One common theme the mainstream press uses when it covers digital publishing is the demise of ebooks and revival of print. Now The Independent is turning that on its head, and proclaiming that the rise of ebooks is killing off publishers.
In the year to 30 June, 128 publishers in the UK went out of business, according to the accountancy firm Moore Stephens. The prior year there were 81 insolvencies. A rise in popularity of e-readers such as the Kindle has fuelled the increase, said Moore Stephens.
The firm added that smaller publishers that have been slow to adapt and make their products available as e-books have seen sales fall. Parts of the industry that have typically enjoyed higher margins, such as academic publishing, have also endured a tougher sales market. Meanwhile smaller companies are feeling the strain of having to offer discounts to compete with larger online rivals.
David Elliott, restructuring and insolvency partner at Moore Stephens, said: “The fall in the value of sales for physical books is larger than the growth of e-books, and this is a worrying trend for publishers that are still dependent on paper for their profits.”
Digital continues to grow, with UK e-book revenues climbing 11 per cent to £563m in 2014. But data from the Publishers’ Association shows sales of physical books fell 5 per cent to £2.7bn.
As an ebook fan, I'd love to proclaim this as good news, but the lack of evidence, or in fact any causal relationship, has stopped me from joining the parade. (And then there's the bad/incomplete industry sales data, which in no way represents the whole of the UK book market.)
Sure, digital is creatively disrupting the publishing industry, but you can't attribute every failed publishing venture to ebooks; that is too simplistic of a conclusion, and in many cases it is simply false.
And that goes double when you consider what Moore Stephens hasn't told us, including the segment of publishing industry the now-deceased publishers were part of. Did they operate in one of the segments where ebooks are disrupting the business model (trade fiction, mainly) or one of the segments where ebooks had less impact?
In trade non-fiction, for example, the internet with its many sources of useful info is arguably having as much of an impact as ebooks; at least with the latter publishers have a chance of making sales, but websites are replacing print advertising dollars with mobile pennies.
And then there are textbooks, where publishers are pricing themselves out of the market and have to contend with free OER alternatives.
All in all, this story has less substance than a Nickelback song, and I'm not the only one to think so. Baldur Bjarnason commented on this nubbin of a story earlier today, and he points out that trade publishing has 99 problems, only one of which is ebooks:
- Consumer customers (the worst/least predictable kind of customer).
- Entertainment good (the worst/least predictable kind of product).
- A market that’s shifting increasingly to the blockbuster model (the worst/least predictable kind of market).
- Dominated by vendor duopolies (Amazon and B&N in the states, Amazon and Waterstones in the UK).
- No access to customer data.
- No direct communication possible with the customer.
- Archaic production infrastructure dependent on enterprise products from completely disinterested tech companies (mainly Adobe).
- Extremely expensive locations (London and New York).
- Low average pay across the board.
- Staff that on average has little training or experience (the combination of low pay and expensive location results in experienced staff burning out or leaving for greener pastures).
He argues that instead of asking why a trade publisher fails, we should ask this:
- How in hell have existing trade publishers survived?
To answer his question, my current working theory is that most major publishers are money-laundering operations for organized crime.
But a slightly more plausible explanation is that they can't survive - which is why some governments continue to prop up the industry with either handouts, tax incentives, or price control laws (France, Germany, Australia, etc).
In any case, trade publishing has about the life expectancy of a moa, and yet it is still around. The real wonder today shouldn't be that ebooks killed off a few publishers, but that the industry hasn't imploded in an Enron-level disaster.
Oh, well, there's always next year.
image by Katherine Hodgson