More doom and gloom on a sunny Tuesday

Posted: May 12, 2009 in Uncategorized

The decline and fall of books

Traditional bookshops are closing; vending machines are churning out novels; and e-books are the new paperbacks; so is this the final chapter for the book industry?


 

Like so many prototypes of supposedly revolutionary inventions, the Espresso Book Machine (EBM) fails to impress. Sited in a branch of Blackwell’s in Charing Cross Road, London, the machine resembles an oversized photocopier with extra bits. Can this be part of, as a Blackwell’s executive has claimed, “the biggest change since Gutenberg”?

It is an attractive idea. Wouldn’t it be marvellous to go into a shop knowing that if the book you wanted was not in stock, you could get it printed specially for you? Or that you could browse the catalogue and get copies of whatever you fancy in minutes. Blackwell’s claims that the EBM offers 400,000 titles, which are digitised texts from libraries and other sources. On receiving an order, the machine takes about 20 minutes to set up the file and then prints a perfectly acceptable paperback book in five minutes. A 400-page book costs about £9. Those produced from digital files look good; those produced from books that have gone through a scanner look a bit rough.

On May 6, Amazon unveiled a new Kindle e-reader (a widescreen version of the handheld device for reading electronic books). “You never have to pan, you never have to zoom, you never have to scroll. You just read,” said Jeff Besos, Amazon’s chief executive, at the New York launch. It is yet another indication that the book industry could do with a new way of distributing and selling books.

Booksellers are struggling to make a go of shops with large ranges of slow-turning stock, and they are paying prohibitive rents. Leading publishers are gambling scary sums of money on books by top authors and celebrities and struggling to underpin their lists with less glamorous titles. Authors, unless they are talented or lucky enough to make the bestseller lists, look on as these firms’ ever fiercer battles over dwindling margins eat into royalty payments.

No doubt future generations of the EBM will be less clunky. Then the machine will be well adapted to conform to the theory advanced by Chris Anderson, the author of The Long Tail. Businesses would thrive, Anderson argued, by supplying deep ranges of items, many of them selling in small quantities to niche audiences. Amazon is an example. The internet retailer promotes bestsellers heavily, with deep discounts. But it really scores in offering a huge catalogue of titles – many more than a terrestrial bookshop can stock. Even more profitable is Amazon’s Marketplace business, through which it acts as a middleman for sellers of second-hand and out-of-print books.

The effects of Amazon’s activities can be seen all around Blackwell’s on Charing Cross Road, once the heart of London bookselling. Now only Foyles, Borders and Blackwell’s remain. Blackwell’s specialist neighbour, Sportspages, is long gone. Another specialist, the crime and science-fiction bookshop Murder One, closed recently, blaming competition from the internet. The art booksellers Zwemmers and Shipley have disappeared too, and the women’s bookshop Silver Moon survives as a department within Foyles. Murder One was a great shop to browse in. But even the most conscientious supporter of independent bookselling must have found Amazon too tempting to ignore. Buy from Amazon and you start getting recommendations of new titles. If you made a trip to Murder One you could not be confident that, for example, every title in Andrew Taylor’s Lydmouth series would be there; they are all on Amazon, though some are second-hand.

A visit to Blackwell’s on a weekday afternoon illustrates another problem for terrestrial booksellers. There are fewer than ten customers in the shop. They have the run of thousands of square feet of selling space and of thousands of titles. Many of these titles attract buyers just two or three times a year; and those long-awaited sales may bring in no more than the price of a paperback. Meanwhile, Blackwell’s is paying premium rents.

Booksellers have managed to make profits from this bizarre business model by balancing new titles, which sell quickly, with deep ranges of stock. The bestsellers pull in customers and generate instant turnover and profits; the backlist ensures continuing custom. The problem now is that profits from the bestsellers have sharply declined. The abandonment of retail price maintenance on books in 1995 allowed supermarkets and Amazon – the only retailers to achieve substantial growth in their book businesses in the past few years – to discount bestselling titles at levels that specialist booksellers struggle to match. As a result, independent bookshops have largely given up selling celebrity memoirs and other mass-market titles. Waterstone’s, as the biggest bookseller in the country, has to try to compete, but by offering far deeper discounts than it would like. In its last set of financial results, Waterstone’s profit margin was less than 3 per cent. Its latest strategy is the “Discover” campaign, an effort to promote its shops as unrivalled places to find expected or unexpected gems.

From the producer’s end, the economics of the book business are just as challenging. The leading publishing houses are international giants, hungry for bestsellers, which are very expensive to acquire. Last autumn, Transworld had a huge hit with Paul O’Grady’s memoir At My Mother’s Knee. This spring, the company signed up a further volume from the chat-show host, but reportedly had to double its previous advance, to £2 million – because O’Grady, or his agent, wanted to match the sum that Dawn French had received for her memoir, Dear Fatty. So Transworld has paid twice as much for a book that will probably sell half as well. Another company found itself similarly penalised for success: to buy a second novel by the author of an unexpected bestseller, the publisher was asked to pay a sum equivalent to the profit it had made on her first book. It meant that the new book was almost certain to be unprofitable unless it reproduced the earlier success. It didn’t.

In spite of the scary economics, celebrity books and other blockbusters have made a lot of money for publishers in the past few years. Will our appetite for such books be as strong in a credit crunch? It must be doubtful. Publishers are praying that the trend can survive, however, because the economics of the rest of their businesses is also looking dodgy.

The publishing model has a lot in common with the bookselling one: in theory, the bestselling titles bring in the turnover and profits and the rest of the list provides the bedrock of the business. But publishing the so-called “midlist”, or any book that does not come with some kind of marketing angle, has become more difficult. A book has to be “promotable”: the author will be young and attractive, or have an interesting CV; the work will tell an extraordinary story. Biographies of literary figures outside the top rank, or novels with undemonstrative virtues, do not cut it.

The reason why Tindal Street Press – an Arts Council-funded imprint in Birmingham – was able to publish Clare Morrall, the Booker Prize-shortlisted novelist, and Catherine O’Flynn, the Costa award-winning writer, is that no big publisher saw the potential of these authors’ novels. (They do now: Morrall is with Sceptre and O’Flynn with Penguin.) Some acclaimed authors have moved to small houses: Maggie Gee (formerly HarperCollins), for example, is now with Telegram Books, and Tibor Fischer (formerly Chatto & Windus) is with Alma Books.

Practices that have been normal in the book industry for years are becoming unsustainable. You pay an author an advance – say £15,000 – that is probably too large, even though it is too small as recompense for what may have been a year’s work. You print 1,000 hardbacks and manage to sell 800 copies to booksellers. Lorries bring them to your warehouse and take them out again to the shops. The book gets a few reviews, but no recognition from prize jurors. Half of the copies come back and they, along with the 200 that never left, get pulped. A year later, the paperback comes out. Richard and Judy fail to recommend it, the booksellers do not select it for their three-for-two promotions. The lorries go to and fro again and more books get pulped. No wonder publishers are looking for new authors through low-cost ventures such as HarperCollins’ Authonomy, a self-publishing website, and Macmillan New Writing, which pays no advances.

This is where digital technology, such as the EBM and electronic devices, including the Sony Reader, comes in. Printing thousands of books that sit in warehouses or on booksellers’ shelves, only to be pulped, is unsustainable. But remember the long tail: there may be a demand, albeit “niche”, for these texts. It makes sense to create digital files that can be downloaded or printed according to demand.

This prospect causes book industry figures to look with alarm towards their counterparts in music, where digital downloading, legal and illegal, has caused turmoil. It seems that consumers expect digital books to be cheap. But giants such as Penguin and HarperCollins will not be able to remain profitable if all their books cost less than, say, £10; and authors’ rewards from these books, unless sold in large quantities, will be trifling. Worse, many consumers expect digital content to be free. While digital piracy is a minor problem for the book industry, it will grow.

Perhaps the digital revolution will decentralise publishing and bookselling, as Gutenberg’s movable type did in the 15th century. Publishing, printing and bookselling may come together again. Will the bookshop of the future consist of a few hundred bestsellers and a print-on-demand machine? At Blackwell’s, such a prospect required an imaginative leap. The EBM would print only some out-of-copyright works and those only if purchasers knew exactly what they wanted. The customers’ terminal in the store was not functioning: you had to ask the bookseller to search for a title. The copyrighted works that various publishers are making available had not yet come through, and there was no search function on Blackwell’s website.

A Gutenberg-style revolution is not, on this evidence, expected in the next few months. But if you are a lover of well-stocked bookshops, then you should enjoy them while you can.

 

Nicholas Clee is the joint editor of the book industry newsletter BookBrunch and the author of Eclipse (Bantam Press)

From: TimesOnline.com

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