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Publishing market analysis by Len Vlahos, Executive Director of BISG

Calendar September 14, 2012

Paris, the 12 September 2012

The « April in Paris » global digital summit, organized for the second year running, on Friday 13th April in Paris, by the Jouve Group in partnership with CIGREF, brought together more than 150 international leaders and business figures. Several round tables were organized during the day, allowing participants to share some of their experiences with regards to new business strategies for the digital world.

Len Vlahos began by explaining the Book Industry Study Group. BISG “represents all stakeholders” in the U.S. book industry and exists “to remove friction from the book ecosystem”.
BISG, through its volunteer committees, works in a number of different areas:

  • Metadata – BISG knows that “there’s a direct correlation between good, rich, clean metadata, and sales”.
  • Identifying products – BISG recently published a policy statement on best practices for identifying digital products, and is now investigating “Work Level Identifiers.”
  • Rights management – BISG is aware that “piracy has become a very significant issue that publishers are spending a lot of time addressing”. Yet, rights management can be “a barrier to consumption”.

Len Vlahos then presented to some key industry information.
Publishing is “about a 28 billion dollar book industry in the US” and “in terms of units, we’re about 2 and a half billion units”.
Bookstore chains and wholesalers represent the largest channels for book distribution. Independent bookstores are now down to 4% of the overall market, and about 7% of the trade market. “There has been a massive shift over the last two decades in channel distribution in our industry”. The challenging economy has hurt the publishing industry – “hardcover books did well into the beginning of the recession and then started to dip”.
However, “ebooks have simply exploded – the explosion really began in 2010 and carried on into the first two quarters of 2011”. This is largely a phenomenon of “new, hardcover fiction”. For instance a new Stephen King book “might sell 40-50% as digital now” – it is this sort of work that is driving digital growth.
The e-reading devices sold at Christmas 2010 lead to a huge boom that meant that “the ebook market effectively doubled”. Nonetheless in 2011, “as we went through the year it flattened out”, and “growth has slowed from explosive to incremental”.

This was an unexpected turn. Is it a sign that the market is maturing?
Most people are still using dedicated e-readers to read digital content, and it’s clear from the data that “for iPad users and Android users, reading is not the number one activity done”.
BISG now views the biggest challenge to the book industry as “distraction”. People now have fingertip access “to unbelievable amounts of ways to spend their leisure time”. Tablets are being used for videos, games, web browsing, and ultimately people are spending “less and less time reading”. According to Len Vlahos, “this is an enormous challenge for the book industry”.

BISG think there are three potential scenarios, yet Vlahos reminded participants of the danger of falling in love with any one scenario, telling the audience that it’s mostly important to “plan as best you can, based on your business model”.

  • Scenario 1 suggests that this recent slowdown is just “the calm before the storm”. There are tens of millions of devices being sold, and around “50 million iPads in China”.
  • Scenario 2 is based around the idea of seasonality – “people get their device for the holidays”. Purchasing will occur in bulk during the holiday season. We have to wait to see whether this pattern emerges.
  • Scenario 3 is proposes that this is a “natural plateau”. Despite the tremendous changes brought by digital, roughly half of all music is still sold on physical formats.

Asked about self-publishing, Vlahos replied that there was a “tremendous amount of hype in the US media” yet not enough data “to understand the size and scope of the market”. At the moment it appears to be stable at about 5-7% of some ebook vendors’ sales.
He also noted that higher education’s switch to digital is much “slower than trade”, with particularly slow adoption rates on student side. With faculty and students collaborating on new projects, and the launch of new interactive digital learning materials, we should see vast improvements.

Press Contact

JOUVE Group Christèle Blay
Corporate Communication Manager- Tel : 00.33.1 44 76 54 43

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