Used Books: Publishers, Authors See New Threat

by John Mutter, Jim Milliot and Karen Holt, PW Daily for Booksellers -- Publishers Weekly, 9/24/2004

Editor's Note: This is Day 1 of a multi-part series on how the used books market is affecting the book industry. Today, we explore how publishers and authors view the increasing popularity of used books. Tomorrow, a look at how booksellers are responding. For more coverage of the subject, see the Sept. 27 issue of PW, which appears this coming Monday.

Until four years ago, used books were a thriving but peripheral part of the trade book business, confined mainly to often-musty stores, flea markets or fund-raising drives. But in as little time as it took Amazon to begin posting used books next to new titles, the Internet has brought secondhand books into the center of customers' consciousness.

Now sites such as eBay, Amazon, B&N.com, Alibris and Abebooks feature used copies of new books as soon as the title is released. Some smaller used bookstores have closed, but many of them now sell online. They've been joined by thousands of part-time "booksellers" who hawk used books from their homes. (Many are "penny sellers" who make their money from shipping and handling fees.) At the same time, bricks-and-mortar bookstores that focus on selling new books have added used book sections.

Already the e-accessibility of used trade books has helped them find a wide audience and a new respect. Whether this is a threat or an opportunity, is still up for debate. Most likely, it's both. What isn't in dispute is that the rising popularity of used books is reshaping the book industry. And the changes are just beginning.

David Shanks, president of Penguin Group USA, said he is "very, very concerned" about the growth of the used book market and "lies awake nights worrying about reorders." The biggest effect is on frontlist, he said, since the used editions of new books appear on Amazon "the day after books go on sale." If used book sales become more widespread, he continued, used books "could redefine the economics of publishing. It's unfair to us and to our authors."

Noting that used book sales don't benefit authors or publishers, Random House spokesperson Stuart Applebaum characterized them as "lopsided free enterprise." He acknowledged, though, that it is difficult to measure the used book market.

As with many aspects of the book market, reliable statistics for used book sales are hard to find. One of the best measurements may be figures from market-tracking service Ipsos Book Trends, which estimated that used books accounted for 14% of trade book purchases by adults in 2003, up 1% from 2002. The company also stated that in the past nine months of 2003 used book purchases rose 5% over the same period the prior year, while new book purchases fell 2%. Book Hunter Press estimated that used book sales amounted to $614 million in 2003, based on an online survey of used book dealers.

The college market, which often is a precursor of trends in the trade book world, does not offer solace to publishers and authors concerned about the effect of used books. Observers estimate that used textbooks make up 30%-40% of textbook sales. Some college bookstores report for the first time ever that textbook unit sales have flattened even as enrollments increase.

A few publishers have publicly acknowledged the effect of used textbook sales on frontlist sales. Earlier this month Will Pesce, CEO of John Wiley & Sons, blamed a nearly 5% quarterly decline in higher-education sales on used book sales. Similarly, in March, Ron Schlosser, president of Thomson Learning, noted that sales of backlist titles were soft because of used book sales.

In trade books, some publishers say they have noticed slower reorders of backlist and older hardcover titles, especially fiction and some book club picks. Others see an effect on new titles. Discussing his company's results in July, Simon & Schuster president Jack Romanos said used books are contributing to softness in backlist sales. "It's an issue worth watching," he commented. "We're hearing that term around here more and more."

Jan Nathan, head of the Publishers Marketing Association, said members are growing increasingly concerned about used books. Some small publishers are especially irritated by the listing of review copies on the Internet before pub date. Paul Aiken, executive director of the Authors Guild, said he has no doubt that used books "are taking away some part of the new book market." He added, "Every time an author sees a new book facing competition from a used book on Amazon, I get a call."

But those authors--and as well as publishers who complain about used books--have it wrong, said Amazon spokesperson Kristin Schaefer Mariani. "By offering customers the opportunity to buy used books at a lower price, Amazon Marketplace helps customers find and discover authors and titles they may have been hesitant to experiment with at a higher price point, which ultimately leads to the sale of new books," she said. Not only do the lower prices encourage experimentation, they keep customers coming back more often. And customers use the money they get from selling used books to buy more books, including new ones, she said.

Barnes & Noble.com has taken a more subtle approach than Amazon--for one, the used books are less prominently displayed--but it hasn't been able to ignore what its competitor is doing. "We don't operate out of a vacuum," said Tony Astarita, manager of used and out-of-print books. "Our customers expect to see this product and they ask for it, and we're responding to our customers' needs."

Like Amazon, B&N.com is anxious not to be seen as damaging the new book industry by offering used titles. Astarita stressed that B&N's involvement in selling used books, which dates back to 1998, began with out-of-print titles, though he acknowledged that demand for used copies of in-print books is growing much faster. As for how publishers will be affected, Astarita put it this way: "I think at the end of the day, whatever is good for the customer is good for the industry, because what else are we there for than to serve the customers' needs?"