The Global eBook Report 2017 (www.global-ebook.com) provides an overview of internationally evolving ebook markets, with a unique set of data from a wide array of the best available sources, a thorough analysis, with exclusive charts underpinning a synopsis of key global developments, and a broad set of detailed references to both global and local actors, forming a resource for anyone interested in the globalization of digital (book) content production and dissemination.
The report is highlighting, and measuring the relevant international trends:
By 2017, ebooks are so much more than yet another format and edition of printed books. Instead, in a global perspective, with in depth data analysis allow a realistic and precise understanding of how consumer publishing has become a highly diverse and segmented business, with hugely different developments in the big English language countries, in continental Europe and in emerging economies.
Segmentation of book markets
No one size, or angle, alone fits divergent economic fundamentals, market size, or consumer preferences.
Innovative in depth analysis of European book markets by price and genre
A more granular analysis of the different developments in Europe, between large and small markets, for long had been next to impossible, as reliable detailed data had not been available.
The Global eBook report 2017 is now offering new ways of looking in great detail into recent digital developments, by cooperating with, and analyzing data from, book distributors for measuring ebook trends in the UK, Germany, France, Spain, Italy, the Netherlands, and Slovenia.
The study reveals in much detail,
These new approaches to understanding a highly dynamic digital sector are based on sales date provided exclusively for the Global eBook report 2017 by Beletrina (Slovenia), Bookwire (Germany), edigita (Italy), Madrigall Group (France), Ingram (US/UK), Kobo Rakuten (Canada/Japan), and CB (Netherlands).
The new challenges in the global context for books and publishers
The Global eBook report 2017 looks into relevant challenges to book publishers as they come from global players, and the digital transformation of all content and media industries.
The study builds data driven case studies on key developments and actors:
Take away: Readers of the Global eBook report 2017 retrieve a unique overview of key developments in international book publishing, and novel in depth, data driven insights into the very diverse trends in digital. Ebook market trends are presented as a relevant reflection of the much broader overall transformation of the international trade book market.
Publishing - print and digital - in the global context:
Market close ups, detailing key figures and key developments:
Thematic chapters on key drivers and debates shaping the ebook markets:
Global eBook Yellow Pages:
Extensive references to key industry sources provide direct access and links for further reading. We strongly encourage critical feedback and -even more enthusiastically- the input of information and data to improve the foundations of this analysis.
The Global eBook report has been initiated in fall 2011 by the Tools of Change conferences and O'Reilly Media, and has been updated on a regular basis.
Since fall 2013, the report is published by Rüdiger Wischenbart Content and Consulting (RWCC), who had developed the format and authored the reports from the beginning.
To support the Global eBook report, we offer several - highly customizable - sponsorship opportunities.
Applause to our current sponsors, Bookwire, Copyright Clearance Center, and Klopotek!
The production of this report has been supported generously by Booktype.
We are furthermore grateful to our media partners for helping us to disseminate this report!
If interested in becoming a sponsor, or to advertise in the Ebook Yellow Pages, please let us know by sending an email to ebookYP (at) wischenbart.com, or use the contact form at www.global-ebook.com.
Mobile is eating the world.
- Ben Evans
By 2017, half of the world's population has gone online. Two thirds
of all people own a mobile phone. 37 % have become 'active social
media users.' In a word, communicating, socializing and accessing
content digitally has become the standard today, according to data
aggregated by the media agency "we are social" for their
Global Digital Report
2017.
The continuous expansion of the digital realm however is probably only half of the story, with the other half pointing to many remarkable differences in how that transformation is impacting the various parts of the world.
"Mobile is eating the world" is the new paradigm, in the words of Silicon Valley analyst Ben Evens. Smartphones have surpassed PCs, which implies not just a shift in the preferred device. It points much more at a fundamental turn in what people do with their digital connection to the global data systems. And this anticipates already the next step, as Artificial Intelligence (AI) applications are getting integrated very fast into applications that run on the smart phones that people used. One could say in a candid way: With this next step, you will never be entirely alone, in whatever digital activity you get immersed.
For the lone reader of an old fashioned (printed) book, the
transformation could hardly be more radical.
Digitization, though, comes in hugely diverse ways, according to territory as well as cultural and political context, type of content and format, method of access, or targeted group of users. The map of the world as we know it, is about to be re-drawn. The ways of how people use the various digital services differ greatly.
Comparing three parameters for the mobile Internet across 10 highly diverse countries provides an idea of those differences.
In some places, such as the United Arab Emirates or Singapore, about everyone except the youngest children has a smartphone, with most also organizing parts of their lives through social media that they access primarily with their phones.
Social media platforms are fundamental to more than half of the grown ups in many countries, from China to France, and the United Kingdom to Mexico. Only Germany and India are below that threshold, of thosecountries in our election.
In some countries, mobile data traffic accounts for over half of all web traffic: 57% in the UAE, 61% in Turkey, a staggering 77% in India, indicating a leapfrogging from no access at all to principally mobile use of the digital sphere. France and Germany, with 16% and 23% respectively, hard still largely 'hard wired' nations in the comparison.
Great differences become visible also in the extend that people use their mobile connections for spending money, with the UAE, China (probably due to itsunique WeChat ecosystem) and the United Kingdom are on the top, as far as mobile commerce goes. India, Mexico and France are at the tail end of our selection, while we also see that the overall penetration of the Internet has hardly any significance at all as far as the impact of mobile goes.
In this new world order, a few companies stand out. First of all, it is Google, Apple, Facebook and Amazon (refered to often as GAFA) whose combined revenue is three times bigger thant that of the old dominators of digital, Wintel (a portmanteau made up of Microsoft and Intel, who had shaped much of the PC and laptop era). But more importantly, GAFA's impact on shaping today's digital ecosystems is much bigger. And they dominate not only technology, but they are also giants in the economy. (See for more details Ben Evans)
For book publishers, this has direct consequences. Their clients, the readers and consumers who want to spend time reading those books, on paper, on a screen, or by listening to them in audio, have mostly gathered around a new type of campfire, that are smartphones, used for communication, to access information, to select what is relevant, and for skipping what is not, as well as for sharing their reading experiences with others, both friends and the anonymous crowds out there.
But hardly any publisher has succeeded in building an online community that is anywhere nearly as prominent as the new favorites of the mobile entertainment sector, like Netflix for TV shows and movies, or Spotify for music. For audiobooks, as well as for subscribing to a stream of reading offer flatly, Amazon is the global leader by far. And with Amazon, the publishing industry is in a direct competition with one of the "Four Hoursemen" (in Scott Galloway's metaphore for GAFA, in a DLD 2015 talk).
As a consequence, the main competition for publishers is probably not another publisher, or Amazon per se, as a book retailer with challenging commercial terms, but anyone distracting consumer's attention, and time, from material published through the traditional value chain of publishers. This can be a TV series as much as time spent on social media, or on YouTube, or content generated and disseminated directly by (private as much as, in the case of education for instance, professional users).
Newspapers and consumer magazines are hit even harder than books by this substitution plus shift from traditional to digital and mobile distribution channels. Yet all the moving images based, and the music industries have been more successful in the past decade to establish integrated value chains, and combine them with digitally driven revenue models. So has science publishing, as we shall see later on.
The most relevant finding from these data for our survey is the widening gap between those media and content industries which have successfully found ways to marketing, and monetize, their offerings directly to consumers through digital channels - and the rest, where we see largely print based industries relying on distribution by intermediaries. Consumer and education book publishing sits uncomfortably in the middle.
The basic trends portrayed in this chart most likely has intensified recently, yet with no more recent umbrella study available for this report.
Book publishing has traditionally had its centers of gravity in only a few big cities, and large markets, in Western Europe, North America and in Japan, yet with long historical traditions for printing and publishing a many more places (like Korea) and reading (like Russia). This situation has gradually changed with the growing importance of emerging economies. Books, for learning and entertainment, are closedly connected to a certain level of affluence and the emergence of a mostly urban or suburban middle class, which has leisure time and ambitions for their children's perspectives in life.
A global perspective on today's largest publishing markets echoes this pattern.
Six countries account for two thirds of the global book industry's turnover. Over the past decade, China has forcefully made its entry into that top group, not the least driven by substantial government efforts pushing for education, and building a competitive and professional industry for books - as the country did for the entire spectrum of media.
Japan, for long the number two, fell behind, while Germany is now the largest European book market. Great Britain is the strongest exporter of books, as it is for products and services of the cultural industries in general.
Over the past years, since recovering from the effects of the economic crisis of 2008, book markets have followed largely different courses meanwhile. Overall, the top segment has slightly grown its total market share, yet this being almost exclusively due to China's still continuing rise.
The two leading English language markets, the United States, and the United Kingdom, have been flat. In the last two years both have seen a return to optimism. And in a few European countries, general indicators are now pointing cautiously upwards again. But the recent loss has not been compensated, as an aggregated chart of market developments in the top six countries highlights.
Altogether, publishing has entered a status in which many of the current transformation processes are primarily beneficial to the biggest players, and markets, while bringing a huge burden to those smaller and mid-sized houses that used to form the traditional core of the industry.
A landscape emerges in which several groups of countries stand out.
The two leading English language markets, the US and the UK, have both embraced the digital transformation with much less hesitation than most of continental Europe. And the US and the UK are home markets to the Big Five predominant consumer publishing groups, Penguin Random House, Hachette, HarperCollins, Scholastic, and Simon & Schuster. These groups have been by and large successful and after some turbulence have been able to make significant international acquisitions, and streamline their operations, for leveraging scale and up their competitiveness. Interestingly, the parent organization of those among the Big Five with headquarters in Germany (Bertelsmann as owner of Penguin Random House) and to a slightly lesser degree France (home of Hachette), are running their English operations as if they were genuine Anglo-Saxon enterprises.
According to the Global Ranking of the Publishing Industry 2016, which reported revenues of the fiscal year 2015, the 57 largest publishing houses represented a combined turnover of 63.7 bn €. The top 10 alone accounted for more than half of the top 50's combined revenue, or 34.2 bn €, which was up 8 % over 2014, and a remarkable 17 % more than in 2013.
So once again, after years of an overall flat global publishing market, the largest players have found ways to expand, by the combined strategies of mergers and acquisitions, for becoming more international in reach, and integrating digital revenue for compensating losses in print.
Among the top 10, only 3 consumer book publishers from Western Europe and North America can be found, Penguin Random House at rank 5, Hachette Livre at rank 8, and Spanish Grupo Planeta at rank 10. The ranking is led for several years by UK headquartered educational publisher Pearson (formlerly also the parent of Penguin), followed by three science and professional groups, ThomsonReuters, RELX (formerly Reed Elsevier, and WoltersKluwer, with each have accomplished early transformations driven principally by digital subscriptions.
Two Chinese publishing holdings have joined the top segment of the industry, both with headquarters in some of the fastest developing provinces of China's South, with mixed portfolios ranging from education to trade.
Nine of the top 10 publishers have seen an increase in their turnover in the past three years, with the exception of US McGraw-Hill, which had been taken private for a thorough re-structuring recently.
A direct comparison of the 9 leading consumer publishers shows a more mixed picture, yet again, the majority of them has been able to increase sales continuously over the past three years.
All the transformation processes of recent years, which in the meantime have well reached also non-English language publishing markets, have heavily impacted on the retail landscape distinctly across continental Europe. Hardly a large book retail chain has remained untouched, and several had to either undergo severe restructuring (Fnac in France, or Thalia in Germany), or had to file for bankruptcy, yet struggling on for survival (like Weltbild in Germany), or even have disappeared as brands altogether (like Chapitre in France, or Polaris in the Netherlands, each chain being dismembered, with units sold off to become new independent bookstores).
Publishing, by comparison, so far has not hadone real casualty. The largest trade houses in Germany, for instance,experienced losses of just around 1% in 2014, according to a new domestic ranking. (100 largest publishers in Germany, buchreport, 1 Apr 2015)
This seemingly solid overall impression only disguises that all across Europe the pressure to consolidate has mounted significantly in recent years, resulting in a widening list of mergers and acquisitions among trade publishers.
The merger of Bertelsmann's Random House, with Pearson's Penguin group in 2013, and the subsequent creation of a new global leader in consumer publishing under the brand of Penguin Random House (with the former accounting for 53%, and the latter 47% of the new entity) was only the tip of the iceberg. Quickly, the new group formed a massive division, Penguin Random House Grupo Editorial, to bring all its Spanish language publishing under one roof, plus the newly acquired trade arm of Santillana, formerly the third largest consumer publishing in the Spanish language (after Grupo Planeta), and consolidating also its control over the third largest Hispanic house, by acquiring Mondadori's 50% stake in Mandadori Random House.
Hachette also had some acquisitions, in Brazil, and with Quercus in the UK. A planned takeover of US Perseus in 2014 fell apart at first, but was successfully concluded in a second run, in 2016 with Hachette taking over the company's publishing activities. Wholesaler Ingram has acquired the distribution and services division of Constellation (and the British arm of Constellation, which had initially been a joint venture, being now fully taken over by that partner publishers, Faber and Faber). (See Publishers' Weekly, 1 Mar 2016 for the Hachette deal, and on 3 Mar 2016 for the Ingram acquisition.)
HarperCollins, which so far had been pretty much an English language enterprise only, took over Canadian Harlequin, for Can $455 million from its parent company Torstar in one of the more interesting consolidation moves. Harlequin had been pioneering the digitization of genre fiction, by re-inventing romance literature, turning it from a disdainful house-wife niche into a digital, community driven offer to urbanites who typically would read the serialized stories on their smartphone during a commute to work. At first, Harlequin was remarkably successful, and expanding internationally to 17 countries with books out in 33 languages. But then, revenues hit a ceiling, as the next wave of innovation, with self-published content, took over the newly created terrain. For HarperCollins, Harelequin must have appeared as the perfect prey, as it provided worldwide experience with well catered readers' communities and distribution. (Publishers Weekly, 1 Aug 2014)
In continental Europe, indebted Italian RCS handed over its French holdings of Flammarion to Gallimard, in an efford to close the gap with the two leading French groups, Hachette and Editis (the latter acquired by Spanish Planeta not long ago). With the addition of Flammarion, Gallimard is now clearly the French number three in trade.
In late 2014, rumors spread in Italy about the market leader Mondadori to be interested in acquiring RCS, and the deal was closed effectively in fall 2015, and approved, with some restrictions by Italian trade authorities in spring 2016.
Already a few years earlier, in 2011, a complex swap between Swedish Bonnier and Finnish WSOY resulted in Bonnier acquiring all of the Finnish' partner's trade publishing in return for Bonnier's educational division. WSOY also sold off all of its book retail holdings, to streamline its portfolio.
Central Europe in return saw also several mergers, with the contrary strategy of vertical integration, as major local publishers acquired retail chains, or vice versa. Remarkably, these were all local moves, while no foreign investment in publishing has been reported recently throughout the region. (See the close up on Central and Eastern Europe in this report for details.)
In early 2015, consolidation was picking up speed also in academic publishing, as the German Holtzbrinck group, the owner of Macmillan, announced the acquisition of Springer Media, through a majority stake of 53% in a future joint venture, making the group the global number four in the sector. (For a detailed assessment, see an interview with Axel Bartholomäus in Börsenblatt, 15 Jan 2015)
All those actions from more or less traditional publishing groups must be seen in context of totally new actors who begin to walk into their vested terrain, of course. Self-publishing triggered the disruption at Harlequin. But also Amazon (through both Direct Publishing, and Kindle Unlimited's streaming offer), Apple (e.g. with iAuthor), or Google (e.g. with Classroom) all aim at replacing what used to be the core business of (trade, educational, or academic) publishing.
The Big Five, as the largest English language driven publishing corporations, have succeeded over the past several year, to improve profitability in a majority of events, despite the overall challenging market environment.
When many observers recently pointed to a by and large positive recovery of the book business in many major markets, particularly in the US and UK publishing in 2015 and 2016, the expressed optimism had not been evenly distributed among actors. In retail, a slight turn around for independent bookstores was coinciding with a much more vibrant further expansion of the share of books sold online, primarily by Amazon.
And on the publishing end, the biggest houses clearly performed better at adjusting to new competition, creating industries of scale, and improving their bottom line.
Clearly, a number of factors, and specifics to each company, are responsible for the increase in commercial muscle. But one helping factor was that scale effects helped the learning curve in making the best out of ebooks for adding a profitable element in the value chain. Only few smaller consumer book publishers have been able to similarly take advantage of digital.
| Group | Penguin Random House |
Hachette Livre |
Harper Collins |
Simon & Schuster |
| Year | 2016 | 2016 | 2016 | 2016 |
| Group revenues from publishing (million, reported currency) | € 3.361 | € 2.264 | $ 1.578 | $ 767 |
| Revenues from ebooks (in %) | 19% | 23% | ||
| Comments | Print up; ebooks down in US, UK; flat in DE, SP. |
US ebooks -6%; UK ebooks -9% |
100,000 e-titles available (ebook & audio) |
|
| Year | 2015 | 2015 | 2015 | 2015 |
| Group revenues from publishing (million, reported currency) | € 3.717 | € 2.206 | $ 1.667 | $ 780 |
| Revenues from ebooks (in %) | 20% | 9% | 22% | 25% |
| Comments | 22% US; 26% UK |
Source: Company reports.
Adding up these developments into an estimate for consolidation rates in at least the major European publishing markets remains a difficult exercise. But it is more then safe to say that in most larger countries, notably France, Italy, or Spain, a few leading groups have gained significant control over both the trade and the educational publishing respectively.
As we can see from many observations and the data throughout this report, digital developments are led by, and work to the advantage of the respective predominant players. And consolidation adds to the momentum in significant ways.
A good hand full of premier league international groups reach out across all borders, remarkably Penguin Random House (UK, Spain, Germany), Hachette (UK, France, Spain), HarperCollins (UK, Germany, and in early 2016 also France), Holtzbrinck (Germany, UK, plus academic and educational). In this race they are joined by two regional groups, Planeta (Spain, Latin America, and France) and Bonnier (Scandinavia, Germany).
Similar moves of expansion can be seen also in educational publishing. Amazon, for instance has created a stir among French publishers as it signed a deal with the French Ministry of Education, to encourage teachers to use tool sets and platforms from Amazon for the creation and dissemination of open educational resources (OER). (BookBusiness Magazine, March 2016) Also specialized platform organizers in the field, like Ingram, with Vital Source, or Infinitas Learning are reaching out to ever new markets and target audiences with their educational services.
All those many remaining, primarily national medium sized,
usually family owned enterprises below that level of the
transnational corporations, confront a steep challenge to stay
afloat, to fill their traditional niches, and compete, notably in
trade, directly with the transnationals - a process that
will effectively transform these houses too, as they need to
reach out to new sources of investment for the journey
- though at significant risk.
In 2013, "self-published authors (when viewed as one single publisher) had more best-sellers than any other single publishing house."
Jeremy Greenfield at dbw 2014
The introduction of digital books into mainstream consumer publishing in 2007, with the launch of the Kindle platform by Amazon, has not just introduced a new reading format and distribution channel for books to readers, but also opened new ways for authors to publish, and market their works to their audiences.
The size of this self-publishing market segment, as well as how and where these publications are picked up and consumed by readers vary significantly between markets, cultures, and most importantly, according to thematic specifics. Self or independently published literature has by and large been successful in just a few, albeit important niches, mainly general and young adult fiction, and genre fiction. But in these segments, independently published authors have succeeded in building considerable audiences, and gaining recognition and market share worldwide, and across languages and cultures.
Looking into the international ebook markets cannot be reasonably done without pointing to Amazon's pioneering role, and market leadership in many territories, especially with its Kindle Direct Publishing ecosystem, and related services that span from giving authors detailed statistics on the performance of their works, to integrating self-published titles in its many bestseller charts and user rating tool sets, thus making self-published books an integrated element in the bookish universe as such.
At first, self-publishing - as an alternative way of reaching out to a massive reading audience seemed to be, much like ebooks overall, a specific American feature.
In fall 2016, Bowker, the US ISBN agency, released a report that saw 625,327 self-published books published in the US on 2015, up 375% from 2010. (Publishing Perspectives, 4 Oct 2016)
While the fundamental recognition of the importance of self-publishing for the book business has become universal, measuring the segment is challenging, due to the lack of any publicly available data for most markets, except the US, and to a certain extend the UK and Germany.