Analyst: Publishers Seeing Steady Print Declines Should Ready for Steep Drop

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By Jeremy Greenfield, Editorial Director, Digital Book World, @JDGsaid

Publishers are more optimistic that they won’t see “significant” drops in print revenue in 2012, according to a recent survey. That optimism may be misplaced.

While print publishing revenues showed a steady decline across the industry in 2011, publishers should ready themselves for a steep drop in 2012 or 2013, according to a Forrester analyst.

In a Digital Book World survey conducted by Forrester Research, 5% of publishers believe their print sales will “decrease significantly” in 2012 versus 12% who thought the same about 2011 when asked in 2010. The percentage of publishers who predicted any print declines in 2012 was virtually unchanged versus the previous year.

“There’s an optimism about the pessimism,” said James L. McQuivey, Ph.D., vice president and principal analyst at Forrester, who conducted the survey. “But in reality the decline hasn’t hit yet. And when it does, it comes in big drops, not gradual tapers – that’s what we learned from music and DVD, both of which tapered down until they hit big drops and shelf-space disappeared rapidly. The same will happen in books, probably by late this year and certainly in 2013.”

In late 2011, book publishers representing 74% of U.S. publishing revenues were surveyed on a wide range of topics concerning digital books. The same survey was conducted in 2010.

According to the Association of American Publishers, print revenue in the two largest publishing segments for which it tracks monthly book sales numbers was down 17.5% and 15.6%, respectively.

(E-book revenue overall was up 117%. E-book revenue’s increase of about half-a-billion dollars just about matched decreases in the adult hardcover and adult paperback segments, the two largest at $1.3 billion and $1.2 billion, respectively.)

At several major book publishing companies, including Penguin and Simon & Schuster, increases in digital revenues accounted for declines in print revenues. But, because of higher profit margins on e-book revenues versus print-book revenues, profits were up even though sales were flat.

Related: How Long Can Publishers Ride the E-Book Profit Wave

For some, less-diversified publishers, a precipitous decline in print due to rapid drops in shelf space could be disastrous.

“For those people – illustrated books, cookbooks – if print goes down, they go out,” said Thad McIlroy, a Vancouver-based digital publishing consultant.

On the even more “pessimistic” side of pessimism, fewer publishers believe they will see “significant” gains in print in 2012 than did in last year’s version of the survey: 2% versus 9%.

“There is always a segment that can expect to grow,” said McQuivey. “But these successes will be modest and may not represent an opportunity worth investing in because they won’t last.”

Write to Jeremy Greenfield

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3 thoughts on “Analyst: Publishers Seeing Steady Print Declines Should Ready for Steep Drop

  1. This got me to thinking: I switched almost 100% of my reading to digital. It’s been gradual over the years but once I had my own kindle, I made a huge leap. I also started reading more library books because 2011 was my year of getting burned by poorly edited books. I found with digital I’m exposed to new authors to me who are not always traditionally published (indie) at better price points. As a result, with the savings I have from buying digitally and mostly independents (though there are regular big names lumped in), and with more library reserach prior to buying out an author’s collected works, I have enough money left to induldge in buying non fiction again – primary big ticket cook books. In fact, I’d stopped buying them, relying on sites like food.com and epicurious to expand my skills and recipe base. But now I’m able to get back to buying the bigger books because there’s more give in my expenses.

  2. A small clarification:

    My comment was made specifically with respect to IPG, noting that (a) less than 15% of the titles represented by IPG have been digitized and (b) the reason in many cases is because the books are heavily illustrated works ill-suited to conversion to the most common ebook formats in use today.

    But I also see that there are many text-only titles that have yet to be converted, and this puzzles me. For these books in particular, keeping them print-only is a great disservice to the author — an increasing number of sales opportunities are missed.

    On the other hand, smaller publishers often feature the bandwidth to get the word out online with more energy and attention-to-detail than larger publishers. I think there are lots of online opportunities to extend the audience also for print titles. Start with getting accurate and complete metadata in place, and onward from there.

  3. Thad,

    It’s my belief that smaller publishers of illustrated books may well expand their audience by offering eBook versions of their titles. MyTabletBooks is an eBookstore I created to help illustrated book publishers (whom we’ve handled printing for 27 years through sister company Four Colour Print Group) convert their print PDFs into excellent .ePub versions and allow the publishers to sell direct to the end consumer. By selling direct, these publishers are now in contact with their customers and can begin marketing all products to them. Including print versions of the .ePubs they want for the beauty of a book. I think many will be glad to get rid of the huge discounts and hassles associated with bookstores and become more profitable in the future.

    Thanks,
    George Dick
    President
    MyTabletBooks

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