Much of the news is cheery in “COVID-19 and Book Publishing: Impacts and Insights for 2021,” a free 50-page report from three seasoned industry consultants, Cliff Guren of Syntopical, Thad McIlroy of The Future of Publishing, and Steven Sieck of SKS Advisors.
True, the coronavirus has bankrupted some brick-and-mortar stories, and libraries will have to compete at budget time with other agencies the virus is battering. But publishers themselves have fared surprisingly well.
Working at home to avoid the contagion, millions have ditched their commutes and are now ordering books online from Amazon and other big retailers. Many Americans, at least those not saddled with new childcare burdens, enjoy more reading time.
Savvy publishers also will be able to sell directly to consumers directly, including those home-schooling their children. Print on demand should make all kinds of things possible. Same for electronic books, whose September sales grew 22 percent year over year. And the “online first” publishing model may become increasingly attractive.
. . . .
The report covers plenty of territory, but one observation in particular leapt out at me—how publishers have stayed afloat partly because they are so focused on affluent consumers, who tend to be less affected by the virus than America at large.
Backing up their claims, the authors reached back to some 2015 statistics from the Bureau of Labor Statistics showing in their words that “the top 10% of earners spent nearly 8½ times more on reading than the bottom 10%. And so while the pandemic is hitting lower earners financially more heavily than the more prosperous, this is at worst a minor negative indicator for publishing’s bottom line.”
On the surface, that tidbit would seem to delight. Hooray! Publishers so far have been more virus-proof than, say, restaurants or brick-and-mortar bookstores in malls.
But the ultimate message is a downer in a certain way, and not just in regard to the threat to democracy if financial and cultural gaps grow between rich and poor Americans. Unwittingly, between the lines, the report is implying that major publishers, at least, are leaving a lot of money on the table by focusing on the well-heeled at the expense of the masses.
Ebook prices from them have been too high, as I see it, to tempt many consumers, and publishers should not take the status quo for granted or even be happy with it if they look ahead.
“Consumer discretionary spending should rise with the economy’s anticipated growth in 2021, a positive note for consumer book sales,” the report itself says while citing widely accepted forecasts of six percent for such spending as a whole. “But there are clear signs of demand elasticity in, for example, consumer willingness to add or cancel video streaming services to lower cost, and resistance to paying high prices for home rental of first-run movies; and in the high demand for library ebook lending.”
Too many publishers, in my opinion, would rather protect their infrastructure for paper books than assure their digital titles maximum distribution by pricing them reasonably. There is also the issue of editorial content of the books. Small publishers and self-publishers are dominating category fiction such as romance.
Even with that factored in, the entire publishing business is still leaving billions on the table. Household expenditures for books are just a fraction of the several thousand dollars a year that the typical American household spends on other forms of entertainment.
Such is the bad news, worsened by the virus, which if anything is exacerbating income and wealth differences. And the good news? Lots and lots of potential upside for publishers of all sizes. The industry simply needs to think more about expanding the universe of readers and less about such short-sighted strategies as overpricing ebooks and and in the future especially jacking up prices for library ebooks.
I know. Some publishers complain that library borrowing steals from retail sales. But despite the willingness of many consumers to check out books rather than buy when prices are too high, the truth is more complex.
Borrowing of library ebooks has surged during the epidemic, but print book sales have risen, too—8.2 percent in 2020. The message here is that publishers can be both pro-library and solvent. And pro-library is really pro-publisher since today’s borrower may be tomorrow’s buyer even if direct correlations may not be evident. It’s the book habit that we need to encourage among the many millions who are now spending either a pittance or nothing at all on books.
Asked for his thoughts on the demographic differences in book-buying, especially during the pandemic, Thad McIlroy emailed me: “I feel there’s a major study to be done on this issue. 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.
. . . .
As noted in our report, the pandemic has led to a lift in ebook sales and lending. I suspect the increases in sales and borrowing will last beyond the pandemic. Familiarity breeds contentment. And, as you note, we are all getting used to doing more and more online and on our phones. Convenience is addictive.
“With regard to libraries and discovery—I agree that libraries have an increasingly important role in driving discovery, but discovery doesn’t automatically (or uniformly) drive sales. It’s relatively easy to assess the impact of specific events (such as author readings) on sales—much harder to assess the long-term impact of library promotion and availability of a specific title on sales. The Panorama Project is working on this, but it’s going to take time and significant industry cooperation/coordination to get to authoritative results.”
Link to the rest at TeleRead
PG says (again) that when you combine too little business and marketing savvy at major publishers with an obstinate refusal to spend money to build the size of the overall market and market share on the part of the primeval management of the large international holding companies that own most of the US traditional publishing business, you’re likely to wait a long, long time for any sort of innovation in pricing, business practices, more focus on innovation in ebook marketing and sales activities, etc. to occur.
Innovation for this group usually involves long discussions about how much higher the prices for books can be increased this year.
Traditional publishing has a highly-conflicted view of libraries. They have the idea that a high percentage of borrowers would buy their books if it were unable to conveniently borrow them from a library.
Publishers don’t understand (or are unwilling to accept) that readers don’t live in an information-consumption box that only contains books (and traditionally-published books at that). Consumers can find entertainment and education from all over the place, including from online sources besides libraries.
PG spends far more time during the day reading text that comes to him via email and web browser than he does reading text that arrives on his ereader (and he’s a regular reader of books on his ereader). PG hasn’t purchased a physical book for himself in years. Ditto for Mrs. PG.
Something PG hasn’t seen discussed by traditional publishers or journalists who cover that beat is that more than a handful of avid readers of hardcopy books automatically put their physical books up for sale as used books as soon as they finish reading them. This includes readers of printed books that they purchase new from Amazon as well as readers who have purchased used books from local or online bookstores.
These types of readers want to help fund their physical book reading habit, so any amount of money they can generate from selling their once-used or many-times-used books help fund the purchase of additional books.
PG just checked on eBay and over 35 million books were for sale. All the ones he looked at were used and selling for a small fraction of their original retail price. PG includes a handful of eBay screen shots at the end of this post.
PG notes that most of the eBay screen-clips he made were sponsored posts – paid advertisements – not just a bunch of amateurs selling their books. A would-be reader could spend ten minutes and ten dollars and buy at least a couple of weeks of reading on eBay (with free shipping). And there was no mention of any sales tax the purchaser would have to pay.
Looking at the overall book market with a hard-eyed view not limited to only wealthy readers, a business-savvy publisher would sell ebooks direct to readers, keeping virtually all the money the ebooks generate for their first sale and rely on off-the-shelf copy-protection systems to discourage most purchasers from re-selling the ebooks to their friends.
Speaking of high ebook prices, this “strategy” encourages tech-savvy individuals to circumvent copy protection. If you compare the likelihood that a non-techie reader will look outside of traditional sales channels for an illicit ebook that carries a retail price of $2.99 from Amazon vs. one that carries a $10.99 price on Amazon, more than a few people will seek a way around paying $10.99 to Amazon than will spend the time and effort to get a free or lower-priced $2.99 ebook.
(PG notes that the last eBay ad he clipped and pasted at the end of this post offered 300,000+ ebooks in PDF format with “Master Resell Rights” for 99 cents)
Low prices sell more consumer products of every kind. That’s why Amazon sells so much of everything. That’s why Walmart sells so much of everything.
That’s why higher-priced physical retailers who don’t sell primarily to rich people have closed most of their doors during Covid and are unlikely to open them after Covid goes away.
Covid has continued for long enough that, for many people, the changes involved with Covid aren’t all going to reset themselves after everyone is vaccinated.
As an example, the PG’s are likely to continue to order a lot of their groceries online, then drive to the store and have someone put their purchases in their trunk instead of wasting time pushing a cart around the store, making impulse purchases (more of a problem for PG than Mrs. PG), waiting in line to check out, then wheeling a filled grocery cart across a large parking lot, then putting their grocery items into their trunk and driving home to unload the groceries once more. Since PG does most of the grocery lugging, he’s going to opt to touch his purchases once when he takes the groceries out of the trunk to carry them into the house.
If PG had used the grocery pickup service for a couple of weeks then the Covid lockdown had ended, he would be likely to go back to his normal pre-Covid practice of going into the grocery store to shop. After several months of grocery store pickup experience, the pickup service has become his habit.
There are a lot of readers who have purchased physical books in the past who have experimented with ebooks or have learned that they get a much wider selection of physical books from Amazon at lower prices if they stay in their home rather than follow their habitual behavior of making a mental note to stop by the bookstore the next time they go out shopping.
PG predicts that this going-on-line-to-find-and-purchase-books habit is not going to change after the Covid storm passes. It’s going to be a life-long habit for enough people to change traditional bookselling forever.
Here are some of the eBay used books listings PG found in less than ten minutes: