The UK Books and Publishing Industry Analysis

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TheUnited kingdomBooks and Publishing Industry Analysis

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Table of Contentss

1. Introduction5

1.1 Objective5

1.2 Reasons for Choosing theUnited kingdomBooks

and Printing Industry6

2. Industry Overview9

2.1 Market Size and Attraction10

2.2 Market Sectors10

2.2.2 Paperback book11

2.2.3 Electronic11

2.2.4 Fiction11

2.2.5 Non-fiction11

2.3 Industry Target Markets12

2.4 Market Gross saless, Performance and Activities14

2.4.1 Domestic Market14

2.4.2 Export Gross saless15

2.4.3 Imports16

2.5 Printing Companies17

2.6 Employment19

2.7 Distribution20

2.8 Major Tendencies and Developments21

2.8.1 Emerging Book Formats21

2.8.2 Emerging Distribution Channels and Markets22

2.8.3 Developments in Technology and

Concerns in Copyright and Production23

3. Industry Analysis – PESTEL24

3.1 Using the PESTEL Analysis24

3.2 Political Factors24

3.2.1 Tax24

3.2.2 Pricing24

3.3 Economic Factors25

3.3.1 Global Economic Factors25

3.3.2United kingdomEconomic Tendencies25

3.4 Social Factors26

3.4.1 Consumer Preferences26

3.4.2 The Internet and Technology26

3.4.3ReadingHabits27

3.5 Technological Factors27

3.5.1 The Digital Age27

3.6 Legislative27

3.6.1 Copyright and Intellectual Property27

3.6.2 Market Regulations for New Entries28

3.7 Environmental28

3.7.1 The Issue of Paper28

3.7.2 Other preservation steps29

4. Industry Analysis – Porter’s Five Forces Model29

4.1 About Porter’s Five Forces Model29

4.2 Competition29

4.3 Supplier Power29

4.4 Buyer Power30

4.5 Menaces of Substitutes30

4.6 Barriers to Entry30

5. Decision31

Mentions34

List of Tables

Time Spent of Main Activities, by Sexual activity, 20058

Entire Book Gross saless 1998-200210

Projected Book Gross saless: 2002-200710

Unit Book Gross saless by Format: 1998-200211

Projected Book Gross saless by Format: 2002/200712

Value Book Gross saless by Target Market: 1998-200213

Projected Book Gross saless by Target Market: 2002/200713

Publishers’ Export Gross saless: 1998-200116

Book Imports: 1998-200117

Leading Publishers Ranked by Entire Retail Gross saless 2001/200218

Entire Employment in the Publishing Industry 1998-200220

Retail Distribution21

TheUnited kingdomBooks and Publishing Industry Analysis

1. Introduction

Harmonizing to the Encyclopaedia of Global Industries ( ‘Book Publishing’ , 2007 ) , planetary disbursement on books increased from US $ 85.3 billion in 2000 to US $ 104.6 billion in 2005. This is despite the fact that the planetary demand for books had significantly dropped for a figure of grounds. One of the major grounds cited for this bead was the September 11 terrorist onslaughts in the United States. In contrast, the United Kingdom ( UK ) is presently one of the world’s taking participants in the universe of publication. However, it remains behind to major planetary manufacturers the United States, Japan and Germany. UK is followed by another European major publishing house, France In 2002, the UK book and publication industry reached the value of a‚¤2.5 billion ( ‘Books and Publishing – United Kingdom’ , 2003) and continues to be the major location of European publishing’s cardinal operations and the U.S. publishing’s gateway across the Atlantic.

1.1 Aims

The UK books and printing industry is one of the UK’s distinguishable industries. As stated above, UK ranks among the world’s major book and publication manufacturers. Readers across the Earth are familiar with the UK’s part to the publication universe. UK authors have long been one of the more celebrated sets of authors in the authoritative and modern histories. Ranging from William Shakespeare to J.K. Rowling’sHarry Potterfranchise, the UK books and printing industry continues to play a important function, particularly among the English-language readers across the Earth. However, the new media signifiers that have been emerging recently such as electronic and on-line signifiers of printing presently challenge the publication penchants of the consumers today and UK print media excessively has got impacted.

The present survey is an effort to analyze the UK books and printing industry. The aims of this industry analysis are as follows:

  • Supply an overview of the UK books and printing industry, its current position and projected waies.
  • Analyse the factors that influence the current and future operations of the industry by utilizing the tool of PESTEL analyses.
  • Assess the books and printing industry and its impact and public presentation in the market by utilizing market analysis tools of Porter’s Five Forces.
  • Determine the critical factors that can find the hereafter of the UK books and printing industry.

1.2 Reasons for Choosing theUnited kingdomBooks and Publishing Industry

The UK remains to hold a healthy and dynamic book and publication market ; non merely does the UK contain one of the important market portions in the planetary book market, it boasts of a figure of in-demand writers. Books and publication in the UK highlights the society’s built-in love for books.

What is interesting in the UK book and publication industry can be seen in the undermentioned factors:

( 1 ) United kingdom has had a important function in the publication universe particularly among English-language readers across the Earth ; nevertheless, in footings of industry size, UK remains behind book bring forthing giants the United States, Japan and Germany. These three states have a competitory production advantage:

  • the United States has strong media and amusement industry which has besides influenced its publication sector ;
  • Japan is known for its in writing novel and books publication, as driven by the strongmangacivilization and demand ;
  • Germany’s media corporate giant, Bertelsmann, has managed to have and unify with big publishing houses, which makes this German company a important participant in the planetary industry ( ‘Book Publishing’ , 2007 ) .

( 2 ) New signifiers of media, electronic publication and the Internet, have emerged which have challenged the conventional publication signifiers. Electronic publication and the Internet has become a challenge in a figure of countries including the redefinition of publication format ( electronic or published through the Internet ) and publication entree ( self-publishing has become popular online ) . This besides influences the sum of involvement the public continues to hold in books particularly when more recreational signifiers have evolved which may be preferred over picking up a magazine or a book. Besides, recent times have besides witnessed a rise of on-line / practical schools and other signifiers of practical world which has now given manner to outgrowth of digital versions of these books or e-books.

( 3 ) Emerging markets brought by globalization besides affect the enlargement of UK publishing houses to other parts of the universe. This is in add-on to the increasing demand for English-language acquisition classs in non-English speech production states can promote the publication of books. Regional writers excessively can increase the involvement of the planetary readers, and it is interesting to see how the UK publication industry has responded to these new chances.

In add-on to this, it is interesting to measure the public presentation of this immense industry that reaches different planetary markets and at the same clip, is functioning a more peculiar sector of the people’s reading wonts. Based on a study on leisure activities in 2005 by the National Statistics Office’s, reading has been cited as representing a negligible portion of how people spend their clip every twenty-four hours. Reading, on an norm, merely accounts for 23 proceedingss among work forces and 26 proceedingss among adult females. The following tabular array illustrates how this industry has been providing to a fraction of people’s mean day-to-day activities:

Time Spent of Main Activities, by Sexual activity, 2005

( ‘Time Use Survey’ , 2006 )

As can be seen in the tabular array, reading has taken a backseat as compared to the clip people spend watching telecasting or holding a “social life” . A similar study conducted in 2001 among full-time workers on how they spend their free clip, reading emerged as the 3rd highest activity whereas games/hobbies/computing came in stopping point behind ( ‘Lifestyles’ , 2004 ) . Obviously, in the antecedently cited more recent study, games/hobbies/computing activities have overtaken reading. However, this curious development holds true among males who spend an norm of 37 proceedingss in playing games, indulging in avocations or working on computing machines whereas adult females tend to be fervent readers, thereby passing more clip reading than other avocations. It should besides be noted that reading does non merely restrict itself to the merchandises of the book and publication industry as the Internet has besides become a important beginning for information.

2. Industry Overview

2.1 Market Size and Attraction

Harmonizing to the Confederation of British Industry, the book sector has been one of the important drivers in the overall UK retail gross revenues growing, along with furniture and food markets ( ‘Books and Printing – United Kingdom’ , 2003 ) . This shows that books are among the chief purchases that people make in a combined demand in the leisure and educational sectors.

The UK books and printing industry reached the a‚¤2.5 billion grade in 2002, doing this industry holding a positive overall mentality. Volume and value additions were seen lifting from 2001 to 2002 at 12.1 % and 16.8 % severally. The 12.1 % volume addition reflected the 323.8 million units sold by 2002, which contributed to the compounded one-year growing rate ( CAGR ) of 2.9 % . Positive developments were besides experienced, which started from the late 1990s up to the beginning of the millenary, with strong value additions finally lending to the 4 % CAGR since the rush in gross revenues in 1999 ( ‘Books and Printing – United Kingdom’ , 2003 ) .

Entire Book Gross saless 1998-2002

(Euromonitor International: State Market Insight)

Projected Book Gross saless: 2002-2007

(Euromonitor International: State Market Insight)

Harmonizing to the Printing Industry Market Review 2006, the entire publication market was deserving 18.63bn in 2005, holding increased by 7.6 % across the reappraisal period ( 2001 to 2005 ) . The Publication Industry is defined by Newspapers, Magazines every bit good as Book publication. Newspaper publication histories for the largest portion of the market ‘s entire value, followed by magazine publication and book publication.

Within the books and printing industry in 2004, retail book gross revenues were ?3.98bn which represents a 3.2 % addition on 2003. (United kingdomPrinting Industry 2005, ) Since 1999, the market has grown by a sum of 16 % and about 67 % of the market ‘s value is consumer books. The UK Publishing Industry 2004 study indicates that the UK publication market is expected to turn by 12.9 % between 2004 and 2008. Magazine grosss are likely to lift by 17.3 % , newspaper grosss by 15.2 % and book publication by 14.7 % . (United kingdomPrinting Industry 2004, ) .

2.2 Market Sectors

The commercial publication industry extends far beyond books and diaries. Merchandises are available in electronic every bit good as print signifier.

The overall book and publication industry ( ‘Books and Printing – United Kingdom’ , 2003 ) can be classified on the footing of format and class

Format:

2.2.1 Hardbacks

Hardback formats are hardbacked books. This format can be normally found among books for kids, new releases, and non-fiction books.

2.2.2 Paperback book

Paperback book or paperback book is the most common format. This dominantly makes up the books targeted for commercial and educational intents.

2.2.3 Electronic

The electronic formats are the non-paper based merchandises available on CD-ROM, or as audio books, e-books etc.

Class:

2.2.4 Fiction

The fiction class includes children’s books, novels across genres ( offense, Western, thriller ) , historical, love affair, etc.

2.2.5 Non-fiction

The non-fiction class includes educational, academic and professional books, mention books, travel ushers, DIY, etc.

The public presentations of these different sectors ( by format ) are illustrated in the undermentioned tabular array ( ‘Books and Printing – United Kingdom’ , 2003 ) :

Unit Book Gross saless by Format: 1998-2002

(Euromonitor International: State Market Insight)

Projected Book Gross saless by Format: 2002/2007

(Euromonitor International: State Market Insight)

Based on the public presentation of the two chief classs, fiction and non-fiction, the latter continues to rule the book gross revenues and continues to turn ( ‘Books and Printing – United Kingdom’ , 2003 ) :

2.3 Industry Target Markets

Books can besides be classified on the footing of the mark market: consumer and institutional ( ‘Books and Printing – United Kingdom’ , 2003 ) . The consumer market is the mainstream book market which includes regular readers and single purchasers. The institutional market for books is defined by establishments or administrations that buy books for specific intents such as libraries. It besides includes the books bought by the instruction sector.

There is a possible confusion as to the designation of the consumer and the institutional market as the consumer market besides includes publications for academic and professional intents. However, institutional books are largely identified by agencies of predominating subject and the market section, such as in the instance of libraries and field-specific establishments ( i.e. jurisprudence books aggregation ) whereas the consumer market’s chief beginning of distribution channel are bookstores, online shops, etc. In footings of public presentation, the consumer market has a important market portion over the institutional market. The entire gross revenues brought by he consumer market in 2002 was at a‚¤2.0 billion, thereby holding 80.3 % of the overall book market portion. Average growing was cited at 17.4 % , with the rush of gross revenues throughout the twelvemonth normally picking up during the last one-fourth ( ‘Books and Printing – United Kingdom’ , 2003 ) .

The institutional market has been besides sing positive growing at 14.3 % , with its gross revenues making a‚¤490.6 million and consisting 19.7 % of the overall market gross revenues. Educational gross revenues continue to rule the institutional gross revenues at 63.4 % whereas parts from the library sector continue to fluctuate. As can be observed from the tabular array given below, there was a important bead in library gross revenues from a‚¤114 million to a‚¤101

million from 1998 to 1999, with this peculiar sector sing fluctuations until 2002 ( ‘Books and Printing – United Kingdom’ , 2003 ) .

Value Book Gross saless by Target Market: 1998-2002

(Euromonitor International: State Market Insight)

Projected Book Gross saless by Target Market: 2002/2007

(Euromonitor International: State Market Insight)

2.4 Market Gross saless, Performance and Activities

The UK books and printing industry relies on assorted market forces in order to keep its dynamism ; this can be attributed to its public presentation chiefly on domestic gross revenues, and so through the export and import volume and gross revenues.

2.4.1 Domestic Market

As antecedently mentioned, the consumer market chiefly comprise of the industry’s domestic gross revenues. Strong public presentation has been seen across sectors and classs, with positive developments in fiction every bit good as non-fiction books. Gross saless in fiction class experienced an mean addition of 56 % from 1998 to 2001, although non-fiction remains to hold the important market portion ( ‘Books and Printing – United Kingdom’ , 2003 ) .

A figure of market schemes have emerged in order to hold the publishing houses improve their public presentation. It has been noted that UK has even adopted an American market scheme model which includes book Tourss and taking advantage of the different media channels to increase exposure and publicity such as on-line book telling publicities and book superstores ( ‘Book Publishing’ , 2007) .

It can be observed that this has been evident in the franchising sector in which UK fictional giant, theHarry Potterfranchise, have farther ventured into movie and consumer merchandises. In a manner, books have established a force to make a peripheral market sector which relates the books to other relevant industries. However, the opposite takes topographic point when authoritative British books such as J.R.R. Tolkiens’The Lord of the Ringssand C.S. Lewis’The Chronicles of Narniawere made into films, and because of the success of this channel, book gross revenues for these plants have besides experienced a important addition as this has become a promotional agencies in order to sell more books. Such scheme is non merely felt in the UK domestic sector but besides in other planetary gross revenues every bit good.

2.4.2 Export Gross saless

UK books are exported throughout the universe and a cited addition of 4.4 % was seen from 1998 to 2002. As per a Department of Trade and Industry ( DTI ) study, the export market is deserving about ?1.4bn a twelvemonth. However, UK’s chief export competition comes from the United States, which besides produces English-language books. Some exporting scheme can be besides seen through the industry ( ‘Books and Printing – United Kingdom’ , 2003, p. 19 ) :

Although the worldwideHarry Potterphenomenon had a strong impact on exports, peculiarly over the 1999/2000 period, non-consumer publication book gross revenues were besides a pillar of export public presentation. English is the universe linguistic communication for rubrics in the scientific/technical/medical class and as such, theUnited kingdomdominates the field internationally in footings of gross revenues. For publishing houses of these sorts of texts exports can account for up to 60.0 % of gross revenues, peculiarly to the US, and it can be of great advantage for a publishing house to hold an American arm or to be portion of an American-controlled group in footings of procuring US rights of publication.

In this instance, despite the stiff competition with the US rubrics, UK books have besides been executing reasonably good in the United States ; the UK chiefly exports to the United States. In fact, UK has been the largest exporter of books to the United States books market. The public presentation of the UK publishers’ export gross revenues are as follows ( ‘Books and Printing – United Kingdom’ , 2003 ) :

Publishers’ Export Gross saless: 1998-2001

(Euromonitor International: State Market Insight)

2.4.3 Imports

The UK besides imports books from abroad markets such as the United States. Interestingly, Asiatic markets have been lending significantly to UK book imports. The 2nd largest imports, after the United States, come from Hong Kong, and the 4th largest market is Singapore ; China excessively is besides among the top beginnings, deriving the 8th import beginning place in 2001 ( ‘Books and Publishing – United Kingdom’ , 2003) .

Interestingly, UK imports additions industry competition, with its value lifting at 16.6 % within the period 1998-2001. The following tabular array shows the import value during this clip period ( ‘Books and Printing – United Kingdom’ , 2003 ) :

Book Imports: 1998-2001

(Euromonitor International: State Market Insight)

2.5 Printing Companies

Each of the three sectors of printing in UK-newspapers, magazines and books- is dominated by around a twelve companies. Merely a few companies are active in more than one sector. In fact, merely Pearson PLC is involved in all three markets in a important manner. News Corporation, which publishes newspapers and which owns the book publishing house Harper Collins excessively has entered the magazine market early in 2006. The UK publication industry is still chiefly UK owned. However, in the magazine market, there are several foreign-owned companies. These include the followers:

  • The Conde Nast Publications Ltd
  • Hachette Filipacchi ( UK ) Ltd
  • IPC Media Ltd
  • The National Magazine Company Ltd
  • The Readers Digest Association Ltd and VNU Business Publications Ltd.

As indicated in Books and Publishing – United Kingdom 2003

TheUnited kingdomis non the place base of any major media participant, such as Bertelsmann, Vivendi or AOL Time Warner. The ordinances on media ownership make it easier for new entrants from abroad to set up a presence in theUnited kingdomthan forUnited kingdomcompanies to well enlarge market portion. Most of the major participants in the book industry

are owned by international multimedia publication concerns, and hence the most helpful signifier of comparing is toanalysetaking publication houses, and the consequences of the amalgamate groups which own them.

(‘Books and Printing – United Kingdom’ , 2003, p. 23 )

Therefore, the books and printing industry in the UK is characterised by a smattering of planetary pudding stones or international companies, such as Reed Elsevier Group PLC, Pearson PLC, The Random House Group Ltd and Harper Collins Publishers Ltd. The taking publishing house in the UK, HarperCollins, is a amalgamation of British publishing house William Collins Sons and Co Ltd. and the American publishing house Harper & A ; Row. Today, HarperCollins is owned by the American media pudding stone, News Corp. , although HarperCollins UK is the UK’s taking printing house ( Books and Publishing – United Kingdom’ , 2003 ; ‘Harper Collins’ , 2007 ) .

In the recent old ages, many other companies have been acquired and merged. For case, in 2004 a major development was the acquisition of Hodder Headline from WH Smith by the Gallic publishing house Hachette Filipacchi in 2004. This simply added to farther internationalization of UK publication. Hachette already owned Orion which farther owned Weidenfeld & A ; Nicholson. This has lead it to go the UK ‘s second-largest consumer book publishing house. Macmillan and Random House are both owned by German companies. These chief drivers of these developments have been the concern schemes applied by these corporations. These schemes can be observed to be influenced by forces such as globalization and certain deregulatings when it comes to foreign operations. Besides these, other major publishing houses are Blackwell and the university imperativenesss of Oxford and Cambridge.

The following tabular array shows the taking publishing houses in the UK harmonizing to gross revenues ( Books and Publishing – United Kingdom’ , 2003 ) :

Leading Publishers Ranked by Entire Retail Gross saless 2001/2002

(Euromonitor International: State Market Insight)

2.6 Employment

By 2002, the books and printing work force, which besides include employees in the printing sectors, were recorded at 352,000 ; harmonizing to the National Statistics, this figure was at 366,000 in 2001 ( Books and Publishing – United Kingdom’ , 2003 ; ‘Harper Collins’ , 2007 ) . In 2004, about 280,000 people were employed nationally and about 15 % work portion clip.

It has been cited that the books and printing industry has non offered a really promising development to its work force in footings of wage and employment assurance (Books and Publishing –United Kingdom’ , 2003, p. 22) :

… In a recent study by Bookcareers.com, 66 % of employees in the industry said that they had lost co-workers to redundancy. There is widespread discontent in the industry, peculiarly over the issue of wage. Levels of wage, particularly for get downing wages, are notoriously low, peculiarly bearing in head the degree of instruction required for printing work, and get downing wages can be every bit small as ?15,000 a twelvemonth. Pay is a factor in most employees’ lives,

peculiarly because most ofUnited kingdompublication Centres aroundLondonand the South East, where house monetary values are

merely unaffordable for people gaining mean wages in the industry.

In add-on to this, professional development does non sound as promising in this industry due to the deficiency of developing enterprises and specific professional accomplishments. Professionals in this industry are largely managerial in nature. Hence, in footings of accomplishments development, the demand has non been as impressive in this sector. It is hence non as surprising that the figure of employees in the industry has been detering in footings of rate, and employment has been besides black due to redundancies.

Entire Employment in the Publishing Industry 1998-2002

(Euromonitor International: State Market Insight)

2.7 Distribution

In the past consumers were purchasing books through a assortment of distribution channels such as big concatenation bookshops book nines and independent and little concatenation bookshops, mass merchants, mail order, nutrient and drug shops, price reduction shops, used books etc. The traditional bookstores have been losing their influence and as a consequence such booksellers have been besides get downing to turn up up. The Internet is going one of the most active distribution channels for books and publications. Although the Internet does non hold every bit much distribution portion at this point, it continues to lend significantly in this country as it besides continues to increase as a highly-used distribution channel.

Book retail merchants continue to rule the merchandise distribution ; these retail merchants include chained retail merchants and independent bookstores. As compared to independent bookstores, in recent times, , bookstore ironss are get downing to increase its market appreciation and influence ( Books and Publishing – United Kingdom’ , 2003 ) .

Another distribution beginning is through book nines. The UK’s taking book nine, BCA, combines to book nine construct and its mail-to-order strategy, in add-on to smaller subdivision of smaller book nines.

The book retail distribution tendencies have been presented in the undermentioned tabular array: ( Books and Publishing – United Kingdom’ , 2003 ) :

Retail Distribution

(Euromonitor International: State Market Insight)

It can be observed that there has been important addition in sale through Internet and multiple ( chained ) booksellers whereas at that place has been a lessening in distribution through independent booksellers and book clubs/mail-to-order.

2.8 Major Tendencies and Developments

The dynamism of the books and printing industry in the UK can be determined by the cardinal tendencies and developments that can finally impact how the industry operates and performs.

2.8.1 Emerging Book Formats

As antecedently mentioned, new formats such as e-books, CD-ROMs and audio books have now entered the market. Among the three, e-books have been making a splash due to a figure of grounds: it is in digital format that can be easy downloaded.

What besides works good with the outgrowth of e-books is the outgrowth of technologies.. For illustration, PDAs have now developed into little, hand-held computing machines that can transport a significant sum of informations ; e-books, which are normally in the PDF can be easy downloaded in PDAs and accessed through PDF reader ( Microsoft Reader and Adobe Acrobat ) . Hence, people do non hold to transport big books around as they can easy entree them through their devices. As per the statistics from an on-line download beginning for public sphere books, manybooks.net, PDF downloads have reached about 140,000, non including the other electronic book formats such as eReader and RTF, and downloadable text in HTML format ( Nagle, 2007 ) . In any instance, the figure of downloads can make 100s of 1000s, and this lone includes books from one web site and works within the public sphere.

Another popular beginning of free e-books is Project Gutenberg (Undertaking Gutenberg, hypertext transfer protocol: //www.gutenberg.org/wiki/Main_Page ) which claims to hold over 2 million downloads every month.

2.8.2 Emerging Distribution Channels and Markets

As discussed in the distribution channel subdivision, the Internet is going to affect its influence among UK consumers ; book gross revenues online experienced an 11 % growing in 2001 and continues to be important till day of the month. Although some on-line start-ups wanted to take advantage of the UK market, most of them were adversely affected by the dotcom bubble in the 1990s. Expectedly, Amazon.co.uk is the top online marketer of books in the UK (Books and Publishing –United Kingdom’ , 2003) .

2.8.3 Developments in Technology and Concerns in Copyright and Production

Technological developments have mostly affected the books and printing industry. As antecedently mentioned, engineering has allowed the outgrowth of new book formats, and as a consequence, some companies have responded to this by spread outing printing rights and including holding digital formats. Books have besides been besides digitized for on-line libraries. Even though most on-line libraries require subscription, there is a turning job of the issue of right of first publication ; Digital books can be copied and transferred to another user for free ; hence, there have besides been instances in which e-books have been pirated.

Developments in the production methods have besides affected the industry in a sense that print-on-demand engineering has besides caused the outgrowth of self-publishing ( ‘Books and Printing – United Kingdom’ , 2003 ) . Although self-publishing is still limited when it comes to measure, acquiring published is no longer a immense job since anyone can acquire himself or herself published through these agencies. Another progressively popular signifier of acquiring published is through online ; web logs have allowed Web publication, and self-publishing online company, Lulu.com, has made printing possible for endeavoring writers ( seeSmasher, www.lulu.com ) .

3. Industry Analysis – PESTEL

3.1 Using the PESTEL Analysis

The PESTEL analysis is an effectual tool to analyze an administration or an industry within the political, economic, societal, technological, environmental and legal contexts. The analysis can give a important snapshot of the macro-environmental factors in which the company or the administration maps. Basically, a figure of elements can be cited to impact the books and printing industry in these countries, which can be besides considered to be influential to its current province and possible hereafter.

3.2 Political Factors

3.2.1 Tax

Unlike other European markets, UK books are exempt from the presently imposed 17.5 % value-added revenue enhancement or VAT. Because of this, UK consumers are more willing to pass on books, in add-on to giving the publishing houses the competitory advantage. This shows the UK government’s support for instruction and civilization, given the value that is instilled among books.

3.2.2 Pricing

Pricing has become a major issue in the book publication sector. Harmonizing to a research by Nielsen Media Research in 2003, “thevolume of books being bought in the high street is lifting much faster than the value of books being sold.“Price competition is high among UK publishing houses and Sellerss. Unlike in other markets where retail monetary value is fixed, books in the UK are capable to the company’s pricing scheme. However, the Net Book Agreement ( NBA ) , which was formulated among UK publishing houses, was established in which monetary values are fixed in order to give the retail merchants the border when it comes to explicating their ain pricing schemes. Hence, publishers’ monetary values are fixed whereas retail merchants have the autonomy to set up some books on sale or offer them at discounted rates ( ‘Books and Printing – United Kingdom’ , 2003 ) . Publishers and writers are concerned about who is gaining from the addition in the sum of books being sold. It appears that the retail merchants are gaining much more than the publishing houses and the writers.

3.3 Economic Factors

3.3.1 Global Economic Factors

The United States is the single-most of import market for UK publishing houses. China excessively presents a possible chance for the UK publication industry

The planetary tendencies in books have been influenced by the undermentioned factors:

  • English as a turning lingua franca in a figure of channels, particularly in commercialism.
  • Turning influence of international partnerships as planetary media pudding stones continue to organize.
  • Turning demand from emerging markets.

From this position it can be pointed out that globalization besides affects the book and publication industry ; in add-on to the concern partnerships among international media companies, demand for English books have increased in emerging markets although international publishing houses have been besides providing to a figure of local linguistic communication interlingual renditions because of the diverse market demand.

3.3.2United kingdomEconomic Tendencies

Harmonizing to the National Statistics, disposable income in the UK rose by 2.1 % per caput per family ( ‘Income and Wealth’ , 2006 ) . Basically, the disposable income can besides find how consumers allocate their disbursement of this income ; as explained ( ‘Books and Printing – United Kingdom’ , 2003, p. 12 ) :

In general, consumer disbursement on books has to vie with a greater pick of recreational and cultural

activities, from computing machines and electronic games ( peculiarly among work forces and male childs ) to telecasting, place picture

and the mass media. Magazine publication has been a enormously burgeoning industry over the last few old ages, and

has by and large succeeded over book publication in the conflict to win the mean consumer’s reading involvement.

Harmonizing to Euromonitor International ( ‘Books and Publishing – United Kingdom’ , 2003 ) , combined outgos on books, newspapers and letter paper increased from a‚¤8.9 billion in 1996 to a‚¤10.8 billion in 2000. Hence, it can be gathered that consumers do pass on books although this still depends on the economic capacity and the allotment of the disposable income.

3.4 Social Factors

3.4.1 Consumer Preferences

It can be observed that books today have a turning figure of genres providing to about every conceivable sub-group and other demands in the countries of DIY and self-help. Some formats have been besides successful such as books that are “packaged” ( audio plus print plus picture ) for some rubrics. There have been besides strong franchises today such as the “Dummies” and “Idiot’s Guide” , to uninterrupted series and rubrics such as Harry Potter, and chick-lits that have a figure of “parts” such as the UK Bridget Jones and Shopaholic franchises.

3.4.2 The Internet and Technology

Technology remains a cardinal issue to a figure of traditional books, and the books and printing industry continues to be affected. As antecedently mentioned, the demand for digitised content has been increasing, particularly for plants within the public sphere. Peoples have been besides trusting on the Internet for information intents, and books can be “condensed” through a figure of web sites that people can easy entree for significant information.

The universe broad web is being progressively used by established publication companies to offer added amusement and information. There has been a strong addition in the “ just-in-time ” bringing of “ must-have ” information over the Internet in combination with new content and services.

Even the magazine and newspaper publication has been impacted by engineering in the last decennary. Most of the major magazine and newspaper publication companies have launched internet-based publications. These have been launched either as stand-alone entities or as extensions of their print publications. Publishers are besides acquiring into certain market niches where information is either scarce or non-existent.

Technology is besides impacting distribution of merchandises. Assorted engineerings make it possible for publishing houses to administer their merchandises electronically. For illustration, print-on-demand engineering allows publishing houses to bring forth bound transcripts of books on demand. Digitised books free the publishing houses from the restraints of conventional production. Electronic distribution is going more popular in the proficient publication section.

3.4.3 Reading Habits

A major driver for the publication market is consumer disbursement. Clearly there is a well-established relationship between consumer disbursement on books and reading habits..

Harmonizing to Euromonitor International, although there are less people purchasing books today, those who still buy books are passing more money on these points. The surveyed figure of book purchasers in 2000 was 46.4 % , which was really a bead from the 1998 rate of 49 % ( ‘Books and Printing – United Kingdom’ , 2003 ) .

Another interesting facet is relation of gender to books ; misss read more books than male childs, and as antecedently cited, more adult females spend clip reading than males.

3.5 Technological Factors

3.5.1 The Digital Age

As antecedently mentioned, the demand for digital or e-books have been increasing. In add-on to this, people have accepted alternate signifiers of book entree such as subscribing up for on-line libraries. Technology has hence allowed the development of the book format which can now be easy uploaded online and transferred to personal appliances such as computing machines and PDAs.

In add-on to this, self-publishing is another interesting facet because there is a direct-selling scheme involved. Writers merely need to print their books by utilizing on-line self-publishing services and they do non necessitate to travel through the conventions of traveling to a publishing house. Although self-publishing has yet to pick up, it is interesting to expect how this new technological sector will finally execute.

3.6 Legislative

3.6.1 Copyright and Intellectual Property

The digital environment airss many challenges for right of first publication proprietors by interrupting the equilibrium between assorted involvement groups in footings of accessing and reproducing copyright stuff. Although some books have been long protected by right of first publication and rational belongings Torahs, there remains to be the issue of rights and royalties. The conventional rights of the writer are vested to him or her for the whole continuance of the author’s life plus 70 old ages after decease ( ‘Books and Printing – United Kingdom’ , 2003 ) . Intellectual belongings and right of first publication in the UK is strongly respected which are enumerated under the Copyright, Designs and Patents Act 1988. In add-on to this, there are the relevant EC directives and international treatises, and the more vulnerable protection during the “Digital Age” through the Digital Millennium Copyright Act. However, due to germinating engineering, copyright break can happen in a figure of ways:

  • easiness of copying and reproduction is greatly enhanced by digital engineering ; The increasing usage of sophisticated copying machines poses new jobs to the demand of publishing houses and writers to protect their belongings.
  • transcripts are the same quality as the original ; and
  • re-use of stuff is facilitated by the cyberspace and the networked environment.

This easiness of reproduction and airing threatens the traditional concern theoretical account in the publication industry. In the yesteryear, the figure of transcripts that could be made from published plants was limited. Digital engineering means people can now administer right of first publication content easy and cheaply when they have no right to make so. Further, that content, because of the quality of the reproduction, competes straight with legitimate content.

Policy shapers need to equilibrate the desire of right of first publication proprietors to command and protect their right of first publication works with the demands of consumers for entree to those plants.

Therefore, right of first publication will be an of import constituent to the books and printing industry of the hereafter.

3.6.2 Market Regulations for New Entries

The UK is extremely unfastened to market entrants, including possible concerns from foreign multimedia pudding stones ( ‘Books and Printing – United Kingdom’ , 2003 ) . For illustration, Macmillan and Random House are both owned by German companies. Similarly in 2004 there was an acquisition of Hodder Headline from WH Smith by the Gallic publishing house Hachette Filipacchi in 2004.

3.7 Environmental

3.7.1 The Issue of Paper

One of the chief environmental concerns today is the development of natural resources. Paper is a premier stuff of books, and because of this, environmental groups such as the Greenpeace has been maintaining ticker as to how publishing houses expeditiously use its paper resources. Although non all books in the UK are printed on 100 % recycled paper, there have been fluctuations and options which combine efficiency and “green publishing” . Canada and Germany have started on this green moving ridge by publishing some of their books on 100 % recycled or partly recycled-partially FSC-approved stuffs. In the UK, one of the recent developments is that the much-anticipated concluding episode of the Harry Potter series is traveling to be printed in the UK utilizing certified sustainable stuffs ( Bullough, 2007 ) . A 6-8 % rise in paper monetary values in 2006 due to lifting energy costs will badly impact little publishing houses in the UK

3.7.2 Other preservation steps

In 2005, the UK has launched Book Aid International, an version of the US Book Crossing. Book Aid International is an enterprise to go around books “for free” by go forthing them on public topographic points to be read by others ; these people, in bend, will besides go forth the book for others to read. Although there is a strong cultural saving component in this plan, under Book Aid, books are preserved for more users and readers, hence, the environmental component lies in the full use of the book.

4. Industry Analysis – Porter’s Five Forces Model

4.1 About Porter’s Five Forces Model

Porter’s Five Forces Model is an industry analysis theoretical account in which it assesses how a company or administration is affected by these identified five forces: competition, supplier power, purchaser power, menaces of replacements, and barriers to entry. Since this paper examines an industry, this theoretical account can be used to exemplify the current position of the industry and finally, set up its future waies.

4.2 Competition

Competition is high in the books and printing industry, with the competition bing among publishing houses and retail merchants ; there is besides the instance of viing for endowment. In this instance, ordinance is implemented chiefly on pricing schemes, although involved parties are provided with certain borders in order to set their ain pricing.

4.3 Supplier Power

There are two chief elements that determine the supplier power of the industry: handiness of resources and the labour power. In this instance, there are the possible jobs for the industry. Environmental concerns have led to the strong indorsement for controlled paper merchandises. Furthermore, as antecedently mentioned, the industry has been worsening in footings of employment, in add-on to the deficiency of professional developments and accomplishments in the industry.

However, the industry requires new accomplishments for the staff, from the creative activity of content to its use in the most complex of digital environments. These new accomplishments will necessitate to be integrated into printing concerns to enable them to run into client demands and vie efficaciously in a planetary market place. Merely suppliers holding the right combination of accomplishments will boom. Publishers need to develop and spread out the accomplishments of their staff to cover countries antecedently considered to be outside the scope of publishing houses.

4.4 Buyer Power

The influence of purchasers to this industry is non as strong in a sense that publishing houses still publish endowment they believe in. However, it can be observed through certain publication tendencies that publishing houses are going more antiphonal to purchaser demand. For illustration, when “chick-lit” became strong because ofBridget Jones’s Diary, a figure of other similarly-themed books emerged in the market. Other tendencies include the uninterrupted success of franchise DIY and other successful rubrics.

4.5 Menaces of Substitutes

Book publishing houses compete for the leisure clip of their traditional clients with overseas telegram telecasting, VCRs, picture games, multimedia merchandises, and the Internet. The menaces to this industry are chiefly based on how people will pass their disposable income and their relevant wonts and forms. So far, this can be seen in the studies as to how people spend their clip, in add-on to the figure of people who buy books. Although gross revenues have been positive, purchaser count really decreased, and reading as a avocation has been unstable in the past old ages due to other leisure activities such as telecasting, sports/hobbies, socializing and the Internet. The Internet can besides function as a particular menace as people will most likely read stuff uploaded online for free instead than purchase a book.. In add-on to this, there is besides a menace from alterations in engineerings. Many book publishing houses respond to these challenges by cutting costs, streamlining operations, following new engineerings, and look intoing the marketing potency of electronic merchandises such as CD-ROMs and on-line information bringing.

4.6 Barriers to Entry

Most of the major participants in the book publication market are merely little parts of immense media corporations. Due to the proliferation of smaller publishing houses, the book publication industry is non extremely concentrated compared to other industries. In many classs there are comparatively few barriers to entry. There are no unequivocal barriers to entry in this industry other than the strong enforcement of right of first publication and rational belongings patterns.

5. Decision

To reason, the tendencies and chances of the books and printing industry in the UK can be summarised as follows:

  • The industry continues to hold an optimistic mentality due to the uninterrupted demand for books despite the lower figure of people purchasing them.
  • Cited market tendencies can find the hereafter of the industry.
  • Globalization can be considered as a turning component that can finally find the planetary success of the industry.
  • Diversification when it comes to genre, market, sections, and format can be deemed critical to the future success of the industry, in add-on to specific market integratings and schemes that need to be applied such as the combination with other signifiers of media.
  • The rights of the writers need to be to the full emphasised and implemented.
  • The Internet and engineering makes up a important part of the hereafter of the industry.
  • Mainstream markets are traveling to derive on more force such as bookshop ironss and the Internet because of the strategic pricing and selling schemes utilised by these companies.

In appraisal, alterations in the book and publication industry are traveling to be significant when it comes to penchants, the concern model and the switching demands. Although book formats have been discussed, their influence does non give a full warrant that physical books will to the full disappear in the old ages to come. On one manus, because of printing concerns, more sustainable steps are traveling to be practiced, which can besides give rise to the increasing demand for digital books.

In order to keep the success of the industry, the following are the formulated recommendations:

  • Diversification in merchandises, rubrics and mark markets – it is of import for publishing houses to diversify its merchandises, rubrics and markets because more and more people are cognizant of their demands and desires as a consumer. Since the Internet can supply them any information they want, books need to be antiphonal to these built-in societal alterations in which the publication universe is threatened by the “easy” entree provided by engineerings. In add-on to this, UK publishing houses should non overlook the potency of the emerging markets, which can give these markets the chance to acquire exposed to UK-based books and at the same clip, have the plants of these markets showcased with other UK-books.
  • Selling and scheme – the industry needs to be strategic, non merely in the concern side of the industry but its societal elements as good. Since purchasers have more power when it comes to finding how they want to pass their clip and where they want to pass their disposable income on, publishing houses should go on to market and back strategically the importance of reading. In consequence, publishing houses should besides do accommodations based on the consumer demands.
  • Bing pro-active with alteration – the industry needs to enforce certain criterions harmonizing to critical alterations in the universe today. This includes the use of engineerings and at the same clip, the lovingness for the environment. Hence, the industry can hold an industry-wide pattern of sustainability, which can besides positively impact the society.

Mentions

  • ‘Book Publishing.’Encyclopedia of Global Industries. Online Edition. Thomson Gale, 2007. Reproduced in Business and Company Resource Center. Farmington Hills, Mich. : Gale Group. 2007. hypertext transfer protocol: //galenet.galegroup.com/servlet/BCRC
  • ‘Books and Printing – United Kingdom’ . 2003, April.Euromonitor International. Bullough, O. 2007, Mar. 21. ‘Boy charming bends green’ .Guardian Unlimited. [ Online ] Available at: hypertext transfer protocol: //books.guardian.co.uk/harrypotter/story/0, ,2039221,00.html
  • ‘Income and Wealth’ , 2006.Office for National Statistics. [ Online ] Available at: hypertext transfer protocol: //www.statistics.gov.uk/cci/nugget.asp? id=1359
  • ‘Lifestyles’ . 2004.Office for National Statistics. [ Online ] Available at:

hypertext transfer protocol: //www.statistics.gov.uk/CCI/nugget.asp? ID=440 & A ; Pos=2 & A ; ColRank=2 & A ; Rank= 208

  • Nagle, R. 2007, Feb. 5. ‘Ebook Statistics + PG p2p’ .TeleRead: Bring the eBooksHome. [ Online ] Available at: hypertext transfer protocol: //www.teleread.org/blog/ ? p=6155
  • ‘Time Use Survey’ . 2006, July 20.Office for National Statistics.[ Online ] Available at: hypertext transfer protocol: //www.statistics.gov.uk/CCI/nugget.asp? ID=7 & A ; Pos=4 & A ; ColRank=2 & A ; Rank=17
  • UK Printing Industry 2004 – Market Research Reports, Available at www.researchandmarkets.com/reportinfo.asp? report_id=54436
  • UK Printing Industry 2004 – Market Research Reports, Available at hypertext transfer protocol: //www.researchandmarkets.com/reportinfo.asp? report_id=340227
  • DTI Publishing Reports, Available at hypertext transfer protocol: //www.dti.gov.uk/sectors/publishing/index.html
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