PRIMIR Books Study Points to Morphing Industry Model

North American Major Book Industry Segments in 2008

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.

The traditional consignment business model places the sales and profitability risk with the publisher—the reduced publisher price model shifts the risk to the bookseller; a risk that they had previously declined to take with the occasional exception of a specific title. However, economic conditions and the need to take cost out of the entire book industry system to ultimately reduce consumer prices, may lead to the adoption of the no-returns model. Returns and unsold copies account for over 50% of the print run in some book categories. Thus, a change in the publisher bookseller business model will have a significant negative impact on conventional book manufacturers and their print supply chain. Run length reductions are likely to favor digital printing technology at the expense of offset.

Discussion about e-books substituting for printed books continues as a hot topic. The term e-books encompasses a wide range of electronic files and file readers that have been in development over 40 years including Amazon’s Kindle and the Sony Reader that have seen some recent adoption.

With a murky definition of an e-book, there are no reliable sources for book unit or dollar volume data to use to assess displacement of the printed book. Nevertheless, as the e-book product and its various read-out devices are undergoing development, they are beginning to become noticeable competition for printed books although e-books are unlikely to become serious competition before 2010.

The PRIMIR study forecasts that over the next several years the displacement of printed textbooks by e-books will accelerate so that sometime between 2012 and 2015, the printed textbook market especially, will have virtually disappeared in a fashion similar to what has already happened with dictionaries and encyclopedias.

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