This report examines the UK book publishing industry. The book market in the UK is the second largest in Europe after that of Germany. Like most other book markets, the UK market is mature and is therefore growing fairly slowly in value, though in volume it is growing by around 5% to 6% a year. This report looks principally at the market for UK publishers' books in the UK, which comprises three sectors: consumer books; academic and professional books; and school books.

Key Note estimates that the value of retail book sales in 2006 was £4.24bn, which represents a 3.3% increase on 2005. Around two-thirds of the market is accounted for by consumer sales.

There are approximately a dozen very large publishing groups followed by a number of small to medium-sized companies and thousands of small publishers. The industry is dominated by the big publishing groups such as Reed Elsevier PLC, Pearson PLC, Hachette Livre UK, Random House UK, Informa PLC and HarperCollins UK. Most of these companies have very significant sales outside the UK. In the consumer sector of the UK book market, Hachette Livre UK and Random House UK are the largest publishers. Other major companies include Macmillan Ltd, owned by Bertelsmann in Germany, and Thomson Corporation PLC. Oxford University Press and the Cambridge University Press also play an important part in the market.

The percentage of adults who buy books has increased marginally. Book buying is still concentrated among those aged 30 to 50, but those aged 50 and over and teenagers have become key sources of growth. In addition, women tend to buy more books than men.

Several themes are apparent in the market. Publishers are keen to exploit the opportunities of the Internet and some of the large publishers are creating digital warehouses. It is not clear what role electronic books will play in the future, but many publishers want to be prepared for when the market in e-books becomes more obvious. They are also concerned about issues such as copyright, piracy, open access for academic research and territorial rights.

Meanwhile, educational publishing has seen its biggest shake-up in years, with a number of leading companies changing hands. Educational publishers are also the centre of attention for another reason. Many of them are registered as charities but, in 2008, new charity legislation comes into force, and it is not yet clear how this will affect charitable publishers.

Key Note forecasts slow growth in the book publishing market to 2011. However, UK publishers can take some comfort from the fact that the UK market will probably be growing at about the same rate as the book markets of continental Europe and the US.