European Media Markets 2023: Student White Paper #2

The European Books Market: Challenges and opportunities after COVID-19

Paula Budge Liceti, Marlene Simonini and Jewel Islam Hedayetul  

Editor: Marlen Komorowski

The book market is one of Europe’s biggest cultural sectors, with a total market value of around €36-38 billion. The entire book value chain (including authors, booksellers, printers, designers, etc.) employs more than half a million individuals, according to the 2018 report of the Federation of European Publishers (FEP). Moreover, about 500,000 new titles are released per year, designing in this way an extremely variegated industry.^[1] While the COVID-19 pandemic undoubtedly posed great challenges for the sector, it also allowed it to find creative solutions for its distribution chain, the growth of new formats and the possibility to reach new audiences. This White Paper highlights the challenges and opportunities of the book sector after COVID-19. To provide a comprehensive analysis, we integrated insights from an interview with Enrico Turrin from FEP, as well an extensive review of the European recovery actions.

1.   The impact of COVID-19 on the book market in Europe

The global bookselling markets were not indifferent to the COVID-19 pandemic, which demanded a creative response to a harsh sales decline, prompted mostly by preventive measures to fight the pandemic. Booksellers, as the last link in the distribution chain but also at the forefront of customer relationship, were exposed to this new unpredictable situation, being directly affected by consumer behaviour changes driven from lockdowns. Non-essential shops (including bookshops) had to close their doors in the UK, Germany, France, Spain, Italy, Greece, Bulgaria, and Belgium, among other countries. In addition, public events such as book fairs were cancelled during that time. The annual literary meetings in Paris, London, Bologna, Prague, Antwerp, Tallinn, Thessaloniki, Budapest, Turin, Gothenburg, Lisbon, and Rome, to name a few, had to be postponed. Even still in 2022, the Leipzig Book Fair was not taking place for the third consecutive year.^[2]

The postponement or cancellation of new titles was another major factor that affected revenues in the book market during COVID-19. It occurred after a series of costs had already been incurred (rights acquisitions, translations, promotion, logistics and so on). Additionally, postponing leads to a new fear: the following years being affected by crowding of new releases and further delays and cancellations, affecting the overall production for years to come. Finally, as the global economy was struggling due to consecutive lockdowns and restrictions, booksellers and publishers have also been impacted by supply shortages. Consequently, export volumes and disruption of the supply chain also affected the operations of some publishers.

Due to these factors, we can see how the book sector has been highly impacted by COVID-19. While more than 50% of European countries have seen a general decrease in book sales during 2020, traditional physical book shops were the most affected. According to the Swedish Booksellers Association, book sales in physical bookstores still declined by 19% in 2021, despite bookshops being open in Sweden in that year.^[3] As reported by the Association of Czech Booksellers and Publishers, the total inter-annual decrease of sales in the bookselling industry amounted to about 10% in their country. Small bookshops without an online shop, as well as bookshop chains operating their shops in shopping malls, experienced a decrease amounting to even about 30%[4]. In cases where total lockdowns were in place in Europe, the sales in bookstores dropped between 75-95% in 2019 alone.^[5]

According to the European and International Booksellers Federation (EIBF) which surveyed seventeen national booksellers associations, 88% of bookshops had to close at least once during the lockdown. Furthermore, the sector experienced that many bookshops had to stop operation in 2021 across Europe.^[6] The Marskramer, Novy and Prima stores of the Dutch family bookshop chain Audax Group were all up for sale in 2021. Also, Blackwell, a family bookshop chain with 18 shops operating for 143 years in the UK, was up for sale in 2022.^[7] Albeit lockdowns were lifted, and local economies started to resume their normal operations for most of 2021, some traditional books stores still struggled in 2022. In Spain, Pérgamo bookstore, the flagship of Spanish bookstores and the oldest in Madrid, announced its closure in April 2022 (it was lastly purchased by a private businessman, who refused to close the bookstore in the end).^[8]

Different segments of markets were affected in different ways, however. For example, for obvious reasons, travel books were mostly erased by the market. One of the “winners” was certainly children’s books, which performed better than average in almost all countries where data is available.^[9] Although e-books could be seen as the “go-to” format during the pandemic, they still only account for about 18% of the European book market, with exceptions on Nordic countries, where they can reach 50% of total book sales. In most countries, e-book and audiobook sales increased significantly. However, digital sales did not compensate for the loss of physical stores.[10]

2.   Creativity and digitization to overcome the impact of COVID

We could see that the book market explored digital opportunities during COVID-19. For example, book events and book clubs moved online. Despite the lockdown, many bookstores strengthened their online presence finding other creative ways to reach their customers. For example, some bookstores experimented by collaborating with food delivery apps to allow customers to order and receive books (examples can be found in China and the UK).^[11] In this sense, small independent bookstores found more creative ways to still reach their customers, who in turn “also wanted to support their local stores” as Enrico Turrin, spokesperson from FEP, commented. The Swiss Booksellers and Publishers Association found that small bookshops in Switzerland expanded their online shops and many customers remained virtually loyal to them during COVID-19.^[12]

A relatively new digital format also gained popularity during COVID-19 times and experienced a steady growth during the last three years: the audiobook. In fact, while work moved to the domestic environment, people gained more free time, which provided more opportunities to listen to audiobooks. A study conducted by the Stockholm School of Economics argued the ‘need for companionship’ was a significant factor for reasons to listen to audiobooks.^[13] Enrico Turrin, from FEP, commented that “it seems that audiobooks have really managed to also open a new segment of audiences. And it is a different way of consumption: a lot of people listen to them while commuting, buying groceries, or driving a car. This new format also represents some challenges in terms of production, but it is a format that will continue to gain relevance in the near future”. It is also worth highlighting that this format does not require expensive hardware, as audiobooks can be consumed in almost any smartphone.

Overall, the recovery of the book sector after the pandemic is driven by digital formats, digital retailing, and new types of publications, such as audiobooks and interactive books. Digital subscriptions have also started to become more relevant.^[14] It is expected that digital distribution channels will become more and more important also in the future driven by the changes in 2019-2020 and later (see Figure 1).

3.   Policies and initiatives as a response to COVID

The European Commission established the Recovery and Resilience Facility (RRF) to assist European economies in recovering from the consequences of the epidemic.^[15] The RRF is an instrument to finance a set of reforms and investments all throughout the EU’s 27 member states. It went into effect on February 19, 2021, and provides a total of €723.8 billion in loans and grants to EU nations till 2026. To 2022, 14 of the 27 of the member states had designated the cultural sector as a priority in their plans, indicating that financial support would be allocated to a variety of strategies and initiatives to help their local cultural sectors thrive.

Also on national level, more and more initiatives aim to support the local book markets. For example, Romania foresees €4 million investment for the digitization of book businesses, and France wants to boost the regional role of 10,500 bookstores by increasing their competitiveness vis-à-vis platforms with a €53 million investment, according to the EIBF.^[16] For the FEP, it is crucial to also support the demand side of the market. Enrico Turrin commented that “for example the Italian government has put in place very good policies such as a bonus for people who turn 18, that get a bond of €500 to spend in cultural activities. There’s something similar in France. And I think they’re considering that in Spain”.

Other policies and initiatives include, for example, the EIBF’s new training and networking program titled ‘Resilience, Innovation and Sustainability for the Enhancement’ funded by the EU.^[17] Furthermore, the EU’s Economic and Financial Affairs (ECOFIN) ministers concluded an agreement on April 5t, 2022 to alter and modernise Directive 2006/112/EC on VAT rates. The main benefit of this rule is that printed books and e-books will be qualified for a reduced, super-reduced, or even 0% VAT rate in all EU Member States based on the willingness of the respective national governments.

4.   Conclusion

Although COVID-19 had great impact on the total book value chain, we could see that 2021 and 2022 are already marked by a steady recovery for the sector. This was possible thanks to the creativity and adaptability in terms of utilizing digitization. In this context, audiobooks not only became an alternative, but also allowed publishers to reach new audiences during the pandemic. New policy interventions and initiatives might further boost the book market in Europe in the future.

Footnotes

[1] https://culture.ec.europa.eu/sectors/books-and-publishing

[2] https://www.dw.com/en/how-the-cancellation-of-the-leipzig-book-fair-affects-publishers/a-52647335

[3] European and International Booksellers Federation. (2022). Northern European Bookselling Markets in 2021.

[4] https://europeanbooksellers.eu/press/launching-2021-global-bookselling-markets-report

[5] http://www.aldusnet.eu/k-hub/impact-pandemic-publishing-europe/

[6] http://www.aldusnet.eu/k-hub/impact-pandemic-publishing-europe/

[7] https://www.theguardian.com/books/2022/feb/01/family-blackwells-bookshops-for-sale-sign-waterstones

[8] https://www.elmundo.es/madrid/2022/04/14/6256e023fdddff487e8b45e5.html

[9] Anne Bergman-Tahon, Consequences of the covid19 crisis on the book market, Federation of European Publishers

[10] http://www.aldusnet.eu/k-hub/impact-pandemic-publishing-europe/

[11] https://europeanbooksellers.eu/press/bookselling-times-health-emergencies

[12] European and International Booksellers Federation. (n.d.). Central European Bookselling Markets 2021.

[13] https://europeanbooksellers.eu/press/northern-european-bookselling-markets-2021-despite-overall-growth-bookshop-sales-numbers

[14] https://europeanbooksellers.eu/press/national-recovery-and-resilience-plans-how-do-they-help-booksellers

[15] https://commission.europa.eu/business-economy-euro/economic-recovery/recovery-and-resilience-facility_en#rrf-supported-projects-in-the-member-statesa

[16] https://europeanbooksellers.eu/press/national-recovery-and-resilience-plans-how-do-they-help-booksellers

[17] https://europeanbooksellers.eu/press/announcing-rise-bookselling

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