Argentina’s book market is the most traditional market in all of Latin America, and the country continues to pride itself on a flourishing independent landscape, both in bookselling and publishing. The last couple of years, however, have been not easy for Argentinean booksellers and publishers. Carlo Carrenho recently caught up with Javier López Llovet, CEO of Penguin Random House in Argentina (and also responsible for the groups’ operations in Latin America) to talk about the challenges the industry faces, especially in the upcoming election year.

Give us a sense of the market in Argentina, and what are your expectations for 2019?

The market is very recessive. The sales drop in 2018 really affected the whole commercial chain—printers, publishers, booksellers. With annual inflation reaching 40%, it is very hard to keep the prices updated and the whole chain was forced to drop margins to avoid even deeper sales declines.

We don’t think 2019 will be any better. The presidential election will surely divert people’s attention from cultural consumption, including books. The elections affect the book market because people direct their attention to news outlets, where they can follow the political debates. Meanwhile, they are not so attracted to a more relaxing experience, like reading fiction, which requires a certain “peace of mind.”

Argentina has very few online sales of books, around 1% of total sales, and a huge presence of brick-and-mortar bookstores. Do you expect this to change?

In the short run, we don’t see any meaningful change in the online vs. offline sales ratio. Amazon is not present in Argentina, and they were the ones who developed the online market in the countries where they launched operations. Concerning physical retail, the independent bookstores—and also the chains—were the ones who most suffered with the recent sales drop. In fixed-price markets like Argentina, booksellers can only keep or improve their margins by cutting costs, and that has a very precise limit during high inflation. If the economic situation does not improve in the short run, we could see a very complex scenario in the retail market, with the closure of bookstores.

Penguin Random House recently acquired control of Companhia das Letras in Brazil. Can we expect more integration in the region now?

Since Companhia das Letras does not report to our LatAm division, I can’t really comment much. That said, Grupo Editorial could contribute with many back office synergies to Companhia, given its presence in seven countries and its wide experience in Latin American markets. These synergies could help Companhia to give even more focus to the expansion of its extraordinary catalog in Brazil, and in the Latin American countries.

If the economic situation does not improve in the short run, we could see a very complex scenario in the retail market...

What is your take on digital books in Argentina? Do you have an estimate of its market share? Do you expect it to grow?

The digital market is somewhere close to 2%. Until a retailer that is able to significantly push sales enters the Argentinean market, e-book sales will only keep its organic growth. And that will happen without any bounces like the one that happened in Spain after Amazon arrived.

What about audiobooks?

Audiobooks are a growing market in the whole world, and it is no different in Latin America. This market has grown a lot in Argentina and there are cases where the audio edition of a title has sold more than the e-book version. You can explain this by the ease of using an existing device—the mobile phone—to listen to audiobooks, while e-books demand an e-reader to provide a pleasing reading experience. The use of a single telephone opens the market in a significative way in countries where the importation of advanced technology devices, such as Kindles and iPads, is still complicated.

What Argentinean author or authors the world is missing because it hasn't been translated into English or other major languages?

Fortunately, most of our authors are translated and known in all major languages. But still, there’s always hope for other great voices to be known overseas. That is the case of María Moreno, a legendary writer and journalist whose recent memoir was an acclaimed success; Daniel Guebel, our 2018 National Literature Award; or María Teresa Andruetto, winner of the prestigious Hans Christian Andersen Award. I would also point out that Florencia Bonelli’s books, Argentina’s bestselling fiction author has yet to be offered to an English-speaking audience.

Carlo Carrenho is a publishing consultant and founder of PublishNews.