About this report
 
About the market…
 
This report is essentially three reports in one as it covers three distinct markets, namely, book, music and video retailing. The three product categories are often grouped together under the heading of “cultural goods” and while the three sectors have enjoyed varying degrees of success over the last five years, the products share certain similarities that justify our decision to include them in one report title.
 

 
The UK book, music and video market grew by almost 45% between 1999 and 2003. This remarkable increase was driven by strong growth in the video sub-sector, which was fuelled by strong consumer demand for DVDs. Additionally, consumer spending on books rose by 33% in the last 5 years. But who has won this share of spend, the specialists or the non-specialist?
 

 
The UK music market has continued to out-perform the global music market, which has been in decline for a number of years. A decline partly attributable to the proliferation of illegal music downloading and file sharing. The opportunity for growth in the UK music does however look promising if players can tap into the market of paid-for music downloads.
 

 
About Mintel’s research…
 
Pooling together the most innovative consumer research and latest market analysis, Mintel's new report offers you all the insight and inspiration you need for designing clever, creative and profitable business strategies in the UK market. Use Mintel's research to:
 

 
Develop your sales strategies to win share of developing new markets
 
Discover what consumers think about purchasing books, music and videos
 
Switch UK book browsers, to book buyers
 
Pin point market potential before your competitors
 
Find out how to best reach key audiences with the most effective marketing communications
 
Track the sales performance and trading strengths and weaknesses of the market’s leading retailers
 
Measure market forecasts and build realistic business models.
 
Intriguing findings include…
 
Women are more likely to have bought a video in the last year than men
 
In 2003, data would suggest an average book price of £7.39
 
Our research showed that over a third of consumers questioned hardly ever bought CDs, while 21% revealed that they bought a lot of CDs.
 

Contents
 

 
Executive Summary – UK
 

 
DVD boom drives strong growth in books, music and video market
 
Buoyant book market as non-specialists continue to take market share
 
Beleaguered UK music market continues to struggle but outperforms global downturn
 
Music downloads expanding rapidly in line with installed base of technology
 
HMV Group leads the market
 
Report Scope
 

 
Definitions
 
Booksellers
 
Music retailers
 
Video retailers
 
Home shopping retailers
 
Technical notes
 
Financial definitions
 
Currencies
 
Figure 1: Exchange Rates: National currencies against the Euro, 2002-04
 
Country codes
 
VAT
 
Figure 2: Europe: Standard VAT rates, 2004
 
Other abbreviations
 
Background Data – United Kingdom
 
Population
 
Figure 3: UK: Population trends, 1999-2003
 
Figure 4: UK: Population, by age group and sex, 2003
 
Figure 5: UK: Households, 2003
 
Figure 6: UK: Regions and major cities, 2002
 
Economy
 
Figure 7: UK: Gross domestic product, 1995-2003
 
Figure 8: UK: Consumer prices, 1997-2003
 
Figure 9: UK: Consumer expenditure, 1995-2003
 
Figure 10: UK: Detailed breakdown of consumer expenditure, 1999-2003
 
The UK Book, Music and Video Market
 
Market value and trends
 
Figure 11: UK: Books, music & video market, 1999-2003
 
Other market data
 
Figure 12: UK: Consumer spending on books, music & video, 1999-2003
 
Figure 13: UK: Spending on books, music and video as % of total spending, 1999-2003
 
2004 data
 
Figure 14: UK: Consumer spending on books, music and video, first three quarters, 2003-04
 
UK Book, Music & Video retail sales
 
Figure 15: UK: Retail sales by commodity, 1997-2002
 
Figure 16: UK: Retail sales of books, newspapers and stationery, 1999-2004 (e)
 
The UK book market
 
Figure 17: UK: Consumer spending on books, 1999-2003
 
Channels of distribution
 
Figure 18: UK Book market, estimated channels of distribution, 2003
 
Outlets
 
Figure 19: UK: Book, newspaper & stationery retailers’ outlets, 1999-2003
 
The UK music market
 
Market size
 
Figure 20: UK: Sales of pre-recorded music by format, 1999-2003
 
Channels of distribution
 
Figure 21: UK music market: Estimated channels of distribution, 2003
 
Outlets
 
Figure 22: UK: Number of music outlets by type, 1999-2003
 
The UK video and DVD market
 
Market size
 
Figure 23: UK: Video market by main category, 1999-2003
 
Figure 24: UK: Video & DVD market, by format, 1999-2003
 
Channels of distribution
 
Figure 25: UK video market: Estimated channels of distribution, 2003
 
Consumer Trends
 
Introduction
 
Book buying and visiting bookshops
 
Figure 26: Number of books bought in the last 12 months in Great Britain, by gender, age, family income and region, 2004
 
Figure 27: Visiting bookshops, reading and buying books in Great Britain, by gender, age, family income and region, 2004
 
Music buying
 
Figure 28: Purchasing of CDs, DVDs and mini discs in the last 12 months in Great Britain, by gender, age, family income and region, 2004
 
Video & DVD buying
 
Figure 29: Purchasing of any videotapes or DVDs in the last 12 months in GB, by gender, age, family income and region, 2004
 
The Consumer
 

 
Key consumer findings
 
Books, music & video
 
Books
 
Music
 
Video (DVD)
 
Books – Channels
 
Specialists continue to dominate…
 
Figure 30: Outlets used for buying books in the last 12 months, the retired lifestage & ABC1 retired special group, by major channel, March 2005
 
The rise of the supermarkets
 
Figure 31: Outlets used for buying books in the last 12 months, by outlet type, March 2005
 
The Amazon Effect
 
Book clubs successful at reaching older consumers
 
Missed sales and new opportunities
 
Figure 32: Outlets used for buying books in the last 12 months, by gender, age and socio-economic group, March 2005
 
Books – retailers
 
WH Smith continues to draw in book buyers
 
Figure 33: Outlets used for buying books in the last 12 months, by outlet, March 2005
 
Waterstone’s dominates the specialist sector
 
Figure 34: Outlets used for buying books in the last 12 months, by gender, age and socio-economic group, March 2005
 
Ottakar’s strategy proving successful
 
Borders’ urban stores finding favour with affluent consumers
 
Woolworths attracting younger book buyers
 
Figure 35: Outlets used for buying books in the last 12 months, by gender, age and socio-economic group, March 2005
 
Supermarkets converting food shoppers into book buyers
 
Figure 36: Outlets used for buying books in the last 12 months, by gender, age and socio-economic group, March 2005
 
Music
 
Specialists still the leading channel for music
 
Supermarkets limited offer delivering dividends
 
Figure 37: Outlets used for buying CDs or other pre-recorded music in the last 12 months, by major channel of distribution, March 2005
 
Internet players have lower penetration in music than in books
 
Missed sales & opportunities
 
Figure 38: Outlets used for buying CDs or other pre-recorded music in the last 12 months, by gender, age and socio-economic group, March 2005
 
Retailers
 
HMV is music market number one
 
Figure 39: Outlets used for buying CDs or other pre-recorded music in the last 12 months, March 2005
 
WH Smith – broad appeal or lack of focus?
 
Figure 40: Outlets used for buying CDs or other pre-recorded music in the last 12 months, by gender, age and socio-economic group, March 2005
 
Woolworth’s finds favour with women
 
Almost half of ASDA food shoppers buy music in-store
 
Figure 41: Outlets used for buying CDs or other pre-recorded music in the last 12 months, by gender, age and socio-economic group, March 2005
 
Internet players appeal to a surprisingly broad range of music consumers
 
DVDs/videos
 
Supermarkets the main channel for DVD buying
 
Specialists slip to second place
 
Figure 42: Outlets used for buying DVDs/videos in the last 12 months, by major channel of distribution, March 2005
 
Internet players weaker in DVD market than in books or music
 
Figure 43: Percentage of consumers shopping on the Internet for books, music & DVD/video, March 2005
 
Missed sales & opportunities
 
Figure 44: Outlets used for buying DVDs/videos in the last 12 months, by gender, age and socio-economic group, March 2005
 
Retailers
 
HMV leads Virgin in the specialist stakes
 
Figure 45: Outlets used for buying DVDs/videos in the last 12 months, by gender, age and socio-economic group, March 2005
 
High street generalists under-perform the market?
 
Figure 46: Percentage of consumers shopping at WH Smiths and Woolworths for books, music and video, March 2005
 
Figure 47: Outlets used for buying DVDs/videos in the last 12 months, by gender, age and socio-economic group, March 2005
 
ASDA & Tesco dominate supermarket DVD retailing
 
Internet players attracting younger consumers
 
Figure 48: Outlets used for buying DVDs/videos in the last 12 months, by gender, age and socio-economic group, March 2005
 
The Consumer – Detailed Consumer Demographics
 
Figure 49: Outlets used for buying books in the last 12 months, by lifestage and Mintel’s Special Groups, March 2005
 
Figure 50: Outlets used for buying books in the last 12 months, by lifestage and Mintel’s Special Groups, March 2005
 
Figure 51: Outlets used for buying books in the last 12 months, by lifestage and Mintel’s Special Groups, March 2005
 
Figure 52: Outlets used for buying books in the last 12 months, by lifestage and Mintel’s Special Groups, March 2005
 
Figure 53: Outlets used for buying books in the last 12 months, by region and ACORN category, March 2005
 
Figure 54: Outlets used for buying books in the last 12 months, by region and ACORN category, March 2005
 
Figure 55: Outlets used for buying books in the last 12 months, by region and ACORN category, March 2005
 
Figure 56: Outlets used for buying books in the last 12 months, by region and ACORN category, March 2005
 
Figure 57: Outlets used for buying books in the last 12 months, by media, commercial TV viewing and source of regular grocery shopping, March 2005
 
Figure 58: Outlets used for buying books in the last 12 months, by media, commercial TV viewing and source of regular grocery shopping, March 2005
 
Figure 60: Outlets used for buying CDs and pre-recorded music in the last 12 months, by lifestage and Mintel’s Special Groups, March 2005
 
Figure 61: Outlets used for buying CDs and pre-recorded music in the last 12 months, by lifestage and Mintel’s Special Groups, March 2005
 
Figure 62: Outlets used for buying CDs and pre-recorded music in the last 12 months, by lifestage and Mintel’s Special Groups, March 2005
 
Figure 63: Outlets used for buying CDs and pre-recorded music in the last 12 months, by region and ACORN categories, March 2005
 
Figure 64: Outlets used for buying CDs and pre-recorded music in the last 12 months, by region and ACORN categories, March 2005
 
Figure 65: Outlets used for buying CDs and pre-recorded music in the last 12 months, by region and ACORN categories, March 2005
 
Figure 66: Outlets used for buying CDs and pre-recorded music in the last 12 months, by media, commercial TV viewing and source of regular grocery shopping, March 2005
 
Figure 67: Outlets used for buying CDs and pre-recorded music in the last 12 months, by media, commercial TV viewing and source of regular grocery shopping, March 2005
 
Figure 68: Outlets used for buying CDs and pre-recorded music in the last 12 months, by media, commercial TV viewing and source of regular grocery shopping, March 2005
 
Figure 69: Outlets used for buying DVDs/videos in the last 12 months, by lifestage and Mintel’s Special Groups, March 2005
 
Figure 70: Outlets used for buying DVDs/videos in the last 12 months, by lifestage and Mintel’s Special Groups, March 2005
 
Figure 71: Outlets used for buying DVDs/videos in the last 12 months, by lifestage and Mintel’s Special Groups, March 2005
 
Figure 72: Outlets used for buying DVDs/videos in the last 12 months, by region and ACORN categories, March 2005
 
Figure 73: Outlets used for buying DVDs/videos in the last 12 months, by region and ACORN categories, March 2005
 
Figure 74: Outlets used for buying DVDs/videos in the last 12 months, by region and ACORN categories, March 2005
 
Figure 75: Outlets used for buying DVDs/videos in the last 12 months, by media, commercial TV viewing and source of regular grocery shopping, March 2005
 
Figure 76: Outlets used for buying DVDs/videos in the last 12 months, by media, commercial TV viewing and source of regular grocery shopping, March 2005
 
Figure 77: Outlets used for buying DVDs/videos in the last 12 months, by media, commercial TV viewing and source of regular grocery shopping, March 2005
 
UK – Advertising Expenditure
 
Total spending
 
Figure 124: UK: Books, music & video retailers’ advertising expenditure, 2000-04
 
Figure 125: UK: Books, music & video retailers’ advertising expenditure by media, 2004
 
Leading Retailers
 
Figure 126: UK: Leading books, music & video retailers, 2003
 
Market share
 
Figure 127: UK: Leading books music & video estimated market shares, 2003
 
Music downloads
 
Figure 128: UK: Leading music download websites, March 2005
 
Prospects and Forecasts
 
Figure 129: UK: Books, newspapers & stationery retail sales forecasts, 2004-09
 
Major Company Profiles
 

 
amazon.com
 
Background
 
History
 
International expansion
 
Customer focus
 
Financial data
 
Figure 130: Amazon.com: Financial performance, 2000-04
 
International division outperforms North America
 
Figure 131: Amazon.com: Sales and gross profit by segment, 2001-04
 
Figure 132: Amazon: Sales by division, 2001-04
 
Products
 
Operations and systems
 
Loyalty card
 
SWOT
 
Blockbuster
 
Background
 
Figure 133: Blockbuster: International expansion
 
Financial data
 
Figure 134: Blockbuster: Financial performance, 2000-04
 
Figure 135: Blockbuster: Revenue breakdown, 2000-04
 
Figure 136: Blockbuster: Estimated European sales by country, 2000-03
 
Outlets
 
Figure 137: Blockbuster: Group outlet data, 1999-2003
 
Figure 138: Blockbuster: European outlet data, 2000-03
 
E-commerce
 
Products
 
Figure 139: Blockbuster: Estimated European product breakdown, 2003
 
Non-European activities
 
Figure 140: Blockbuster: Non-European outlet data, 2003
 
SWOT
 
HMV Group
 
Market share
 
Background
 
Financial data
 
Figure 141: HMV Group: Financial performance, 1999/2000-2004/05
 
Outlets
 
Figure 142: HMV Group: Outlet data, 2000-04
 
Figure 143: HMV Group: International stores by country, year to April 2004
 
E-commerce
 
Music downloads
 
Products
 
Figure 144: HMV Group: HMV UK & Ireland (a) product breakdown, 2000/01-2003/04
 
Figure 145: HMV Group: HMV UK & Ireland estimated sales by product breakdown, 2000/01-2003/04
 
Figure 146: HMV Group: Asia Pacific & North America product breakdown, 2002/03 & 2003/04
 
SWOT
 
Virgin Entertainment Group
 
Background
 
UK and Republic of Ireland
 
The demise of Our Price
 
Some converted…
 
…some sold
 
Continental Europe
 
France
 
Financial data
 
Figure 147: Virgin: UK & Ireland financial performance, 1998/99-2002/03
 
Figure 148: Virgin Entertainment Europe: Financial performance, 1998/99-2002/03
 
Outlets
 
Figure 149: Virgin Entertainment Group: Outlet data, 2000/01-2004/05
 
Xpress comes…
 
…and goes
 
E-commerce
 
Figure 150: Virgin Megastore online (UK): Financial data, 2001-03
 
Products
 
Boosting depth of range
 
Loyalty card
 
Virgin Mobile concessions
 
SWOT
 
WH Smith
 
Background
 
Non-core retail activities
 
Refocusing
 
Latest developments
 
Financial data
 
Figure 151: WH Smith: Financial performance, 1999/2000-2003/04
 
Full-year performance
 
The worm turns
 
Focus on margins
 
Recent trading
 
Interim results
 
Outlets
 
Figure 152: WH Smith: Outlet data, 1999/2000-2003/04
 
Store portfolio strategy
 
E-commerce
 
Products
 
Books
 
Entertainment
 
Other
 
Loyalty card
 
SWOT
 
Mini Company Profiles
 
Borders
 
Background
 
Financial data
 
Figure 153: Borders: Financial performance, 1998/99-2003/04
 
Outlets
 
Figure 154: Borders: Outlet data, 1998/99-2003/04
 
Products
 
Britannia (Universal Group Direct)
 
Background
 
Financial data
 
Figure 155: Universal Group Direct: Financial performance, 1996-2003
 
MVC
 
Background
 
Financial data
 
Figure 156: MVC: Financial performance, 1999-2004
 
Outlets
 
Figure 157: MVC: Outlet data, 1999-2005
 
Ottakar’s
 
Background
 
Financial data
 
Figure 158: Ottakar’s: Financial data, 1999-2005
 
Outlets
 
Figure 159: Ottakar’s: Outlet data, 1999-2005