Publishing Trends

“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.”