Book Publishers Go Back to Basics!

As consumer e-book sales fall, publishers look to find new footing with old ground—and faster pipelines

FRANKFURT— Book publishers are giving an advance review of the industry’s future, and it looks a lot like the past.

After a decade of technological upheaval and lackluster growth, executives at the top four U.S. consumer book publishers say they are done relying on newfangled formats to boost growth.

It has been nearly 10 years since Amazon.com Inc. introduced its Kindle e-book reader amid the financial crisis, destabilizing publishers and challenging their well-honed business models.

Now, e-book sales are on the decline, making up a fraction of publishers’ revenue, and traditional book sales are rising. The consumer books industry is enjoying steady growth in the U.S., with total revenue increasing about 5% from 2013 to 2016, according to the Association of American Publishers.

Executives gathered in Frankfurt for the industry’s biggest trade fair said they are returning to fundamentals: buying and printing books that readers want to buy—and they are streamlining their businesses to get them out faster than ever before.

It is about “knowing what [readers] want,” said Markus Dohle, chief executive of Bertelsmann SE and Pearso  PLC’s joint venture Penguin Random House, “to drive demand at scale.”

The shift is a surprise reversal for an industry that experts just a decade ago predicted was facing radical change, if not a slow death, because of digitization and changing reading habits. Instead, e-book sales in the U.S. were down about 17% last year, according to the AAP industry group, while printed book revenue rose 4.5%.

Interviews at the Frankfurt Book Fair with the top four consumer book publishers in the U.S.—Penguin Random House, CBS Corporation’s Simon & Schuster Inc., Lagardere Hachette Livre and News Corp’s Harper Collins Publishers—showed the decade of seeking cover from outside threats is over, but the fight to overcome the lackluster growth it left behind has just begun.

One thing all agree on is the need for speed. Companies are reinvesting in printed books after years of cost-cutting, and they are building pipelines to bring author’s words into readers’ hands faster.

Mr. Murray blamed flagging e-book sales on “screen fatigue,” and said HarperCollins was upping investment in printed books, “the value anchor” for the entire business.

Printed books are “more beautiful now,” he said. “You’ll see endpapers [and] a lot more design sensibility going into the print editions because we recognized that they can’t be throwaway.”

And after years “spent taking pennies out of the cost of making a book,” the company is raising the quality of its print editions again, she said.

In France, Hachette makes about 9% of its revenue from digital sales because of national rules limiting discounts on the price of e-books, Mr. Nourry said. In the U.S., they have stabilized at about one-fifth of the big four publishers’ revenue.

Simon & Schuster’s Ms. Reidy said a young generation of internet natives has been turning to print books—a trend she noticed when her company signed a deal with Rupi Kaur, a poet based on Instagram, to sell and distribute her work in the U.S.

Her young fans “don’t want the e-book at all. They want the physical object,” Ms. Reidy said. “They want to own something that is connected to the person they like online and, number two, because they can share it.”

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Jeffrey A. Trachtenberg contributed to this article.

Photo by John MacDougall

Appeared in the October 16, 2017, print edition as ‘In Books, Print Makes a Stand.’

Oct. 14, 2017 Part of an article from The Wall Street Journal

Book Sales vs. ebooks Sales
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