Talk to book publishing executives about the state of the industry, and a few things will become immediately clear. Returns are either alarmingly high or surprisingly unchanged. Backlist is either coming on strong or fading fast. There's been either no blockbuster book this year or there's been a whole gang of them. And the worst can be found in one of two places: behind us or yet to come.
Getting a sense of which way the wind is blowing these days is a little like trying to catch a feather in a tornado. That said, conversations with industry insiders and outside experts yield some important points.
Despite reports of higher returns, the book business has escaped the economic downturn's crueler effects. Sell-through hasn't fallen precipitously; bellwether publishers such as Simon & Schuster are reporting reasonably good years; and there may be as many as 14 books with million-copy first-printings this fall.
"The book industry is faring better than other print media, since it's driven by consumer spending, which has been plugging along, and not business spending, which, of course, has slowed dramatically," said Michael Burt, an economist with Economy.com, in West Chester, Pa.
But for every encouraging distinction, there's a reason for the industry to grit its teeth. Unlike last summer, when the biggest book news was Harry Potter and Dave Eggers, the most talked-about title this year, Bill Clinton's memoir, won't be published for two years. Anticipating weakening demand, many publishers are lowering print runs, an action that could make them more profitable but will do little to goose overall sales.
Among the top concerns for nearly every industry veteran is cash flow. With companies less willing to part with dollars quickly, getting float and passing money along the supply chain may not happen as often as it used to. Walker publisher George Gibson said his house has seen an atypical spike in returns when payment is due. The problem is made worse, said Chris Kerr, a principal at the sales rep firm Parson Weems, because banks are less likely to extend credit to struggling businesses.
While title levels and staff haven't been scaled back much, experts believe that publishers have kept title counts high out of a fear of losing shelf space. If things take a dark turn, this practice could amplify the effects. "If the holidays are bad, layoffs could hit hard in January," said one observer who asked not to be identified. The fourth quarter came up repeatedly in these conversations, and most publishers don't underplay its importance. "It's make-or-break," said Sourcebooks publisher Dominique Raccah. NBN president Jed Lyons says he hopes reorders will rise in the next several months in response to the heavy returns of the first half of the year.
In the January June period, the country's largest publishers reported strikingly different results. Time Warner had a weak first two quarters, but got a boost this summer from James Patterson. The house hopes its other big "J," Jack Welch, does the same this fall. Meanwhile, buoyed by John Adams, Simon & Schuster saw a 10% growth in sales for January June. Sales for the first two quarters at Penguin are up 7%, while returns are up only 1%, though the house is expecting a slower second half of the year. Random House said that reorders have been solid across the board since spring. And Houghton Mifflin might want to send thank you notes to the Tolkien and Mitchell estates; Lord of the Rings and The Wind Done Gone have propelled the new Vivendi acquisition to one of its best years in recent memory. "Everything that can go right has," said publisher Wendy Strothman.
At small publishers, returns seem to have hit particularly hard. Distributors NBN and LPC, along with independent-publishing trade group PMA, admit that returns have been heavy. Some of this may be less a function of the economy than of Ingram closing warehouses. Still, PMA executive director Jan Nathan said, "It's more important than ever for small publishers to have plans on how they are going to project their titles."
On the retail side, independent stores have generally reported sales growth, though some of these numbers can be misleading. At Vroman's, in Pasadena, Calif, for instance, monthly growth of 15% 20% is partially attributed by the store's Karen Watkins to the closing of a nearby Crown Books outlet. At the superstores, overall sales were up.
Attempting to analyze patterns among formats proved equally tricky. According to the AAP, mass-market paperbacks enjoyed the highest gain (or, in some months, the smallest loss) among all adult trade formats in four of the first five months of 2001, inviting speculation that in these times, consumers are more likely to buy less-expensive books. Children's hardcovers have gained in all but one month this year. Adult hardcovers have also shown resilience. After falling off 46% in February, they rebounded to post double-digit gains in March, April and May. Book club sales have bounced around like a Superball, rising 50% in March but dropping 33% in May.
Backlist is an equally confusing sector. Walker's Gibson said many of his key backlist titles are barely off. Raccah pronounced it dead. The truth, as it does with so many of these indicators, probably lies in-between or somewhere else entirely.
