Despite the economic gloom, the number of titles produced annually in Russia continues to grow. The country is now #3 in terms of book production (approximately 125,000 new titles per year), after the U.S. and China. It also saw more than 20 million e-book downloads and some one million reading devices sold in 2011.
Closer ties with the global book community mark the biggest change in the Russian publishing scene, notes publisher Natasha Perova of GLAS. “We have Russia as the market focus at the upcoming BookExpo America, besides last year’s London Book Fair. Who could have imagined anything like this 20 or even 10 years ago? Today, Russian publishers and literary agents are learning to promote their authors internationally following Western practices, when just a decade ago they saw no point in it or had no idea where to start or how to go about it.”
Now for the bad news: a shrinking reading population will cause an estimated 5%–7% drop in sales this year (8% in 2011) for the publishing industry. For Oleg Novikov, vice-chairman of the Russian Book Union and CEO of Eksmo (one of the major publishers in town, with 22% of market share), it is imperative to get Russians to read again (and to read more). Last year, the Russian Book Union, the Federal Agency of Press and Mass Communication, and Moscow and St. Petersburg city governments supported an extended reading campaign, with some help from several Russian celebrities. This year, a similar program targeted at children is planned.
Says Novikov, “The industry decline is a huge issue for Eksmo, not least because of our leading market position. So far, we have managed to compensate for the drop in overall [print] sales—especially for fiction due to the popularity of e-book format—with those from segments such as business, professional, hobbies and crafts, popular literature, and children’s books. In the longer term, however, the whole industry needs a society with a strong reading habit.”
“We have been lamenting about declining reading habits in the past five years, and the harsh reality is here: Russia is no longer a nation that reads,” adds CEO Arkady Vitrouk of Azbooka-Atticus, pointing out that efforts to arrest further decline would require sustained social advertising with plenty of government support and cooperation from all industry players. “Often, available market statistics show printed volume, not the total quantity sold to end consumers. This means that the drop in book sales has been understated all along and the issue much more serious than it appears to be.”
The Distribution Dilemma
“The market is at a crossroads where people will head to the bookstore less frequently, and books are becoming more of an impulse purchase. Readers wanting to browse through books will opt to do it electronically,” says Vitrouk, which started selling books from its Web site last October (with “current sales comparable to those of a small bookstore”). “Increasingly, people will buy books through nontraditional channels such as supermarkets, toy stores, and specialty stores. For instance, pharmacies would be an ideal place for selling health books, and gourmet [food] stores for cookbooks and wine titles.”
The bankruptcy of the retail chain Top Kniga (despite massive cash injections from various companies, including AST) has created a ripple effect, the biggest problem being the loss of publishers’ and consumers’ trust and confidence. Major publishers such as Eksmo and AST that own distribution and retail networks might naturally benefit from such closures and expand their market domination. But rebuilding that trust and confidence could take a while.
“Bookstores see lower sales as consumers, facing an escalating cost of living and increasing financial burden, turn to kiosks and supermarkets that offer heavy discounting programs,” adds president Yury Deykalo of AST. “So we are seeing very cheap editions selling in high volumes in these two new channels. How this will impact the future of bookstores remains to be seen, but it is not encouraging, to say the least. Publishers would have to figure out how best to distribute their titles and seek different channels to stabilize their sales.”
A weak national distribution network, says editor-in-chief and director Andrei Sorokin of ROSSPEN, means that “major publishers that are geared toward the mass market are dependent on their own retail and distribution networks, something that smaller and academic publishers usually do not have. What is worse is that Moscow lags far behind other European cities in terms of bookstore numbers per capita. In short, Russia’s book market structure is distorted and distribution highly monopolized. For academic publishers like ROSSPEN, it is an uphill battle every day.”
Battling Pirates New and Old
Electronic piracy plays a part in declining book sales, and fighting it, says AST’s Deykalo, requires determination and combined effort, as evidenced by his collaboration with his closest rival, Eksmo, in several piracy cases. “To stop book piracy, we should start with protecting music and TV content—a strategy proven effective in the U.S. But the battle involves money to educate people about copyright and legal downloads. And in these times of declining sales and shrinking margins, money is not that easy to come by.” (E-book sales at AST represent a mere 5% of its bottom line.)
Adds Eksmo’s Novikov, “Only 10% of downloads involve legally obtained content. Eksmo has been leading the fight, and we closed down 20 pirate sites and removed several dozen unauthorized download links to our titles last year. Obtaining digital rights for more Russian and translated titles is crucial as we go all out to protect our content from illegal downloading.”
Over at OLMA Media Group, a focus on high-end illustrated books means that it faces far less piracy problems than its counterparts. “Still, pirated editions of our titles have appeared in various countries, especially in Ukraine. The worse news is that those books sell at half their retail prices in Russia,” says general director Dmitry Ivanov. “We have seized nine such contraband print runs with assistance from the Ukrainian police. In one case involving an encyclopedia on Russian Orthodoxy, while we sold 78,000 copies, the pirate managed to reprint and sell 40,000. So, while the present focus is on digital piracy, traditional piracy is alive and well.”
However, Ivanov is confident that publishing extensively researched and illustrated series such as his bestselling 18-volume encyclopedia on history is the right strategy for OLMA. “Given the proliferation of e-reading devices, the speed of broadband, and the tons of free material available online, there has been much skepticism about the longevity of reference titles among publishers and readers alike. It is a fact that many people turn to sites such as Wikipedia for information. But is the information reliable? Can it be used for publishing or research purposes? No, and no. So we believe that our reference titles will stand the test of time in the foreseeable future.”components/article_pagination.html not found (No such file or directory)