Given all of the attention that the Department of Justice’s successful trial to block Penguin Random House’s purchase of Simon & Schuster drew, it can be hard to remember what other trends, challenges, and issues confronted the publishing industry in 2022.
In many ways, last year the industry was still dealing with the fallout caused by the pandemic. For one thing, return-to-office policies remained in flux throughout the year; just when a publisher would announce plans to bring back employees to the office for a few days a week, another surge would come along and scuttle those plans. In addition, executives at the big publishers were meeting stiff resistance from employees on any sort of mandate to return to the office. In PW’s most recent salary and jobs survey, respondents said that the creation of work-from-home policies was the most important benefit their company established during the height of the pandemic, and the overwhelming majority of respondents were concerned that their company would soon be requiring employees to be in the office for a certain number of days each week.
The supply chain problems that were prevalent for much of 2021 continued into 2022, though conditions did improve. Price increases for printing, paper, and shipping eased in 2022, though, as the highest inflation in decades set in, production costs still remained well above 2019 levels, squeezing profit margins. The printing capacity crunch also eased a bit, albeit not for a good reason—printers received fewer orders as book sales declined.
When the pandemic began, consumers moved more of their spending toward online retailers and away from bricks-and-mortar stores in 2020 and 2021. That shift led Amazon to place big orders for all items, including books, over the past few years. As consumers began returning to stores in greater numbers in 2022, increases in online spending slowed—a trend that hit Amazon hard. To work down the amount of book inventory it had accumulated, Amazon drastically cut back on new orders it placed over the summer, with some publishers reporting sales declines as deep as 70% with Amazon in the summer months. HarperCollins cited the plunge in orders from Amazon as the key reason why sales in its quarter ended September 30 fell 11%. The dramatic decline of orders from Amazon, along with the news that Amazon had cut some jobs in its Books group, led some industry members to wonder if the company was losing interest in the book market, speculation that Amazon firmly denied. Publishers did report orders from the e-tailer improved in the early fall.
The return of shoppers to physical retailers was good news for bookstores. ABA reported a record number of members, while Barnes & Noble began opening new outlets in the year and expects to open 30 new stores in 2023. Total bookstore sales through October were up 7.5% over the comparable period in 2021 and, following two years of declines, could return to 2019 levels in 2022. The improving retail environment didn’t lift all boats, however. In the spring, Amazon announced it was closing all 24 of its physical bookstores; Amazon opened its first bookstore in November 2015 to tremendous fanfare.
A return to familiar rhythms
With the easing of pandemic-related restrictions, the publishing calendar returned to a more normal pattern. In the U.S., the fall regional bookseller shows had solid attendance as they returned to in-person events. All of the primary international book fairs also held in-person events, though many still saw reduced foot traffic from pre-pandemic levels in the shadow of inflation, the ongoing threat of Covid, and the war in Ukraine.
In March, the Bologna Children’s Book Fair sought to draw more publishers to its event by expanding into programming for adult publishing with its Bologna Book Plus program. London followed in April and featured Ukrainian author Andrei Kurkov as a keynote speaker as the industry considered a blanket ban on working with Russian publishers. The fair, which is considered the main rights-trading venue for English-language books, saw the buzz return to its rights center after three years without meeting in person. The same was seen in October in Frankfurt, where its rights center sold out and many international publishers returned, albeit to a more subdued event as the effects of the nearby war, the resulting energy crisis, and inflation were felt. Several large publishers scaled down their exhibitor booths, and total attendance was 180,000 people, approximately half the number its last pre-pandemic fair drew.
One event that grew in 2022 was the Sharjah International Book Fair, which welcomed more than 971 publishing houses, literary agents, and rights professionals from 92 countries. Sharjah had significant momentum going into the event, having been guest of honor at Bologna and the market focus country in London. It too was the guest of honor nation at the Guadalajara International Book Fair, which took place in Mexico at the end of November. The fair saw a return to full strength after a virtual fair in 2020 and a hybrid event in 2021, drawing some 800,000 people, down just 3,000 from 2019.
Books under attack
Challenges to the First Amendment and freedom to read were prevalent in 2022. In the spring, the American Library Association’s Office for Intellectual Freedom reported it tracked 729 challenges to library, school, and university materials, resulting in more than 1,597 individual book challenges or removals in 2021. Most targeted books were by or about Black or LGBTQ people. In 2020, only 273 books were challenged or banned. Challenges to books intensified in the election year in 2022, as some conservative groups saw the issue as a winning one. To combat the censorship efforts, various groups and individuals began to organize ways to stand up for the freedom to read (and, collectively, were selected as our People of the Year).
Employee activism, which first began to emerge in earnest as a reaction to pandemic concerns, as well as the murder of George Floyd, continued into 2022. Following the ruling by the Supreme Court that overturned Roe v. Wade and the disclosure that one of the justices who voted in favor of the decision, Amy Coney Barrett, had signed a lucrative contract for a memoir with PRH, an employee group circulated a letter condemning the deal. The pandemic also gave a boost to unionizing drives at a number of independent bookstores in the year. What is likely the largest book publishing union, some 237 HarperCollins employees who are members of Local 2110 of the United Auto Workers, went on strike on November 10, seeking higher pay, improved family leave benefits, a greater commitment to diversifying staff, and stronger union protection, At press time, no new deal had been reached.
As 2022 was drawing to a close, it became evident that industry sales, after two consecutive years of good growth, would fall in 2022. With one week left in 2022, NPD BookScan reported that unit sales of print books were down about 6.5% from 2021, but were 12% higher than in 2019. The Association of American Publishers reported that total industry sales fell 5.1% through October compared to 2021, with trade sales also down 5.1%, at the 1,368 publishers that report revenue to its StatShot program.
A final word on the PRH, DOJ trial
The three-week trial, which began August 2, highlighted the divide in the industry between those who favored PRH’s acquisition of S&S and those against it. As the trial went on, it became clear the government had the momentum, and it came as no surprise when Judge Florence Pan ruled in late October to block the acquisition. Events unfolded quickly after her ruling when, just before Thanksgiving, S&S parent company Paramount Global did not renew its purchase agreement with PRH, making it impossible for PRH to appeal the decision. In early December, PRH global CEO Markus Dohle announced he was stepping down at the end of 2022. How interim CEO Nihar Malaviya, most recently PRH president and COO, performs and who makes a bid to buy S&S will be two of the biggest stories of 2023.