Saturday, May 05, 2007

Where Bookclubs Flourish

Things are back to normal in my household. I came home around 9 PM last night to E*L*E*C*T*R*I*C*I*T*Y--yes, that modern day miracle, which I promise never to take for granted again.

I was so thrilled, I tumbled into bed, slept my usual six hours and am now wide awake, happy to be at my re-charged laptop and back in business.

I love doing follow-up stories.

Almost exactly two months ago here, I reported on the seven large media companies that dominate the publishing universe. Among them was Bertelsmann, which owns Random House, the largest book publisher in the world.

Then, a month ago here, I reported that Bertelsmann had just announced its willingness to pay $150 million for a fifty-percent interest in Bookspan, the company that owns Book-of-the-Month Club and several other bookclubs. Since Bertelsmann already owned fifty percent of Bookspan, that purchase gives them complete ownership of the company.

Among the other bookclubs Bookspan owns are: American Compass, a club primarily aimed at American conservative readers; InsightOut, a book club featuring books of topical interest to gay and lesbian readers; and Mosaico and Circulo, two clubs offering Latin and Spanish-translated selections (Info courtesy of Wikipedia).

At the time of my April post, I said: "Bertelsmann is putting its money on a very old-fashioned business model--the traditional bookclub--at a time when Internet book sales continue to grow."

I was curious as to why a company that was so on the cutting edge of the publishing world would take such a seemingly backward step. Now I can offer you an answer.

BusinessWeek has a forthcoming article in its May 14th edition, titled "Where the Book Business Is Humming." The story describes "Bertelsmann's success with book clubs in the former Soviet bloc."

It turns out that, while conventional wisdom would indicate bookclubs in the United States are being replaced by online sales at Amazon.com along with a growing trend toward e-books, places like the Ukraine have "well-educated populations hungry for a good read but relatively few bookstores where they can indulge their passion. As a result, Bertelsmann has also become the biggest book publisher in the Czech Republic and has scored big successes in Poland, Russia, and elsewhere."

Don't you just love learning the rest of the story? At a time when the developed countries are going digital, BusinessWeek reports that the developing world is experiencing a "booming print media." The article cites places like India, Vietnam and China as well as Argentina, where the number of published books has more than doubled since 2002.

While American bookclubs target older consumers, nearly half of the 2 million members in Bertelsmann's Ukrainian bookclub venture are under thirty. "The secret: The Bertelsmann club recruits hot young Ukrainian authors and serves as their exclusive distributor, a smart strategy in a country with only about 300 bookstores."

Bertelsmann focuses on keeping its prices low in recognition of the lower incomes in the developing world. To help keep costs down, rather than delivering the bookclub shipments to a customer's door, deliveries are made to post offices where the customers come to pick up their books.

The BusinessWeek article was a great reminder to never assume that your reality and your experience are the reality and experience of everyone else in the world. My two days without electricity was a crash course in what it must be like for people living in developing countries or places like Iraq where utility disruptions are commonplace.

You can read the entire BusinessWeek article here.

1 comment:

Sherry Davis said...

This is seriously an awesome article, Maya. It really puts a different perspective on the publishing industry.
Thanks!