The U.S. Book Market: Trends and Demographics in 2016

I. What are the most important trends on the U.S. book market in 2016?

The United States are home to the world’s largest market for books, with stable sales over the past few years: In 2015, the U.S. book and journal publishing industry generated $27.78 billion in net revenue, slightly down by 0.6% from $27.96 billion in 2014 (Association of American Publishers (AAP) StatShot Annual survey). At the same time, unit sales have slightly increased by 0.5% to 2.71 billion units sold in 2015 (AAP).

Within this relatively stable overall market, three major trends are currently impacting the future of the U.S. book market:

a) Decline in electronic book sales. After years of uninhibited growth, the U.S. eBook market appears to be contracting. While eBooks still accounted for 21% of all books sold in 2013, their share fell to 17% of all book sales in 2015, representing $2.8 billion in revenues (Forbes). As the main reason, researchers at the Codex Group identified “digital fatigue,” with 37% of 18-to-24-year-old book buyers stating that they want to spend less time on digital devices.

b) Increase in independently published books. While U.S. eBook sales from “Big Five” publishers (Penguin Random House, HarperCollins, Simon & Schuster, Macmillan, and Hachette) have slowed, another category is picking up momentum: Independently published eBooks, or “indie books” published on platforms such as Amazon Kindle. According to the September 2015 Author Earnings Report, “non-traditionally-published” books constituted nearly 60% of all Kindle ebooks purchased in the United States , and represent 40% of all consumer spending on Kindle ebooks.

c) Rise of audio books. While sales of printed and eBooks are under pressure, the category of downloadable audio books (mostly in MP3 format), is seeing immense growth. According to the Association of American Publishers, sales of digital audiobooks rose by 35.3% in 2015. Beyond the U.S., the global market for audiobooks is estimated at $2.8 billion, with 43,000 new titles released in 2015 alone (eReader survey).

II. Target groups: How do book readers vary in terms of education and social stratification?

Women, young adults, and people with a higher education are the most avid readers in the United States. This is the result of a 2015 study by the Pew Research Center conducted among adults in the U.S. that found:

Gender was a major factor for readership. 77% of women had read at least one book over the 12 month period before the study, compared to 67% of men. Women also had the highest preference for eBooks at 29%.

Ethnic background slightly affected readership, with 76% of Whites having read at least one book, compared to 66% African-American and 59% Hispanic respondents.

Education was the most significant factor affecting readership: Only 34% of respondents with below high school education had read a book and only 4% had read an eBook during the survey period. Meanwhile, 61% of high school graduates and 90% of respondents with college education or above had read a book.

Household income also played a role, with readership in households with incomes below $30,000 per year at 60%, compared to 86% in households earning above $75,000.

III. International perspective: In what ways does the U.S. book market differ from the book market in Germany?

The German book market differs significantly from the United States, mainly in terms of the relatively low proliferation of electronic books. In 2015, eBooks only accounted for 4.5% of all book sales in Germany – compared to a 17% share in the United States – according to the annual report of trade organization Boersenverein Deutscher Buchhaendler.

The main reason for the low share of eBooks in Germany lies in legal constraints: According to the Buchpreisbindungsgesetz (German law governing resale prices of books), eBook prices need to mirror price points for print editions. These regulations effectively thwart pricing strategies by eBook powerhouses such as Amazon, who frequently offer eBook versions of best-selling print books at less than half the price. According to Fortune magazine, Amazon drove aggressive growth for its Kindle e-reader by offering popular eBooks at $9.99, a practice which has since come under pressure by competitors.

The share of online book sales in Germany was estimated at 17.4% and EUR1.6 billion in 2015 (Boersenverein Deutscher Buchhaendler), compared to 37.4% of the market in the United States according to the Association of American Publishers. In Germany, a whooping 48.2% of book sales came from physical stores, compared to only 26.2% in the U.S.

As an interesting side note, based on population size, the Germans can be said to be more avid readers than their American counterparts: With a population slightly over 80 million people according to the most recent census (2011 census), Germany spent over EUR9.19 billion – or $10.06 billion – on books in 2015 (Boersenverein Deutscher Buchhaendler). By comparison, the United States with a population estimated at 320 million people – four times the size of Germany – spent $27.78 billion on books in the same period. Per capita, this represents about $125.70 spent on books in Germany in 2015, compared to $86.80 per person in the United States.