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Brave New World The Booksellers Association of the United Kingdom & Ireland Brave New World Digitisation of Content: the opportunities for booksellers and The Booksellers Association Report to the BA Council from the DOC Working Group Martyn Daniels Member of the BA's Working Group November 2006 1 The Booksellers Association of the United Kingdom & Ireland Limited 272 Vauxhall Bridge Road, London SW1V 1BA United Kingdom Tel: 0044 (0)207 802 0802 e-mail: [email protected] website: http://www.booksellers.org.uk © The Booksellers Association of the United Kingdom & Ireland Limited, 2006 First edition November 2006 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior permission of The Booksellers Association. British Library Cataloguing in Publication Data Brave New World Digitisation of Content: the opportunities for booksellers and The Booksellers Association ISBN 978-0-9552233-3-4 This publication was digitally printed by Lightning Source and is available on demand through booksellers. This publication is also digitally available for download to be read by DX Reader, MS Reader, Mobipocket & Adobe eBook reader from www.booksellers.org.uk This digitisation plus the digitisation for Lightning Source has been performed by Value Chain International www.value-chain.biz 2 Members of the DOC Working Group Members of the working group are as follows: Joanne Willetts Entertainment UK (Chairman) Willie Anderson John Smith Helen Baker Ottakar’s Philip Blackwell The Ultimate Library Martyn Daniels Bibliophile Books (Report Author) Sydney Davies Booksellers Association Tim Godfray Booksellers Association Angus Hayman W H Smith Daniel Johns University Bookseller Gary Mudie Borders Sharon Murray Blackwells Chris Mumby WH Smith Patrick Neale Chipping Norton Bookshop Alison Pinder Booksellers Association Graham Rand THE Douglas Schatz Stanfords Garry Warren Waterstone’s and this report to Council is supported by all members of the working group. Author’s Acknowledgement: The BA was the catalyst for this work, but the depth and range of material and diversity of input is down to the contribution of time and effort that was freely given by all the members of the DOC Working Group. In writing the report my task has been made easier both by the level of individual contributions and the consensus reached by the group to this complex and diverse issue. I am also grateful for the booksellers, publishers and consultants who kindly reviewed the report and provided additional insights and comment. Martyn Daniels Author’s Background: Prior to his involvement in publishing, Martyn had worked for many years as a Senior Executive in blue chip organisations in the retail, oil and automotive sectors. He was Director of Strategic Development at VISTA, where he was responsible for, and a contributor to, their highly acclaimed ‘Publishing in the 21st Century’ research series. He was also the primary creator behind publishing services PubEasy and the initiator of the development of new Front Office systems to support publishers. Martyn also played a key role in getting the BA's 'batch' system off the ground to enable publishers to provide booksellers with invoice information electronically and for booksellers to pay their suppliers, and he is currently a member of the board of batch.co.uk Limited. Latterly he has worked as an independent consultant, both within publishing and with blue chip clients in other sectors. 3 Brave New World Digitisation of Content: the opportunities for booksellers and The Booksellers Association Table of Contents: 1 Letter from the Chairman of the Working Group ....................................................... 7 2 Introduction ............................................................................................................... 9 3 Executive Summary ................................................................................................ 11 Please Note: sections 4 - 10 (inclusive) have a summary at the end which covers the section’s findings and the potential impact on Booksellers and the BA 4 Market Overview ..................................................................................................... 14 4.1 Market Trends and Directions.......................................................................................14 4.2 Specific Sector Developments......................................................................................19 4.3 Geographic Market Developments ...............................................................................23 4.4 Market Overview Summary...........................................................................................28 5 Consumer and Key Market Drivers ......................................................................... 31 5.1 Consumer Models and Demand ...................................................................................31 5.2 Consumer Behaviour ....................................................................................................34 5.3 Library Sector Demand.................................................................................................35 5.4 P.E.S.T. Model..............................................................................................................36 5.5 Consumer and Key Market Drivers Summary ..............................................................38 6 Publisher Strategies ................................................................................................ 40 6.1 What is e-Publishing? ...................................................................................................40 6.2 Media Neutral In – Media Neutral Out ..........................................................................40 6.3 Storing and Repurposing Assets ..................................................................................42 6.4 The Organisational Impact of Digital Content ...............................................................43 6.5 e-book Publishing Formats, Reading Devices and Considerations ..............................43 6.6 Rights Acquisition and Royalty .....................................................................................46 4 6.7 Pricing...........................................................................................................................46 6.8 Publisher Issues............................................................................................................47 6.9 Audiobook Publishing Considerations ..........................................................................47 6.10 Overview of STM and Academic Sectors .....................................................................48 6.11 Trade Sector.................................................................................................................50 6.12 Polarisation...................................................................................................................51 6.13 Publisher Strategies Summary.....................................................................................52 7 Existing Players in the Digital Market ...................................................................... 54 7.1 The e-book Retailing Model…………………………………………………………………. 54 7.2 Booksellers ...................................................................................................................54 7.3 Secondary Publishers - Bibliographic Agents...............................................................58 7.4 Search and Discovery Providers...................................................................................59 7.5 Digital Vendors and Influencers....................................................................................61 7.6 Blogs and Podcasts ......................................................................................................61 7.7 Readers and Communities ...........................................................................................62 7.8 Others to Watch............................................................................................................62 7.9 Existing Players in the Digital Market Summary ...........................................................63 8 The Publishing Value Chain .................................................................................... 66 8.1 The Impact of Digital Content on the Publishing Value Chain……………………………66 8.2 The Value Chain Model ................................................................................................67 8.3 Value Add Changes......................................................................................................69 8.4 Digital Contextual Information.......................................................................................70 8.5 The Creator’s Value......................................................................................................71 8.6 Omnivores.....................................................................................................................71 8.7 The “Killer Store”?.........................................................................................................72 8.8 Value Chain Options.....................................................................................................73 8.9 The Publishing Value Chain Summary .........................................................................75
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