Sunday, December 12, 2010

The Last Country House Party? E-Books and Publishing's Phony War

From what I can gather around town, major trade publishers have been having a pretty good year--a surprisingly good year, given a lingering recession and the widespread predictions of the death of the book business.  And it seems pretty clear a primary reason, perhaps the reason, for our good results is the  explosive growth of e-book sales.

The introduction of the iPad, slashed prices on the Kindle, now the color Nook and the long-awaited arrival of the Google e-bookstore--all these have helped to drive a massive increase in e-reading. While print book sales have declined in the past year, e-books, with lower per-unit costs, have more than taken up the slack. Even for houses where gross sales have declined, profits may well have increased. And many of us in the industry expect a bonanza after Christmas, when everyone who has just opened their gift Kindles and iPads loads them up with new e-titles to read. We could see a surge in e-book sales that makes the year look triumphant for book publishers.

I can't help wondering if what we're living through right now is like the "Phony War" of 1939-40--the period when war had been declared in Europe but Germany had yet to assault the countries to its west. The country-house parties went on as before, but the storm was coming. 

Right now e-book sales are,  not exactly gravy for publishers, but a profitable layer on top of print sales that have yet to fall off drastically.  But that won't last.  As Mike Shatzkin starkly put it this week, "every book purchased online is another nail in the coffin of brick-and-mortar bookselling." As the e-book trend continues, more bookstores are going to close--both independents and chain locations. Both B&N and Borders have been closing superstores and also devoting more space to non-book items, further reducing shelf space and inevitably book sales.  

I don't know when it will happen, but we're likely to see bookstore sales go from "declining" to "plunging" in the near future. Shatzkin's take is that "what brick-and-mortar booksellers will experience in the first six months of 2011 will be the most difficult time they’ve ever seen, with challenges escalating beyond what most of them are now imagining or budgeting for." My impression is that most publishers are not budgeting for these challenges either. When they start to hit home, we may have to take our motor-cars back from the country houses and get ready for the Blitz. 

P.S. If you believe, as I do, that independent bookstores--and even well-run chain bookstores for that matter--are a vital part of our literary ecosystem, please remember to do your Christmas shopping there. 

(Still from Jean Renoir's The Rules of the Game, 1939.)


The Novel Road said...

Interesting observations on how this evolution of publishing is going to shake out.

Do you see publishers building larger portfolios of authors to offset the overall lower sales numbers?

Great post as always,


Peter Ginna said...

Doug, that's a very good question. There are too many other factors in play for me to know the answer for sure. But I do think it's very likely that it will motivate some houses to consolidate--one effect of which, obviously, (and one reason for doing so) would be that those houses would have larger lists.

David Krancher said...

I don't worry a bit whether the publishing world will survive as it presently exists. Change has a 17 billion year history. I do worry whether there will enough good writers to raise the consciousness of readers enough to save life on earth.

—David Krancher

colette obrien said...

If mainstream publishing is learning from the booming digital world of social media, I think there's a chance for survival. As a writer, I would hate to see them go even though I have failed to gain the attention I'd like from them. No hard feelings.

Peter Ginna said...

Colette, I didn't mean to suggest the "survival" of mainstream publishing is in question. It's simply that I think mainstream publishing is going to change--how radically we don't yet know, but significantly. It has begun to do that but the pace is inevitably going to accelerate. There is no question that social media is going to be an even more important part of the landscape than it is already.

eug said...

With the latest figures out it appears the phony war is over and the shooting war has started. Let's hope it's not the music business all over again.

On the spot prediction!