Trendspotting:
Waiting to Exhale
FROM PUBLISHING
TRENDS (JANUARY 2002)
“We will
never be the same,” ran the popular refrain after 9/11,
and as we continue to unpack that sentiment in the various
parts of our lives, it seems a fitting enough epigram
for the state of book publishing nearly four months
into the post-terror twilight. Something has changed,
all right. But across the industry no one is quite sure
yet how far gone they really are, and faced with massive
market uncertainties made more volatile by the southbound
economy, this business like many others is effectively
holding its breath. “The worst thing anyone can do is
to actually think and make decisions,” says one publisher
when asked about sales prospects for the near future.
Too much thinking, of course, leads to panic, and panic
leads to bare bookshelves in a sort of self-fulfilling
prophecy: publishers cut print runs, afraid that stores
won’t reorder, hence books aren’t available where and
when they should be, and so on. “It’s best to leave
inventory issues up to the computer models that trigger
the orders,” this publisher advises, “so that there
will at least be some books on the shelves.” Bearing
this caveat in mind, PT has culled the following
year-end impressions from our conversations with a wide
spectrum of industry executives. We hope they offer
some welcome food for thought — when you feel it’s safe
to think again, that is.
Am
I solvent? Ask me in six months. Those who are thinking
about sales forecasts for the near term say — no surprise
here — that the barometer reads “unsettled.” Sales managers
tell us they glimpse a ray of light at the end of the
tunnel, but editors seem more wary of further downward
pressure. One publisher reports frantically shipping
titles two weeks before Christmas, as Ingram
and others had let inventories slide after 9/11. Meanwhile,
most anyone with a backlist is probably kneeling in
gratitude before it, especially if it is modelled and
orders are kicking in automatically. Conventional wisdom
is that all bets are off until six months from now,
when final results are in and returns have been accounted
for. One bright spot in the gloom, incidentally, may
be for book packagers, several of whom report gung-ho
forecasts for 2002, as ongoing book contracts have softened
the brunt of the general downturn. “I would imagine
that our backlist sales and royalties will reflect the
weakness in the marketplace this quarter,” says one
packager. “But otherwise, I’m cautiously optimistic
for 2002. Am I nuts?”
Ad
spending and review space: a negative dialectic.
The continuing shrinkage of review space in newspapers
and magazines has had what an industry marketing guru
calls an “obvious impact on sales.” And it’s a downward
cycle, as fewer ads lead to fewer review pages, which
lead to fewer ads. Expected cutbacks coming down
the pipeline, say publicists, are only going to make
matters worse. Advertising spending in all industries
is projected to fall by up to 7% this year (it would
be the biggest decline since 1938), with a further,
though less drastic, drop expected next year. Many in
publishing may still hew to the belief that ads don’t
sell books, but some marketers point out that come what
may, advertising dollars make a vital contribution to
the promotional machine: “They support the review pages
that do sell books,” says a marketing director, “and
that may have to be the new justification for book advertising.”
Picture
not so perfect for illustrated books.
“Illustrated book syndrome”
is the grim diagnosis one illustrated book publisher
offers for this troubled segment, which has been wracked
by layoffs of more than 25 from Abrams, the displacement
of Abbeville’s entire staff due to the office’s
proximity to the World Trade Center (some are still
working from home), and the closure of Viking Studio
at the end of the year (with all staff including Christopher
Sweet headed out the door). Publishers cite heavy
production costs, slow earn-out, competition from proprietary
publishers, and retail discounting, which was accelerated
by the Taschen/ Könemann rivalry (and
led to the latter’s financial troubles). Those houses
escaping the brunt of the scourge (at least for now)
include Clarkson Potter, where sell-through has
been healthy across the list, Watson Guptill
(despite the recent departure of President and Publisher
Glenn Heffernan), and Chronicle. Thames
& Hudson, which had its best year ever
in 2000, expects to sail on an even keel this year,
and is now cheerily shipping titles for the 30% to 40%
of its list that’s in the college market. Meanwhile,
distributors such as Antique Collectors Club
have cut back staff, and DAP reports that sales
are down from last year, but are up in niche areas and
limited editions, where quantities are slimmer but prices
higher. Other distributors are warily monitoring sticker
shock, as the segment clings to the $30 mark — the top
price that consumers seem willing to pay.
Giacometti
catalog, anyone? In a related segment, museum publications
departments are getting particularly hammered by post-terror
declines in attendance, and the guillotine has already
been hoisted in many a sculpture garden. The MoMA
store had already powered down in anticipation of its
hiatus next June, but a quick sales reforecast after
9/11 and the stealth actions of what’s been called a
“brilliant marketing department” revamped the operation
in a week so that attendance numbers were only down
6% — compared to the Met’s publicly announced
40% and the Guggenheim’s 50% drop. MoMA is on
track to sell its complete run of the Giacometti
exhibition catalogue, but even with that morale boost,
sales will still be weak without the usual tourist trade.
As museums batten down the hatches, will the German-
and US-based house Prestel — and others of its
ilk which compete with museum publishing divisions —
take home the spoils?
When
all else fails, Harry Potter prevails.
Shuffle the numbers
any way you like, kids’ books still seem to outpace
adult sales. Moreover, Harry and company have
staying power, with anticipation hot and heavy for HPV
(which is due in next year). Our sources tell us the
children’s business is “steady, solid, and somewhat
heartening” given the teeth-gnashing and breast-beating
from other retail sectors. That said, what seems to
be selling are the tried and true (the familiar is obviously
a special comfort these days), as well as the fantastic
and all things holiday related. And sales are strong
for Lord of the Rings, Lemony Snicket,
and Olivia, with a number of other children’s
properties buoyantly described to us as “just a dream
to the bottom line.”
The
smaller the store, the better the sales.
As chain retailers continue to drive up their direct
purchasing percentage, and cash-strapped independent
booksellers resort to just-in-time buying via wholesale,
you might think the Goliaths have finally prevailed.
But as one sales executive noted, with all their markdowns,
chains may be having a tough go of it, provoking an
audacious few to put them on credit hold. This predicament
has in fact given rise to a tentative new mantra: “It
seems like the smaller the store, the better the sales.”
The indies are still in the game, despite reports that
their share of the business has dropped from 33% in
1993 to 15% today. One large independent operation tells
us they checked their Nov. 2000 figures against last
year, and found comparable sales for each month. And
get this: Saturday, December 15th was this store’s best
sales day ever. For its part, Book Sense is said
to be modestly moving the needle, and making a more
notable difference in establishing smaller books. On
the other hand, indies are keeping tabs on reports that
online sales are going gangbusters, with Amazon
ordering heavily from wholesale. (A Consumer Reports
feature on book retailing notes that online stores account
for 7% of book sales — and in a survey of 25,000 readers,
Amazon was ranked a close second behind independent
booksellers in terms of reader satisfaction.) In other
retail tips, don’t forget those impulse buys. “Point-of-sale
is dramatically up over last year,” says an executive
at a major publishing house. “It’s a real bright spot.”
Too
pricey? Check that page count. As the industry
rubbed its collective chin over the recent New York
Times article on steep retail prices for books,
we note a logical response might be a more aggressive
approach to pruning today’s monster tomes. (The ever-fattening
size of volumes has been chalked up to the advent of
the computer.) Despite arguments that printing and binding
costs have declined significantly over the last decade,
paper costs are still going up for many publishers,
and account for a big chunk of any book’s cost. The
industry might tamp down prices by trimming page counts,
and — who knows? — you might even get buzz over brevity,
like Ken Lipper’s and James Atlas’s Penguin
Lives series.
Paradigm
shift: Linear out, cyclical in. On
the bright side, one agent points out, the industry
as a whole appeared to turn a corner after Thanksgiving,
when the phones gingerly began to ring again and we
collectively exhaled. (Given the pessimism still voiced
by the likes of Random’s Peter Olson,
however, it remains to be seen how far that next breath
of air will take us.) Another upbeat reading of post-September
events is that they mark a healthy return to a cyclical
view of the business, which had been tossed in the dumpster
during those heady boom years, when the damn-the-torpedoes
linear business model ruled.
Once
more to the steaming altar. Covering your bases
never hurts, either. “We’re looking OK, or damn close,”
says an upscale academic publisher, who offered a few
comparative thoughts on the mega-hit-driven trade business.
“I think this is in part because we’re more diversified
than echt Trade houses, so we have something else to
fall back on besides the great and insatiable god of
bestsellerdom, upon whose steaming altar virgins must
regularly be offered up.”
©2002
Publishing Trends
