EXECUTIVE SUMMARY

UK
September 2014

BOOKS AND E-BOOKS

Unusually for any market, the 2013 merger of two of the biggest
market players in publishing caused less of a stir than the continuing
external impacts from new delivery and distribution platforms, and a user base
with shifting habits of consumption. Publishers have been relatively adept
at embracing the digital revolution, with some already investing in crowdsourcing platforms to find new authors and manuscripts with a guaranteed
reader appeal, whilst others experiment with subscription-style all-you-canread services, similar to Netflix and Spotify. Its the continuing dispute between
Amazon and the publishing giants that will determine the industry mechanics
over 2015 and beyond though, as the details of e-book pricing and control are
finally resolved.

SAMUEL GEE
Senior Technology and Media Analyst

BOOKS AND E-BOOKS

Executive Summary
September 2014

The market
The value of the total consumer books market has been
relatively flat in the years leading up to 2014, thanks to a
consistent annual marginal drop in print book retail sales
almost but not quite offset by e-book increases. The value
of print sales fell by 28% between 2009 and 2014, with
3.3% of that estimated to have taken place in the latter
year. This is partly due to e-book migration, and partly as
the market continues to suffer in the context of a wider
decline in media buying by consumers. (See Figure 1)

Market factors
e-reader purchases are tailing off as Kindle
competitors shut down
According to quarterly research carried out and reported
in Mintels Digital Trends series of reports, e-reader
penetration in the UK has plateaued since June 2013, at
around a third of internet users. This activity has taken
place within the context of consistently growing access to
tablet computers, which were present in over 50% of UK
households as of July 2014.
In 2014, the manufacturers of two of the largest Kindle
competitors the Sony eReader and the Nook
announced that they were shutting down and spinning off
their respective businesses due to poor demand and high
production costs.

e-book price dispute between Amazon and

publishers may boost self-published author
rates
In 2013 the US Department of Justice ruled against
Hachette Book Group, HarperCollins Publishers, Penguin
Group (USA) Inc, Macmillan, Apple and Simon & Schuster
Inc for illegal collusion in price-fixing their e-books in order
to compete more effectively against Amazon. Recently,
tensions have again risen between Amazon and Hachette
as the e-commerce giant has attempted to force the
publisher to lower the price of its e-books. Whichever
way the dispute is resolved will have a lasting impact on
traditional publishers. Should Hachette manage to resist
Amazon, the other Big Five publishers are likely to try
to follow suit. Such a situation would undoubtedly spur
Amazon into increasing the power and activity of its own
digital imprints. It may also increase the proportion of
authors choosing to self-publish for the first time.
UK and US retailers focus on delivery and indie feel
The market swing towards digital content appears to be
stabilising, with only a 13% year-on-year value growth
in e-book sales in 2014, according to Mintels estimates.
However, Mintels e-commerce UK July 2014 report
estimates that some 43% of all physical consumer books
will be sold online in 2014; a 3 percentage-point increase
on 2013. Even if digital migration stops entirely, this 43%
still represents a significant chunk of possible physical
book sales that bypass bricks and mortar stores.

FIGURE 1: VALUE OF THE CONSUMER BOOKS AND E-BOOKS MARKET, 2009 - 2019

SOURCE: MINTEL

BOOKS AND E-BOOKS

Executive Summary
September 2014
Waterstones is combating this by trialling a change of
its in-store environment in order to renew interest. Many
high street retailers across all categories are doing
the same from Waitroses experimental supermarket
redesigns to Virgins living room in a store layout to
try and spur attendance through improvements to the
experiential aspect of their retail environments. The
knock-on impact that these store redesigns have on
brand perception as well as sales rates mean they
represent a likely better strategy for boosting purchases
than a US-trialled alternative: costly same day delivery.

Companies and products

No publisher is close to approaching the share of the
market taken by Penguin Random House after its 2013
merger. The company controlled some 24% of revenue
in 2013, close to its 25% market share in 2011. The
2012 increase to 27% was no doubt due in part to Fifty
Shades of Grey, which sold approximately 70 million
copies worldwide over the course of the year. The book
was published by Vintage Books, an imprint of Random
House. (See Figure 2)

Many of the biggest publishers have steadfastly refused

to examine all-you-can-read services as a new revenue
stream. Scribd (worldwide) and Oyster (US only) are two
examples of these; both are confined to smartphones,
tablets and web-readers, and offer access to
approximately half a million titles on a subscription basis.
Other retailers are trying to match the immediacy of
digital delivery as closely as possible in the real world. In
the second half of 2013, Google launched its same day
delivery service across a small selection of test cities in
the US. From August 2014, the internet giant partnered
with US book retailer Barnes & Noble to offer free same
day delivery service for books.
Some service providers are trying to appeal through
customisation rather than immediacy of delivery.
Zoobean (launched May 2013) allows parents to sign
up to a series of personalised plans that, after the input
of information about their childrens genre preference,
reading ability and development level, produces expertpicked recommendations for which books the child may
enjoy next.

FIGURE 2: PUBLISHER REVENUE FROM SALE OF CONSUMER PRINT BOOKS, 2013

SOURCE: NIELSEN BOOKSCAN/MINTEL

BOOKS AND E-BOOKS

Executive Summary
September 2014
Others are trying to increase the interactivity of
storytelling and consumption. Poptropica launched in
2007 as a Pearson-owned online role-playing adventure
for children aged 6-15. The players on the site can
travel between different islands, compete against each
other and complete puzzles or overcome obstacles that
allow further progression through the game. The site
is described as an environment in which children use
gaming and literacy to explore narratives frequently
rooted in factual history, and expanded onto the iPad in
March 2014 in recognition of childrens changing reading
habits.

FIGURE 3: BOOK FORMATS CONSUMERS BUY, APRIL 2014

Which, if any, of the following have you done in the last 12 months? Please select all that apply.

Base: 2,000 internet users aged 16+

The consumer
Book formats consumers buy
Some 68% of internet-using consumers have purchased
a book in the last year, according to Mintels research.
Paperback fiction books remained the most popular, with
38% of consumers having purchased one over the year.
(See Figure 3)

SOURCE: GMI/MINTEL

FIGURE 4: HOW CONSUMERS READ BOOKS, APRIL 2014

Some 73% of e-reader owners have purchased some
kind of e-book in the 12 months to April 2014, suggesting
over a quarter of all device owners have decided that the
technology is not to their liking.

Which, if any, of the following have you done in the last 12 months? Please select all that apply

Base: 2,000 internet users aged 16+

Some 70% of e-book buyers have also purchased print

books in the 12 months to April 2014. By comparison,
only 30% of print book buyers have also purchased
e-books.

How consumers read books

Some 68% of consumers have read a print book in
the last 12 months. That this is slightly more than the
proportion who have bought a print book over the same
time period (60%) is to be expected, given that libraries,
gifts from friends and family or legacy collections would
normally provide the opportunity for consumers to read
print books without needing to purchase them. (See
Figure 4)

SOURCE: GMI/MINTEL

BOOKS AND E-BOOKS

Executive Summary
September 2014
Less than half of consumers (and less than half of all
book buyers) have only read a print book in the 12
months to April 2014. Though a quarter of consumers
have purchased e-books within the last year, only 12%
(14% of any book buyers) have exclusively read a digital
book in the same time period.

exclusively in-store, rather than using their websites.

(See Figure 5)

Nearly one fifth of consumers (18%) have read a book

on a mobile device (ie a smartphone or a tablet) in the 12
months to April 2014. Over one in ten (11%) have read a
book on a desktop or laptop computer.

There is little brand exclusivity some 45% of consumers

who have purchased a print book at WH Smith, 37%
who have purchased a book at Asda and 43% who have
purchased a book through Amazon, have also purchased
one at Waterstones. (See Figure 6)

Retailers used to buy books

Consumers have very little channel crossover when
buying print books. Amazon remains the most popular
retailer, with over half of consumers who bought print
books visiting the store. For those bricks and mortar
retailers used by consumers though, the majority shop

The proportion of consumers shopping for books at the

largest UK supermarket operator, Tesco, is only 6 percentage
points higher than those visiting independent bookstores

Attitudes towards buying books

Some 18% of consumers have purchased both a book
and an e-book in the 12 months to April 2014, and almost
half of them make their choice based entirely on price.
(See Figure 7)

FIGURE 5: RETAILERS USED TO PURCHASE PRINT BOOKS, APRIL 2014

Youve indicated that you have bought print books in the last 12 months. Where were these purchased from? Please select all that apply

Base: 1,194 internet users aged 16+ who bought a hardback or paperback book within the last 12 months

SOURCE: GMI/MINTEL

BOOKS AND E-BOOKS

Executive Summary
September 2014
FIGURE 6: RETAILERS USED TO PURCHASE E-BOOKS, APRIL 2014
Base: 508 internet users aged 16+ who have bought e-books within the last 12 months

Digital Only is a net of Amazon, Apple iBooks/iTunes, Google Play Store and Tesco (blinkbox)
Bricks and Mortar is a net of WH Smith, Sainsburys, Blackwells, Independent bookshop, Waterstones, and Foyles
SOURCE: GMI/MINTEL

FIGURE 7: HOW CONSUMERS CHOOSE WHICH FORMAT TO BUY, APRIL 2014

Thinking about how you choose which book format (ie print or e-book) to buy, which one of the following statements best applies to you? Please select one option only

Base: 357 internet users aged 16+ who bought both print books and e-books within the last 12 months

SOURCE: GMI/MINTEL

BOOKS AND E-BOOKS

Executive Summary
September 2014
The 70% of e-book buyers who have also bought a
print book over the 12 months to April 2014 are partially
explained by the 36% of consumers who generally read
print books, but who buy e-books for convenience when
travelling or on holiday. (See Figure 8)
Crowd-funded special covers and sleeves could allow
independent retailers without the financial clout to order
in advance to attract the fifth of print and e-books buyers
more likely to buy print books if the quality of materials is
especially good.

Attitudes towards spending money on e-books

Some third of consumers who have purchased an

e-book in the last year prefer to read print books, but buy
e-books as theyre less expensive. These consumers are
more likely to be women than men, and more likely to be
16-24 than over 45. (See Figure 9)
Some 26% of consumers who have bought both books
and e-books in the 12 months to April 2014 say that
they read more than they used to because e-books
cost less than paperbacks. This increase in readership
is more in evidence with e-books than print books
though.
Some 21% of consumers who read across both
formats are buying e-books because they feel they
need to make use of their e-reader.

FIGURE 8: ATTITUDES TOWARDS BUYING BOOKS AND E-BOOKS, APRIL 2014

You indicated that you have bought both print books and e-books in the last 12 months. Which of the following statements, if any, do you agree with? Please select all that apply.

Base: 357 internet users aged 16+ who bought print books and e-books within the last 12 months

SOURCE: GMI/MINTEL

BOOKS AND E-BOOKS

Executive Summary
September 2014

Reasons consumers have not purchased

books
One third (34%) of consumers who have not purchased
any form of book in the 12 months leading to April 2014
are simply not interested in reading books. Men are
disproportionately more likely to hold this view, as well as
to claim that they lack the time to read. (See Figure 9)
In contrast to men, who lack either the time or inclination

to buy books, women are more likely to have not

purchased books because they either cannot afford to, or
because they borrow them.
Consumers were asked to specify if there were any
reasons that had prevented them buying books in the last
year beyond those listed. A common theme was already
having a large collection of purchased books that the
individual had yet to read; a problem only likely to get
worse with time. (See Figure 10)

FIGURE 9: ATTITUDES TOWARDS SPENDING MONEY ON E-BOOKS, APRIL 2014

Thinking about spending money on books and/or e-books, which of the following statements, if any, do you agree with? Please select all that apply

Base: 508 internet users aged 16+ who have bought an e-book in the last year

SOURCE: GMI/MINTEL

FIGURE 10: REASONS FOR NOT HAVING PURCHASED BOOKS OR E-BOOKS, APRIL 2014
Which of the following reasons describe why you have not purchased any books or e-books in the last 12 months? Please select all that apply.

Base: 641 internet users aged 16+ who have not purchased a book in the last 12 months

SOURCE: GMI/MINTEL

WHAT WE THINK
Its true that, as many of the largest publishers seem to believe, the
market is starting to stabilise and the digital migration of consumers
is slowing down. However, for any retailer bar Amazon which dominates
e-book distribution this simply means that up to a third of all market
value is locked away, essentially unreachable. The first possible response
for traditional retailers to this is to try and convert these e-book reading
consumers not only back to print, but to print delivered through a retailer other
than Amazon. The second could be to invest in a competing e-reader platform
that all other retailers can plug into, to deliver e-books to consumers with the
ease and fluidity which Amazon delivers content onto the Kindle. Both are
difficult paths to take, and costly. Strong measures are necessary now though,
for any bookseller with a long-term view to succeeding in an environment that
is no longer turbulently or potentially, but resolutely digital.

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