Ninety-eight UK publishers went out of business during the past year, 42% more than the year before, figures which reflect an ongoing squeeze on publishers' profit margins driven by deep retail discounts and new digital business models.
Wilkins Kennedy partner Anthony Cork pointed to a clutch of reasons why publishers' traditional business models were so fragile: discounting, the growth of the ebook market, digital piracy, the growth of the secondhand book market, and the scrapping of the Net Book Agreement in 1997.
Niche academic and educational publishers are particularly vulnerable, because their model is being undermined by digital piracy and online secondhand book sales on sites such as Amazon Marketplace. Cork said: "The arrival of Amazon has transformed the secondhand book trade from a fairly minor nuisance to a serious threat. Where once you had to trawl the secondhand bookshops if you wanted to get hold of a cheap hardback or academic book, you can now be fairly certain of getting hold of what you want at the click of a button, and the publisher will not make a penny."
Growth in sales of ebooks, whose average price is £3 or less, compared with £5.50 for a paperback, has also undermined publishers' margins. UK consumer ebook sales rose by 134% to £216m in 2012, while print sales fell by 1% to £2.9bn, meaning that consumer ebook sales now represent 7.4% of book publishers' total sales, according to the UK Publishers Association.
Do you know what I find most ridiculous about this piece? It's how no one thought to consider whether the ongoing recession might be having an effect.
Maybe, just maybe, niche publishers are struggling because consumers see some book purchases as luxuries. And perhaps the used book market is thriving because book buyers have had to tighten their belts and reduce expenses. That could be why they're buying used books instead of new.
But no, The Guardian thinks the demise of 98 publishers is more likely due to ebooks now accounting for under 8% of the UK book market. Or piracy, even though no one has any real numbers to back up the claim.
BTW, if used books are such a threat to publishers then why haven't more died off by now? The online used book market has been around for 10 years or more, so why is it only now that publishers are succumbing to its effects?
image by L'habitant