I spent Monday with the Booksellers Association Conference at the University of Warwick, and wrote up my immediate reactions in this piece, published by The Bookseller.
I do believe that there is a robust future for the best independent bookshops. But they’ll have to evolve, and to stay ahead of their customers’ expectations rather than trailing behind them. I hope that bookshop owners, publishers and their trade associations can work together to ensure that there is still a role for these businesses.
Do add your comments.
Some Twittering this morning, inspired by a couple of articles spotted by Jellybooks‘ Andrew Rhomberg. One is a market report from Publishing News, the other a blog entry distributed by ebookporn.
Low prices are transforming ebook buying behaviour from “buying to read” to “buying to collect” http://ebookporn.tumblr.com/post/28845301698/why-publishers-are-having-difficulty-settling-on-a …
Collect, or just accumulate?
bit of both? Some is accumulate “wanted to read” (and then forgot), but also collect “don’t want to miss out” (deal!)
the post certain rang a bell with me in that ebook buying and physical book buying are evolving somewhat differently
you now have genuine impulse buying from the comfort of your home and at genuine “impulse prices”
Front list/back list ratio is 40/60 for print, books, but 20/80 for ebooks! http://www.publishersweekly.com/pw/by-topic/industry-news/bookselling/article/53430-what-happened-to-the-long-tail-.html …
Concepts like frontlist/backlist, based on print runs/reviews/marketing, increasingly redundant in ebook world.
PN notes that Nielsen Bookscan has reported a fall of 30%, almost one-third, in US sales of fiction backlist titles in printed book form, for the period ending 22nd July 2012, compared to one year earlier.
The shift in market shape is accelerating, not slowing down, with the article noting a significant fall in physical book space at retail outlets (over and above Borders’ US closure). One major American publishing group is reporting that 80% of backlist sales are now in ebook format – the pbook long tail is getting shorter and shorter. Assuming Amazon still accounts for a large part of those backlist sales, backlist bread-and-butter in bookshops must be looking very stumpy indeed. And without backlist sales to prop up the discounted frontlist, the book-specific store model looks very troubled. Booksellers need to diversify, and to recognise that the “general bookstore” is probably unsustainable.
But hell, you know that already. What’s piqued my interest today is the effect that all of this will have on publishers – and not so much on the grand strategies of media groups (many of which are quite forward-looking), but more on the basics of seasonality, range management and changing consumption patterns.
Amazon made one of their opaque announcements this week, proclaiming that for every 100 physical paperbacks and hardbacks they had sold in 2012, UK customers had downloaded 114 titles to its Kindle e-reader. Such is Amazon’s dominance in the UK book market that this was headlined “Readers are now buying more e-books than printed books“, ignoring the enfeebled minority of book-lovers who are doltish enough not to use Amazon.
Ebook customers aren’t behaving like pbook customers. Are you a traditional “heavy book buyer”? If so, how many books might you buy for yourself at a time – four, five? Any more, and the weight/bulk will be too much to carry, and once you get home, there’s the imputation that all those pages piled up at your bedside must be read.
Whereas ebooks – pah, easy. Click, download. Click, download. Moby-Dick – always meant to read that. Click, download. À la recherche du temps perdu, twelve volumes for £3.25 – no problem. Click, download. Having it on your Kindle is almost tantamount to reading the thing anyway.
Back to that ebookporn piece. As the writer notes, people are downloading “huge chunks of content that will never be read”. The piece concludes:
If your download 70 books at $0.99 each you are spending $70 and acquiring years of books to read. Very soon this reader stops purchasing and that sales bubble bursts.
If instead they were to spend not $70 for 70 books but $7 a month for access to 7 million books this reader spends $84 a year, year in and year out. Knowledge is light and it stands to reason that access to all books can be sold like a utility such as electricity, water, and internet access.
This is what might be described, broadly speaking, as the Spotify principle, and it’s one that slashes through publishing, bookshops and libraries as we know them. Which has more value to a reader who has no desire to surround him/herself with dead tree content – 70 ebooks, most of them unread and never-to-be-read, or an almost infinite quantity of content, from classics to trash, all available from the cloud at a moment’s notice?
This brings us back to frontlist and backlist. I can understand how new ebook content can break through and succeed, whether a title starts with word-of-mouth build, typical of self-published hits, or is driven by a professional marketing campaign. However, that approach divides ebooks into Monster Hits and Everything Else. When publishers were putting out a few dozen pbook titles each season, they were reasonably certain that most bookstores would carry/display/promote most of those titles. The books would get their place in the sun, and then (if they’d sold a few copies) earn a position in the backlist, where sales could tick over unto eternity. They would move from frontlist to backlist; most of them heading ultimately to oblivion, and few lasting for lifetimes.
There is no straightforward translation of this old world into the land of ebooks, where hits will be bigger and faster, but will probably also be forgotten more swiftly. The solution, of course, is not to try and force a frontlist/backlist pbook mindset on the ebook world, but to adapt methods that works best for readers – who now have the freedom to behave in a totally different, less considered way.
Note, methods. Sales will fluctuate; surge, recede and return again. Content will no longer be defined by its copyright date, but by its relevance to a particular reader’s needs. Publishers will require a whole range of different sales tactics which are reliant on understanding the end customer. This is best achieved through partnership with sellers, sharing sales data and market understanding, though it runs counter to Amazon’s established strategy – Seattle is determined to hold on to its data and control the customer relationship.
The “Spotify” approach is a rational response to the hangover that will follow downloading excess; alternatively, publishers may have to assume that a high proportion of ebooks will be sampled, but never read, and price them accordingly. Neither solution represents a straightforward “format shift” (in the way that hardcovers were succeeded by paperbacks in the mid 20th century). Consumers aren’t thinking in those terms, so publishers are going to have to change their model fundamentally. And because the book has been such a successful object for so many centuries, that’s a difficult shift for people and corporations alike. Ask any old bookseller – we know…
And to close, a gratuitous photo of about seventy pbooks, all of them pretty well-read…
No argument about what today’s big story is – though details of the proposed relationship between Waterstones and Amazon are scant at present. The Guardian is all over the story:
both merit your attention, and The Bookseller has of course been updating all day long.
The Bookseller asked me to write an instant blogpost, and you can read it here. I don’t just draw lessons from history, but I’ve been through one consummated relationship with Amazon in my life, so some reflection is allowed!
To comment on this blog post, just click on “leave a comment” in the Tags block above.
The Bookseller has published my monthly column, and this time around, Waterstones’ Piccadilly flagship has sparked off my train of thought.
In retailing, flagships tend to come in two forms – the retailer, and the brand. Examples of retail flagships would be Marks & Spencer at Marble Arch, Top Shop at Oxford Circus, Harvey Nichols in Knightsbridge and HMV in Oxford Street. These are the stores that define the chains, and that set the standards for the rest of the business to follow.
Plenty of retail brands get by without flagships. Supermarkets don’t have flagships (they may have a current “future store”, but these things shift), nor do electricals or many retail park brands.
Brand flagships are different, and create a halo for fashion, jewellery, perfume and lifestyle brands that are sold through many different retail channels. In London, Bond Street is the home of these flagships, and of course similar stores can be found in major cities worldwide.
It’s questionable whether either type of flagship always stacks up as an economic proposition, and many retailers and brands have had their fingers burnt by flagships. Nevertheless, the “best of the best” is always seductive, and the new businesses continue to seek their flagship opportunity.
I started writing the Front of Store blog a year ago, as a response to British retailers’ 2010 Christmas trading numbers. A year later, a new set of results has been published, another Christmas has been put to bed, and it feels like a sensible time to take stock.
When I created the first entry, I couldn’t be certain what directions my blog would take – I knew I had plenty to say, both about my “home” trade of bookselling, and about the broader world of retail. And the news stories kept on coming throughout the year – Borders, HMV, Waterstone’s, and more recently Westfield, Tesco and Mary Portas. Underpinning the bricks and mortar triumphs and travails is the real unavoidable success story of modern retailing – online commerce, digitisation and Amazon.
Ah yes, Amazon. An inescapable part of everyone’s life now, bringing good things (service and value) to the consumer, while driving a coach-and-horses through established practices in every sector it touches. Like Apple, Amazon anticipates the future, leaving its competitors to react to its initiatives. Too often, Amazon’s competitors try to protect their heritage, where instead they should be repurposing their companies for the future.
There came a point last autumn when I looked at the total word count and thought, blimey, I’ve got a book here. Hence a Front of Store e-book – and, of course, I’m selling it through Kindle Direct Publishing. Industry estimates suggest that around 1.3m e-readers were bought in the UK over the Christmas period, and of that number, 1.2m were Kindles.
It would therefore be profoundly foolish to début anywhere other than on Kindle. Naturally, if I have a smash hit on my hands, I’ll make use of other formats – but the effort required to make a Kindle book has been fairly demanding – many evenings of editing and formatting in, and swearing at, Microsoft Word.
The initially published result was below par, so today’s buyers are being offered the second edition; after KDP struggled to translate tables and jpegs into ebook format in the first version, I went back and substituted lists and descriptions. This probably says more about my book-creating abilities than it does Amazon’s – but it underlines the complexity of creating “real” books, and the relative ease of ebook publishing.
I was talking to a friend last week who spends much of her life on planes and trains, and who loves her Kindle – convenience, accessibility and readability all score high marks with her. However, she confessed that she struggled to remember what she’d read on the Kindle; by contrast, physical books have a tactile presence that imprints itself on your memory (and thereafter, they sit on your shelves, whispering “remember me?”).
“A Year at Front of Store” is journalism, news and comment as it happens. I’ve carried out some pretty vigorous editing – excising time-expired pieces, eliminating anything that required colour illustration (or indeed any pictures at all), improving syntax (a bit), and adding in summaries and afterwords in the appropriate places. I’ve also included pieces that were published elsewhere, and added the full text of my Frankfurt address from October.
What I haven’t done is to apply any Winston Smith editing, so I don’t foresee that Mamut will buy Waterstone’s in June, or that London will riot in August.
There are a number of themes that I’d like to explore for a book “proper”, which will require a shift from journalism to more considered writing. The retail industry continues to be the most fascinating business arena – fast-moving, unpredictable, unsafe, and undergoing its most fundamental changes since the birth of the supermarkets.
I’d like to give a big hurrah for WordPress, which allows the Front of Store blog to happen, and whose text is relatively easy to shunt into Word, and thence to KDP. The blog has created opportunities for the Front of Store consultancy, as well as opening up some fascinating opportunities to speak at conferences and to advise behind closed doors.
Finally, thanks for reading. Readership of Front of Store has been growing exponentially – January’s hit-rate is 30% higher than December, which was 48% higher than November – and so on. Here’s to an exciting, challenging, ever-changing 2012.
My friends at Kingston University, where I am a member of the Publishers’ Advisory Board (Publishing MA) have very kindly splashed me on their blog, following yesterday’s rhetorical burst the the Tools of Change Conference here at the Frankfurt Book Fair.
The US press has been dusting off its “death of the bookstore” pieces following the Borders liquidation announcement.
There has been plenty to read, much of it as fresh as an old haddock, but the summary is: Borders made a series of bad management decisions that hastened its demise, but Amazon and digitisation have fundamentally altered the landscape, so – as the weaker player – Borders was bound to go down anyway.
Here’s National Public Radio’s synopsis of the familiar tale:
It includes this table, which is worth focusing on for a moment:
This indicates that:
- The US market for physical books will fall by 11% in 2011, compared to 2010. It will have dropped by 21% since 2008.
- Amazon grew share through to 2010, and its share of the physical market in 2011 will rise from c.24% in 2010 to c.27% in 2011.
- The increase in eBook sales is not compensating for the decline in total industry unit sales.
- Given the lower average selling price for eBooks, this will significantly lower overall industry revenues.
And by the way, all of this will happen in the UK (and progressively in other non-English language countries) as well.
Actually, I believe the WSJ’s premise is in danger of being optimistic. After Borders closed in the UK, it’s estimated that 40-50% of the company’s book sales simply vanished. The impulse purchases, the gift buys and the self-indulgences evaporated; customers who were spending miillions of pounds a year at a big store in Ellesmere Port had nowhere local to transfer their purchases to – book-buying became inconvenient and, in recessionary times, an unjustifiable luxury. (And Borders UK folded before there was any significant eBook market in this country.)
This AP article offers quite a good perspective on format changes, and customers drifting away from books:
Adrian Sierra, 36, a real estate agent from Westchester, N.Y., walked out of a Borders store in Penn Station in New York without a shopping bag filled with books. He was, however, carrying his iPad. “I’ll miss them,” he says, but, “I’m not going to buy another paperback in my life. There’s no reason to anymore.”
Meanwhile, as book retailers have serially exited the market, the publishing community has been making robust noises throughout the storms of recent years. But structural change is likely to come.
What happened to the record companies
The music business is far further down the the path of digitisation and collapsing sales values, than book publishing. Back at the peak, the music industry in the UK was dominated by five huge corporations, each with their own A&R, studios, manufacturing and distribution. They were:
- EMI (HMV, Parlophone, Capitol, UA/Liberty, Harvest, MfP)
- Polygram (Polydor, RSO, Phonogram, Vertigo, Deutsche Grammophon, Philips and Decca)
- CBS (US Columbia, Epic)
- RCA (Victor)
- WEA (Warner Bros, Reprise, Elektra/Asylum, Atlantic)
These were the global players. Also significant were the big independent labels, such as Island, Arista, Tamla Motown, A&M, Virgin, MCA, Ariola, and Chrysalis; parochial leftovers like Pye/PRT; and feisty post-punk indies like Stiff, Factory and Sire.
Every one of those labels, and all of their output (notwithstanding the fall-out from individual licensing deals) is now subsumed into four businesses:
- Universal Music
- Sony BMG
- Warner Music
(And it should have been three – EMI and Warner tried and tried again to merge.) Of course, new independents have appeared, from indie and hip-hop through to Naxos. They’re better suited to the multi-channel era, but none of them has the reach or ambition of the old giants.
Former Waterstone’s MD Dominic Myers was lambasted when he suggested that the UK book industry has too much distribution capacity – but he was right. What will be the shape of “old publishing” in five or ten years time? Discuss…