The Word Cloud

Following the recent discussion on Local Libraries, I found myself wondering whether our perception of the book market is really the same as the reality. I, for one, have somehow garnered the impression that the printed book industry is in serious decline. I can't say exactly where I got that impression from, I just have it. And from reading posts in forums, I don't think I'm alone.

Out of curiosity, I wanted to have a nose around and see whether my ideas are justified, or whether they're askew.

When a friend in Dublin told me that he was going to purchase something on Amazon, I said 'why not pop into Waterstones,' to which he replied that the one in Dublin had closed! In Dublin! I was aghast.

I discover that this was part of a twenty-branch closure, claiming 'poor Christmas sales'. Naturally I assumed this must be symptomatic of the spiralling decay of the publishing and book sales industry. My feelings were justified, right?

The article doesn't shine brightly for the US, either: "...crisis at US bookshop chain Borders looks to be reaching a head, with shares sinking steeply on the New York Stock Exchange last night after a Bloomberg report that it may file for bankruptcy next week, with the likely closure of 150 stores."

So it's easy to start nodding along and lamenting the days of ink and parchment. Until you read a bit further...

An article by the Beeb stated that in 2007: "Brits bought an estimated 338 million books, at a cost of £2,478m. This was 13% higher by both volume and value than five years ago, according to the Book Marketing Limited's latest Books and the Consumer survey."

If even a conservative 20% of that market was going through Waterstones then they alone would be generating a 495.6 million share of national sales. Meaning that each of their 303 academic and high street stores would be turning over a cool 1.6 million. How can you possibly scream financial woe at that?

The answer is, you can't. The article goes on to explain:

Waterstone's is paying the price of poor performance elsewhere in the HMV Group, after looking to refocus over the past year...

So book store closures aren't necessarily a statement specifically about the book trade in the UK. It's as much to do with album chart sales!

In 2006, when HMV was in the process of buying up its last independent rival, Ottakar, an interesting summary report was compiled on third party views. Makes for interesting reading:

A publisher said that in many ways the UK market was healthier than in recent times, with a wide range of competitors.

Tim Waterstone said that the book market was flourishing with growth of 4.4 per cent since 1963 and 6.2 per cent compound in the last ten years. He thought the entry of Amazon and other Internet booksellers had increased the market.

Interesting, and then we descend into a whole world of confusion with established names falling to guesswork over the number of books being sold, and speculating that ISBNs might be confusing the counting process. Essentially - nobody's too sure how many books are being sold, either in the UK or US. So it's open to an educated guess. I found myself quite confused by the end of that list of qualitative data. A mixed bag of messages.

Although many groups seem to be saying that the count for book sales is too high because of multiple ISBNs, the reality may also be that it's too few, as a US study considered:

...the Book Industry Study Group has issued a report that says book sales have been seriously underreported. The study, “Under the Radar,” says that approximately 63,000 publishers with annual sales of less than $50 million generate aggregate sales of $14.2 billion.

Jeff Abraham, executive director of BISG, says that while some of that revenue is represented in current industry sales estimates—which puts revenue at between $23.7 billion and $28.5 billion—a significant portion of the revenue is not. Abraham says the discrepancy between the findings of “Under the Radar” and historical industry measurements is that the study tracked sales from companies whose main business is outside of book publishing. The study also found that the majority of sales made by midsized and smaller publishers are made outside of traditional bookselling channels...

So, the closure of book shops might not be related to the sale of books, or even to the rise in e-books. And if the printed book trade has been growing in strength as suggested in '07 - and presumably continuing to do so (because these trends only tend to slow or dip during recesion, rather than reverse) - then what is the current state of play?

I set out for a more reliable source. Perhaps people have suggestions?

I found Nielsen Bookscan, and would love to know whether anyone has an account? I'd be fascinated to nose around that.

Then I checked out the above mentioned Book Marketing Ltd and discovered that they have a free monthly market report. So I tried to sign up for that but the e-mail bounced back. Although they seem to have a lot of interesting information on the state of the UK book industry, I'm not about to pay £350 to access it. Has anyone already got access?

The only useful parts I found for free were the 2009 gross estimate of the market at: £3,404m - which is a 37% increase in value since 2007! Remember the 2007 report said: "This was 13% higher by both volume and value than five years ago"? Well, now it's four years later and a 37% increase in value alone, if statistics are to be believed. Although you'd have to knock off inflation, which would reduce the percentage.

If people were heralding the market as 'healthy' in 2006, it's reasonable, from this, to assume that it still is.

Then there was some interesting statistical data at the bottom - in rather rudimentary tables (another reason I wouldn't fork out £350 - they can't even manage a pie chart?):

2009 List of largest book outlets by Volume (i.e. items sold) in % of market:

1. Chain Book Shops - 33.4
2. Supermarkets - 14.9
3. Internet - 14.4
4. Direct Mail - 11
5. Non-specialist Retail - 10.2
6. Independent Bookshops - 8.6
7. Bargain Bookshops - 7.6

(Although there's a .1% error in the above - yet another reason I wouldn't pay £350...)

By value (income generated):

1. Chain Book Shops - 39.7
2. Internet - 17.2
3. Direct Mail - 11.1
4. Independent Bookshops - 10.9
5. Supermarkets - 10
6. Non-specialist Retail - 7.4
7. Bargain Bookshops - 3.7

So clearly, at the end of 2009, high street chains were outstripping internet sales significantly both in volume and value. Even the supermarkets didn't come close.

That rather turns the image of struggling Waterstones on its head. With around 40% of the '09 market it's drawing in around 1,361.6 million with its closest competitor, the Internet, garnering a measly 578.7 million.

Now how reliable any of that is becomes arguable, especially if we can't count the number of books. And we're assuming this is based on printed sales, rather than e-sales...although it's not explicitly stated.

But it's interesting to mull over. The industry seems far from in decline, and the high street chain is storming ahead, far beyond the internet and supermarkets which we often hear are threatening the book sales industry.

I'd just like to know what people think. I'm fairly surprised by most of that. The summary report on HMV/Ottakar is certainly something to chew over - so many fascinating statements in there from a range of sources.

But just generally, I'm never going to feel guilty about buying from Amazon again. Especially not when book shop closures appear to be for completely un-book related reasons. Are we, the public, being duped into feeling guilty about our shopping habits? Are we manipulated by the media to assume that we are responsible for a decline in the much-loved book trade that, on closer inspection, doesn't actually appear to be there...?

Are there any other sources we can consider?

Kasubi, Harry's Getting Published book has a very interesting discussion of the structure and economics of the market - as an ex-banker, he's better at explaining it than most... Nielsen figures are hard to come by, in the sense that they're very expensive: serious industrial data for serious prices. The Sunday Times and Booksellers best sellers lists give Nielsen figures, for that week and lifetime sales, which you can inflate by 30% or so to get a roughly realistic figure. (50% for academic books)

Yes, Waterstone's current troubles are largely to do with the parent company, which is terribly frustrating, but Waterstones' have found things extremely difficult for a long time. They tried to take the supermarkets on at their own game - deep discounting, pile 'em high and sell 'em cheap - and they simply can't do it: their pockets aren't deep enough (It was actually HMV's fault, for thinking that books would respond to the same strategies as music etc. when they're completely different products. You reap what you sow). They can never have the range of the online sellers, and HMV sacked half their good booksellers and restricted what the survivors could do, and so they also alienated customers who wanted the knowledge and range that only a real bookseller, allowed to sell books, can supply. Their recent re-design and change of policy back to being a proper specialist has been extremely well received, but it may have been too late.

Things have changed hugely since the Ottakars takeover, though. And will, more, when they bring out the iPhone app which means that when you're in a bookshop you can scan any barcode, call the book up on Amazon, see if it's cheaper the and click to buy.

Foyles, apparently, is in fine form at the moment, though it's a much smaller chain. I guess it's up to each potential bookbuyer, whether they feel guilty about not supporting a failing chain. But it is true that with the Waterstones closures many high streets of quite big towns have been left with no actual bookshop, if Waterstones/Tesco/Internet between them have squeezed out whoever was the independent bookshop, which they mostly have. Mind you, W H Smiths is a much better bookseller than it gets credit for, to my mind, and has the advantage of drawing in many readers who'd never set foot in bookshop. The thing is, bookshops aren't just retail outlets like yet another clothes shop, they're an element of the culture, like libraries (when they were small my children used the two terms interchangeably) and if they go, that culture has no representative in the high street.

The problem, as far as writers and hard-core readers are concerned (remembering that the industry's definition of a 'heavy reader' is someone who reads more than five books a year), is how the structure of the industry reduces the range of titles which can expect to have decent exposure and therefore sales, with more and more of the sales and therefore the marketing-and-publicity money, focussed on the top-selling titles. Although this is chiefly the result of the abolition of the Net Book Agreement, which mean the supermarkets started selling huge numbers of a very narrow range of books, it's also caused by Amazon, which makes a wonderful range available in principle, (and supports the long tail who would have no distribution otherwise), but relentlessly steers readers towards the top sellers, both as a matter of policy, and in the nature of online retailing.

When an agent says - as they increasingly do - "five years ago I could have sold this" - that's what they're talking about: that there's an ever-increasing gulf between the big-sellers, and the rest. Because of that, more and more books of which the best guess is that they might break even or make a modest profit, (either because they're a nice example of a steady-selling genre, or because they're wild and far-out and probably where the next real literary excitement will be, but a bit of an outside bet) and keep the writer in business to build a readership, now won't be bought.

The only bestseller list I've ever really studied was typical: you'd expect a steady series from top to bottom of the 20, but in fact the top three had sold between 20 and 30,000 that week, no's. 4 and 5 were a bit below 20, and the other fifteen were all down in the 6-8,000 bracket. Guess where the publishers had put, and would continue to put, the main marketing spend? And of even the bottom set, a good deal of marketing spend had gone into them to get them there.

Not that overall sales are down, they're not, hugely. When the recession first hit, overall sales only went down by 1%, (but it would have been 3% if it weren't for Stephanie Meyer. So, don't scorn the blockbusters, thank goodness for them because they're what keep the industry afloat.) But it's the proportions - the economic structure of the trade - which have changed hugely, which the overall figures don't reveal, but has a huge effect on authors.

Interesting discussion, thanks a lot Kasubi and Emma...

I think I am definately a "heavy reader" - five books only! I get through at least twenty or more...but I do know lots of people that don't do books...they miss out!

Interesting debate and I'm amazed that there has ben so little additional correspondence because I'm starting to get a feeling that the world is changing around us and we are kind-of aware of it but are in denial. I love bookshops and, living in Germany, am starved for the good stuff so I use Amazon a lot. That's my excuse. I scribble, of course; far more than is good for me, and I send my stuff to agents- packages of printed paper to people who won't accept submissions by email. Now I'm a technocrat, I suppose, so this comes as a culture shock and I have had this feeling for a while that we are complicit in a Luddite reaction to technology. Have a read of this: http://www.nick-alexander.com/ebooks-rescue.html So, that's where it's happening. Books that the conservative agents and publishers won't touch are actually selling; people are buying them and reading them on Kindles. Ebooks are outselling hard copy in Amazon and the Kindle has only been out a couple of years. This is just the start of it; some agents are acceptiong submissions by email - difficult to believe, I know. The dust is being blown off Dickensian desks, ink in quills is drying up and POD is here as well. You see, we all know that the world has changed but we'd still really like to hope that it hasn't. HMV thought that they could withstand the change in music-buying tastes but got it wrong and if you can do it with an MP3 player, you can do it with a book. The writing's on the wall. Now this won't come as news, I suspect but I have the growing realisation that we are living through the death of the dinosaurs and the birth of mammals. Brave new world.

It has to be said that e-books are only out-selling paperbacks on Amazon US - not here - because the vast majority of the e-books are self-published. It's hundreds of thousands of titles selling a handful each, and the quality of most is better not even contemplated. It has very little - so far - to do with real publishing, of fiction at least...

And a publishing friend has pointed out a) that Kindle sales out-number paperback sales, but they don't out-value them: vast numbers of e-sales add up to a very small proportion of the $$$ value of the market.

and b) Kindle is Amazon's proprietory format, so of course they have an interest in making the sales sound as zizzy as possible.

Amazon don't really release hard numbers. All they ever tell you is things like "The Kindle 3 has now outsold Harry Potter". It's frustrating.

I'm usually wary of statistics because it's possible to slant the search to favour the result, but I think the numbers speak for themselves. However, my point wasn't so much the numbers game, it was to suggest that the world is changing and woe betide those who resist it. The Harry Potter generation have moved on to Twilight and they read when they're not on Facebook or Twitter or working. Those same readers are now the young adults and will one day be the old adults. For them, the internet is as natural as breathing and they will download their books and read them on their Kindles or Wordpads or whatever. They will occasionally get them from bookshops but predominantly it will be from the internet, just as it is now with music. By any standards the growth in ebooks is staggering, and we're in a recession. The good news is that reading is alive and well but we should be prepared for a change in the way that the books are delivered to the customers. I guess the more savvy agents are on the ball in this respect.......

The UK is about a year behind the US, but it might close the gap quicker than that.