Veronis Suhler Stevenson's annual Communications Industry Forecast & Report predicts that spending on consumer books will continue to grow at a slow pace over the next five years. The report projects that consumer book spending, which was estimated at $19.53 billion in 2003, will increase at a compound annual growth rate of 1.9% between 2003 and 2008, reaching $21.51 billion. The growth rate is slightly slower than the compound growth rate of 2.9% recorded in the 1998 through 2003 period.
Bob Broadwater, managing director of VSS, an investment banking firm, called consumer books a "mature industry," and noted that "it is hard to see why" spending on consumer books would grow at a much faster rate than inflation. Some categories will do better than others in certain periods, Broadwater said, pointing to the religion market as one of the hotter categories. The report predicts that spending in the religion segment will increase at a 2.9% annual rate through 2008, the fastest growth of any consumer segment.
If spending on consumer books is to grow faster than predicted, the industry needs to overcome a number of challenges, Broadwater said, including broadening the base of consumers. Most readers come from a "fairly defined demographic group," that is literate and somewhat affluent, he said. "Year in and year out, it's the same universe" that buys books, Broadwater observed. And even though the book business has made progress in improving the efficiency of the supply chain, most publishers still don't know who is buying their books and in what quantities.
Despite its shortcoming, the book industry "is not going away," Broadwater said. "Books still have the power to validate" what's important in the culture, he said.
