Five years ago, the book world was seized by collective
panic over the uncertain future of print.
As
readers migrated to new digital devices, e-book sales soared, up 1,260 percent
between 2008 and 2010, alarming booksellers that watched consumers use
their stores to find titles they would later buy online. Print sales dwindled,
bookstores struggled to stay open, and publishers and authors feared that
cheaper e-books would cannibalize their business.
Then
in 2011, the industry’s fears were realized when Borders declared bankruptcy.
“E-books
were this rocket ship going straight up,” said Len Vlahos, a former executive
director of the Book Industry Study Group, a nonprofit research group that
tracks the publishing industry. “Just about everybody you talked to thought we
were going the way of digital music.”
But the digital apocalypse never
arrived, or at least not on schedule. While analysts once predicted that
e-books would overtake print by 2015, digital sales have instead slowed
sharply.
Now, there are signs that some e-book adopters are
returning to print, or becoming hybrid readers, who juggle devices and paper.
E-book sales fell by 10 percent in the first five months of this year,
according to the Association of American Publishers, which collects data from
nearly 1,200 publishers. Digital books accounted last year for around 20
percent of the market, roughly the same as they did a few years ago.
E-books’
declining popularity may signal that publishing, while not immune to
technological upheaval, will weather the tidal wave of digital technology
better than other forms of media, like music and television.
E-book
subscription services, modeled on companies like Netflix and Pandora, have
struggled to convert book lovers into digital binge readers, and some have shut
down. Sales of dedicated e-reading devices have plunged as consumers migrated
to tablets and smartphones. And according to some surveys, young readers who
are digital natives still prefer reading on paper.
The surprising resilience of print has provided a lift
to many booksellers. Independent bookstores, which were battered by the
recession and competition from Amazon, are showing strong
signs of resurgence. The American Booksellers Association counted 1,712 member
stores in 2,227 locations in 2015, up from 1,410 in 1,660 locations five years
ago.
“The
fact that the digital side of the business has leveled off has worked to our
advantage,” said Oren Teicher, chief executive of the American Booksellers Association.
“It’s resulted in a far healthier independent bookstore market today than we
have had in a long time.”
Publishers,
seeking to capitalize on the shift, are pouring money into their print
infrastructures and distribution. Hachette added 218,000 square feet to its
Indiana warehouse late last year, and Simon & Schuster is expanding its New
Jersey distribution facility by 200,000 square feet.
Penguin
Random House has invested nearly $100 million in expanding and updating its
warehouses and speeding up distribution of its books. It added 365,000 square
feet last year to its warehouse in Crawfordsville, Ind., more than doubling the
size of the warehouse.
“People talked
about the demise of physical books as if it was only a matter of time, but even
50 to 100 years from now, print will be a big chunk of our business,” said
Markus Dohle, the chief executive of Penguin Random House, which has nearly 250
imprints globally. Print books account for more than 70 percent of the
company’s sales in the United States.
The
company began offering independent booksellers in 2011 two-day guaranteed
delivery from November to January, the peak book buying months.
Other
big publishers, including HarperCollins, have followed suit. The faster
deliveries have allowed bookstores to place smaller initial orders and restock
as needed, which has reduced returns of unsold books by about 10 percent.
Penguin
Random House has also developed a data-driven approach to managing print
inventory for some of its largest customers, a strategy modeled on the way
manufacturers like Procter & Gamble automatically restock soap and other
household goods. The company now tracks more than 10 million sales records a
day, and sifts through them in order to make recommendations for how many
copies of a given title a vendor should order based on previous sales.
“It’s
a very simple thing; only books that are on the shelves can be sold,” Mr. Dohle
said.
At BookPeople, a bookstore founded
in 1970 in Austin, Tex., sales are up nearly 11 percent this year over last,
making 2015 the store’s most profitable year ever, said Steve Bercu, the
co-owner. He credits the growth of his business, in part, to the stabilization
of print and new practices in the publishing industry, such as Penguin Random
House’s so-called rapid replenishment program to restock books quickly.
“The
e-book terror has kind of subsided,” he said.
Other
independent booksellers agree that they are witnessing a reverse migration to
print.
“We’ve
seen people coming back,” said Arsen Kashkashian, a book buyer at Boulder Book
Store in Boulder, Colo. “They were reading more on their Kindle and now they’re
not, or they’re reading both ways.”
Being
able to set my own text size is much easier on my eyes and less weight is
easier on my wrists. I imagine this will only become true as...
Digital books have been around for decades,
ever since publishers began experimenting with CD-ROMs, but they did not catch
on with consumers until 2008, shortly after Amazon released the Kindle.
The
Kindle, which was joined by other devices like Kobo’s e-reader, the Nook from
Barnes & Noble and the iPad, drew millions of book buyers to e-readers,
which offered seamless, instant purchases. Publishers saw huge spikes in
digital sales during and after the holidays, after people received e-readers as
gifts.
But
those double- and triple-digit growth rates plummeted as e-reading devices fell
out of fashion with consumers, replaced by smartphones and tablets. Some 12
million e-readers were sold last year, a steep drop from the nearly 20 million
sold in 2011, according to Forrester Research. The portion of people who read
books primarily on e-readers fell to 32 percent in the first quarter of 2015,
from 50 percent in 2012, a Nielsen survey showed.
Higher e-book prices may also be driving readers back
to paper.
As
publishers renegotiated new terms with Amazon in the past year and demanded the
ability to set their own e-book prices, many have started charging more. With
little difference in price between a $13 e-book and a paperback, some consumers
may be opting for the print version.
On
Amazon, the paperback editions of some popular titles, like “The Goldfinch” by
Donna Tartt, are several dollars cheaper than their digital counterparts.
Paperback sales rose by 8.4 percent in the first five months of this year, the
Association of American Publishers reported.
The
tug of war between pixels and print almost certainly isn’t over. Industry
analysts and publishing executives say it is too soon to declare the death of
the digital publishing revolution. An appealing new device might come along.
Already, a growing number of people are reading e-books on their cellphones.
Amazon recently unveiled a new tablet for $50, which could draw a new wave of
customers to e-books (the first-generation Kindle cost $400).
It
is also possible that a growing number of people are still buying and reading
e-books, just not from traditional publishers. The declining e-book sales
reported by publishers do not account for the millions of readers who have
migrated to cheap and plentiful self-published e-books, which often cost less
than a dollar.
At Amazon, digital book sales have
maintained their upward trajectory, according to Russell Grandinetti, senior
vice president of Kindle. Last year, Amazon, which controls some 65 percent of
the e-book market, introduced an e-book subscription service that allows
readers to pay a flat monthly fee of $10 for unlimited digital reading. It
offers more than a million titles, many of them from self-published authors.
Some
publishing executives say the world is changing too quickly to declare that the
digital tide is waning.
“Maybe it’s just a pause here,” said
Carolyn Reidy, the president and chief executive of Simon & Schuster. “Will
the next generation want to read books on their smartphones, and will we see
another burst come?”
Source | Business Line | 24 September 2015
