The Bookseller.com

8th January 2009

Toby Mundy is chief executive and publisher of Grove Atlantic.

State of denial

21.08.08

I used to think the two laws of British publishing were that (1) things are never as bad as they seem and (2) things can always get worse. These principles were underpinned by the maturity of the British book industry and the fact that with its over-educated, overworked, underpaid legions, trade publishers are prone to bouts of pessimism.

However, the tectonic plates of the industry are shifting and it seems increasingly clear to me that trade publishing as a whole is in denial about the weakness of its existing business model, and the scale of the demographic and technological changes confronting it.

One of the results of the seismic rupture in the music industry is that a single company, Apple, came to dominate both software delivery (via iTunes) and the hardware on which it is consumed (the iPod and, crucially for publishing, the iPhone), at a time when manufacturers and artists were at their weakest.

Newspapers, meanwhile, are finding that the internet is hollowing out their business model, flattening newsstand sales, and consuming advertising revenue.

Does all this sound familiar? Despite the attentions of publishing's best minds, trade houses, as well as authors and agents have adopted a wait-and-see approach to the future. This is not altogether unwise (CD-Roms, anyone?). But when Apple has sold millions of iPhone and iTouch handsets, and their besotted owners are desperate for content, it's odd there aren't already 10,000 e-book titles available. The prevailing wisdom is that the internet's impact on trade publishing is primarily about marketing. This could be a serious mistake.

When these technological changes are combined with a risk assessment of our advance-against-royalty/sale-or-return business model; demographic variations in our reading habits; the effects of supermarket competition on specialist retailing; the ugly fight over territorial exclusivity between US and UK publishers; and the immense difficulties of launching original new writing in this country, such insouciance about the future seems dangerously misplaced.

We are not all doomed. In the week that I write this, Random House Group has reported a 16.7% operating profit, while an independent outfit such as Profile managed nearly 10%. But the fact that the new e-commerce companies seem so brash and foreign to established publishing firms reveals the contours of future relationships. A number of successful publishers will soon find themselves trying to win a game that no longer exists.

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