Latest changes in the book trade
The current situation in the book trade continues to be one of rapid change. It’s important for writers to understand what is happening as it will impact on their own chances of getting their work published and how it will be published. This newly revised series looks at the changes in the book trade, with a different focus each week. First, where books are heading and what changes are taking place at the sharp end of the book trade - the bookselling world.
The major changes going on in the bookselling world are still a factor. As the world has moved towards recession the focus has gone more onto survival. The big American chains, especially Borders, have been suffering from acute financial problems and US publishers are still very anxious about Borders. It seems to have just received more financial support from its owners but has just reported a 57% drop in quarterly earnings and announced plans to close most Waldenbooks stores.
In the UK Waterstone’s takeover of Ottakars in 2006 and its current domination of the bookselling market is now old news but the chain has its own problems. Gerry Johnson, CEO, said recently that 'the recession is affecting business' and 'the first rule of business is to survive'.
Elsewhere, Borders UK is now owned by Luke Johnson, chairman of Channel 4, and it’s reassuring to know that at the time of the takeover Johnson said: ‘Books are one of the cornerstones of civilisation. They are where potentially all of human knowledge is set down. They are an ancient technology which is entirely valid today, despite the internet.’ Let's hope he still thinks this.
On the independent booksellers’ front, the decline in numbers has been inexorable, from 1,562 independents in the UK in 2005, to 1,422 in 2007. Those that survive might be doing better though, as sales through independents have grown by 2% in volume and 10% in value over that period. The 10% suggests independents are successfully selling books at a better margin, ie less discounted, than before. Just as independent publishers are starting to band together, indie booksellers are doing the same.
A funding initiative by the French government is helping French independents to survive. In the US the picture is quite gloomy, although the shakeout has meant that surviving indies have found their niche and are now more likely to survive.
Discounting has become a huge problem for everyone though, with the supermarkets wading in with loss leaders that bookshops cannot compete with. In the UK the downward trend of prices has continued, with the average price of a book falling every year over the last four years, during a time when the consumer price index has risen 11%.
2007 saw the biggest one-day international sale of any book in history with Harry Potter and the Deathly Hallows. As the doors were thrown open at midnight on Friday 26 July 2007 in 10,000 shops across the planet, it became a global phenomenon.
In the US 12 million copies were ordered in advance and 325 million Harry Potter books have been sold worldwide, only 21 million of them in the UK. In Germany 1.2 million copies of the hardback were sold in English. The five Harry Potter films to date have grossed more than $3.5 billion (£1.7 billion) and the books have been translated into 65 languages, showing that it’s a global audience, and also that books are part of a wider international entertainment business.
More recently, sales of Stephenie Meyer’s Twilight series have not matched J K Rowling’s but are nonetheless astounding - Little, Brown sold a massive 27.5 million copies of her four vampire novels last year. The focus on selling bestsellers continues apace and if anything the recession has deepened it and highlighted the importance of megasellers.
Author Celia Brayfield put her finger on it in The Times:
‘The publishing business has become a small adjunct to the global entertainment industry, a tiny fragment in the worldwide economy of screen, media and information… The role of a publisher has been reduced to sieving the primordial soup of writing for some viable blob of artistic matter that these risk-averse wealth creators can culture into a planet-buster.’
The Harry Potter saga shows that the book world has changed for good, and not in ways that necessarily make sense in relation to the simple equation of writer, book and reader.
Discounting has become a huge problem for everyone, with the supermarkets wading in with loss leaders that bookshops cannot compete with. In the UK the downward trend of prices has continued, with the average price of a book falling every year over the last four years, during a time when the consumer price index has risen 11%.
Discounting is a problem for publishers but also for authors. For instance the British supermarket chain Asda sold the last Harry Potter for £5, although the published price was £17.99. This means both the chain and the author got very little return on it, although the publisher, having refused to discount the book, made a handsome profit.
Prices like this are much less than independent bookshops have to pay to stock the book in the first place, and they make it a huge loss-leader for the supermarkets. Bookshops simply cannot compete on price with supermarkets, with their deep pockets and their determination to see low prices as just part of the battle for market share. As Will Hutton wrote in the Observer: ‘British competition rules permit supermarkets to wreck the book distribution networks so important to publishing.’
In the US the price clubs have a similar discounting effect on book prices, and cream off sales of bestsellers, which used to be the icing on the cake for booksellers.
The irony therefore is that - in the UK at least - the book with the biggest one-day sale in history did not made any money for many of those who sold it. The Harry Potter saga shows how bookshops – both chains and independents – are caught between Amazon on one side and heavily discounted supermarkets on the other.
Amazon has continued to squeeze publishers for better terms, as increasingly dominates internet sales. In the UK there’s been a doubling of book purchases through the internet, which have gone from 15% of the total to 28%.
In summary, the underlying trend in bookselling across the world is still to focus on bestsellers, rather than stocking a range of books. The effect of the recession is for publishers to cut back on their lists and try concentrate on books they perceive as having a big market. The result is that the pressure on other stock is greater than ever. This means that it’s tougher for new authors to make their way on to the shelves, and it’s also hard for published authors to make sure that their books stay in print.
Latest changes in the book trade
© Chris Holifield 2008-10