Spending on consumer books is expected to grow at a compounded annual growth rate (CAGR) of 5.9% over the next five years, hitting $22.5 billion in 2003, from the $16.9 billion reported last year, according to findings released by Veronis, Suhler & Associates in its 1999 Communications Industry Forecast. The strongest growth is expected to come in the trade segment (which includes adult and children categories), where consumer spending is forecast to rise at a 7.5% CAGR over the next five years to $14.9 billion in 2003, while spending on mass market paperbacks is expected to rise to $2.6 billion, a 2.1% CAGR. The only category where spending is expected to decline is mail order, with VS&A forecasting a 32% drop in spending to $330 million.
Bob Broadwater, managing director of consumer books at VS&A, said, "the underlying demand for consumer books is as healthy as it has ever been. For better or worse," Broadwater observed, VS&A "d s not see any dramatic changes in the growth rate of the adult segment, although there will be peaks and valleys in the children's category." Favorable demographics as well as the completion of the retail consolidation should help keep the growth of spending on consumer books steady. The massive returns that hit publishers in the mid-1990s have largely been cleared up, and improved inventory management practices should keep book supply more in line with demand, Broadwater told PW.
VS&A is extremely bullish about the outlook for online book sales, but very cool on the prospects for e-books between now and 2003. The report predicts that online bookstore sales will have a 31.5% CAGR in the forecast period, bringing online book purchases to $2.7 billion in 2003. Purchases of e-books, however, are not expected to be significant in the consumer market over the next five years. Broadwater said that while e-books may find a market in niche areas, he sees little impact on the sales of general trade books. For consumers to buy e-books in large numbers, they would need to see "easily understood benefits" that the new products would provide compared to printed titles, something Broadwater d sn't see e-books providing in the general books segment.
While Broadwater views the consumer book segment as a solid business, he acknowledges that the different players in the industry-retailers, publishers, authors, wholesalers-are all uneasy about their particular part of the business. "They feel they don't have control over future events, which makes them unhappy, which in turn could result in more changes," Broadwater concluded.
