1.
EVOLVING MARKETS
AND CONSUMER E-BOOK PURCHASING BEHAVIOUR
David Walter
19 March 2013

2.
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
• Context
• Consumer Confidence and International Print Book
Markets
• Connected devices adoption
• US and Italy e-reader and tablet penetration
• Manufacturer market share
• 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 consequence for print book
prices
2

3.
CONTEXT

4.
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
GLOBAL CONSUMER CONFIDENCE
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5.
CONSUMER CONFIDENCE INDEX – BOOKSCAN TERRITORIES
Q4 2012 Nielsen Consumer Confidence Index
160
140
121
120
111
100 95 94 Global average = 91
89
79 76
80
65
60
46
39
40
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
20
0
Base : All respondents n=31972
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6.
BOOKSCAN’S NINE INTERNATIONAL TERRITORIES
A combined total of over 1 billion sales were measured in 2012
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
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7.
BOOKSCAN’S NINE INTERNATIONAL TERRITORIES
Only India showed year on year growth in 2012 – but the UK saw a shallow decline
-7.2% -3.4%
-10.3% -7.0%
-9.3%
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
16.0%
? -6.3%
-8.8%
-3.7%
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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% -5.0% 0.0% 5.0% 10.0%
Total Fiction Non Fiction Children's
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THE UK E-BOOK MARKET

10.
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
10%
12%
14%
16%
18%
20%
0%
2%
4%
6%
8%
23-Jan-11
20-Feb-11
20-Mar-11
17-Apr-11
15-May-11
Top-line overview
12-Jun-11
10-Jul-11
7-Aug-11
4-Sep-11
2-Oct-11
30-Oct-11
27-Nov-11
UK DIGITAL PENETRATION
25-Dec-11
22-Jan-12
19-Feb-12
18-Mar-12
Proportion of the UK population aged 13-79 that have bought an e-book: 2011-2012
15-Apr-12
13-May-12
10-Jun-12
8-Jul-12
5-Aug-12
2-Sep-12
30-Sep-12
28-Oct-12
25-Nov-12
23-Dec-12
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11.
EVOLUTION OF THE UK E-BOOK MARKET
Value sales doubled year-on-year in 2012
Rolling 52-week value sales and year-on-year penetration growth
600% £180
Millions
£160
500%
£140
400% £120
£100
300%
£80
200% £60
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
£40
100%
£20
0% £0
% Change Latest Year Previous Year 11

12.
UK 2012 VOLUME SALES
Volume sales proportions by format
Fiction Non-Fiction
8.4%
27.0%
Children’s
6.5%
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
physical books e-books 12

13.
UK 2012 VALUE SALES
Value sales proportions by format
Fiction Non-Fiction
3.9%
16.9%
Children’s
4.7%
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
physical books e-books 13

14.
THE UK FICTION MARKET
E-books drive volume growth
Fiction – 52 week rolling volume sales
120 2.4%
Millions
100
80 -15.0%
60
40
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
20
25-Dec-11 23-Dec-12
Physical Books e-books
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15.
THE UK FICTION MARKET
E-books drive volume growth – but don’t deliver revenue growth
Fiction – 52 week rolling value sales
£600 -3.6%
Millions
£500
-13.4%
£400
£300
£200
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
£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
£2.38 £3.21
£5.00
£4.50
£4.00
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
£3.50
£3.00
Physical Books ebooks
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17.
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
• US e-reader adoption is skewed towards an older, female demographic
• Italian e-reader adoption is stronger among a younger, male
demographic
• In the UK e-books have rapidly 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 Children’s 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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18.
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
KEY CHALLENGES
In the developing digital space
• How can publishers maintain (and grow) revenue as
the migration to digital brings a new pressure to
deliver low prices?
• How can publishers develop compelling digital
content for the Non-Fiction and Children’s markets?
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david.walter@nielsen.com