More than many, publishing is a business of highs and lows: of chart-storming bestsellers and mega-flops; blockbuster advances and pittance royalties; and bulging profits and eyewatering losses. It is in part what keeps us interested. But rarely have the signs been so positive and so challenging at the same time. It feels like this moment is a unique combination of the good and the bad, trends that have been building for 30 years or more, on both up and downside, crescendoing at just the same moment. This means publishing is at a time of maximum peril and opportunity.
Let’s break it down. First the good. The digital wave didn’t wipe out publishing, as some forecast. Instead, it was readily manageable; it simply added a new, high-margin format to the mix. Far from breaking publisher business models, it underwrote them. Digital piracy was the dog that didn’t bark. Major disruptions like having to reconsider what a book is, what the basic product was; well, they just went away. People carried on reading, and what’s more paying for it. On the retail side, the moment of maximum danger for core Anglo- American channels like Barnes & Noble and Waterstones faded with a new, apparently stable, ownership. Publishers continued doing what they always had: at once jumping on every passing trend, but also creating new ones, winning either way.
They went back to books
Then the pandemic happened. Everyone held their breath. But actually, it turned out to be a phenomenal boost for reading. When everyone got bored at home, they went back to books, and books delivered. Sales boomed. Generations were put back on the reading path, and although it has since calmed down, there is a feeling that part of the progress is permanent—there are more readers out there. At the same time as traditional publicity outlets like newspaper reviews have shrunk, so new platforms like TikTok rushed to fill the space, often explosively. Put it all together and on both the top and bottom lines, publishers have rarely had it so good. Books are selling, but they are also part of the wider cultural conversation. The shocks have been managed. What could go wrong?
Well, inflation, for a start. Books have been remarkably inflation proof, at least as far as the end consumer is concerned. Until recently book prices in the UK had barely shifted in decades. But with the price of paper, ink, printing, and distribution (basically everything in fact) all skyrocketing at rates not seen in many countries for 40 years or more, that was unsustainable. But so fast and deep is this inflation, and so fragile are consumer markets, that passing the entire cost on to the consumer is a difficult call. At the same time, freight costs and timings have leapt. The just-in-time complex supply chain system of trade is teetering—and it has been good to the book world. Put it all together, keep in the mix hungry retailers, and it creates massive margin pressure.
But that’s not all. Every year the competition from other media intensifies even as the book market saturates itself. There may be more readers, but there are far too many books. The result is a house built on sand—readers may be fickle, and quickly divert to PS5s/Netflix/their phone at any moment even as audiences for the average book dwindle. There is a sense of uneasiness in publishing at the minute, about pay, about work, about status. All is not well in the workforce, even as tech companies enticingly pay vast amounts. Especially in countries like the U.S. and the U.K., the extraordinary retail and publicity concentration may have stabilized… but it has stabilized at a very high level indeed.
The challenges no-one is talking about
And all this is before you get to a bunch of looming challenges that it seems to me absolutely no one is talking about. Like the fact that machine-learning systems can now generate large amounts of incredibly high-quality text (and images) on any matter in seconds, and how this ability is jumping forward in leaps and bounds by the month. It is probably a year or two before they can generate books with absolute seamlessness. Or the fact that a coming generation of entertainments will be completely immersive and absorbing, and targeted at literally everyone—the metaverse isn’t just the punchline to a joke, but a project absorbing billions in R&D. Or the shocking demographics of many countries, that will see worker numbers and readers start to fall within the next decade. Or that the era of cheap goods and low-cost supply chains is unlikely to return.
There is a Dickens quote somewhere that springs to mind. Given it really is the best and worst of times at once, what to do? The answer is hinted at in the spectacle we’ve recently seen in a New York courtroom. Get together. The big publishers are consolidating into vast defensive fortresses that will, they believe, enable them to both capitalize on the good and ride out the storms. The logic is, I think, sound, and facing this unique mix of circumstances, it’s inevitable. But it raises the question of what smaller publishers should do.
At Canelo we think the answer is simple: focus on your core strengths, find what others aren’t doing, and above all, partner with others, closely and strongly. Any British publisher, for example, knows the U.S. market is massive, awesome, inviting… And tricky, treacherous and intimidating. We debated for a long time what the right approach for print might be, whether to go it alone. But we have partnered with Printers Row, the publishing arm of Readerlink. It has enabled us to see print titles in the U.S. and given them an opening into fiction with a scale and speed neither alone would have been able to achieve.
The market today is Janus-faced. Get it right, and the rewards are there. Get it wrong and it’s existential.
Michael Bhaskar can be found on Twitter @michaelbhaskar.
