It Was the Best of Times, It Was the Worst of Times…By Steffen • Dec 30th, 2009 • Category: 26th Story, Big Ideas, Books, Business
“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to heaven, we were all going direct the other way – in short, the period was so far like the present period, that some of its noisiest authorities insisted on its being received, for good or for evil, in the superlative degree of comparison only.”
- A Tale of Two Cities, Charles Dickens
Decades from now, when we look back at the book business in 2009, it seems likely that we’ll see it as a threshold year, one in which all of the signs were there for what followed. It was a year in which sales held steady (Nielsen Bookscan, which covers 75% of the market, reported that overall unit sales through December 20 were 724 million copies, only a 3% drop from last year—and adult hardcover fiction was up an amazing 3%), and a few authors were so successful (Stephanie Meyer, Jeff Kinney) that the fates of entire publishing houses were altered by them; however, it was also a year that saw publishing’s profit margins squeezed in perplexing new ways. It was a year in which some of the most highly-respected bestsellers (Audrey Niffenegger’s Her Fearful Symmetry; Andre Agassi’s Open; Edward M. Kennedy’s True Compass) were also apparently the year’s biggest money-losers for their publishers, due to their multi-million-dollar advances; at the same time, some of the books with the highest rumored advances (Dan Brown’s The Lost Symbol; Sarah Palin’s Going Rogue) were likely the most profitable. It was a year in which e-book sales increased exponentially, with the cherry on the sundae being Amazon’s announcement that they had sold more e-books on Christmas Day than p-books (though of course this was helped by all the people who got Kindles as presents and spent the day filling them); but it was also a year in which the prices charged for those e-books made them a threat to the health of the p-book retailers on whom publishers continued to rely, and possibly a future threat to publishers’ ability to make money on the e-book format itself, in spite of that format’s wonderful ability to eliminate the costs of production, distribution, and returns. It was a year in which the largest publishing houses slowed title acquisitions and reduced the number of titles they published, while one company—Author Solutions—increased its annual output to a remarkable 24,000 authors (even more remarkably, these authors were all paying for the privilege). It was a year in which review coverage of new fiction disappeared almost entirely, and yet one first novel (Kathryn Stockett’s The Help) sold more than a million hardcover copies thanks to word of mouth alone. It was a year in which publishers continued to spend exorbitant amounts of money on print advertising, in spite of data showing how ineffective such advertising tends to be, but also a year in which some publishers discovered the power of online media to reach niche markets at significantly lower costs.
What does this mean for the future? That for every trend there will be a counter trend. And since this is the time of year for Top Ten lists, here’s mine:
1. Trend: The large publishing houses will continue to reduce overhead as profits shrink in the years ahead. Counter trend: Publishers will be looking for mergers and acquisitions to compensate for those shrinking profits. The Big Six could be the Big Three within five years.
2. Trend: These companies will continue to focus more resources on fewer titles, using their strengths as large-scale marketers and distributors to publish brand-names. Title count at the largest houses could drop by as much as fifty percent over the next five years. Counter trend: At the same time, self-publishing (including partnerships like the one announced recently between Author Solutions and Harlequin) will grow exponentially.
3. Trend: Title reduction will be most significant for new talent, with the largest houses entrusting support of new authors to a handful of editorial imprints. The editors at those imprints–editors with proven ability to choose new material successfully–will increase in value. Counter trend: Editors whose job is to handle existing talent will find their roles diminished.
4. Trend: In terms of advances, the amounts paid for brand-names will continue to increase, with seven-figure or eight-figure acquisitions commonplace among authors with established track records. Counter trend: There will be an increase in five-figure acquisitions (perhaps with profit-share arrangements) for less predictable material. The six-figure advance—that dangerous neighborhood inhabited by books with lots of potential but few guarantees—will become a rare species within the decade.
5. Trend: E-book sales will grow exponentially, with the proliferation of new devices and applications for reading on smartphones, etc… Within five years, half of all reading will be done electronically. Counter trend: There will be a resurgence of appreciation for well-designed physical books, as keepsakes, gifts, etc… While e-books will create a downward pressure on pricing, there will be notable exceptions (as seen this year with Carl Jung’s The Red Book, in great demand at $195.00, or Thomas Keller’s gorgeous Ad Hoc at Home, a bestseller at $50.00).
6. Trend: As more consumers become e-book readers, demand will increase for the availability of e-books simultaneously with p-books. Counter trend: Publishers will try a variety of strategies to meet this demand while not undercutting their p-book sales, such as offering more expensive “enhanced” e-books at publication and plain vanilla, less expensive e-books several months later (the strategy recently announced by Macmillan) or by offering a variety of “bundled” discounts to purchasers of multiple formats (prediction: within five years, it will be common practice to give every p-book purchaser a “free” e-book version of that book at time of purchase, as is already the case in the music business, in which someone who buys a cd can also listen to that cd on other devices in digital form, without paying a separate fee).
7. Trend: Fewer and fewer books will be sold to publishers at “auction,” and that practice will disappear completely within five years, as more and more publishers realize that the “winner” in such auctions—the publisher willing to pay more to acquire a book than any of their competitors–is often actually the loser in the end. Sales will be made either by brand-name authors to their previous publishing company or by new authors to carefully chosen editors with strong reputations. Counter trend: Instead of auctions for the highest advance, there will be auctions in which a basic advance is established by the agent, with the auction winner being the publisher who bids the most in marketing committed to the book.
8. Trend: As the initial sale becomes less of the focus for authors, the agent of the future will become more of a business manager who handles every aspect of an author’s career, overseeing the author’s online presence, developing sources of revenue outside of book sales such as workshops and lecture tours, and acting as the author’s publicist in between publications. Counter trend: Publishers will create free-standing departments whose services can be purchased a la carte by authors, whether that author is self-published or published by a competitor who doesn’t offer such services.
9. Trend: As the Boomers lose their eyesight and their children become teenagers, demographics will favor books for young adults over books for adults. This is also the generation most likely to embrace a variety of online and offline formats, without feeling the need to choose one over another. Counter trend: While auctions and advances diminish for adult titles, they could heat up for young adult material as publishers bet big in search of the next Stephenie Meyer. (Prediction: publishing houses will soon have entire departments devoted to developing books about the undead.)
10. Trend: Every year for the foreseeable future, books will be purchased between Thanksgiving and Christmas about how to prepare high-calorie foods (a favorite from this year: Fat: An Appreciation of a Misunderstood Ingredient, by Jennifer McLagan). Counter trend: Every January for the foreseeable future, the bestseller lists will be dominated by books about how to lose the weight gained by eating those high-calorie foods. (Not much of a prediction, sorry…but I needed a tenth trend to complete the list!)