Growth in digital book sales

Russia’s invasion of Ukraine, issues with the price and availability of paper, the energy crisis: all these make 2022 stand out from the previous few years, which were strongly marked by the pandemic. The effects of the war in Ukraine changed consumer behaviour in the book business.

Poor demand, the rising price of paper and other cost increases weakened the book business’s result to a quarter of the previous year’s result.

The pandemic years 2020–2021 generated growth in general literature. People spent more time reading than in the preceding years, and sales of printed books picked up after a ten-year downswing. But the war in Ukraine brought about rapid changes.

Sales of general literature remained on par with the previous year. Although digital sales grew by ten per cent, growth had clearly slowed on the past few years. Sales of printed books saw a year-on-year fall of seven per cent. About fifty per cent of net sales in general literature came from digital publications.

In general literature digital sales grew by ten per cent.

Sales of children’s and young adult books remained on par with the previous year, but sales of non-fiction books decreased.

The best-selling author of the year was Enni Mustonen, whose titles sold more than 300,000 copies in all formats.

When Russia invaded Ukraine in late February, President Volodymyr Zelenskyy emerged as the leader of his country’s and continent’s struggle for freedom. In June, Otava quickly published a biography of this charismatic leader in the fight to defend Ukraine. 

After having firmly established themselves in the market, audiobooks have now taken a giant leap forward. March saw the publication of Samu Haber’s Forever yours deluxe, which contains more than 2,000 audio enrichments and is a perfect example of the direction in which audiobook publishing is heading. (Audio enrichments are sound effects such as music.) Haber’s book quickly found an audience, and it became one of the most listened to audiobooks of the year.

There is great potential for the use of audio enrichments in children’s books in particular. For example, music is well suited to nursery rhymes. Otava wants to add music to books and experiment with all kinds of audio enrichments.

However, developing audiobooks does not mean the end of printed books – digital and printed books will complement each other.

Inspiring new generations to take up reading is important for Otava. Otava supported children and young people’s reading by donating EUR 30,000 to the Children and Youth Foundation. The Foundation is using our donation to instill a joy of reading among children and young people, and to organise a variety of workshops at schools and kindergartens. Reading a book allows you to pause for a moment and let your imagination run wild.

Nearly 80 per cent of new sales of educational materials to upper secondary schools are already digital sales. Achieving sales growth required major investments in the operational reliability of digital services.

The expansion of the new curriculum to the second grade generated record-breaking sales for Otava Learning. Nearly 80 per cent of new sales of educational materials to upper secondary schools are already digital sales. Achieving sales growth required major investments in the operational reliability of digital services.

 Investments were also made in developing new teaching content, such as Loikka, a primary-school series for teaching Finnish as a native language that was successfully launched in late 2022. These measures halved Otava Learning’s profitability in comparison to the previous year. Otava Learning also recruited new personnel to ensure digital competence. These systematic measures are all aimed at preparing for the future.

Otava Book Printing Ltd achieved a good result in 2022. This favourable trend has been continuing for some time, and Otava Book Printing has also been able to transfer cost increases to product prices. Locally produced books are now more highly valued as well. 

A desire to save money was visible in customer numbers

2022 was a challenging year for the Trade business area. Consumers’ confidence in the economy weakened towards the end of 2022, and by early 2023 it was at its lowest since the recession of the 1990s. The negative impacts of the war in Ukraine have been most visible in the form of higher energy prices and rising inflation. Interest rates also increased sharply in the summer. 

According to preliminary data, although euro-denominated sales in the retail trade rose by about four per cent year-on-year, they fell by the same amount in quantitative terms. Christmas retail sales were also disappointing. However, growth in e-commerce has continued.

The number of bookshops continued to fall, and their share of total sales declined at a faster rate than the market in general as a result of free upper-secondary education and dwindling sales of educational materials. Suomalainen Kirjakauppa had 36 stores at the end of 2022.

Customer numbers at bookstores began to pick up slightly in early 2022 after a long period of pandemic isolation, but inflation and a subsequent desire to save money were visible by the summer months. This desire to save money affected both customer numbers and consumer behaviour at bookstores.

Consumers began to use their time differently after coronavirus restrictions ended, which led to a significant decrease in demand for domestic literature in particular.

 The impacts of rising fuel prices were first seen in rural areas and smaller towns, where people tend to live further from stores. Higher prices made customers consider their purchases more carefully, which led to a lower conversion rate, smaller average purchases, and reduced customer numbers in those areas.

Higher prices made customers consider their purchases more carefully.

However, stores in larger centres such as Helsinki, Tampere and Oulu continued their slow recovery from the pandemic.

Suomalainen Kirjakauppa took numerous measures to improve the situation, for example, by paying special attention to in-store selections. Bookstores also invested in customer service and growing product groups. Sales of growing product groups, such as children’s, creativity, leisure-time and wellbeing products, developed as expected.

A rapidly rising interest in English-language literature has made this product group a new focal area.

Fifty per cent of Suomalainen Kirjakauppa’s sales consisted of book products. 

Suomalainen Monitaito, a new service that was launched in the autumn, opened up a new online market. Suomalainen Monitaito makes online courses from a diverse range of top coaches available through a single website. It offers fun, insights and inspiration for everyday life.

The online courses are suitable for anyone who wants to learn new things, and cover topics such as wellbeing, self-development, handicrafts, and other hobbies. New courses are continually being added to the selection.  You can complete courses at your own pace in the privacy of your own home when it best suits you, and the materials can be accessed immediately after purchase.

Closer cooperation bears fruit at Otavamedia

The business environment of media was undergoing continual and major changes throughout 2022. It also affected Otavamedia’s business in many ways. 

Otavamedia continued to perform reasonably well in both consumer and media sales. Consumption of all digital content increased. Media sales were more successful than the market in general, and digital media sales overtook print media sales for the first time.

We enhanced cooperation between the editorial and sales teams, and our new ways of working were successful with regard to sales of digital services in particular. Online services for our magazines Anna and Kotiliesi broke records in terms of page loads, which increased online media sales.

Our new ways of working were successful with regard to sales of digital services in particular.

In its centenary year, Kotiliesi managed to increase subscription sales in terms of both monetary value and volume, by developing its content and engaging in closer cooperation with the consumer sales team.

The number of digital subscriptions to Tekniikan Maailma also increased by almost ten per cent thanks to closer cooperation between the editorial and consumer sales teams.

Working with the editorial team to introduce new marketing sections on websites and improve the paywall helped to increase sales of new subscriptions in our online channels. The number of subscriptions increased by ten per cent on the previous year, and by 20 per cent in monetary value.

We have continued to change the way we work, and the rules we drew up with personnel for multi-location work required updating. Our organisational changes meant that it was also time to make more economical use of our premises in Tripla.

Competence and learning development projects supported the renewal of our operations and strengthened the employee experience.

Updated practices, a greater level of activity and strict cost control helped the media business to exceed its profit forecast.

2023 will be a difficult year in both the consumer and media markets.