Sunday, August 06, 2006

Question #3: What About Book Sales?

I've just completed the task I hate most: carcass retrieval.

Every evening, I circle my house with a black plastic trashbag and a shovel scooping up bodies, one of the drawbacks to sharing a home with Bob the Hunter.

Over the two years Bob has lived with me, the young cat has established himself as an unbelievably adept hunter. In our family division of labor, he has assumed the job of bringing home the bacon. Of course, his definition of "bacon" is somewhat loose. As near as I can tell, it includes anything that moves, be it cockroach or snake.

Bob has a strong work ethic. Every day, he leaves "a gift" at each entrance to my house. I'm assuming he wants me to see evidence of his affection every time I set foot outdoors. He won't return home for the day until he's completed his self-appointed task. Today's offerings included a lizard on the front welcome mat, a mouse on the back deck and a rat by the garage entrance. Ugh!

Now that I've got that job out of the way, I'm free to move on to more pleasant subjects. Today we ask the third of our three questions: What about book sales?

To answer that question, we'll visit another publishing industry stalwart: the BISG (Book Industry Study Group).

According to their website, "The Book Industry Study Group, Inc. is the industry’s leading trade association for policy, standards and research. Membership consists of publishers, manufacturers, suppliers, wholesalers, retailers, librarians and others engaged in the business of print and electronic media."

The BISG is the place to get information about annual sales in the publishing industry.

Last night I asked: When we say we want to know about book sales, what information are we looking for? Do we want the number of units (individual books sold), the dollar amount of sales or whether publisher profits are up?

I've opted to look at the number of units for a reason that makes sense to me. Dollars and profits are slippery things. A publisher can actually sell fewer books than it did the previous year and still log an increased profit because of other factors. Factors such as currency fluctuations (i.e. from Canada to the U.S.) or because they have cut their expenses (i.e. laying off employees or closing satellite offices) or because they raised prices, which permitted them to sell fewer units but make more money.

Once again, we'll start in 2004, the same year the NEA study was released.

About the time that study came out (mid-2004), the publishing industry was awaiting the results of 2003 sales from the BISG. The outlook was gloomy. In fact, Hyperion President Bob Miller told journalists to expect that "flat is the new up."

When the results were released, it turned out that the sales for 2003 were neither flat nor up. Although the industry made slightly more money in 2003, it sold 23 million fewer books (unit book sales had been decreasing for a number of years).

Then something interesting happened. In 2005, the BISG began to realize that there was a lot of activity taking place below their radar. They summarized it this way last May: "Despite the size and surging numbers of the small and midsize publisher market segment, these publishers have proved difficult to track and have been all but invisible in the aggregate. This is primarily because they are scattered across the country; because many don't belong to book-industry trade associations; and because they tend to sell not only through book-trade channels . . . but also . . .through sales channels designed mainly to serve other industries, which the book industry does not study."

The number of books sold in 2004 dropped by another 44 million to 2.29 billion.

Then we come to May of this year when BISG reported on 2005 sales. Michael Cader of Publishers Lunch said:

The big change is that the 'under the radar' survey data they collected last year . . . has now been integrated into the basic Trends data. The effect, if you find it credible, is to magically expand the conventionally measured $28 billion book industry into a $36 billion industry. Don't you feel better now?

But the new data stream is clearly mixing apples and oranges. Traditionally BISG has not created any data -- they have analyzed . . . But the extra $8 billion comes from survey data commissioned by the BISG through InfoTrends -- taking a small number of responses from the vast body of some 87,000 or so "active" publishers per the Bowker database, and multiplying them based on the assumption that the actual respondents match the whole population.

In other words, they didn't "find" another $8 billion of undiscovered publisher revenues -- they found a small fraction of that, and multiplied like mad to acount for the tens of thousands of companies that never respond to these data surveys . . .

Even . . . traditional measures depict 2005 as a year of growth . . .Unit sales also rebounded after multiple years of decline.

As it turned out, unit sales for 2005 were actually up 3.8%.

For the record, dollar sales were up slightly in each of the three years in question.

So, we've come to the end of our three questions. People are reading less, and--until 2005--a fewer number of books were selling, but the number of titles released each year was increasing.

Those answers tie with something I mentioned in my blog of July 13th: "The average number of weeks that a new No. 1 bestseller stayed top of the hardback fiction section of the New York Times Bestseller List has fallen from 5.5 in the 1990s, 14 in the 1970s and 22 in the 1960s to barely a fortnight [two weeks] last year."

On average, more book titles are competing for attention with a smaller population of readers. That explains the rapid turnover of the bestseller list titles. Competition is more fierce.

Something for all writers to think about.

Happy writing.

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