{"id":41501,"date":"2013-07-08T23:12:41","date_gmt":"2013-07-08T21:12:41","guid":{"rendered":"http:\/\/businesstech.co.za\/news\/?p=41501"},"modified":"2013-07-09T08:47:58","modified_gmt":"2013-07-09T06:47:58","slug":"the-e-book-market-in-south-africa","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/media\/41501\/the-e-book-market-in-south-africa\/","title":{"rendered":"Digital books in South Africa"},"content":{"rendered":"

Brian Wootton<\/a>, head of books at Times Media Group (TMG<\/a>) believes that that the growth in digital books in developed markets like the UK and US is already beginning to flatten out.<\/p>\n

In South Africa, meanwhile, take-up has been slow, according to financial services firm PwC<\/a>, largely due to high prices and bandwidth constraints, it says.<\/p>\n

In its South African entertainment and media outlook: 2012-2016, PwC argues that the consumer book market is limited because of relatively high illiteracy, low incomes, and few books published in African languages.<\/p>\n

According to Wootton, e-books already accounted for 9% of consumer book sales in South Africa in 2012. This, however, conflicts with research conducted by PwC which found that e-books accounted for 2% of the total market in 2012.<\/p>\n

In March, TMG said it had begun the sale process for two brands within its books division \u2013 Van Schaik<\/a> and Exclusive Books<\/a>, considered non-core assets as the group looks to restructure its business.<\/p>\n

In February, the online retail division of\u00a0Exclusive Books,\u00a0Exclus1ves<\/a>, said it was shutting down several channels, namely film, music and games to focus on its core strength, books.<\/p>\n

In a letter to BusinessDay, Wootton defended TMG\u2019s decision to try to offload its Exclusive Book business, pointing to strong sales by academic chain Van Schaik in recent operating periods.<\/p>\n

\u201cFrom an Exclusive Books perspective it is better to be sold than to have an uninterested holding company \u2014 one only has to look at CNA in the Edcon group to realise that it is not ideal for a business to remain part of a group where it is not considered core,\u201d he said.<\/p>\n

Digital books<\/b><\/h3>\n

According to PwC, the electronic consumer book market is still relatively new to South Africa and this market is forecast to grow to R19 million in 2016 from just R2 million in 2011, which is an increase of 56.9% at a compound annual rate.<\/p>\n

\u201cWe expect total spending on consumer books to increase at a 3.0% compound annual rate, rising from R1.5 billion in 2011 to R1.7 billion in 2016,\u201d the group said.<\/p>\n

And while the electronic book market accounted for just 0.2% of the market in 2011, PwC believes they will generate 17% of the projected growth during the next five years.<\/p>\n

However, the consulting firm says that, overall, the electronic market also faces the same constraints as the print market \u2013 \u201crelatively few people buy or read books in South Africa\u201d.<\/p>\n

\u201cWith regard to the specific challenges facing Exclusive Books, much has been made about the effect of e-books. It was interesting to read that, according to consulting firm PwC\u2019s forecasts, e-books will account for 8% of the consumer market in 2017, up from 2% in 2012,\u201d Wootton wrote.<\/p>\n

\u201cAccording to our research, e-books already reached the 9% mark in 2012 – admittedly assisted by the Fifty Shades of Grey trilogy,\u201d he said.<\/p>\n

Wootton noted that internationally, e-books at the end of 2012 accounted for 28.2% of the consumer book market in the US and 9.3% in the UK, citing research conducted by Bowkers Books and Consumers.<\/p>\n

\u201cE-books have shown dramatic growth over the past few years. However, growth is beginning to flatten and indications are that the e-books will form between 20% and 30% of the total consumer book market, depending on the territory,\u201d he said.<\/p>\n

PwC found that, globally, spending on electronic books will rise to $20.8 billion in 2016, a 30.3% compound annual increase. As a result, electronic books will comprise 17.9 % of total sales by 2016.<\/p>\n

Spending on electronic consumer books, according to PwC, will rise to $15.9 billion in 2016 from $4.1 billion in 2011, up 30.8 % compounded annually. Electronic consumer books will account for 21.6 % of total consumer book spending in 2016, it said.<\/p>\n

Wootton still believes a retailer like Exclusive Books has a future due to the dynamics of people\u2019s behaviour. \u201cWith regard to shopping for books, whether in print of digital format, online favours those who know what title they want to buy, whereas bricks and mortar stores are better for discovering titles and impulse-buying,\u201d he said.<\/p>\n

“If the estimate that e-books will settle at between 20% and 30% of the consumer book market is correct, then at today\u2019s level of 9%, we have already absorbed about 40% of the expected effect.<\/p>\n

\u201cAs e-books grow to their full potential, they will have an effect on both bricks and mortar stores and online retailers. If foreign experience is anything to go by, they will have a bigger effect on online retailers, who are frequented by “connected” customers, than on sales through physical retail outlets,\u201d he said.<\/p>\n

Exclusive Books<\/h3>\n

\u201cWithout dismissing the fact that e-books will have an effect on Exclusive Books, they will not result in the death of the business as seems to be implied,\u201d the book lead opined.<\/p>\n

Exclusive Books will have closed seven marginal and loss-making sites \u2014 down to 45 stores \u2014 by the end of July, \u201cand it is our view that these stores should never have been opened in the first place,\u201d Wootton said.<\/p>\n

\u201cExclusive Books is still by far the biggest channel to market for consumer books in South Africa and the sale of the business has attracted keen interest,\u201d he said.<\/p>\n

\u201cChange must be embraced, and at Exclusive Books we are positioning the business for the future, which we believe will include physical book stores for many years to come,\u201d Wootton said.<\/p>\n

More Exclusive Books<\/h3>\n

Times Media to acquire textbook reseller<\/strong><\/a><\/p>\n

Times Media to offload Exclusive Books<\/strong><\/a><\/p>\n

Exclusives.co.za closing online channels<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Brian Wootton, head of books at Times Media Group believes that that the growth in digital books in developed markets like the UK and US is already beginning to flatten out.<\/p>\n","protected":false},"author":10,"featured_media":3551,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5554],"tags":[4622,26,2407,3741],"class_list":["post-41501","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-media","tag-exclusive-books","tag-headline","tag-pwc","tag-times-media-group"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/41501","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=41501"}],"version-history":[{"count":8,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/41501\/revisions"}],"predecessor-version":[{"id":41505,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/41501\/revisions\/41505"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/3551"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=41501"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=41501"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=41501"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}