The book world is finally being forced to wake up to the reality of the discounting culture that it unwittingly created with the abolition of the Net Book Price Agreement. Echoing what I have been saying for months, The Bookseller reports that according to the Booksellers Association Benchmark Study, the results of which were released on Friday (November 21st), UK booksellers are locked in a damaging "vicious circle" of discounting, and are making fewer profits and seeing less growth than their counterparts overseas.
The report goes on to say that book stores have been hit by a "triple whammy" of declining average prices, stagnating growth and rising costs. Of the countries studied (UK, USA, Ireland, Netherlands, Finland and Sweden), only one (the United States) had a lower average selling price than the UK, with perhaps more worryingly, the number of books sold at discount in the UK rising from 44 percent in 2004 to 51 percent in 2007.
The report estimates that UK bookshops lost around 10 percent of volume sales to other sources, such as supermarkets and online retailers during that same three years. Gross margin for UK booksellers per book is put at around 25 percent (meaning that my book which is sold at 40 percent discount, is a relatively high earner for most), far lower than the average of the countries surveyed.
Echoing my own words, BA president Graham Rand said: "We have to ask ourselves whether the industry has gone too far in creating this -'lowest price' environment for consumers; through this serial discounting are we simply devaluing the worth of the book in consumers' eyes?" I have been saying this for a long time, ever since I first began to learn about publishing in fact and understood how the supply chain works. The lower the prices go, the more books are seen as throw away commodities, of little or no value.
Any fool can surely see that such heavy discounting is not good for business - and not just for book stores. Every sector of publishing is affected by this aggressive strategy, from publishers to book stores to authors. On the surface, it is good for the consumers, since they get lower prices, but it also means less choice, as the money is no longer there to nurture and support up and coming talent, hence the explosion in self publishing. Instead of welcoming this, and seeing it as a good thing that leads to increased choice and competition, the majority working in the industry see this as bane and a dumbing down of quality, to be kept out at all costs. One look at the average celebrity (supposedly) written book will soon tell you where the real dumbing down has come from - the industry itself that pays such obscene amounts to publish these books - not for much longer though.
The BA hopes that this report will be used as a springboard to book sellers to re-think their business strategies, and so do I, for the good of all. Discounting has its place, to encourage sales in slower moving titles perhaps, but to sell brand new books as loss leaders is irresponsible in the extreme. Instead of creating business and instilling brand confidence, this ultimately has the opposite effect. The company I work for, in the electrical sector is undergoing a major re-branding exercise to overcome their public image as a discount retailers; if the book stores do not change their stance, they may be forced to do the same. The conditions may be difficult - they are for all - but there is more than one way to skin a cat - if money is tight, instead of discounting, we need to find ways to cut costs by as the report suggests, closer negotiations with publishers, rethinking of labour costs, increased product ranges and ensuring the supply chain is being used effectively.
Things may be good for Katie Price (her latest book is reported to have outsold Gordon Brown's by 4,446 copies to 193, in just two weeks) but the signs are that the industry is finally catching up with public opinion and cottoning on to the fact that these so-called celebrity memoirs are not worth the money being spent on them. As a genre, celebrity memoirs are losing popularity fast, in favour of self help and books on how to beat the credit crunch.
As well as a more cautious public, who see these books as expensive luxuries, publishers can no longer afford fees reaching into seven figures for such authors. In the first six months of 2008, publishers' lists for non-fiction hardbacks were crammed with books by celebrities, including the aforementioned Katie Price, Katherine Jenkins, Myleene Klass and Craig Charles. Books were also scheduled for older more established stars such as Esther Rantzen, Julie Andrews, Mike Oldfield and William Shatner (now that one might be worth reading). Lists for 2009 reveal only 3 such celebrity books, by comedian Jack Dee, TV host Jeremy Kyle, and comedienne Jo Brand.
The majority of these books are issued as hardbacks, with cover prices (before discount) around the £19 mark, which is a high price to pay. Last December, books had to sell at least 10,000 copies to make it into the Top 20 of the Bookseller magazine's sales charts, this year that has halved to just 5000 copies. While some books have done remarkably well, other have failed to meet expectations. Dawn French is said to have received an advance of up to £2 million for her memoirs, Dear Fatty, yet the book has sold just 30,000 copies. Simply put, celebrities are becoming a de-valued currency. Despite these huge advances with thousands spent on publicity, the majority fail to deliver on sales and do not earn their advances back. Books like this cost publishers money, and lots of it, and the more books that make a loss, the less there is to pay the real writers, who in the meantime, struggle to get any advance at all.
Publishers are beginning to see the light, and are becoming more and more cautious when it comes to these deals. As Stuart Kelly, Scotland on Sunday's literary editor, said: "When even the big names aren't selling, the economics don't add up. Add in the shrinking books market overall, as the credit crunch takes effect, and publishers become no longer willing to take a chance."
Publishing, or for that matter any business venture, is a game of chance, which can go either way. The current economics and experience show, that celebrity books are losing favour with the reading populace. Everything goes in circles, as I knew it would sooner or later. At times of uncertainly the public do not want to know about other peoples glamorous lives, as all this does is create more misery, what they want is believable information and ideas on how to escape from their own. Maybe it is time for me to write that book about Lundy?