Director of Studies - IDATE
IDATE has released recently its report "E-Book” which takes an in-depth look at the e-book market, and provides industry figures for 2008 to 2015. It breaks down the new digital value chain, identifies stakeholder strategies through some 20 case studies, details their business models and analyses the core technical issues (formats and portability, DRM, electronic ink, etc.).
“We expect the worldwide digital books market to grow at an average rate of 30% per year between 2010 and 2015 to reach 5.4 billion EUR in 2015, some 12% of the total book market. E-Book readers will also develop fast from 3.3 million units sold in 2010 to 29.8 million units sold in 2015, representing a 24% growth rate per year,”says Sophie Lubrano, project manager at IDATE. “Currently electronic-ink displays are the only solution for a comfortable reading experience, but the hybridization of tablets or other portable devices with e-reader will clearly be the compelling answer in a near future.”
Digital book market in million EUR vs E-reader sales in thousand units worldwide, 2008-2015
E-book markets are still on the rise
Digital book markets will continue to grow in the coming years:
- North America, a mature market, is expected to soon be reaching its cruising speed, with an average annual growth rate of 13% between 2012 and 2015. At that time, sales of e-books are expected to generate a turnover of around EUR 2.2 billion.
- Currently catching up, the five major European countries will experience higher growth on the same period, to reach in 2015 an overall turnover of about EUR 1.4 billion for an average annual growth rate of 30% over that period.
- Japan should experience a more chaotic development. While the annual growth rate of e-book sales appears to be stabilising around 12% in 2011 and 2012, the Japanese market should rebound in 2014, and even more in 2015. This dynamism can be especially explained by a rise in e-book sales on tablets and e-readers, in parallel to historical sales levels on smartphones. At that time, sales of digital books in Japan should total around EUR 1.7 billion, still ahead of the European top 5 market.
In addition, 2015 market share forecasts in terms of value and volume establish a clear distinction between two groups of countries in addition to the particular case of Japan, which corresponds neither to the North American model, nor to the continental European model.
The most advanced countries in terms of market share are the US, Canada and the UK. In terms of value, these markets should range from 13% for the UK to 18% for the United States. In terms of volume, the 2015 market share should reach 35% in the US, against 21% in the UK.
Analysis of the growth/disruption factors
The development of digital book markets is determined by four major factors.
The digital book offer
The digital book offer reflects the mind-set of publishers with respect to digital works. Outside the US, the catalogues available in each language remain relatively modest in size and should increase significantly in coming years.
In general, publishers opt for providing an electronic version of their new releases before embarking on the digitisation of their back catalogue.What is more, new genres historically adverse to the digital world are now converted into e-books since the advent of color tablets. Examples include comics, art books, photo books and cookbooks.
The price difference between digital and paper versions
After the offer of available contents, the price is the second determining factor in the rapid rise in e-book sales. In the United States, where the price of digital books is not regulated, an average price difference between printed books and e-books of almost 50% was recorded in 2010. Conversely, the difference is only 20% in France and does not encourage consumers to migrate to digital media.
By 2015, the various markets of the study should have reached a price difference of at least 44% (Italy, United Kingdom, Germany), and up to 60% in the United States.
The average price of an e-book on a given market depends largely on the regulatory framework in place. In countries where the price is not regulated, retailers regularly offer significant discounts on the books sold under the wholesale model for the benefit of consumers. Conversely, in countries where the sales price of e-books is regulated, publishers are able to harness and control the market’s evolution, and prices fall more slowly.
As a rule of thumb, to achieve mass consumption, an e-book should always be less expensive than the paperback version.
The presence of "big player" retailers
The take-off of a market also depends on the presence of powerful players able to cater their customers with attractive reading ecosystems. Globally, this highly competitive status is currently only coveted by Amazon, Apple and, eventually, Google. Although significantly smaller in size, Kobo has also opted for an international presence.
Locally, the markets are developing under the influence of national players such as the major print booksellers also involved in e-book sales and a few large telecom operators.
The penetration of connected devices
The digital book markets will be driven by the increasing penetration of connected reading devices: tablets and e-readers. On the one hand, the display technologies of tablets should improve, especially to reduce the backlight’s aggressiveness and the daylight reflections. On the other hand, e-readers based on electronic ink should gain in power and speed, and eventually offer color and video support. In addition, device prices should continue to drop (less than EUR 100 for e-readers), while the spread of connectivity (3G, Wi-Fi) will foster compulsive e-books purchases among consumers.
More information about this study and other IDATE research solutions on www.idate-research.com