Much of the loudest buzz within the book business is of Random House’s plan to swallow Simon & Schuster.
S&S among other advantages could enjoy more outlets for its books. But such a vision still reeks of “shuffling chairs on the Titanic.”
Merger or no merger, and regardless of Random House’s profits, the industry as a whole is a dismal underperformer, as shown by pre-Covid numbers from the U.S. Bureau of Labor Statistics—covering publishers of all kinds, large and small.
Americans in 2019 were spending 33 times more on big-screen TVs, Netflix, and other nontext diversions than on books and other forms of recreational reading.
Many U.S. publishers have enjoyed a bump in book sales during the pandemic (especially to well-off households locked up at home and interested in home-schooling children). But reading-related expenditures, in fact, might on the way down or at least end up flat for too long if we extrapolate long-term from some BLS numbers.
Yes, “Tiger King,” football, and the like are more alluring and more in-your-face to the population at large than is text. Still, the book business’s numbers stink even when we acknowledge the ratio between slack-jawed nonreaders and bright-eyed lit majors or even bestseller fans.
For recreational reading of all kinds, pre-Covid expenditures per household fell from $118 in 2016 to $92 in 2019. The $92 excludes, say, textbooks but encompasses nonbook reading of all types, so the statistic for books is likely to be noticeably lesss. The just-mentioned $92 would be a speck of the $3,090 devoted to other forms of entertainment in 2019. Nontext entertainment in 2019 fell slightly from 2018 but actually increased from 2016’s $2,913 to the $3,090.
So what percentage was the $92—the amount spent on recreational reading—of a total of $63,036 household expenditures in 2019? Would you believe, a mere .146 percent of the expenditures compared to 4.905 percent lavished on entertainment. Even tobacco and smoking supplies could claim .579 percent—several times the percentage spent on recreational reading—despite all the warnings on cigarette packages.
While publishing will never enjoy the full revenue potential of many other industries, I believe it deserve a big fat F in the marketing department and related ones.
Old habits, such downplaying electronic books in some cases because of the existing paper-oriented infrastructure, can be costly. So can onerous digital rights management, as opposed to watermarking or even the absence of any “protection” at all.
And oh how the industry is hobbling itself by using DRM to block many books from being usable with text-to-speech technology. Imagine what text to speech could mean in terms of expanding the reading time for many readers who could multi-task while, say, performing household chores. A market would still exist for audiobooks with skilled narrators.
I could go on and on about the changes the industry needs, both during and after the pandemic. Some are already happening, as shown by sales increases at large retail outlets such as Walmart and Costco—see COVID-19 and Book Publishing: Impacts and Insights for 2021, a comprehensive report by Cliff Guren, Thad McIlroy and Steve Sieck, covering this and many other details.
Thinking more strategically, the industry need to care more about marketing beyond the elite. “I feel there’s a major study to be done on this issue,” Thad emailed me last month. “The book publishing industry largely sells to the same well-heeled audience, year after year. The audience increases slightly as additional literate graduates enter the reading world—then declines with the deaths of the heavy-reading seniors.” Paraphrasing BLS information, the report said: “The top 10% of earners spent nearly 8½ times more on reading than the bottom 10%.”
As I see it, we should regard libraries as key to increasing the number of readers. Yes, book expenditures are just a tiny fraction of household expenditures in the U.S. and probably in Canada and elsewhere, but regardless, consumers can be ultra-sensitive to prices. One partial solution would be national digital library systems in effect expanding the universe of readers and increasing sales volume rather than replicating the fixation of so many publishers on price per book sold. Digital library catalogues could include “buying links” not just to digital online bookstores but also stores near consumers who wanted to get books faster or keep them permanently. Certainly libraries can be a major source of book discovery, if we go by statistics from BookNet Canada in 2015:
Also, do you notice the importance of used books? At least back in 2004, the $2.2 billion in used books sales in the U.S. were 8.4 percent of total consumer spending on books, with textbooks the main show in that market although used sales of nontextbooks were rapidly increasing.
With lower ebook prices, publishers could more successfully encourage consumers to buy new rather than used books and could thus benefit financially. Same in regard to new purchases in place of borrowing books from friends or relatives. Moreover, borrowers could more easily be converted to buyers.
Helpful, too, would be national library endowments in the U.S., Canada and elsewhere, which, among other activities, could promote libraries, family literacy, reading and even individual titles—to the benefit of libraries and the book industry alike. See LibraryEndowment.org. For more information on synergies and potential synergies between libraries and the commercial side of publishing, see the Panorama Project and TeleRead’s look at it.
Simply put, publishers could do much better at developing markets than they are now. While the pandemic may provide a boost, especially if the reading habit lingers among some at-homers, it is dangerous to be pat about the status quo.
On the brighter side, think of the vast revenue opportunities if only the industry will show more flexibility and receptiveness to new ideas.
BLS definition of “reading” excluding textbooks: “Reading includes subscriptions for newspapers and magazines; books through book clubs; e-books and digital reading material; and the purchase of single-copy newspapers, magazines, newsletters, books, and encyclopedias and other reference books.”
Addendum #1: I see that Statistica service has come up with print book unit sales from 2004 (648 million) to 2019 (693 million) and virus-boosted 2020 (751 million). Not very impressive growth, long term, in my opinion, if you consider that the 2005 stat was 778 million and that the corona created special tailwinds to increase 2020 unit sales 8.2 percent over 2019! Sources are Publisher’s Weekly and Nielsen Book Scan. Now, how about household expenditures on books? BLS-based Statistica stats going back to 2007 show that the long-term trend has been more or less flat. That would jibe with the household numbers I saw on the BLS site for 2016-2019.
Addendum #2: “Expenditures consist of the transaction costs,” BLS says, “including excise and sales taxes, of goods and services acquired during the interview or recordkeeping period. Expenditure estimates include expenditures for gifts, but exclude purchases or portions of purchases directly assignable to business purposes. Periodic credit or installment payments on goods or services already acquired are also excluded. The full cost of each purchase is recorded, even though full payment may not have been made at the date of purchase.” Since BLS is gathering information in this case at the consumer end, publishers’ sizes or whether they were included in certain industry-reported statistics would not make any difference. Remember, we’re talking about household expenditures.