The continued decline of traditional publishing

[Hex]

There's still a process like that -- in fact, the book sellers come and set up a little shop in the gym hall -- but the books are so painfully expensive that I don't tend to let my kids buy them

 

[Brian G Turner]

Techcrunch has a piece about a fall in Big 6 print revenues, especially from digital sales:
Print and ebook revenue down as Amazon slashes prices

I wasn't originally going to post this, because the sources for this appear to be "industry observers" rather than hard facts from publishers themselves.

However, the interesting point raised is that publishers are trying to undercharge for print while over-charging for digital, in order to try and push consumers back into print.

But - the problem is that Amazon buys stock at such huge volume discounts that it's causing the publishers' strategy to completely backfire, resulting in lower revenues for themselves, while having no significant effect on Amazon.

Which touches on issues I've raised here before, hence why I've posted it.

 

[Martin Gill]

Amazon can also afford to sell gateway products (like books - low consideration, highly penetrated on line market, very little differentiation in terms of if you buy from Amazon, Waterstones, whatever - its the same book) at a low margin or even a loss to acquire customers and migrate them onto much higher margin products. Plus they operate on much longer cycles than most retailers (and probably publishing houses, but I'm a retail guy, not a publishing guy so I don't know for certain) in terms of getting product lines to profitability - so publishers thinking they can beat Amazon in any kind of price war is a bit naive.

Print is a fundamentally more expensive and less agile business model than digital publishing anyway. The lack of vision of some companies staggers me. If anything, encouraging customers to go digital cuts their costs and hikes their margins. I'm curious about what the breakdown of costs on book production is. I've never looked.

Interestingly though, academic publishers like Elsevier and Wolters Kluwer are grasping this.

 

[Brian G Turner]

Pearson sales drop 7% after third quarter | The Bookseller

softening the expected impact of reduced demand for e-books

IMO it's a basic premise of supple and demand is that if you price too high, you lose sales.

 

[Ursa major]

Plus they operate on much longer cycles than most retailers

And every dollar they invest in entrenching their market dominance is a dollar on which they don't have to pay tax.

If they are eventually going to pay tax, they won't choose to do it until their competitors are all on the ropes.

 

[Venusian Broon]

And every dollar they invest in entrenching their market dominance is a dollar on which they don't have to pay tax.

If they are eventually going to pay tax, they won't choose to do it until their competitors are all on the ropes.

Do you work for Starbucks???

 

[Brian G Turner]

I posted this link in it-s own thread to discuss the new royalties system Hachette are aiming to apply:
Hachette to bring in new royalty statement system in 2018 | The Bookseller

However, it also gives an insight into the fall of sales in fiction:

He warned authors that the "well-publicised" resurgence of print was "not the whole story," explaining that the sales had been skewed by the craze for adult colouring. The trade print market and publisher values had still fallen by 11.5% between 2011 and 2015, and by 27% for fiction, he said.

He further warned that the e-book market will have fallen by about 22% for Hachette by the end of this year from its peak in 2014. This he attributed to "the imposition of UK VAT at the full rate on e-books, changes in e-book trade terms and, to a smaller extent, self-publishing".

A fall in sales of 27% for fiction is quite staggering, really.

The 22% loss of digital sales is quite predictable, considering that Big 6 publishers in general have been over-pricing ebooks - especially through underpricing bestsellers in paperback to undercut ebook prices.

 

[Brian G Turner]

The Passive Voice does a good analysis on how publishers caused trouble for themselves - and continue to refuse to properly adapt to digital:
What the “Book People” Won’t Tell You: Print is Dead | The Passive Voice | A Lawyer's Thoughts on Authors, Self-Publishing and Traditional Publishing

 

[Vertigo]

They just didn't get it and they still don't.

 

[Brian G Turner]

Something interesting linked to from that piece is an interview with John Grisham earlier this year, where he happens to mention that he now sells only half as many books as he used to. He puts that down to discretionary spending after the financial crisis, rather than due to the emergence of the ebook market.

There is another piece linked to, where Kathryn Rusch claims that she knows of "bestelling" writers being quietly pushed aside in order to focus on the biggest sellers only. However, no names are given, so I suspect - if true - it would be a case of publishers comparing ratios of advances to sales, and slimming down on those who have provided the least return to them. I'm not sure that would be anything new, though. As before, though, with no information provided I can only speculate.

 

[ralphkern]

Many shops have remodelled themselves for what is called 'Show rooming'.

New Ikea stores, for example, don't hold a lot of stock. Instead, they focus all their space on showing their wares and having a fast delivery structure behind it.

I suspect this is the way even browsers in a book shop are going. They'll pop into Waterstones. Decide what they want. Order the books on their smart phones for half the price off of Amazon there and then - then receive them the following day.

Book stores are going to die unless they find something to claw people back.

There are enough people who still like to own a physical book (shudder - I couldn't be doing with the clutter myself) that there is still a viable market. If i were a book store, I'd consider what opportunities might lie in POD. The majority of held stock could be in the best seller lists. The rest could instead be held in licence form. A purchaser clicks print then goes to a counter to pick it up.

Shrug... lucky for me, I ain't a book store.

 

[Overread]

Book stores are going to die unless they find something to claw people back.

I'd say its not so much about clawing people back as pushing back the overheads. Overheads on the English highstreet are insane for many stores. It's why charity shops and food outlets are really ruling the roost now - clothing and shoes also seem strong (but seem to change hands quite a bit) whilst mobile phones do very well and don't need much space either to sell their wares (3 or so tables and that's all they really need).

Most hobby level shops are gone; there's just not the business to cover the overheads unless you're using the online market - at which point why have a physical store. Honestly I think local councils want to kill highstreets; the traffic today is insane to control and its much easier to have big out of town tescos and the like on the ringroad than it is to have a few dozen small stores inside on the highstreets.


The internet certainly does do a lot of harm to sales, but I think that many stores could run with a local loyal consumer base if they didn't have such crippling overheads.

 

[Jo Zebedee]

@ralphkern - most bookstores only hold a limited stock, replenishing daily. They also do great click and collect and also online book ordering. for people like me who love their paper (read for leisure off a screen - shudder ) they make it very easy