Lackluster UK sales of e-readers and book downloads

Peter Kilborn | 02/01/2010

I wasn’t able to get to the Publishers Association’s digital seminar this week, colourfully but rather puzzlingly entitled ‘Blue Skies and White Clouds’, but reports suggest that clouds – not necessarily only white – continue to stand in the way of unimpeded digital sunshine.

All the big names were there – the top publishers’ digital directors, Google, Sony, Adobe, and an audience which outgrew the originally planned venue – and the conference focussed on the usual problem areas which are part of the Publishers Association’s core activity - interoperability, DRM and accessibility, and piracy – without reaching any easy answers. From the reports – and I wasn’t there myself – it does sound as if the emphasis was on the bad news rather than the expectation that digital is going to be good for publishers.

The problems may come later but one hopes that they will be problems associated with success. First, the industry desperately needs a market for e-books and robust channels for supplying them. Publishers have invested heavily in digital infrastructures and in the digitisation of backlists – largely on the unproven assumption that there will be payback at some stage, but not any time soon - and the emergence of a genuine and sustainable market is critically needed.

We can’t complain about a shortage of e-reading devices any more. Indeed it’s arguable that a glut of dedicated e-readers is harming the market rather than helping it, causing confusion and cost to consumers, and certainly not showing any signs of driving prices down. Many of them, though, are not available or operable in the UK where, to make matters worse, there are few obvious retail channels for acquiring them. And all that is before we consider multifunctional devices such as smartphones or PCs.

There is, though, little evidence coming from the UK of any breakthrough in sales of digital content. They are growing undoubtedly, but from such a low base as to be meaningless. The absence of statistics from device manufacturers, retailers and publishers itself points to an unflattering picture of digital consumption.

All hopes seem to be pinned on Apple and the long awaited announcement of the iPad. First reactions are that this will go down well with the many Apple fans out there and its bookish relationship with the iconic iTunes store will do no harm at all. However, there is some doubt as to what this product actually is: a tablet PC or a reading device. It may just be another reinforcement of the view held by many, including me, that multifunctional devices are the real future of e-reading. There may not be an iPod moment for e-books, but the increasing availability of textual material on a wide variety of different devices may in the end become some sort of tipping point.

Meanwhile the iPad has no immediate UK availability or price…

Comments [0]

RSS Feed

A turbulent start of the year for Waterstone’s

Peter Kilborn | 02/01/2010

The Christmas season, blighted by the slow and messy death of Borders UK, has produced another casualty: Gerry Johnson, Managing Director of Waterstone’s, has lost his job after presiding over an 8 percent drop in like-for-like sales over the festive period. Yes, this is a digital blog, but the long-predicted shake out on the high street is significant for a book trade which is seriously unsure of the direction it is heading.

Waterstone’s is part of the HMV Group, a music retailer. How many times have we heard that the music industry is a disaster zone and that publishers must avoid the mistakes the music industry made in order to survive? Yet HMV stores had a remarkably good Christmas, albeit bolstered by the acquisition of a number of the better stores from the failed Zavvi chain and by selling games. The group is now diversifying into cinemas and live music venues; and Waterstone’s has begun to look distinctly unglamorous by comparison.

Waterstone’s has made many mistakes – not least its changes of mind about its commitment to an online presence (moving to a branded Amazon site and then feebly attempting to challenge Amazon by taking it back again) – and there is optimism that there will be a radical change of direction under its new management. But it cannot afford to go on losing sales at current rates, whatever the underlying reasons, so we shall see…

As far as digital publishing is concerned, it has been an eerily quiet start to the year. There have been no published figures for UK sales of e-readers or book downloads and that may in itself be evidence that neither were up to the most optimistic expectations. There is no indication that the availability of Kindle in the UK has made a significant impact. Despite all the noise around new e-readers – every electronics company apparently determined to have one of its own – they are mostly copycat devices, and prices are not falling to a level where a mass market is emerging.

There is in any case no sense in which the UK is at the centre of technical developments for digital publishing and the publishing world’s eyes remain fixed on the major US players - especially Apple at the moment. It is strongly rumoured that UK publishers are negotiating content deals with Apple for its long-awaited tablet. Content is what the UK brings to the digital party: as one of the key centres of English-language – and therefore world – publishing the UK is an extremely important focus. But at the moment this often tends to mean licensing of content rather than either the dissemination or the consumption of it.

Comments [0]

RSS Feed

Borders UK Closes its Doors

Peter Kilborn | 01/19/2010

Since my last post in November, much of the trade talk has been around the slow and painful death of Borders UK (no longer a relation of the US business) which expired with the closure of all its forty-five stores two days before Christmas.

You might say that that’s hardly a digital issue – no one is claiming Borders’ demise is a direct result of digital competition – but of course in today’s world everything is connected to everything else. The significance of this event lies in the changing pattern of publishers’ trading and the end of a chapter in book retailing. Since Tim Waterstone changed the face of high street book retailing in the early 80s, we have had competition from excellent nationwide bookshops from Dillons (bought out of administration by Waterstone’s), Ottakar’s (acquired by Waterstone’s), and Borders (now defunct). Now we just have Waterstone’s as a dedicated bookseller and, even with a near monopoly, struggling to find a role. We still have W H Smith, of course, successfully doing what it does best, but not really a range bookseller.

It didn’t take the death of Borders to say that Amazon is the big winner: they were a big winner already. They have a commanding share of the UK online market, and they have range, heavily discounted prices and outstanding customer service.

The Nielsen BookScan sales tracking service, which tracks in excess of 90% of all retail and online book sales, reported that sales held up well in 2009, with a volume decline of just 0.5% (1.2% by value). 235.7 million book units were sold at a cost of £1.752bn.

It’s impossible to say, though, what these results reflect: the impact of the recession, substitution by e-books, or special factors like Stephenie Meyer and Dan Brown. But it’s certainly a lot of books! What is clear, though, is that the impact of e-books on overall book consumption so far is next to negligible. Whether this will continue to be true as those people who unwrapped e-readers on Christmas Day start downloading e-books will take some time to emerge, but it seems unlikely that Christmas 2009 was any kind of watershed moment for digital content.

2010 will undoubtedly be an interesting and challenging year for the publishing industry and it seems certain that ‘digital’ will continue to dominate the headlines. There may not be anything dramatic that marks out the end of the book trade as we know it: it will be the gradual growth of digital alternatives to books and the appropriate strategic responses which will be the preoccupation of book trade executives.

Comments [0]

RSS Feed