PG Note: Sales and revenue statistics in commercial publishing are not the easiest to pin down nor are they the most reliable. Part of the difficulty is related to the fact that none of the major U.S. trade publishers are independent/standalone companies. The five largest publishers in the United States are Penguin Random House (owned by German-based Bertelsmann), Simon & Schuster (owned by CBS), Hachette (owned by French-based Lagardère), HarperCollins (owned by News Corp.), and Macmillan (owned by German-based Holtzbrinck).
When a company is a subsidiary of another, larger company, the majority of publicly available financial information focuses on the sales, revenues, costs, etc., of the parent company. When the owners of the large parent companies provide financial information, they may gather several different subsidiary companies together in a group, e.g. the “Media Group” or the “News Group” which may include subsidiaries in the news business, radio/television broadcasting, commercial publishing, etc.
The numbers shown below are from an Association of American Publishers publication titled “Statshot”. To the best of PG’s knowledge, the Statshot numbers are what the publishers voluntarily provide to the Association and are not audited to ensure accuracy.
End of PG Note
Estimated Industry Revenue for 2022 was $28.10 Billion
- Industry-wide revenue declined by 2.6% during the year, going from $28.85 billion in 2021 to $28.10 billion in 2022.
- During 2022 the industry’s largest category, Trade (consumer books), decreased by 6.6% to $17.36 billion in terms of estimated revenue.
- Higher Education revenue decreased 7.2% to $3.18 billion.
- PreK–12 Education increased 16.6% to $5.61 billion.
- Professional books decreased by 6.0% to $1.47 billion.
- Religious Presses, a subcategory of Trade, decreased 6.0% to $1.27 billion.
- University Presses, the smallest category reported, declined by 7.7% to $414 million.
Trends During 2022 for Retail Channels
- For the seventh consecutive year, publisher sales via Online Retail channels exceeded sales via Physical Retail channels.
- Revenue attributed to Physical Retail was $5.22 billion for the year, a drop of 5.8% on a year-over-year basis.
- 2022 revenue attributable to Online Retail, a channel that includes both physical and digital books, was $8.19 billion, a decline of 12.4% as compared to 2021.
- Channels that saw increased revenue during 2022 included:
- Direct Sales, which grew 12.3% to $7.23 billion.
- The Intermediary Channel, which was up 0.7% to $5.05 billion.
- The “Other” Channels, which increased 13.1% to $1.16 billion.
Five-Year Trends in Publishing
- Overall, the publishing industry revenue grew 11.0% between 2018 and 2022.
- Revenue in the industry’s largest category, Trade (consumer books), grew 9.7% during the period.
- Religious Presses, a part of Trade, decreased 2.4%.
- Higher Education revenue decreased by 18.0%.
- PreK–12 Education revenue increased 67.4%.
- Professional books revenue decreased by 20.6%.
- University Presses, the smallest category reported, increased by 3.9%.
- Industry revenue by format for 2018 – 2022:
- Revenue from Hardbacks increased 4.1% during the five-year period.
- Revenue from Paperbacks increased 15.6% between 2018 and 2022.
- Mass Market revenue declined a total of 37.7%.
- eBook revenue decreased 2.5% during the five-year period.
- Revenue from Instructional Materials, which includes textbooks, workbooks, review books, standardized tests, digital textbooks, course materials as well as online tools such as homework managers increased 13.0%.
- Digital Audio revenue increased by 71.7%.
- The growth in Digital Audio revenue continues to overtake Physical Audio, which declined by 69.8% during the five-year period.
Link to the rest at Statshot
Another factor in growth rates PG has never seen in any report of traditional publishing growth figures is inflation.
As an illustration of the effects of inflation, an item purchased in 2020 for $1.00 would cost $1.19 in 2023 due to a cumulative inflation rate of 18.9% (in the US).
In the Statshot Five-Year Trends report above states, “Overall, the publishing industry revenue grew 11.0% between 2018 and 2022.” However, the US Inflation Calculator during the period from 2018-2022, the US inflation rate was a cumulative 16.5%, so, in real dollars (and, likely, in other hard currencies), the publishing industry lost ground over that four-year period.
Of course, part of the problem with relying on “general” inflation rates is that they are only general. Paper prices, for example, went up by over a third during COVID (for “trade-paper-quality” stock), when it was available at all. Indeed, a fair number of short- and medium-run printers have drastically reduced their stock selections at the same time prices were rising.
General inflation rates are pretty good for gauging what one can buy with the profits. Investors find them handy in comparing ROI for different opportunities.
>> Simon & Schuster (owned by CBS),
No longer. It is owned by KKR, deal officially closed on Monday or thereabouts.
Thanks for the update, J.
My understanding is that KKR is a meticulous, high-pressure organization that has an insatiable craving for profits. It will be interesting to see how that translates into business practices of an old school publishing company which, as indicated in the OP, is part of a business that doesn’t generate very many profits.
Don’t forget, that it is *new* books that eat capital and offer low ROI.
That was acceptable in the age of “quantitative easing” and near zero interest rates. Today? Not so much. KKR will find plenty of higher return opportunities for their cash so odds are they’ll minimize their costs by publishing less new content, avoiding big gambles, and going all in on backlist (sunk costs!) and franchises. Less staff needed for both. Especially the three martini lunch crowd.
Their acquisition “editors” bear watching as they exit stage left.
Time for the usual reminder that, unlike other industries, corporate publishing ignores inflation.
For 2022, it was (officially) 7.5%.
Add that to the reported drop and you’re well into double digits.
Hard to handwave that away.