Based on the 15th edition of its Entertainment and Media Outlook, 2014-2018, PricewaterhouseCoopers (PwC) projects a slight rise in total book revenue from the consumer, educational, and professional book segments to $37.04 billion, from $34.89 billion in 2013, with digital more than making up for a loss in physical book sales. PwC predicts digital will account for 41% of total book revenue, while consumer print book/audio revenue will decline at a CAGR (compound annual growth rate) of 6.0% to $7.95 billion in 2018.
The forecasts, which are based on data from PwC, rely on historical information obtained from confidential and proprietary sources. According to Chris Lederer, principal at PwC Entertainment, Media & Communications practice, that 41% figure for digital is a blended number. “If you just look at consumer books, that’s a segment that hits a tipping point in aggregate in 2018,” he told PW.
“Romance and science fiction, these are ahead of other categories," he continued. "What we expect to happen is nonfiction, books with color [photographs], and children’s will start to catch up.”
In the case of declining consumer print book sales, PwC factored in several drivers, including the decrease in the number of bricks-and-mortar bookstores, along with the reduction in shelf-space. PwC also sees more book buying online now that Generation Y (those born between 1979 and 1989) has overtaken Baby Boomers as the heaviest segment of readers.
The shift to digital isn’t only on the consumer side. As Generation Z (those born after 2000) enter high school, PwC sees a rise in educational e-books. But e-books haven’t made nearly as many inroads into the educational space. “Our projections say that the core book in education is declining 2.1% a year, while the trade book is three times that,” says Lederer.
PwC forecasts that the total educational books electronic revenue will increase by a CAGR of 13.5% in 2018 to $2.81 billion, nearly double the 2013 educational e-book market. By factoring in the cost of schools purchasing tablets for students, PwC anticipates that total educational books print/audio revenue will fall to $9.6 billion in 2018, down from $10.70 billion in 2013.
Among the report’s highlights is that China will become the second largest book market after the U.S., with revenue of $13.2 billion in 2018. It will surpass Japan this year and Germany in the next three years. In 2018, China will account for 35% of Asia Pacific’s total books revenue
On a global scale PwC projects that total books revenue, which includes consumer, educational, and professional book revenues, will rise by a CAGR of 1.1% to $128.0 billion in 2018, up from $121.5 billion in 2013 and $120.2 billion in 2009. Total consumer books revenue will also rise, 0.9% CAGR over the next five years, despite a decline in consumer books print/audio revenue to $46.0 billion in 2018. PwC forecasts that the annual decline in print revenue will slow, but not stop in 2018.
Globally, educational e-books have yet to gain traction with only 14% of global total education books revenue projected to come from e-books in 2018, double the percentage in 2013.