PRIMIR Books Study Points to Morphing Industry Model

April 2009

multipage

According to a soon to be released PRIMIR study, entitled “Trends in Books: 2008-2012,” printed books reached the peak of their product life cycle with publishers’ net sales of 3,127 million book units in 2007. Printed books were headed toward a new record high in 2008 when the economic recession hit full force in the last quarter sending book purchases in a downward spiral that continues today. PrintCom Consulting, who conducted the research, concludes that by the time the economy recovers companies who are a part of the book publishing production chain will find themselves in a smaller, different book industry.

There are six major industry segments in the book industry accounting in 2008 for 3.0 billion publisher net book copies valued at $35.7 billion. They are: trade, religious, professional, university, elementary/high school (ElHi) and college.

Although factors differ among the various specific book segments, overall the health of the economy and the emerging e-book and/or digital substitutions for books will clearly have a negative impact on book volume. The report concludes that three clear-cut conclusions can be drawn from the study:

• Book content in its present paper form will continue to be a mainstay product through the 2009-2012 forecast period, but at reduced volume levels from the industry’s recent history.

• Book content will morph from being primarily an ink-on-paper product to a multiple media product distributed through a variety of channels.

• Paper books and their key selling outlet, book stores, may have reached the pinnacle of their product life cycle and will emerge from the forecast period on the downside slope of the cycle.

Unlike most other print media, books are a stand-alone product that does not depend upon advertising, or function as a part of a support mechanism for other products. Since the early 90s, U.S. book publishing net unit sales volume has been relatively flat with most ups and downs moderately reflecting fluctuations in the general economy. Industry sales have been buoyed up by blockbuster hits that sell hundreds of thousands, sometimes millions of copies. More limited but steadily growing volume in recent years has come from the small publishers who rarely sell more than 10,000 copies of a title. But the study questions the viability of many of these small publishers as they are challenged by the economic downturn.

Also lurking is the potential of a change in the publisher-bookseller relationship. Currently, the industry’s model is a consignment approach which provides for a full-credit unsold-return privilege.