Strategically Speaking: Surviving Volatility
● Publishers are increasingly selling directly to mass-merchants (e.g., Wal-Mart, Costco, etc.), with net sales dollars up 553 percent and unit sales up 294.7 percent over the past three years.
● As mass-merchants have experienced this increase, there has been a corresponding decline in sales to wholesalers, where revenue has declined 6.7 percent and net units fell 9.6 percent.
Clouding the Optimism: 2011 Figures
While the BookStats study does indeed offer many reasons for optimism, as an industry, we should take this information with the proverbial grain of salt, as the year-to-date May 2011 information provided by the Association of American Publishers suggests that the good times may indeed be on hiatus. Consider that:
● Year-to-date net revenues for higher-education, the shining star of the BookStats study, closed May 2011 at $561 million—decreasing $57 million or 9.1 percent from the comparable period in 2010.
● Year-to-date net sales for professional products closed January through May at $237 million, declining $19 million or 7.4 percent from the comparable period last year.
● Mass-market books continue their precipitous decline with net sales falling almost $80 million or 30 percent from this period last year.
● Children's books (including both hardcover and paperbacks) are down $42 million for the year-to-date through May, a decline of almost 11 percent.
● Adult trade sales (including both hardcover and paperbacks) are down $221 million or 20 percent over last year.
Why the Decline?
Invariably much of this is explainable. E-book technology has matured considerably over the past three years, and e-reader prices have dropped dramatically, accelerating the transition to e-books—and certainly a contributor to the declining fortunes of trade and mass-market's print books. And, of course, the Border's bankruptcy added fuel to the fire, with the implications of the store shutdowns not yet fully clear.
