Market Focus: Saving Religious Books
Maybe divine intervention will reverse the profit slide for religious book publishers. But industry experts believe it also would be prudent to consider scaling back on titles, reducing returns, making intelligent use of data, investing in digital opportunities and otherwise adapting business models for future success. “One of the biggest things impacting at least our segment is our perspective of the business that we’re in,” says Michael Linder, who at the time of this interview was senior vice president of strategy and new business development at Zondervan of Grand Rapids, Mich. “There are some religious publishers who are going to see themselves in the business of evangelism, and … they’re running their business more as a ministry, relying on God’s grace to drive their business—as opposed to, perhaps, God’s grace and good publishing business practices.”
Best-Sellers Begat Attention
In a nation where more than half of the population belongs to a religion, and most Americans boast biblical first names, Mark Kuyper, president and CEO of the Phoenix-based nonprofit trade organization Evangelical Christian Publishers Association, believes that Zondervan’s “The Purpose Driven Life” by Rick Warren and Tyndale House Publishers’ “Left Behind” series by Tim LaHaye and Jerry B. Jenkins opened the doors to mounting interest in Christian literature.
“I think that made people in New York houses and certainly in Christian houses, as well, really begin to get a much better picture of just how enormous the potential market for Christian resources is,” he says.
So, suddenly, there was a bit of a religious title glut, says Michael Norris, lead trade book publishing analyst at Stamford, Conn.-based research firm Simba Information. “To hear some publishers and retailers tell it, book lovers more or less stopped looking for religious titles as soon as the interest in the blockbusters started to fall off,” he says.
Now, Kuyper and Norris agree, the shrinking distribution channels, known colloquially as struggling and disappearing independent bookstores, and that little annoyance—the recession—can take much of the blame for the current profit slump.
Keeping the Faith
Despite dropping a bit in the top 10 book categories he tracks, Norris says, religious titles “easily” will remain within that ranking due to quality, “long-tail” works such as Baker Publishing Group’s “90 Minutes in Heaven” by Don Piper and “The Five Love Languages” by Gary D. Chapman.
Tyndale House Publishers of Carol Stream, Ill., continues to see strong sales in its devotional and fiction lines, says COO Jeffrey W. Johnson.
“Probably if there was anything that we’ve personally been doing a little bit more, it would be personality-driven and particularly connections with sports figures,” he says.
Those nonfiction works that are selling best include: “The Winners Manual” by Jim Tressel, The Ohio State University football coach; “Don’t Bet Against Me!” by Deanna Favre, the wife of former New York Jets quarterback Brett Favre; and “Quiet Strength” by Tony Dungy, a former NFL coach.
“People … are seeking … answers,” Linder says, adding that this is especially true as a result of the recession. “But they’re seeking authentic, faith-based answers. And in their search, there is a huge opportunity for religious publishers to create products [with] real answers to real problems.”
On the flip side, four words—“escapist fiction” and “everything else”—summarize the market for Altie Karper, managing editor of Pantheon and managing editor and editorial director of Schocken Books, Knopf/Doubleday’s imprint for Jewish literature, both owned by Random House. In a down economy doubled with free Internet entertainment, the only titles selling well at Schocken are “escapist fiction,” says Karper. So what’s not selling well? “Everything else,” he says.
Probably the biggest problem the religious book publishing industry is facing is the changing retail environment, which is being exacerbated by the recession and the rise of free Web content, Norris believes.
Big-box retailers are winning the convenience and price battle, which is hurting the independent bookstores. That’s also occurring because cash-strapped consumers continue to buy paperbacks, he says.
Additionally, “ministry accounts are struggling due to decreased donations,” Johnson says of direct sales.
“Returns are coming back faster, retailers and consumers are more cautious about buying, and there’s increased bad debt due to shaky customers,” Johnson adds.
With that burden to bear, industry insiders say religious book publishers need more than the grace of God to survive this recession. They need to adapt.
“We’re seeing publishers pulling back on the number of titles that they are releasing,” Johnson notes. “I’d say the reason behind that is that we went through, … as the general book industry [did], quite an expansion at the end of the 20th century. And now … more and more books aren’t getting their chance to even be viable.”
Tyndale took a look at its title count a few years ago and reduced releases from 120 a year to 100 annually.
But finding the perfect balance is more complex than just publishing fewer titles. Marketing analytics and digital printing strategies are replacing gut instincts for determining initial print runs and reprints. To reduce the number of returns, publishers are building out marketing forecasting models and, sometimes, forgoing that second printing.
Johnson says data reveal when products won’t cover development costs, so titles that will only sell 2,000 to 4,000 units can be left behind, considering their sales wouldn’t even cover printing costs.
Linder believes publishers will dovetail that with dropping backlist support after titles, say, fall below sales of 1,000 a year.
“Amazon will continue to encroach on the major bookstore chains as the primary retailer of backlist titles,” says Dwight Baker, president of Grand Rapids, Mich.-based Baker Publishing Group. “This trend will alter how we launch and sustain our titles. The bookstore chains are the more important sales channel for establishing our new titles. Meanwhile, Amazon is growing more essential for long-term, backlist availability. I see curiously little overlap between our top 10 titles at Amazon and at the bookstore chains. This separation implies that we urgently need both sales channels and that customers use each channel with different demands. This split will continue to widen.”
At the same time, titles can remain in print forever with print-on-demand. “Rather than having books in inventory sitting there, [publishers] might use more of a print-on-demand strategy for those books,” Linder suggests. “So now their money isn’t tied up in the inventory, which improves their cash flow. And better cash flow means a healthier company, and a healthier company means a healthier industry.”
Baker opines that another trend is taking some of the pressure off of the religious book industry. “Vanity publishing lowers the bar for new authors, and it raises the bar for commercial publishers,” he says. “If a self-published work generates some energy, we commercial publishers will later appear, offer a contract and accept responsibility for broad distribution. It’s not an either/or decision for new writers. We all can get the best of both options.”
Then there’s planning for the future.
“It’s not simply going, ‘OK, we’re producing a book,’” Johnson says. “We also have to consider the e-book side. We have to consider, ‘Did we do it on the audio side, and is that downloadable?’ … Now, these other avenues are still a very small percentage of our business. But the opportunities are definitely expanding in ways that you can deliver your content.”
In 2007, the $80-million company’s e-book sales totaled $20,000, and in 2008, that figure jumped to more than $100,000. “At some point, we’re going to have enough nickels to make it worthwhile,” Johnson
Along those lines, under the brand name Symtio, Zondervan makes e-books from various religious publishers available through brick-and-mortar retailers. In stores, consumers can peruse plastic cards—similar in appearance to credit cards, but about twice the size—each bearing information about a particular title. After purchasing a card, consumers go home and download the digital book with a code from the card at the Symtio Web site.
In fall 2008, Tyndale broke into the global mobile market, and now, other religious publishers are doing the same.
Still others are offering providing expanded, searchable content online that provides enhancements beyond print versions, Kuyper says. For instance, Good News/Crossway of Wheaton, Ill., debuted its Internet “ESV Study Bible” in November 2008, which includes options such as audio accompaniment, study guides positioned to the right of the text and key theme outlines.
Zondervan is exploring providing downloadable Bible “slices,” Linder says. Consumers who want a specific chapter or verse will be able to find it through its service.
Johnson adds that traditional growth areas still will produce bounty. “We continue to see strong acquisition competition for good properties,” he says. Another advantage is that a broader array of channels carries religious titles versus the distribution that mainstream titles enjoy.
Even so, Johnson says he would like to see The New York Times start to poll Christian booksellers for its best-seller list. Times spokeswoman Diane McNulty says the newspaper doesn’t disclose its methodology in granular detail, but the methodology is regularly updated to reflect the changing marketplace.
Norris believes that during the next five years, e-books will not be the savior that many publishers believe they will be. Wal-Mart still will hold sway and independent bookstores—well, he hopes they stick around.
It may not be in religious book publishers’ self-interest right now to aid the ailing distribution channel, but it will be down the road.
“The problem with the blockbuster books is that they often can lead to price wars that a lot of retailers can’t win. And it’s actually something that the book industry is going to have to … face sooner or later,” he says. “… Because bookstores … have to sell books no matter what, because that’s their livelihood. But Wal-Mart doesn’t necessarily need to sell books. Costco doesn’t necessarily need to sell books. And if they’re the only ones left selling books, what kind of negotiating heft is a publisher going to have anymore when they talk with their channels? So … I really hope that publishers continue to value their smaller channels, even though they’re not moving the blockbuster books nationwide for them. But they’ve got to value them anyway, because it’s part of a book’s identity and it’s also part of the landscape that makes publishing part of culture.”
The future of this segment lies far beyond products, Linder says. Religious book publishers will need to be aggregators and disseminators of content for communities. But the content will have to be tailored to individuals’ needs and wants, he says.
To that end, Zondervan purchased a Facebook-like tool aimed at the Christian audience, OnTheCity.org. In it, for instance, individuals can create profiles, save Bible notes, coordinate their church groups and activities, and find out what publications Zondervan has to offer.
“I think it’s very unusual thinking, but I think it’s going to be a necessary move for most publishers over the next five years,” Linder says. “For religious publishers, it might be far easier to think of community than traditional or secular publishers, because we’re already selling to a community. That’s the church community.”
Heather Fletcher is a senior editor and staff writer at North American Publishing Co.