just as it is becoming in the newspaper and magazine industries.” (Ingram, M, 2015).Revenues from ebooks in Sweden during 2015 increased 24 percent and continued, therefore, a long-running growth trend. It is growing much faster than the total market - but from very low levels.“During this time period 2015, the total book sales have increased, both in terms of turnover and in volumes.
In 2015, the total sales increased 3,2 percent compared to the year before. The total number of sold books increased 3,1 percent. The average retail price of the books sold hence remained almost the same during 2015. The increase in turnover should thus be explained by the fact that consumers buy more books, and not that average prices have increased.
There are however notable differences between market channels. Physical bookstores increased their sales less than Internet bookstores. In 2015, the increased turnover for physical bookstores amounted to 1,9 percent whereas Internet bookstores saw an increase amounting to 6,9 percent” (Wikberg, Boken 2016 – marknaden, trender och analyser).However, despite the optimism and indisputably impressive growth - sales of ebooks still only account to 2.0 percent of the total Swedish market.It is a significant difference compared to the European share of total sales (4.5 percent) and global share (12.3 percent). In the US, sales of ebooks reached 22.5 percent of the book market in 2015 (Statista, 2016).Figure 1. The Swedish Publishers’ Association, 2015Streaming books.
The market for audio books is accelerating even more than ebooks. Audiobook downloads including streaming services increased by 38.1 percent in 2015. It is to an extent balanced by a continuing drop in sales of physical audiobooks, a market that is most likely becoming highly marginalized. Political aspectsSales taxation have generally a considerable impact on consumption - especially in high-tax markets like Western Europe. Significant differences can be found between various media - and markets - in the publishing industry.
As an example, ebooks in Sweden are taxed with 25 percent sales tax, whereas printed books only have a 6 percent sales tax. It is likely to have held back the consumption of digital media - in Sweden and other markets where this difference can be found – while encouraging consumption in markets where taxation levels are more favorable towards digital media. (DN, 06-04-215). This discrimination towards digital formats can be found in many other geographical markets as well. Behavioural aspectsSearch for ebooks.
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People’s relation and behaviour associated with ebooks might be disclosed when examining how the specific term is used online.Figure 2. Google Trends, 2011-11-06 - 2016-11-06A worldwide decline in the use of the term “ebooks” in Google’s search engine clearly shows (fig 2) a significant trend which appears somewhat surprising to contradict the growth trend in sales.An explanation could be that ebooks are in decline in general, and sales figures lag. However, it could also mean that the specific term “book” now also includes other forms of the media, including “ebooks” in people’s perception. People therefor search mainly after a “book” and regard the term “ebook” as synonymous. The term “audiobooks”, is still much less used in comparison, as illustrated by the graph.Are people still reading? What about reading as an activity? Is there still room for indulging in books in a digitized world - everyone has full-blown entertainment systems in their pockets, why do we need books?
It is a complex question, but the archaic nature of the written word has its advocates. ”What will happen to the poor books and newspapers, magazines and letters from home in a world where there is too much to know and no time to waste? The answer is: Nothing will happen. Reading will still be based on the ABC’s, and readers will still marvel at the ideas and passions forming in their minds,” wrote author Walter Mosely in the Wall Street Journal. Mosely elegantly described how profound the need for reading is, although this might be hard to prove further in the context of this report.He has a point. Reading is still the most common cultural activity in Europe (second to watching TV), and while there are some differences on a regional level, book-reading is a dominant global leisure activity.
Nevertheless, reading is in decline.“Those respondents with poor participation in cultural activities gave three main reasons: lack of interest; lack of time; and cost. Interestingly, citizens from some southern countries confessed a lack of interest in reading more books, while those from northern countries talked about their lack of time to do so. On the other side of the Atlantic, Pew Research Center reported in January 2014 that some 24% of US citizens had not read a single book during the previous year. The number of non-readers in the US has nearly tripled since 1978” (Bazan Babczonek, 2015).An alternative to reading books is listening to them.
The market for audiobooks has developed firmly as described earlier in this article. But is listening really reading? As a way to consume literature, it fits into the lives of many people and is a way to consume literature. Here is a telling example, described by Wall Street Journal:“Cory Wilbur, a 25-year-old software engineer in Boston, never used to read much.
He barely cracked a book in college and would read one or two a year on vacation, at most. But in the past year, he's finished 10 books, including Dan Brown's 'Inferno,' Walter Isaacson's biography of Steve Jobs and George R.R. Martin's fantasy series 'A Song of Ice and Fire.' Technology aspectsUsage of devices. As printed books are carriers of content, ebooks require separate devices in order to consume books; so called e-readers. Ownership data about devices that can be used for ebook reading shows that these devices are widely available. Not so surprising perhaps.
The mobile device segment is still growing. More surprising however is that a decline can be noted for ebook readers in the last few years. Data over a longer period is not available so it’s hard to reach another conclusion than that the continuing trend probably points upwards.Figure 3. Pew Research Center, 2015Books in new ways. The technological development will of course continue. New adoptions and business models are possible to emerge out of digital formats and the freedom they bring. One such concept is the social book - the possible merger of social media and literature.
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Robert Stein, founder of the Institute for the Future of the Book and co-founder of Voyager and the Criterion Collection addressed this in an article (Nuwer, R. 2016):“Stein imagines, for example, that future forms of books might be developed not by conventional publishers but by the gaming industry. He also envisions that the distinction between writer and reader will be blurred by a social reading experience in which authors and consumers can digitally interact with each other to discuss any passage, sentence or line. Indeed, his latest project, allows members to insert comments directly into digital book texts and is already used by teachers at several high schools and universities to stimulate discussions. “For my grandchildren, the idea that reading is something you do by yourself will seem arcane,” he says. “Why would you want to read by yourself if you can have access to the ideas of others you know and trust, or to the insights of people from all over the world?”.
ConclusionThe adoption of digital book formats, especially ebooks will undoubtedly continue. But it will take time.Migration to digital platforms. Some trends are apparent when considering the patterns and signals described above. The migration to digital platforms will continue. Consumers – and the industry - will endorse this development.
The sales trend is a low hanging fruit to predict. Figures clearly reflect a trend, despite variations year-over-year and market-to-market.As to the Swedish market example, ebooks are likely to continue to grow over an extended period, but market dominance will take a long time (fig 4).Figure 4. The Swedish Publishers’ Association, 2015A new paradigm is needed.
Given that the total turnover for printed books in Sweden was over SEK 2 billion, it will take some fifty years for ebooks to catch up with just a linear growth. A new paradigm shift would be needed to change the adoption rate exponentially on a global level. Specific disruptive technologies, new attractive devices, business models, aggressive or creative pricing or even the impact of particular companies, like Swedish Storytel or North American giants Apple or Amazon, might alter the course of the trend.New policies. On specific markets, especially those with high sales tax levels, legislation and public policy would be a driver in the development of digital book formats. It differs from market to market, but the trend is undoubtedly an ongoing harmonization of the legislative treatment of printed versus digital media.One prominent example of this is the Swedish sales tax, described earlier. This relatively significant difference between the two formats is likely to be bridged over time and might exponentially trigger sales growth for ebooks and audiobooks further. AnalysisThis following SWOT analysis concludes the main findings and current trends on the market, including consumer behaviour.
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