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UNDERSTANDING THE MIGRATION TO E-B00KS

CURRENT AND FUTURE TRENDS

David Walter 16 May 2013

Copyright 2012 The Nielsen Company. Confidential and proprietary.

Context
Consumer Confidence and International Print Book Markets

The UK e-book market


E-book penetration and the rate of change The value of the e-book and print book market E-book pricing and the consequences for print book prices

CONTEXT

Copyright 2012 The Nielsen Company. Confidential and proprietary.

GLOBAL CONSUMER CONFIDENCE

CONSUMER CONFIDENCE INDEX


Q1 2013 Nielsen Consumer Confidence Index
160

140

120
120

111 94 93 Global average 90 79 75 70

100

93

80

60

47
Copyright 2013 The Nielsen Company. Confidential and proprietary.

44

40

20

Base : All respondents n=28820


Consumer Confidence Survey Q1 2013 Field Dates: February 17 to March 8, 2013 5

BOOKSCANS NINE INTERNATIONAL TERRITORIES


A combined total of over 1 billion sales were measured in 2012

Copyright 2012 The Nielsen Company. Confidential and proprietary.

BOOKSCANS NINE INTERNATIONAL TERRITORIES


Only India showed year on year growth in 2012 but the UK saw a shallow decline

-7.2% -10.3%

-3.4% -7.0%

-9.3%

Copyright 2012 The Nielsen Company. Confidential and proprietary.

16.0%

-6.3% -8.8% -3.7%


7

BOOKSCANS NINE INTERNATIONAL TERRITORIES


Only India showed year on year growth in 2012 but the UK saw a shallow decline

-7.2% -10.3%

-3.4% -7.0%

-9.3%

Copyright 2012 The Nielsen Company. Confidential and proprietary.

?
-8.8%

16.0%

-6.3%

-3.7%
8

INTERNATIONAL SECTOR TRENDS


The Non-Fiction sector is seeing the sharpest declines in major territories
Year-on-year volume sales change across broad sectors

US

UK

ROI

Copyright 2012 The Nielsen Company. Confidential and proprietary.

IT

AUS

-20.0%

-15.0%

-10.0% Total Fiction

-5.0% Non Fiction

0.0% Children's

5.0%

10.0%
9

THE UK E-BOOK MARKET

Copyright 2012 The Nielsen Company. Confidential and proprietary.

10%

12%

14%

16%

18%

20%

0% 23-Jan-11 20-Feb-11 20-Mar-11 17-Apr-11 15-May-11 12-Jun-11 10-Jul-11 07-Aug-11 04-Sep-11 02-Oct-11 30-Oct-11 27-Nov-11 7.1% 25-Dec-11 22-Jan-12 19-Feb-12 18-Mar-12 15-Apr-12 13-May-12 10-Jun-12 08-Jul-12 05-Aug-12 02-Sep-12 30-Sep-12 28-Oct-12 25-Nov-12 23-Dec-12 20-Jan-13 17.0% 16.1%

2%

4%

6%

8%

Nielsen Insight into the E-book Consumer Market: April 2013

Market penetration in percentage terms

Percentage of the UK population aged 13-79 that have bought an e-book: 2011-2013

DIGITAL CUMULATIVE PENETRATION

8.4%

11

Copyright 2012 The Nielsen Company. Confidential and proprietary.

PERFORMANCE - TRENDED UK - eBooks


eBooks Total Books | 52 w/e

600

160,000

480

128,000 Sales (000)

% Change

360

96,000

240

64,000

120

32,000

% Change

Latest Year

Previous Year

Kantar Worldpanel

12

DIGITAL CUMULATIVE PENETRATION


E-book population increases per four-week period
Numbers of individuals aged 13-79 entering the e-book market: period-on-period growth in population number terms
700,000 621,000 600,000

500,000 423,000 400,000

300,000
Copyright 2012 The Nielsen Company. Confidential and proprietary.

Mean average line (287,000)

200,000

100,000 15-May-11 13-May-12 17-Apr-11 25-Dec-11 15-Apr-12 20-Mar-11 18-Mar-12 23-Dec-12 23-Jan-11 22-Jan-12 07-Aug-11 05-Aug-12 02-Oct-11 30-Oct-11 27-Nov-11 28-Oct-12 12-Jun-11 10-Jun-12 25-Nov-12 20-Feb-11 04-Sep-11 19-Feb-12 02-Sep-12 30-Sep-12 20-Jan-13
13

10-Jul-11

Nielsen Insight into the E-book Consumer Market: April 2013

08-Jul-12

Copyright 2012 The Nielsen Company. Confidential and proprietary.

PRODUCTS - TRENDED UK - TOTAL BOOKS


Spend (000) | Actual | TOTAL MARKET | Books-Adult Fiction | 52 w/e

600,000

Spend (000) - Actual

400,000

200,000

Total Books

Hardback

Paperback

eBooks

Kantar Worldpanel

17

UK 2012 VOLUME SALES


Volume sales proportions by format

Fiction

Non-Fiction
8.4%

27.0%

Childrens
6.5%

Copyright 2012 The Nielsen Company. Confidential and proprietary.

physical books

e-books

19

UK 2012 VALUE SALES


Value sales proportions by format

Fiction
16.9%

Non-Fiction
3.9%

Childrens
4.7%
Copyright 2012 The Nielsen Company. Confidential and proprietary.

physical books

e-books

20

THE UK FICTION MARKET


E-books drive volume growth
Fiction 52 week rolling volume sales

Millions
Copyright 2012 The Nielsen Company. Confidential and proprietary.

120 100 80 60 40 20

25-Dec-11

23-Dec-12

Physical Books

e-books
21

THE UK FICTION MARKET


E-books drive volume growth
Fiction 52 week rolling volume sales

Millions

120 100 80 60 -15.0%

Copyright 2012 The Nielsen Company. Confidential and proprietary.

40 20

25-Dec-11

23-Dec-12

Physical Books

e-books
22

THE UK FICTION MARKET


E-books drive volume growth
Fiction 52 week rolling volume sales

Millions

120 100 80 60 -15.0%

Copyright 2012 The Nielsen Company. Confidential and proprietary.

40 20

25-Dec-11

23-Dec-12

Physical Books

e-books
23

THE UK FICTION MARKET


E-books drive volume growth
Fiction 52 week rolling volume sales

Millions

120 100 80 60 -15.0%

Copyright 2012 The Nielsen Company. Confidential and proprietary.

40 20

25-Dec-11

23-Dec-12

Physical Books

e-books
24

THE UK FICTION MARKET


E-books drive volume growth
Fiction 52 week rolling volume sales

Millions

120 100 80 60

2.4%

-15.0%

Copyright 2012 The Nielsen Company. Confidential and proprietary.

40 20

25-Dec-11

23-Dec-12

Physical Books

e-books
25

THE UK FICTION MARKET


E-books drive volume growth but dont deliver revenue growth
Fiction 52 week rolling value sales

Millions
Copyright 2012 The Nielsen Company. Confidential and proprietary.

600 500 400 300 200 100 0


25-Dec-11 23-Dec-12

Physical Books

e-books
26

THE UK FICTION MARKET


E-books drive volume growth but dont deliver revenue growth
Fiction 52 week rolling value sales

Millions

600 500 400 300 -13.4%

Copyright 2012 The Nielsen Company. Confidential and proprietary.

200 100 0
25-Dec-11 23-Dec-12

Physical Books

e-books
27

THE UK FICTION MARKET


E-books drive volume growth but dont deliver revenue growth
Fiction 52 week rolling value sales

Millions

600 500 400 300 -13.4%

Copyright 2012 The Nielsen Company. Confidential and proprietary.

200 100 0
25-Dec-11 23-Dec-12

Physical Books

e-books
28

THE UK FICTION MARKET


E-books drive volume growth but dont deliver revenue growth
Fiction 52 week rolling value sales

Millions

600 500 400 300 -13.4%

Copyright 2012 The Nielsen Company. Confidential and proprietary.

200 100 0
25-Dec-11 23-Dec-12

Physical Books

e-books
29

THE UK FICTION MARKET


E-books drive volume growth but dont deliver revenue growth
Fiction 52 week rolling value sales

Millions

600 500 400 300

-3.6%

-13.4%

Copyright 2012 The Nielsen Company. Confidential and proprietary.

200 100 0
25-Dec-11 23-Dec-12

Physical Books

e-books
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E-BOOK AND PHYSICAL BOOK SELLING PRICES


E-book prices have been driven down as penetration increases
Rolling 52-week average selling price

7.00 6.50 6.00 5.50 5.00 2.38 3.21

4.50
Copyright 2012 The Nielsen Company. Confidential and proprietary.

4.00 3.50 3.00

Physical Books

ebooks
31

Copyright 2012 The Nielsen Company. Confidential and proprietary.

KEY FINDINGS
From our international markets, including the US, Italy and the UK

Print book markets worldwide continue to see decline E-book sales data is not yet broadly available consumer data helps to bridge this gap In the UK, the rapid growth in e-book adoption has slowed somewhat Christmas sees strong sales of e-readers, but not e-books as these are not easily giftable In the UK e-books have taken a substantial proportion of the Fiction market, delivering volume growth but this is not matched by revenue growth Whilst e-books become increasingly significant for the Fiction market, the Non-Fiction and Childrens sectors have not kept up

E-book pricing is not only lower then physical books - it has been driven down as penetration has increased
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david.walter@nielsen.com

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