With the effect of the recession steadily, if slowly, fading, and the industry getting a better grasp on the role e-books will play in its future, the 2011 edition of BookExpo America was the most vibrant since the economy collapsed in late 2007. BEA event director Steve Rosato noted that with the book business and the economy improving, there were less than 10 cancellations for booth space compared to more than 20 last year. "It was nothing at all like the past few years, particularly 2008 when it seemed like one booth in, one booth out," Rosato said. "And cancellations were far less than in the so-called heyday of the show. This year, people really stuck with it." The vibe on the show floor was more confident than in recent years, and numerous publishers and booksellers said the energy was much more positive. Penguin Group USA publisher Susan Petersen Kennedy observed that while the media may be obsessed by the way books are delivered, booksellers and librarians remain interested in the content. "Books showcase ideas—they start conversations," Kennedy said.

Although many panels and seminars dealt in some fashion with digital publishing, the looming loss of shelf space at physical stores has made publishers more determined to do what they can to maintain a viable network of physical stores. At the ABA annual meeting held last Tuesday at BEA, association CEO Oren Teicher called for booksellers and publishers to work together to overhaul outdated bookselling business models, and publishers seemed willing to explore alternative practices. "Random House is open to considering and testing creative ideas that make our physical business and our partners' business better," said Random House chairman Markus Dohle, adding that the nation's largest trade publisher is "fully committed to supporting physical stores." He said the company is continuing to make investments in its physical book capabilities to make the entire supply chain more efficient. One of Random's goals is to get books to stores faster, an initiative that will lower inventory for stores while increasing sales "because the books will be on the shelves," Dohle said. He emphasized that in revamping business models, Random favors a customized approach to working with retailers since the needs of bookstores are different from those of Wal-Mart, while Wal-Mart's needs differ from Costco's.

Penguin Group USA CEO David Shanks said, "There is no question that bookstores are critical to the business." Shanks is preparing to spend time with the ABA and "start with a blank piece of paper" to develop new models, but there is a caveat. "Both sides have to understand that margins are thin," Shanks said. "It can't simply be ‘give us better discounts.' That won't work." Shanks is hopeful that if both sides get a better understanding of the economic issues each faces, "We can come up with something." He added that if business practices are really to change, "an industrywide solution needs to be developed."

Bookstores are perhaps most critical to the success of publishers like Workman Publishing. Group publisher Bob Miller estimated that 80% of Workman's list is not suited to digital publishing at the moment, and that even at its Algonquin imprint, which is more heavily invested in e-books, trade paperbacks still outsell e-books five to one. "We need them and they need us," Miller said about Workman's relationship with retail stores. Miller said that by publishing books that work best in physical form—gift books, heavily illustrated books, pop-up books, and more—Workman is providing stores with exclusive content. The company is also working with retailers to find the business models that work best for them. "We need each other," he reiterated.

The Numbers Are Up

A contributing factor to the improved mood at BEA were two reports that showed the industry is growing. Although the Association of American Publishers/Book Industry Study Group couldn't provide hard numbers in their first BookStats report, representative from both organizations as well as Kelley Gallagher of Bowker, which is administering the program, said that between 2008 and 2010, unit and dollar sales were up. The sales gain was derived from actual sales from more than 1,100 publishers that supplied sales data for the three-year period.

The strongest sales gains in the three-year period came from small and medium-size publishers. Sales at the largest publishers showed slight gains. Adult fiction sales had modest sales gains, while the children's/young adult market had substantial gains in the period. Bowker's Gallagher noted that sales of adult nonfiction "are struggling a bit." Dominique Raccah, BISG chair and Sourcebooks president, noted that in each of the industry tiers—small, medium, and large—at least 50% of the reporting companies posted year over year gains.

The BookStats figures showed that e-book sales are driving industry growth, and the second report in BISG's ongoing "Consumer Attitudes Toward E-Book Reading" survey found that readers of e-books are increasing their spending on books. According to the survey, about 43% of e-book buyers said they increased their spending on hardcovers in January, up from 40% in September, while e-book readers who reported decreasing hardcover spending fell slightly in the period. E-book readers also increased their spending on paperbacks, with more than 50% saying they upped spending levels on the format in January compared to 40% in September. Increased spending on e-books by e-book readers jumped from just under 50% in September to over 61% of e-book readers in January. Overall, the percentage of e-book buyers who said they are spending more on books rose from about 28% last September to approximately 34% in January.

The growth in e-book sales has been accompanied by an increase in market share for Amazon as the largest source of e-book downloads. Amazon had approximately a 66% share of trade e-book downloads in January compared to about 57% in February 2010. B&N.com's share increased slightly over that period, but Apple's iBooks/iTunes piece of e-book downloads fell in the period despite the popularity of the iPad, pointing up that iPad owners don't use their device for book reading that much and that iPad owners who download books often turn to other outlets to buy e-books.

As e-books become a bigger part of the publishing business, BEA will certainly need to continue to evolve. But at least in 2011, there was much less hand-wringing over the future of the event. Dohle, who acknowledged being a fan of book fairs, said Random will continue to support BEA. "It is important for the industry to come together once a year," Dohle said, and he suggested that rather than focus on now many (or few) orders are being written, the emphasis should be on what can be accomplished. "It's a very efficient way to have meetings with lots of different customers," while at the same time meeting with authors, agents and other industry members, Dohle said.

For all of our coverage of this year's BookExpo America, go to www.publishersweekly.com/BEA2011.