The book publishing market is tough right now. Earlier this week, Publishers Weekly reported that:
Bookstore sales continued their perfect record in 2007 in May, falling for the fifth consecutive month. According to the U.S. Census Bureau, sales in May were down 4.3%, to $1.10 billion, and were off by the same percentage for the first five months of the year. Bookstore sales totaled $6.20 billion in the January through May period. For the entire retail segment, sales were up 5.6% in May and were ahead 4.1% for the first five months of 2007.
In the last few months, I have spoken with most of our largest bookstore customers. A few have reported being up. Most have reported being down. Regardless, everyone acknowledges that the bookselling environment is not what they had hoped it would be when the year began.
The real question is, “why?” What is driving this decline in book sales? I think there are at least four factors:
- High gasoline prices. Gas prices are up 6.8 percent for the quarter ending in June compared to the same period last year. This is not much, but I believe it has a psychological impact on consumers’ willingness to spend money on discretionary items. To be sure, they are continuing to spend money, as the U.S. Census Bureau numbers prove. However, more of their money is going to other items. This is the one variable that publishers and booksellers can’t really fix. As they say, “it is what it is.”
- Competition from alternative media. This is a factor that, frankly, I have been reluctant to acknowledge. But consider how many different alternatives people have today for entertainment: television, movies, music, computer games, live events, and, of course, the Internet. Reading habits are changing—and not for the better. This is particularly worrisome when you observe how teenagers spend their time. I don’t see many reading books. Somehow we have to create more compelling products that capture their imagination.
- Growth of online bookselling. Last year, the major bookstore chains reported that there sales were basically flat to slightly down. Meanwhile, Amazon.com grew 26 percent. This includes all product categories. However, media sales alone grew 21 percent domestically. The brick-and-mortar stores are having to scramble. It’s increasingly difficult to compete against Amazon on selection, price, or convenience. About the only thing booksellers have left—and this is significant if they exploit it—is the experience consumers have inside their stores.
- The lack of blockbuster titles. As everyone in the book publishing business knows, big titles drive traffic. When you have a major release like the current Harry Potter book, consumers have a reason to make a trip to the bookstore. And, while they are buying that big book, they often pick up other books on their way to the cash register. Of course, if you are a publisher, you hope to publish the big books. But even if you don’t, you still benefit from the traffic, particularly if traffic is coming to your category. Unfortunately, as a predominantly religious publisher, we haven’t seen any big blockbusters since The Purpose Driven Life or Your Best Life Now.
Am I discouraged by the current environment? No. But I am challenged. For the first quarter of our fiscal year (April through June), our sales are up against last year by low double digits. In a market segment that is down by 4.3 percent for the calendar year, this is huge.
But, still, we are not where I had hoped we would be. We still have a lot of work to do to hit our numbers for the year. Thankfully, we will start shipping our biggest titles for the year in this current quarter. These include Max Lucado’s 3:16 and the Word of Promise: New Testatment Audio Bible. Hopefully, with these titles—and a few big titles from our competitors—we will drive some store traffic and everyone will benefit.