29.10.08 | Catherine Neilan
In my previous incarnation as a financial journalist, I spent the previous two years listening to City types play down whatever bad news was circulating at the time. "We are cautiously optimistic for the future," they would intone. "Things may not be as rosy as they have been for the last few years, but there's absolutely no reason to panic."
As a quick look at the financial pages will show these forecasts were not entirely accurate. Were the people I was talking to genuinely ignorant of what was in the air, even after the credit crunch started to bite? Were they unwilling to face facts when everyone else seemed to retain their confidence in the market? Or were they chary of expressing their real concerns to a lowly hack?
Fast forward a few months and I've made the move to the hallowed world of publishing. Yet the same "cautiously optimistic" mood hangs in the air. Publishers admit to "not feeling unaffected"—the double negative inserted to take the sting out. Several of them acknowledge they will be buying fewer, but "more quality" books. But most of them insist that books benefit from a downturn. They are, after all, cheaper forms of entertainment, an antidote to all that champagne quaffing that appears to go on during bull markets.
Yes, I'll admit, I went along with it. But is this optimism really valid? A quick look at Nielsen BookScan's figures for the week ending 18th October show year-on-year sales growth of 0.7%—a decline in real terms once our now seemingly rampant inflation is taken into account. And already we've seen signs of the publishing world suffering, with announcements this week of jobs being cut at US group Doubleday and US indie Impetus Press shutting its doors for good.
Retailers—notably Borders Group Inc, again in the US—are also looking shaky, and as for a certain wholesaler, despite being profitable itself, a question mark hangs over the survival of its parent company. I can smell something in the air, and it doesn't seem like optimism.
Journalists are often charged with "sexing up" a story to make it seem more doom and gloom, and recently of "talking us into a recession" —or in Robert Peston's case an even more serious allegation. But arguably, if we'd known more about what was happening behind the closed doors of Lehman Brothers et al, we could have been better prepared for what was around the corner.
Is the book trade right to forecast a solid, if not spectacular, next 12 months? Or should the industry start planning for a worst case scenario—one which more accurately reflects a world that is suddenly $3trn poorer?