David Riley on how characters are faring in the changing children’s book market.
The book market is changing. The recent news about the potential closure of Parragon Books is extremely sad news for staff, suppliers and customers alike, but it also underlines the shift that has been happening in the market. What’s really been going on in the children’s book market, and more specifically in the licensing business? I spoke to Scott Morton, media account manager at Nielsen Book Research to get an overview of 2017.
The total book market value in 2017 was up on 2016 by 0.2%. A whopping £1.6bn was spent on 189.8 million books in the year (down 2.7% on 2016). Within this, children’s (which accounts for about a quarter of the market) was down by 1.6% in volume and flat on value on the previous year.
However, given that 2016’s figures were buoyed up by a big slug of revenue from Harry Potter and the Cursed Child, the performance shows underlying growth. Some 94% of children’s sales came from physical books, and over half of the top ten publishers – including Macmillan Children’s Books, HarperCollins, Egmont, Hachette, Scholastic and Walker – all recorded growth.
Author brands dominated the top ten in 2017 – Harry Potter, David Walliams, Julia Donaldson, Tom Gates, Roald Dahl and Jeff Kinney’s Wimpy Kid delivered £62.5m in revenue compared to £21.8m from LEGO, Star Wars, Peppa Pig and all Disney. Not surprisingly, the biggest drivers of sales remain authors, not properties: picture books and fiction for children and young adults delivered over 60% of the entire market.
Within licensed brands, Gruffalo, Pokémon, My Little Pony, Trolls and Shopkins achieved consecutive years of growth. A genuine boost was also given to the market by cinematic properties such as Beauty and the Beast, Paddington 2, Moana, Spider-man and LEGO Batman. And new players like Centum and Bonnier are gaining ground in licensed publishing.
Here’s Helen Wicks, business development and group licensing director at Bonnier: “2017 was a pivotal year for Bonnier Publishing UK. Not only did we acquire a number of big properties including Disney and Beano, but also we established ourselves as a creative force, an imaginative content creator able to engage with a range of brands and translate them into different forms for fans.
“We look to balance our portfolio of licences between the new and the classic, combining enduring evergreens with hot, trend driven properties where timing and speed to market is all.”
Also noteworthy is the growth of non-fiction, driven by beautiful, high specification information books featuring licensed brands. This category achieved the biggest percentage growth of all in 2017. Titles featuring Minecraft, Pokémon, LEGO and Star Wars all fit this profile and with Fantastic Beasts and the Crimes of Grindelwald airing in November 2018, this category should hold up well this year.
However, the success stories of 2017 did not offset a softening of figures for the some of the biggest brands: Peppa Pig, LEGO, Minecraft and Star Wars. Big properties dominated the market, but according to Nielsen data, sales revenues were down. Nowhere is the volume slide in character books more starkly clear than in annuals which have been in steady decline for ten years.
In 2017 the number one annual (Beano) sold 134k copies and generated £541k. ASP was £4.02. Look back to 2011 and Beano was also the top selling annual, but back then it sold 181k copies and generated £766k (ASP £4.23). Look even further back to 2008 and the top seller was High School Musical. I remember it well: I published it. It sold 285k copies and generated over £1.2m. The annual was £1 cheaper than annuals today, but the ASP was £4.24 (compared to £4.02 in 2017).
It’s difficult to avoid the conclusion that the big hitters of today are generally smaller than the big hitters of yesterday. Only the top properties stand a chance in a marketplace that favours the established and the nostalgic over new, and even then licensed characters are being squeezed, just as shelf space is being squeezed.
I spoke to Sarah Bates, commercial director at Egmont, who says: “2017 was a tough year for the character book market. Our estimation puts the market down by 16% year on year. That can mostly be attributed to the performance of the top ten characters in the market. Six out of the top ten (licensed) brands in the market were in decline YOY and no new brands made it into even the top 20. The market is ever more risk averse, with retailers consolidating space and only making room for the very top licences.”
Book consumers are a relatively small percentage of the population. They expect quality but they also require value for money. Nielsen data shows that just over 30% of book buying consumers bought over two thirds of the new books bought and they did this increasingly through supermarkets, the internet and above all, bargain bookshops.
Sarah continues: “Value is a key trend at retail that is here to stay. Growth is all coming from the discount sectors and we [even] see that across multiple European markets. The reverse then is also true – when we are publishing higher end gift books, they have to be very special and supported by great marketing to persuade consumers to pay the premium. Licensors can help a great deal here by giving access to their own marketing channels.”
So what lies in store for the remainder of 2018?
For Hachette, it’s all about animals. Here’s Katie Price, licensing director at Hachette Children’s Group: “I am really excited about many of the great collectable brands on the market and am still looking for something with strong publishing potential. Cool and cute animals continue to be ‘hot’ so, although not strictly licensing, watch out for some more unicorns, llamas and other more magical animals later this year.”
For Bonnier’s Helen, meanwhile: “Our fourth quarter will see publication of a number of exciting cross-over Disney titles, aimed squarely at the trade market, celebrating the brand’s incredible illustrative heritage and storytelling.”
Egmont’s Sarah concludes: “2018 is going to be hugely exciting for us. We’ll be going dinosaur mad in the summer with Jurassic World 2 and at the end of the year we’re gearing up for what we think will be the biggest character launch in books of the year, Roblox.”
2017 was a good year for children’s books, but a tough year for characters. Will 2018 see an improvement? It’s all to play for…
For further information on Nielsen BookScan TCM UK Market and Nielsen Books and ConsumersTM please contact infobookresearch@nielsen.com
Copyright © David Riley, David Riley Consulting Limited
David is an independent publishing and licensing consultant and agent specialising in book and magazine publishing. Contact him at Davidianriley16@gmail.com for independent support and advice.
