Strategically Speaking: Surviving Volatility
Anyone paying even the slightest bit of attention to book publishing industry news (and also living through it) knows that these are indeed remarkable days. Having more years in and around the book business than I care to count, I can tell you with absolute certainty that the pace of change is unlike any time I can recall, and few signs can be seen of any slow-down in an environment that can only be described as volatile—if not downright unpredictable.
One basic tenet of Wall Street thinking is the value of predictability. The investment community rewards the stocks of companies and industries that exhibit steady (not necessarily spectacular) growth in revenues and earnings with appreciated share prices—and punishes those with wide swings in either direction with lower stock prices. More than anything else, the Street hates surprises. If predictability is a qualification for success, I suggest to you that we are, as an industry, in for a bit of a roller coaster ride for the next several years—as the business environment that has been, for the most part, fairly stable for the past several years undergoes transformational times.
On Aug. 9, the Association of American Publishers (AAP) and the Book Industry Study Group (BISG) gave the book publishing community an early glimpse of the BookStats project—the joint effort of these two industry stalwarts. For those of you new to the BookStats project, the program was created to provide publishers with a comprehensive view of industry sales—across product lines, formats and distribution channels. The project was based on information provided by almost 2,000 publishers using this baseline information to project statistics for the industry as a whole. A glimpse at the BookStats study revealed much interesting and important information, particularly in its reporting of industry growth in sales, from 2008 to 2010, of 5.6 percent—a remarkable achievement in the soft economy of recent years. It also showed a dramatic increase in e-book sales, in both dollars and units, and continued erosion of the market share of brick-and-mortar retailers to the benefit of online booksellers and mass merchants. Here are some of the highlights from the preliminary report: