Phil Groom was kind enough to invite me to cross-post from my personal blog where I have taken a periodic interest in the rise of the eBook. I’m fascinated by the explosive potential of their impact in our small niche within the wider book trade. Digital is clearly not going away but somehow it doesn’t quite feel real to us yet! It soon will. I contend that we all – publishers and retailers alike – need urgently to better understand what’s happening around us.
Retail as we’ve known it is under threat like never before. Major market forces are changing the High Street before our very eyes. Even since Christmas we’ve had news of Waterstones closing branches in order to meet their banking covenants and British Bookshops continues to trade but now under the watchful gaze of the administrator. Today HMV – the last major entertainment retailer apart from WH Smith – has brought in KPMG for advice on external banking and debt concerns. Content remains but format and delivery are all over the place. If you want to look at another industry under even greater pressure, just look at what’s happening to newspapers!
So here’s the post I ran several days ago;
Having castigated The Bookseller recently for poor journalism, I draw your attention to a superb and in-depth reporting piece looking at what life for the trade could look like in 2011. Bringing together the opinions of a wide range of UK book industry leaders it looks at, amongst other things, the likely impact of digital sales on the industry.
You can read the full article here but I want to highlight the main points of interest to High Street book retailers as they face the imminent digital challenge.
Amongst the key points of the article;
- Industry chiefs unanimously earmark digital as a key area of opportunity in 2011
- Digital sales have reached a tipping point and will grow further next year
- Those booksellers not getting a good share of e-book sales are going to find business tougher than ever
- The main challenge lies in supporting retailers in an uncertain economic environment
- However, nearly 95% of all books sold in the UK in 2011 will still be in print format
To my mind, here is the killer statement; ‘Growing e-book sales could lead to the Total UK Consumer Market being negative in 2011 as they hit 7% of the adult trade market’.
Print may no longer be capable of ongoing growth. Fiction – in particular – and mass market publishing in general, is highly susceptible to this drift. How are High Street shops to deal with this change in their market? If print is dropping away, what steps do they need to take to get a bigger slice of the digital cake? If the High Street trade is not careful, it will be the publishers and not retailers that will benefit from an inevitable sales shift to digital.
Gardners’ respected commercial director, Bob Jackson, is quoted in the article as saying:
‘I think that the retailers who continue to focus on customer service and manage overheads will be doing the best they can. They need to stay very consumer focused. It won’t get any easier in 2011. We launched our digital service three years ago, so it’s available to every single retailer. I think the challenge might come more as retailers using e-books as part of their retail offering, I’m sure they [retailers] can be as creative as they have been to date. That’s the challenge’.
Faber Publisher, Stephen Page, said:
‘The big question is how retailers fared at the end of last year and how they will fare in 2011. Looking around the world I can see the retail environment changing and that change is not complete. Retailers have to adapt to a world with very powerful mass market retailing and online retailing and now there is a digital component too. Look at the REDGroup in Australia, Borders in the US. Here we have had a narrowing of the specialist chains to Waterstone’s and W H Smith, and it’s a question of how they adapt. Waterstone’s over the last nine months have been pursuing quite a different tack and it’s a question of where that gets them to. We all want a healthy retail environment. In 2011 we will see a hardening of the e-book market and a lot of people becoming habitual about reading electronically. We will catch up quickly with America – I’m estimating e-books will be 3-5% of the [UK] market in a year’s time’.
The long-serving chief executive of the Booksellers Association, Tim Godfray, stated:
‘This Millennium has seen a huge amount of change in the way books are sold and in the formats available. As ever, booksellers have shown great resilience and those who have adapted have survived. As we enter a new decade, only further change is on the cards. We face in particular three challenges. First, the Government cutbacks and the state of the economy; secondly, the digital economy; thirdly, the consumer having fewer leisure pounds to spend. But with challenges, there are opportunities. The tipping point concerning e-books has been reached and digital content is coming of age. The popularity of e-book readers demonstrates this. The selling of digital content is a threat to traditional booksellers, but it is also an opportunity. A lot has been written about the death of the printed book and the bookshop. Not far short of 95% of all books sold in the UK in 2011 will be in print format and booksellers will develop their offers, customer service and specialisations’.
Victoria Barnsley, chief executive of HarperCollins is quoted as saying:
‘Digital developments continue to present both the challenges and the opportunities for our industry. E-book sales more than trebled over the Christmas period as people rushed to buy e-books for their new gift devices. And, unlike some, I really do think the growth of the digital market is a huge opportunity for bookshops—not only to provide a unique and personal service to book lovers, which is hard to replicate online, but to capitalise on the new readers these devices are creating. … finally, I believe that we should all fight vigorously to support and encourage a broad range of retail options on the high street and online which hugely benefits consumers, retailers and our own industry’.
Well done, The Bookseller – some fascinating opinions and really insightful reporting. I cannot help but think that we continue to be in very uncertain territory with even the most able minds in the trade pretty unclear as to how that future may turn out.
However, I am beginning to think that the tipping point for eBooks is beginning to tilt – albeit slowly but surely.
POSTSCRIPT – If all this gloom and uncertainty is getting you down then read these recent comments by the Editor of The Irish Times;
‘Yet there are opportunities for the retail sector. Barnes and Noble in the US have really got on top of things with their own device and have encouraged their customers to become digital readers. They’re looking at sales of about $400 million (€308 million) for digital content in a 12-month period – and that’s impressive’. He believes, though, that there will always be a market for print books. ‘It might not be huge. It might be down to 30 per cent of the market in 10 years’ time, but there will still be a demand for physical books and the browsing experience that you can’t get from Amazon or the Book Depository’.