Book Trade – Trends in the Wider Market

Canadian retail blogger, PaulThinkingOutLoud was upset recently by one publisher’s website and its aggressive discounting policy. Writing in his blog – which is well worth following – he saw this as

 ‘Another example of a publisher or distributor bypassing the brick and mortar stores. Although some of this might be legitimate overstock inventory, it raises the expectation of consumers for this level of discounting to be normative, which adds to the discouragement of already battered retailers’.

In another post, Paul writes movingly of competing emotions during the closure of one of his stores. He ends with an appeal to press on towards the goal of in-store ministry.

Do you feel battered by falling sales or emboldened by spiritual opportunity? Yes, Christian bookshops continue to close, footfall is in decline, competition from online is savage and at best support from churches is patchy. Yet we are not always that well informed of current trends in the wider publishing scene. In the same way as what happens in the USA often affects the UK, the same is true of events in the general market impacting the Christian trade.

Generally speaking, our grasp of the financials on both ‘sides’ is often lacking. Retailers operate on lower margins with high fixed costs (upward only rents, rising business rates – up 2.6% again in April) whereas publishing in the main has higher margins and a far more flexible cost base. Clearly there are worries on all sides and as publishers face lower physical sales, print-runs continue to fall making the viability of mid-list titles ever more tenuous. Many publishers struggle with storing high levels of physical stock, much of which will eventually be written-down. Ironically for publishers, digitalisation represents yet more cost and a growing overhead; this, coupled with falling average cover prices (ebooks sell at half the average price of a paperback: £3.21 v. £6.31).

Our industry is a torrid place. The physical consumer book market declined by 4.6% in value in 2012, with fiction down 4.5% and non-fiction down 6.3% – only Children’s books held steady. The value of print sales slumped by £74m last year. (It could be worse – in Australia their market fell 6.3%). The marketplace churns violently in a volatile landscape; over 200 libraries were closed between 2011/12 and in another sign of turbulence, Cambridge University Press ceased print production on their Cambridge site after 400 years.

Yet 2012 saw the continued growth in digital publishing, social media marketing and self-publishing. Hive became established. Amazon’s Kindle grew faster than ever and a number of other e-readers, notably Nook, Kobo, and Nexus gathered momentum. Controversially Waterstones began to sell Amazon’s Kindle, recognising that they had neither the time nor money to develop their own platform. The Fifty Shades publishing phenomenon came out of nowhere ending the year with sales of £47.3m.

The market for ebooks was revised upwards to £300m late last year and continues to grow, albeit more slowly. Major publishers report e-sales of between 8% and 17% of overall revenue. In November, the ebook agency price probe in the USA and the EC brought a chill to the major houses as they battled against what felt like unfair external pressures. Now ebooks sell for an unsustainable 20p (a marketing idiocy pioneered by Sony) and most slots in the Kindle top 20 are populated by cheap ebooks. Nielsen data suggest that there are 7m UK ebook adopters, with heaviest use amongst ages 35-44, lowest in the under 20’s. However, the BBC reports that just as many UK adults, 7.4m or 15% of the population have yet to access the Internet.

Bookshop closures continue apace with The Booksellers Association figures documenting ongoing decline: down to 1,028 shops (2012) from 1,535 in 2005 – conversely Children’s bookshops are thriving with more opening this year. In the USA, the one surviving major bookstore chain, Barnes and Noble announced after Christmas that they expect to slim down store numbers by a third. B&N have 689 stores currently with 190-240 of these slated to close over the next decade. It’s a widely held view that the holy grail of ‘Discoverability’ is best achieved in a physical bookshop; browsing activity is their USP.

The debate over the future of our libraries is equally as fierce. The UK Government’s Sieghart ebook library lending review is yet to report but author, Terry Deary said recently: ‘Libraries have had their day. They are a Victorian idea and we are in the electronic age’. How to win friends! It’s worth noting that the PLR on printed books from library lending is more than £6m paid out to 23,000 authors. The debate remains live as people continue to ask if digital will trounce the physical book or whether in due course it will all settle down benignly?

There’s a lot of anger amongst booksellers towards the perceived lack of a level playing field. Writing in The Bookseller, Charles Tongue of the Stroud Bookshop said, ‘I believe Publishers are blindly colluding with Amazon and the result will be the destruction of High street retailing’. He was widely applauded.

I like Foyle’s of London advertising slogan; This Bookshop Will Change Your Life – no ambiguity there! Earlier this year, Sam Husain, CEO of Foyle’s sent an open letter to publishers arguing the need for better terms (an average of 60%) and increased support (promotional stock on consignment). He stated that the current bookshop model is broken, needing a complete rethink. This at a time as Foyle’s announced eight redundancies. Bravely, Foyle’s and The Bookseller have since conducted a two-day ‘Re-imagining the Future Bookshop’ workshop, held in London, allowing the trade to collaborate on what the bookshop of the future might look like. 

WH Smith continue to do a sterling job in showcasing books but even their sales fall year on year; down 7% to the end of August 2012 and down a further 6% in the 20 weeks to mid-January 2013. Another indication of the parlous state of the High Street trade is wholesaler Gardners sales results which dropped 3% to the end of February last year. Blackwell’s did improve their results last year but remain loss making.

Waterstones is far from being out of the woods with the release of poor results (admittedly pre-James Daunt) showing a £37.3m loss. I wish Waterstones well because if their 290 branches were to disappear from the High Street then it would be a very serious matter, and I might add, particularly for publishers. However, I’m encouraged for two reasons: anecdotally, people seem very warm towards the ‘W’ brand and some are switching their buying away from the mighty ‘A’. The question is, will it be enough? Waterstones iconic branding campaign last autumn was well received and this year it has plans for the refurbishment of another 60 shops.

My other reason is that when I visit Waterstones, they generally prove to be busy places and people are markedly buying books. It’s just a shame that Waterstones do not ‘do’ Christianity better and with more visibility. On a positive note, I welcome the announcement by Waterstones of the launch of its staff-training academy and Certificate in Bookselling (accredited by the University of Derby); surely a vote of confidence in its own future by a visionary book chain?

Maybe I’m pipe dreaming? After all, Amazon had overall sales in the UK in 2011 of £2.91 billion (on which they famously paid £416m UK tax). They reported Q4 worldwide revenue growth of 22% to £13bn last Christmas! Latest innovations include customer collection lockers in railway stations and newsagents. This is an immensely powerful online juggernaut and our small trade faces a very significant challenge indeed!

Yet I dare to believe that localism can prevail, customer attitudes can change and that people continue to care about their local shops – you must just hope that I am right! The demise of retailers, Jessops and Blockbuster earlier this year followed by HMV going into administration shows just how tough conditions are. Incredibly, HMV was selling 27% of all CD’s and 38% of DVD’s at the time of its demise.

I would echo Philip Downer’s (ex-Borders) comment from last year;

 ‘The old days of Borders and Ottakars will not return … Coffee, carrot cake, cards and an ebook offer are now essentials for Indies who want to stay in business and thrive for the future’. 

We have to give customers a reason to come to our shops. Why should they shop with you? I was recently handed a forward-dated 15% off voucher for a national (non-book) retailer. It worked. I visited the shop on the stated date, I used my voucher … and I bought far more than I had intended. In the Christian trade we must start thinking more creatively and connecting with customers in a very different way to the past.

Church engagement is a hugely important topic that needs far greater attention and one to which we shall return in the next issue. Many shops find difficulty in communicating with ministers. An earlier church / retail compact has seemingly broken down as leaders shop around – usually online – driven by ‘best price’ owing to the Churches’ own financial constraints. Managers struggle to venture outside their own premises due to low staffing levels or sometimes, unwillingness. And yet, somehow, retailers have to get back in touch with their core customer base – the Churches.

The days of waiting for a church to contact you are long gone. It’s often a salutary task to record daily footfall and till data – but it may just serve as the severe jolt you need in order to take action?

This article was written in early March 2013 for Together Magazine (April – May 2013)

Book Trade: Pressing Issues facing the Trade: The PA Year Book 2011

Last week the deputy editor of The Bookseller described the Book Trade as ‘Bystanders watching a race that began before we were ready’. Is this apt or just plain wrong? He was writing about the global growth of the e-reading market where the statistics continue to astonish and possibly frighten us in equal measure.

The Bookseller postulated in its leader that same week; 50/50 digital-print parity could be with us by 2020. It also posed the chilling question, ‘How many Indie and chain bookshops will remain’? 

Why such gloom? Well, the Publishers Association had released its 2011 Yearbook, containing all the sales value and unit numbers for last year. You’ll need a strong stomach to read this as for most printers, publishers and terrestrial booksellers it makes for grim consumption. On the other side of that particular coin; for self-published authors and for publishers in the eBook market, particularly in Romance or Horror, the future looks very bright indeed. In 2011, digital accounted for a sharply growing 8% of the book market.

Physical book sales declined 4.8% to £2.9bn but when you factor in the growth of the e-Market (up 55%) at £243m, the overall decline falls to 1.9% (at £3.2bn). This represents the first drop in total book sales in more than three years – not the best place for the industry to find itself. When you take inflation into account, this fall is actually much more serious. We are going backwards, not forwards. Even export sales fell, declining by 3% (£1.2bn). It’s worth noting that exports remain almost a third of all UK invoiced sales.

Sales of print fiction – the largest category of print falling victim to the e-Reader – dropped over 10% in the year, a loss of £57m. e-Fiction popularity grew strongly to £70m but by not quite enough to cover the losses in print. Non-Fiction and Reference also fell (down 4%) but these categories were not compensated at all by additional digital sales. In fact, all print categories declined apart from some growth in School and ELT sales. The value of Children’s book sales fell by 8% on the previous year (post-Twilight).

According to the commentators these are now the pressing issues facing our trade:

(1) The speed of digital migration, (2) the vexed question of ‘discoverability’ (and the related importance of browsing in a physical shop), (3) whether DRM should or should not be embraced by the industry (with strong views either way), (4) the growing dominance of Amazon and (5) the steeply falling price of eBooks online, thus devaluing books in general.

Oh, and it’s raining as well!

Note – the PA figures as published here often differ from the Nielsen BookScan figures for the UK book market. Both are correct but each takes slightly differing approaches when compiling the data – apples and pears spring to mind.

Book Trade – London Book Fair 2012: A Perspective

I attended the London Book Fair at Earls Court this week; the first time in several years. I was left with several over-riding impressions.

The Fair remains the premier International Book Fair. It was busy – very busy – with 25,000 delegates, half from overseas, attracted by the 1,500 exhibitors from 57 countries. The Bookseller suggested that the USA DoJ ruling on the Agency Model (eBook pricing) had dampened the mood considerably for rights sales.

I am very much against this ruling as it simply hands yet more power to an already menacing monopoly. I applaud those Publishers who have decided to fight this rather simplistic ruling. Amazon has already done considerable damage to our High Streets, and not just to Bookselling. It’s quite foolish to view Amazon as a consumer champion.

China – this year’s Market Focus – with their visually stunning Fair Pavilion (designed by Yang Liu). The Market Focus logo was in the shape of a hand-fan as used by the Royal Family in China 1500 years ago. LBF reported that China had sent 1,200 people (including 50 authors) representing 180 publishers – quite a commitment! So why China? Well, English and Mandarin are the two dominant world languages and China is a vast country with a 1.3billion population speaking over 50 dialects. It’s projected to overtake the USA as the world’s largest economy within the next 20 years or so, and yet paradoxically it’s still 90^th on the GDP index despite its recent spectacular economic growth.

The sheer size of the country with its many regional imbalances and huge social challenges is overseen by the pro-business centralised Government. For the Western creative industries, protection of Intellectual Property and Copyright remains the pressing issue. Good quality translation skills remain scarce.

There is the inevitable controversy over issues of censorship when judged by the ideals of liberal democracy. Indeed, the Fair’s impressive China and Europe Publishing Forum attracted a goodly number of silent placard waving protesters; ‘Free speech is not a crime’, ‘Stop literary persecution’. The London Evening Standard ran an interview this week with the Chinese author of Wild Swans in which she stated that, in her opinion, ‘Censorship in China is worse than it was 10 years ago’.

The Chinese Government oversees all media output through GAPP and it is this body which issues the requisite ISBN’s.  Since 1949, China has published around 34,000 titles of British books within China. Apparently, ¼ of all books imported into China are from the UK!  Through its 600+ Publishing Houses and with a workforce of nearly 57 thousand employees’, China has the largest publishing output in the world by volume (300,000 titles in 2009). It’s a mature and self-confident market set to generate revenues of $9.5billion in 2012. China is poised to take over from the USA in levels of scientific journal publishing.

There are 167,000 bookshops across China, with some state-of-the-art seven-story bookshops in the largest cities. The number of bricks and mortar shops is growing by almost 5% per year! The state-run chain, Xinhua (new China) has 6,483 outlets.

Why is this of any interest to us Brits? Because there are more people learning English in China than anywhere else in the world and more English speakers in China than in the rest of the English speaking world. Language learning is paramount. For publishers, this obviously represents a huge market and a pressing opportunity. There is a very attractive market for educational and English language publishers!

I was very struck by Pearson’s almost evangelical mantra, ‘Not just touching people, but transforming lives through learning’. 

Islam – I was forcibly struck by the number of large and impressive Islamic publishing stands at LBF. These were in stark contrast to the mainly small booths of the Christian publishers, aside from the usual welcome presence of Lion Hudson PLC.  Islam clearly has plenty of financial backing, is investing heavily in literature and is clearly committed to book distribution in a way that some Christians seem to have forgotten.

Print still dominates, at around 80-85% of the UK market and much smaller elsewhere in the world. We should keep the eBook ‘hype’ in perspective. The digital presence at the Fair was actually quite small, tucked away in one smallish zone. Interestingly, KOBO eReaders have said that 10% of their eBook sales are now for self-published authors. In China, authors are uploading self-published works in instalments, books which are then picked up by publishers and eventually making their way into bookshops; the reverse of our model in the West!

UK Publishers do increasingly view their role as ‘Content Providers’ delivered via various platforms but print currently continues to dominate their activity.

LBF 2012. Quite an event, and yet again, another reminder of just how quickly our world is changing. The tide of globalisation and digitalisation continues to alter the way we all do business yet the basic desire to read remains.

In his summing up, Lord Powell of Bayswater said, ‘The English language is the highway to bring the world to China’. I suspect that China is actually finding her way to the rest of the world!

Book Trade – Christian Resources Together 2011; Full Workshop Text

ALBATROSS, DODO OR JEWEL

‘Is there still a place for Christian bookshops to sparkle on the High Street’?

Introduction

Last year I was asked to give a lecture on Christian Retailing to the Librarians’ Christian Fellowship and Steve Briars invited me to deliver similar material at this year’s CRT.  I am delighted to do so – although the two audiences are quite different!  Since that lecture in April 2010, things have moved on a pace and we are learning to live with constant challenges and change. However, there is no lack of evidence that we are involved in changing people’s lives on a daily basis.

I aim to address four incontrovertible facts facing all Christian retailers;

• The UK is increasingly secularised and less open to Christian forms of spirituality
• Formats, methods and channels – but not the content – are changing almost on a daily basis
• Consumers, and particularly younger people, are not buying as many physical books as before
• The Christian industry – Booksellers and Publishers – is undergoing a serious and prolonged period of retrenchment and rationalisation

I have invited three practising retailers –

• Andrew Lacey, Manager of GLO Bookshop, Motherwell, Scotland
• Melanie Carroll, Owner of Unicorn Tree Books and Crafts, Lincoln
• Steve Mitchell, Retail Director of Wesley Owen

each representing different facets of our trade – to address this question;

• ‘How can our trade best communicate the Good News in an increasingly post ‘bricks and mortar’ era and to a progressively digital generation?

Which of these three images describe and/or sum up today’s Christian book trade;

• Albatross; large seabird, majestic in flight or as in Coleridge, a ‘burden or encumbrance’
• Dodo; flightless bird known only in history; extinct, long gone, utterly dead and finished
• Jewel; beautiful to look at, highly valued. precious to its owner, ‘the jewel in the crown’

A brief trade overview

• The very first UK Christian Bookshop opened in Derby in 1810 – Just over 200 years ago!
• The Derby and Derbyshire Auxiliary of the Religious Tract Society opened this shop in the Cock Pit area of Derby. It then moved to The Strand around 1900 (where it was renamed The Bible and Book Shop) and on to Irongate before finishing up in its present location in Queens Street. Subsequent owners have included; Scripture Union, STL/Wesley Owen and now it is owned and operated by Koorong of Australia.
• Just to add ecumenical balance, the next Christian bookshop was opened in Bristol in 1813 by the Society for Promoting Christian Knowledge. SPCK as a society had been established much earlier in 1698 by Dr Thomas Bray, a clergyman. SPCK went on to open their second shop in London in 1836.
• Many commentators would argue that to be a truly national retail chain, you need around 300 to 600 outlets to be represented in the main towns and cities. No Christian operator has ever come close although at one point in the 1990’s there were probably over 600 Christian Bookshops of some shape or size across the UK, but most operated independently.
• Those numbers have dwindled and are dwindling still. There is some evidence of new players entering the market year-on-year but, in my view, numbers of Christian bookshops are consistently down.  I would estimate there are around 220 bookshops in the Christian niche capable of carrying out a viable trade.
• Due to its unique history, Northern Ireland remains the strongest market for Christian product when compared to its population size; this region continues to sell more Christian books per head than anywhere else in the UK. Scottish shops are mostly sited in the major central belt conurbations and there are virtually no Christian bookshops in Wales outside of the Cardiff area.

 The ‘Missional’ nature of Christian bookselling

• For the past 30 years I’ve had the privilege of being engaged in the vocation of Christian literature distribution in its various forms. I have been involved as a bookseller, an author, a distributor and a publisher. I retain a fundamental belief in the importance of maintaining a Christian witness on the High Streets of our country. I therefore cannot but help feel that the loss of any Christian shops on the High Street is detrimental and I, for one, mourn the demise of those that have closed.
• Controversially, I have long pondered whether the historical separation of Christian bookshops into a specific subset of the wider book trade will turn out in the longer term to have been a mistake? Would it have been better for our specialist outlets simply to have remained part of the wider general bookselling community as it is elsewhere in the world? To outsiders, our bookshop names must inevitably seem a little twee and out-of-touch. Does such a separation help or hinder our aspirations for engaging in Christian witness?

A quick look at the wider social environment

• The UK is a largely secularised, post-Christian society with a significant multi-cultural population. There is clear anti-Christian bias throughout the media and in politics and militant atheism is on the increase. Christian TV & Radio has very low penetration, making product mass marketing difficult.
• Regular church attendance is in decline in most of the traditional denominations. However, there are bright spots; the Black majority and Hillsong churches are growing. Cathedral attendance is increasing and the Emerging Church movement gaining ground. 
• There is a general decline in book readership in society; not just amongst Christians.  Competing media and digital attractions vie for our time and the lack of time affects all of us however much we enjoy buying and reading books.

Some thoughts about channels and digitalisation

• The way books are being bought is changing rapidly. An experienced international bookseller said to me only last week that, in over 30 years, he had not known a time of such momentous change as there has been in the past two years. Someone else has described the current upheaval as ‘a perfect storm’.
• There are enormous structural and societal changes taking place. These have been described as being as immense as the transition from parchment to the printing press. Most are outside of our control and are being imposed on us from outside of the trade. It therefore should go without saying that it is foolish to fall out amongst ourselves over changes which are so outside of our control and which are affecting the whole of retail.
• Woolworths, the 45 Borders UK stores and the Irish Bookseller, Hughes & Hughes have all left the UK High Street in the past couple of years. Since Christmas this year, WH Smith bought 22 British Bookshops and Stationers stores, Borders USA entered Chapter 11 – and is effectively bankrupt – and the REDgroup in Australia went bust leaving big UK publisher debts. HMV put their Waterstones chain up for sale selling it for a knock-down £53m in the last few weeks to a Russian tycoon.
• Supermarkets now sell one in every five books purchased and UK Libraries are under massive pressure due to imminent Government spending cuts.
• The issue here is primarily about the explosion of differing routes to market. Print no longer dominates in terms of the delivery of ideas. Content will continue to remain key.
• There are parallels with the development of digital television. More channels = fewer viewers.   In our field, more ‘books’ (however those are defined; print or digital) equals a dispersed customer base which is no longer dependent on the traditional bookseller.
• Due to digital delivery channels, it is easier to self-publish now than at any other time. Blogs and social networks proliferate but some would argue that this only leads to the problem of quantity at the expense of quality.
• Territorial Rights are clearly a problem in the context of a global marketplace. Old-style publishing rights are not always recognised in the internet environment as single copy orders are taken and shipped – often across national boundaries – on a daily basis.
• Paradoxically, more printed books are being published year-on-year in the UK. Book production figures in the USA rose 5% last year despite a huge increase in eBook sales.

Impact of the Internet esp. Amazon, downloads and ePublishing

• Online sales make up 17% of all UK retail spending – and growing.
• Digital downloading is beginning to affect the sale of print items, especially newspapers.
• Book purchasing via the internet is no longer an exception, it is the norm. Amazon recorded their first £10bn sales quarter in early 2011.
• Several eBook Readers are competing for attention and rapidly gaining traction in the market; Sony’s eReader (Waterstones), the iPad (Apple Stores) and Kindle (Amazon).
• There has been an inexorable rise in the sale of eBooks with PA figures showing that eBooks grew to 6% (£180m) of £3.1bn UK book market. This may grow to 10% in 2011.
• Amazon are selling more eBooks than paperbacks; 105 on Kindle to every 100 in print. Four authors have already sold over 1 million eBooks each. Amazon lists 945,000 Kindle generated eBooks. Analysts expect 2011 sales to be $5.4bn in Kindle generated eBooks.
• However, despite these figures, over 90% of sales continue to take place via print. Black and white text books are struggling but print Bibles and Children’s books remain strong sales lines.

Where might all this change be heading? What is the future for our trade?

• Retailing is hard graft for many categories. Shopping habits are changing fast and there is much less time available for those trips to the High Street. When time is found, then competition for time and money is increasingly fierce.  Supermarkets dominate.
• BBPA figures earlier this year show that the quintessential English Public House is closing down at the rate of 30 per week.
• One in seven retail outlets in the UK were surveyed as being empty in September 2010. UK shop leases are the Achilles heel for all retailers. Most are expensive, with ‘upward only’ increases and, if not carefully drawn up, extremely inflexible. Many businesses struggle with high establishment costs and Business Rates for non-charity shops are high.
• Christian bookshops are obviously not immune – and many are having a torrid time. There have been some major shake-ups in the past couple of years, with a lot of shops going and, thankfully, a few coming.  The SPCK meltdown in 2008 and the IBS-STL debacle at the end of 2009 has badly destabilised Christian retail in this country.
• Demographics also conspire against these specialist shops. Church attendance in the traditional denominations is largely declining and newer Churches with their younger audiences, such as Hillsong, are self-contained in terms of their resource requirements.

Final thoughts

• The challenge we face today is to ask, what should the Christian bookshop of the 21^st century look like?  Will it, as an entity, soon cease to exist, lost as an irrelevance in our increasingly secular world or can it be reinvented in an increasingly post ‘bricks and mortar’ era and for a progressively digital society?
• Although I sincerely wish CLC, Faith Mission and Koorong well in their endeavours, I am no longer convinced of the chain model when it comes to running Christian bookshops. For a variety of reasons, so many major book chains have simply failed over the years. It would appear that, in many cases, their high central costs have acted as the drag on the business and this, in a crisis, hinders rather than helps. Once I would have argued strongly for the efficiencies of scale and the need for central buying that the chain model provides. Now I am no longer so sure. 
• In my view, there is still a lot to be said for a very good independent shop operating solely at the local level. Perhaps we’ve just gone full circle?
• In my view, internet retailers can win every time on the basis of price, range and convenience.  If ‘Bricks and Mortar’ booksellers are to succeed in the future, they have to provide that illusive and intangible ‘sense of experience’ to their customers.
• Nick Page has written elsewhere that ‘average’ is no longer good enough.  For a future, these bookshops have to be ‘really good’ and run by people who love books and love selling books. They have to be ‘exciting, memorable, fascinating’, places where events are held and reading encouraged. In short, such a bookshop must have ‘personality’! 

A final meditation from 2 Corinthians (NIV);

2:17 ‘Unlike so many, we do not peddle the word of God for profit. On the contrary, in Christ we speak before God with sincerity, like men sent from God’.

4:1 ‘Therefore, since through God’s mercy we have this ministry, we do not lose heart. Rather, we have renounced secret and shameful ways; we do not use deception, nor do we distort the word of God. On the contrary, by setting forth the truth plainly we commend ourselves to every man’s conscience in the sight of God’.

Book Trade – a further 12 weeks in the life of the wider trade

This list documents some recent ‘happenings’ in the wider book trade;

• Online sales now make up 17% of all UK retail spending
• Living Oasis – experiencing ongoing shop closures
• STL Distribution – a further round of redundancies
• Celebrated the 400 year anniversary of the King James Bible (AV)
• Inexorable rise in the sale of eBooks
• PA figures show eBooks grew last year to 6% (£180m) of £3.1bn UK book market
• Scott Macdonald replaces Moe Girkins as Zondervan’s CEO
• Amazon eBookstore lists 945,000 Kindle generated eBooks
• Four authors have already sold over 1 million eBooks via Amazon
• USA book production figures rose 5% despite huge increase in eBook sales
• The end of an era; RIP STL Distribution – say hello to Trust Media Distribution
• Amazon predicted to sell $5.4bn Kindle generated eBooks in 2011
• Amazon is selling more eBooks than paperbacks; 105 on Kindle to every 100 in print
• HMV sells its Waterstones business to A&NN Capital Fund Management for £53m

 Click here for an earlier digest of the first 8 weeks of this year.

Book Trade; eBook debate – a view from Singapore

Next week the global book trade will gather in London for the annual London Book Fair. Once again, the ongoing eBook debate will dominate both the trade agenda and the fair programme.

The burning question continues to be, amongst all the hype and speculation, what will happen to physical book sales in the light of the widely predicted digital onslaught? Opinions range wildly from ‘Do nothing; we’ve seen this kind of thing before’ to ‘Get out quickly whilst you are still able to salvage something of value’. Is this truly a ‘Caxton’ moment or will life carry on much as it has before?

 As I write this, I’m in Singapore, probably one of the most wired societies on the planet. The answer to the question here seems to be that there is no discernable impact yet on sales, which to my mind is mildly surprising. Even the mighty Amazon has only a limited Asian presence (although there is an Amazon Japanese site). Singaporeans, if they use Amazon, log on via the UK or American sites.

I met with a significant general market distributor and they reported seeing no real impact on their business. Even Borders troubles here are put down to poor chain management rather than sales being siphoned away through digital stealth. I therefore conclude that, as in the rest of the world, no-one really knows quite what is going on although it seems clear to most in the wider trade that something pretty significant is beginning to stir in the undergrowth!

What is abundantly clear, however, is that all sections of the trade have their own particular fears and are watching the developing situation incredibly closely, leading to some sharply divergent views; 

• Retailers – seeing their business disappearing online and wonder where it’s all going to end
• Publishers – scrambling to find a viable rights and pricing model as authors potentially disappear from view hand-in-hand with online retailers
• Distributors – wondering if they will be cut out of the action all together
• Authors – either upset by inferior internet royalties or sensing new opportunities to cut out the publisher and self-publish via the big internet players such as Amazon

Back in February, the International Publishers Association (IPA) asked its various members for their views on their own embryonic eBook markets. These findings, widely reported at the time in the trade press, are worth summarising;

•  The proliferation of smart phones and tablet computers (such as the iPad) is radically fuelling the eBook market as millions of these devices cry out for content
• Amazon.com’s eBook sales were recently reported as surpassing their print unit sales
• Most reference and academic journal publishing has already largely migrated online
• USA newspapers have started to incorporate eBook sales into their regular bestseller lists
• The UK e-market is around 18 months behind the USA – but the gap is fast shrinking
• Amazon, Apple and Google exhibit every sign of becoming ePublishing competitors!
• The existing copyright and territorial rights are not always relevant to the digital environment
• The new model significantly challenges territorial marketing as eBooks are effectively global in reach
• The proliferation and ease of digital piracy and file sharing is a major worry particularly in certain emerging markets
• Price remains contentious as consumers expect digital texts to cost less than the printed work
• Savings in print and distribution are largely offset by technology costs, new services and VAT
• Surprise, surprise! French publishers are lobbying to extend fixed retail print prices to all eBooks sold in France!

The overall conclusion to all this seems to be that, yes, this market is changing faster than we realise but, in the words of IPA, ‘the day eBooks will outsell print is not imminent’.

No doubt the debate – and the opinions – will continue for a while yet.

Book Trade; Phew – 8 weeks that started the year

This list documents extraordinary activity in the wider Book Trade in a few short weeks;

• UK book sales fell 3% in 2010, selling £56m less than in 2009
• NIV Bible eBook tops the USA bestseller list over the New Year
• 2011 marks the 400^th anniversary of the King James Bible
• Barnes & Noble USA do well over Christmas – thanks to their Nook eReader
• Physical book sales continue to decline around the world
• British Bookshops and Stationers go into administration
• eBook debate intensifies – but with little clarity emerging
• Digital Book World Conference is held in New York
• Kindle; the most popular eBook reader – with sales overtaking paperbacks
• Amazon record their first £10bn sales quarter
• Waterstones owner HMV; shuts 11 UK stores, cuts HO jobs
• WH Smith buy 22 British Bookshops and Stationers stores
• UK Libraries under massive pressure due to imminent spending cuts
• Borders USA enters Chapter 11 – and is effectively bankrupt
• REDgroup Australia goes bust – leaving big UK debts
• Borders Singapore shuts its doors
• Zondervan loses its President and CEO, Moe Girkins
• Gardners launches the HIVE website in the UK
• STL Distribution UK rebrands as Trust Media Distribution
• Living Oasis has its ups and downs, causing uncertainty

Only another 10 months left for this year – don’t hold your breath!

Book Trade; eBook Sales and Digital Reader update

From January 24 – 26, the Publishing Industry will gather in New York for the Digital Book World Conference to debate the new technologies. I really wish I was going but, like me, you can follow it on Twitter during the coming week. As Christians in this industry, we simply cannot ignore such immense changes to our market. If you are part of Linked In, you could also join the group, Digital Book World.

Like it or not, the eBook revolution is here. There’s also a lot of puff around with some drawing parallels such as the shift from the horse to the automobile! Somehow I doubt it. Print is still pretty massive! However, a number of commentators, admittedly mostly American, are stating that this Christmas was absolutely a ‘change point’ in terms of the sale of eBooks. Barnes & Noble, the largest USA bookshop chain, announced it sold one million e-books on Christmas Day. The fact that they developed their own ‘Nook’ eReader has been credited with keeping them ahead of faltering rivals, Borders USA.  

USA Today’s ‘Best-Selling Books’ list demonstrated digital’s new popularity; their top six books outsold the print versions in the week following the Christmas holiday. Of the top 50, 19 had higher e-book than print sales. Perhaps not a great surprise when around 3 to 5 million eReaders were activated in that same week resulting in this surge of sales. The big question; is will it continue? It’s obviously still early days but insiders are predicting that by 2012 three in every 10 books could be delivered digitally. Publishers are aiding this trend by very quickly adding more and more back-list titles.

According to AAP sales figures in the USA, eBook sales were significantly up in November. At the same time, adult paperback sales were down 19% compared to the same period the previous year. Their release states, ‘eBook sales continue to grow, with a 130% increase over November 2009 ($46.6 million); year-to-date eBook sales are up 166%’. It will be interesting to see the December eBook figures when they are released as what starts in the USA tends to end up here.

Gartner predicted that more than 15.8 million e-readers will be in use by 2013.  Some in the industry have expressed surprise at the speed of this transition, which has quickly gained ground particularly in the area of mass market fiction. eBooks sales account for about 9% of the USA market. Bowker, the research company says sales may flatten this year but could still be twice as high as they were in 2010.

Within Publishing, there’s a lot of uncertainty about what to do about piracy and DRM (digital rights management). Should DRM be employed at all as it can so easily by cracked? Is piracy really such a threat to book publishers in the same way as it was for the music industry? The answers may be different depending on whether you are a small niche publisher or one producing high volume, high worth, popular titles. These days it’s just so easy to scan and digitise a printed book and put them up on a web site. For a really informative thread; discussion here.

Google’s announcement earlier this week of its acquisition of eBook Technologies, a company that sells the technology used to operate digital reading devices is fascinating. Google by dint of its size, power, wealth and global reach has the ability to utterly transform the eBook landscape. Already consumers can browse and search through more than 3 million free books on its site.

Publishers are on the defensive. As eBook sales rise, the unspoken question is; will authors still need a publisher? It’s just possible than in the fast-approaching digital future that it will be the (online) retailers who will come to dominate the customer relationship. Why? Because it is the retailer who has the knowledge of their consumer base. They have the ability to market a book far more effectively. Why has Tesco been such a successful retailer? In one word; Clubcard! Consumer data and customer knowledge are all.

The future of eBook selling may therefore lie with the likes of Amazon, Apple and Eden. However, as of today, there are no Christian eBooks for sale on Eden.co.uk. As I write, one site launching to sell Christian eBooks is www.10ofthese.com – so I guess we shall see!

But a way does need to be found quickly for small retailers to gain access to this market. Andrew Lacey from GLO has suggested something along the lines of the now defunct Crown customisable website?

What all this tells us is that retail as we know it will need to be reinvented if it is to survive. My view is that we have a few short months to act and make changes before the impact fully begins to bite.

Book Trade; eBooks – Leading Publishers weigh up the Digital Impact

Having castigated The Bookseller recently for poor journalism, I draw your attention to a superb and in-depth reporting piece looking at what life for the trade could look like in 2011. Bringing together the opinions of a wide range of UK book industry leaders it looks at, amongst other things, the likely impact of digital sales on the industry.

You can read the full article here but I want to highlight the main points of interest to High Street book retailers as they face the imminent digital challenge.

Amongst the key points of the article;

• Industry chiefs unanimously earmark digital as a key area of opportunity in 2011
• Digital sales have reached a tipping point and will grow further next year
• Those booksellers not getting a good share of e-book sales are going to find business tougher than ever
• The main challenge lies in supporting retailers in an uncertain economic environment
• However, nearly 95% of all books sold in the UK in 2011 will still be in print format

To my mind, here is the killer statement; ‘Growing e-book sales could lead to the Total UK Consumer Market being negative in 2011 as they hit 7% of the adult trade market’.  

Print may no longer be capable of ongoing growth. Fiction – in particular – and mass market publishing in general, is highly susceptible to this drift. How are High Street shops to deal with this change in their market? If print is dropping away, what steps do they need to take to get a bigger slice of the digital cake? If the High Street trade is not careful, it will be the publishers and not retailers that will benefit from an inevitable sales shift to digital.

Gardners’ respected commercial director, Bob Jackson, is quoted in the article as saying:

‘I think that the retailers who continue to focus on customer service and manage overheads will be doing the best they can. They need to stay very consumer focused. It won’t get any easier in 2011. We launched our digital service three years ago, so it’s available to every single retailer. I think the challenge might come more as retailers using e-books as part of their retail offering, I’m sure they [retailers] can be as creative as they have been to date. That’s the challenge’.

Faber Publisher, Stephen Page, said:

‘The big question is how retailers fared at the end of last year and how they will fare in 2011. Looking around the world I can see the retail environment changing and that change is not complete. Retailers have to adapt to a world with very powerful mass market retailing and online retailing and now there is a digital component too. Look at the REDGroup in Australia, Borders in the US. Here we have had a narrowing of the specialist chains to Waterstone’s and W H Smith, and it’s a question of how they adapt. Waterstone’s over the last nine months have been pursuing quite a different tack and it’s a question of where that gets them to. We all want a healthy retail environment. In 2011 we will see a hardening of the e-book market and a lot of people becoming habitual about reading electronically. We will catch up quickly with America – I’m estimating e-books will be 3-5% of the [UK] market in a year’s time’.

The long-serving chief executive of the Booksellers Association, Tim Godfray, stated:

‘This Millennium has seen a huge amount of change in the way books are sold and in the formats available. As ever, booksellers have shown great resilience and those who have adapted have survived. As we enter a new decade, only further change is on the cards. We face in particular three challenges. First, the Government cutbacks and the state of the economy; secondly, the digital economy; thirdly, the consumer having fewer leisure pounds to spend. But with challenges, there are opportunities. The tipping point concerning e-books has been reached and digital content is coming of age. The popularity of e-book readers demonstrates this. The selling of digital content is a threat to traditional booksellers, but it is also an opportunity. A lot has been written about the death of the printed book and the bookshop. Not far short of 95% of all books sold in the UK in 2011 will be in print format and booksellers will develop their offers, customer service and specialisations’.

 Victoria Barnsley, chief executive of HarperCollins is quoted as saying:

‘Digital developments continue to present both the challenges and the opportunities for our industry. E-book sales more than trebled over the Christmas period as people rushed to buy e-books for their new gift devices. And, unlike some, I really do think the growth of the digital market is a huge opportunity for bookshops—not only to provide a unique and personal service to book lovers, which is hard to replicate online, but to capitalise on the new readers these devices are creating. …  finally, I believe that we should all fight vigorously to support and encourage a broad range of retail options on the high street and online which hugely benefits consumers, retailers and our own industry’.

Well done, The Bookseller – some fascinating opinions and really insightful reporting. I cannot help but think that we continue to be in very uncertain territory with even the most able minds in the trade pretty unclear as to how that future may turn out.

However, I am beginning to think that the tipping point for eBooks is beginning to tilt – albeit slowly but surely.

POSTSCRIPT – If all this gloom and uncertainty is getting you down then read these recent comments by the Editor of The Irish Times;

‘Yet there are opportunities for the retail sector. Barnes and Noble in the US have really got on top of things with their own device and have encouraged their customers to become digital readers. They’re looking at sales of about $400 million (€308 million) for digital content in a 12-month period – and that’s impressive’.  He believes, though, that there will always be a market for print books. ‘It might not be huge. It might be down to 30 per cent of the market in 10 years’ time, but there will still be a demand for physical books and the browsing experience that you can’t get from Amazon or the Book Depository’.

Book Trade; NIV Bible eBook tops USA bestseller Lists this Christmas

More news of interest to book trade readers as eBook sales continue to gain momentum. Zondervan has just reported its NIV Bible eBook (released on 15 Dec 2010), featuring the newly updated New International Version of the Bible (NIV), is the company’s fastest-selling eBook, and made it onto the USA Today bestsellers list.  The digital release marks the first time that a new Bible translation has launched in a digital format prior to publication in a print format.

Chip Brown, Bible Publisher at Zondervan is quoted as saying, ‘Millions of people unwrapped an iPad, Kindle, Nook or other e-reader during the holiday season, leading to an industry-wide spike in eBook sales, and we are delighted that the NIV Bible was among consumers’ most desired eBooks to download’. 

Zondervan claim to be the first publisher to have had Bibles available in Apple’s iBookstore at the launch of the iPad. In total, the company has published more than 30 Bible titles for eBook readers, including the iPad, Amazon’s Kindle, B&N’s Nook and the Sony Reader.