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WALMART/AMAZON PRICE WAR
A THREAT TO PUBLISHING’S FUTURE?
I’m not one of those “doom and gloomers” who interprets every shift in the way our industry conducts business as its death knell, but this latest price battle initiated by Walmart and the response from Amazon gives some real cause for concern.
If the two contestants were average retailers who mounted a loss-leader promotion now and then, I’d have little concern. But both have enormous capital that can allow them to absorb losses for an extended period of time and/or over a fairly wide assortment of titles. They have thriving income from a vast variety of non-book merchandise they sell.
As these behemoths seek to gobble up book revenue, the losers are the courageous independent booksellers who love books and are dedicated to serving a public equally devoted to reading. Indies can’t possibly compete in price wars.
At best, Indies can offer reasonable discounts, and they do. But not loss-leaders, as they are called in the retail world. The discounts that run from 69% to 74% in this price war mean that the sellers are actually taking a substantial loss on every book they sell.
Walmart is a predatory beast, crushing traditional local retailers and putting them out of business wherever it decides to locate. It has violated labor laws while posing as the true red, white and blue American business as it orders merchandise from sweatshops in foreign lands.
Discounting can be a healthy element of retailing in a capitalist society; predatory selling at a loss is lethal and undermines free enterprise by devouring competition and forging monopolies.
It is true, of course, that our industry is now in a period of re-evaluation. The print segment of publishing is scrambling to find ways to accommodate the growth of online readership. That’s legitimate and healthy, albeit a very difficult transition.
The book segment is reeling from the burgeoning popularity of the e-book. That’s progress based on technological advancements. But it provides a level playing field. Yes, overall sales volume
will decrease because the retail price is so much lower than it is for hardcover print books. But the profit will not only remain equally high, it may even increase because production costs are so minimal.
All of that is very different from the possible consequences of allowing a Walmart to undercut and destroy one of the nation’s most valued industries.
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CALIFORNIA BECOMES THE 4TH STATE TO PROTECT
AGAINST UNFAIR FOREIGN LIBEL SUITS
With Governor Scharzenneger’s signing of a libel tourism law, California joins Illinois, Florida and New York in protecting publishers and authors from libel judgments by foreign courts in countries that do not meet the standards of the First Amendment of our Constitution.
Several cases filed in recent months in courts of foreign jurisdictions have found American authors guilty of libel. Surprisingly, even some of the most advanced western European court systems do not offer the level of free press protection that is standard here in the United States.
Hopefully, some of the remaining states will adopt laws similar to those already in place here.
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SIMON & SCHUSTER TO MERGE SPOTLIGHT ENTERTAINMENT
WITH HARDCOVER & PAPERBACK LINES OF POCKET BOOKS
In what is allegedly a move to strengthen its product lines, Simon & Schuster has announced a new imprint, Gallery Books, that will combine the young people-oriented Spotlight Entertainment with hardcover and trade paperback lines of its Pocket Books imprint.
With its first release scheduled for spring, Gallery will rely on the popularity of the pop culture and women’s orientation of the merged imprints. Plans are to produce 60 to 75 hardcovers a year and the same number of trade paperbacks.
In a memo to staff that was quoted by Crain’s New York Business, Simon & Schuster CEO Carolyn Reidy wrote, “Our publishers and editorial directors realize their lists must have multiple areas of strength in order to withstand the vicissitudes of the marketplace and respond rapidly to reader preferences...especially in this difficult environment.”
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SIX MONTH SALES OF E-BOOKS JUMP 149%
SURPASSING TOTAL FOR SALES LAST YEAR
You keep hearing lots about e-books, and for good reason. Sales are soaring far beyond the expectation of most industry analysts. This growth has great significance to those of us who write conventional print books. Ignoring it risks falling far behind as the industry continues to shift. It will also impact the contracts we sign.
Noelle Skodzinski, editor of Book Business Magazine, writes in a recent column, “Currently, e-books are one of the only growth areas across our industry.” Yet she talks of her surprise when the publication’s annual survey discovered that half of its readers do not currently offer e-books. She states that e-books constitute only about 1 to 2% of sales at most companies that offer them.
Those laggards had best look at the trending. Sales figures compiled jointly by the Association of American Publishers and the International Digital Publishing Forum show a jump of 149.3% in sales for the first half of the year. They also point out that these numbers are compiled from 12 to 15 trade e-book publishers, and estimate that total “retail number may be as much as double” when wholesale discounts are factored in.
Within this year, the trending has been up on a month-to-month basis. The top month was May, which posted a 200% gain. June followed with 132% gain.
Don’t get caught sleeping!
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GOOGLE’S OUT-OF-PRINT INITIATIVE APPARENTLY
HAS SPARKED A NEW PROGRAM AT B&N
Barnes & Noble, searching for ways to offset losses in standard book sales, has now added a new department that will re-publish out-of-print books in newly designed hardcovers. Called Barnes & Noble Rediscovers, the division has released the first 33 titles. Future selections will be based on feedback from both customers and staffers at the stores, as well as result of an analysis of searches on the company’s .com site. The company will negotiate payment to authors for the books that are selected. Hopefully this newcomer will be as successful as the recently-opened e-book division that CEO Steve Riggio says has been very well received.
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MIXED RESULTS FROM THE
MAJOR BOOKSELLERS
Books-a-Million reports that sales in the second quarter slipped slightly by 0.7% (although same store sales were down 4.9%).Despite that, the company posted an increase in profit for the second time this year due to tighter management. Earnings for the first half of 2009 were up 130%, based on a 0.6% increase in sales. However, comparable store sales were down 3.1%. The company opened 11 new stores.
Second quarter sales at Barnes & Noble tumbled by 5%, with same store sales down 6.9%. The .com division enjoyed a modest upswing of 2%. Revenue for the first six months of this year were down 4.9%. CEO Steve Riggio is predicting a better third quarter with a substantially better showing in comp sales.
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NOVEMBER 7 DECLARED NATIONAL
BOOKSTORE DAY
Created to stimulate visits to retail bookstores, the
first National Bookstore Day has been set for November 7. Spearheading the
event, Publishers Weekly, the book industry’s premier newspaper,
will provide marketing and promotional materials, as well as publicity for the
event both on and off line.
PW Publisher Ron Shank explains, “We
want to celebrate the vibrant culture of bookstores, increase store traffic,
sell more books and create an enjoyable customer experience that will lead to
return visits.”
An article in the paper says that Library
Journal, School Library Journal and the Booklife Network
will participate in the event. Other bookselling organizations have been
“overwhelmingly positive,” Shank says.
Indie publishers deserve a real boost from all of us
in the business. They are the tried and true representatives of our industry on
Main Street across the nation. I urge every author to participate in every way
possible to make this event a resounding success.
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AFTER SEVERAL YEARS OF GROWTH,
AUDIO BOOK SALES DIPPED BY 6.7% LAST
YEAR
Releasing sales statistics for the first time, the
Audio Publishers Association reports that 2008 sales for its 30 members
that reported figures fell by 6.7% to a level of $331 million.
Although they continued to produce the highest share
of the market (72%), CD sales fell by 6% compared to 2007. Digital downloads
followed with 21% of sales, a jump of 3% over result of the previous
year,
A total of 38% of sales were posted by retailers,
followed closely by libraries at 32%. Adults purchased 83% of the audio books
sold. Fiction sales reached 73%, trouncing nonfiction at 27%.
Unfortunately, the recession drew blood from even
this small, but flourishing, segment of the book industry. Hopefully, this dip
is only momentary.
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AAP REPORTS THAT BOOK SALES
WERE DOWN IN THE MONTH OF
MARCH
Just as a sidebar to the story above, the picture
isn’t too rosy in 2009. The Association of American Publishers
(AAP) has just released industry sales figures for the month of March, and
they are down 17%. Total book sales year-to-date slipped by 6.8%. Sales of
adult hardcover and paperback fell substantially. Adult mass market was down
modestly, while YTD numbers for Children’s/YA were up by more than
40%.
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JUDGE EXTENDS DEADLINE TO OPT OUT
OF THE GOOGLE BOOK SEARCH SETTLEMENT
The May 5th deadline for opting out of the Google Book Search project has been extended for four additional months. Judge Denny Chin announced the delay until September in response to a group of authors led by Gail Knight Steinbeck.
Although the settlement that Judge Chin was reviewing was based upon input from several writers organizations, a number of authors were reluctant to agree to it. They were uncomfortable with the complexity of the agreement which gives them the right to object to it or opt out of participation.
It’s now up to groups like the Authors Guild and the Association of American Publishers to explain the ramifications of the proposed settlement and how it will affect individual writers.
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