News

Dale: Booksellers have publishers 'over a barrel'

Publisher and former Conservative Party politician Iain Dale has hit out at the big booksellers, including W H Smith, Waterstones and Amazon, saying they have publishers "over a barrel". Speaking at the Independent Publishers Guild conference this morning (7th March) Dale also repeated a call he made ten years ago to abolish "sale or return".

Dale, founder of the political publisher Biteback Publishing, reserved his harshest criticism for W H Smith, which he said was "very willing to take publishers' money and sell no books in return".

He added: "Whenever I have done business with W H Smith they demand a large "marketing fee"—some might call it the book trade industry of protection money— to place our books in their stores. A few months later we get between 75% and 90% of our books returned in boxes that have never been opened! W H Smith has become nothing more than an exorbitantly priced warehouse for books, or as I have heard many people refer to them as 'a lending library'." He said he was now "totally ambivalent about doing business with WH Smith ever again".

Dale also had strong words for Waterstones, which he said had moved to "correct the failings of the past", under its new owner Alexander Mamut. However, despite this he said he was not a fan of its new buying policy, that saw it make fewer orders more frequently. "Whereas a few years ago they would place the order months before publication, which helped us decide print runs, now the order is sometimes not placed until after publication. Fewer risks are being taken, and by their own admission they have become reactive rather than proactive."

He said it "would be a tragedy if it [Waterstones] went the same way as Borders", but he said publishers needed to prepare for the possibility that it might not survive. "As publishers we'd be mad if we didn't plan for a post Waterstones environment."

He also criticised Amazon for demanding high discounts off small publishers. "They do give smaller publishers like us a choice. Never let it be said they don't. And the choice is sell your books to us at 60% discount, or we won't take any of them at all. They are able to do it because we, individually, aren't strong enough to say no, and because the competition rules allow them to." Nevertheless he said the internet giant had changed the book busines for both "good and bad".

Dale also hit out at industry practices such as paying to have books included in retailer bestseller charts, citing the WH Smith charts in particular, saying it was designed to "deliberately mislead" customers. He said: "Many will say I am mad to break the conspiracy of silence on these business practices, which have gone on for years."

On independent bookshops, he said "the challenge now is to keep them", after customers started to question their own buying habits, after hearing about Amazon's tax policies.

Dale was most positive--as you'd expect--about independent publishers, which he said could still "hold their ground" by being brave enough to experiment and by "discovering new ways to get our material to the customer". He added: "Small independent publishers don't have numerous committees and layers of management, we can make decisions fast. Most importantly with a small team you can adapt quickly to the changing market."

And he added: "The next few years are going to continue to be tough for us small independent publishers. I don't believe the doomsday prophets who claim it is the end of independent publishers and the physical book. We need to restate exactly what publishing is all about."
 

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Well done to Iain Dale for having the balls to come out and say these things. A lot of publisher-bashing goes on on here, and this redresses the balance somewhat. A lot of what he says is spot on, especially with regard to WH Smith and their book "selling" practices. They want ratecard for pretty much everything and their compliance is shocking. Many publishers are pushing back on this now and not before time.

I agree wholeheartedly with what Iain has to say. There are huge issues here at stake and Iain talks about things that are particularly pertinent to independent publishers and the industry in general. Waterstones has become almost impossible to deal with especially for book events. London branches have become a no-go zone with store managers demanding authors sell 80 books in 3 hours. It’s fine if you are a big publisher with a line of celebrity authors but Waterstones must live in the real world and realise we can add value and much needed revenue to stores. It is becoming increasingly difficult to get unknown, up and coming talent into the stores. They have started demanding that we hold launch events there instead, getting the authors to invite all their friends for an evening event, conveniently when the store is closed to actual customers. Why on earth would we want to do that and sacrifice a large percentage of sales when a local room above a pub would equally serve that purpose and not steal half the sales?

WHS are even harder to deal with. It’s no wonder publishers are turning to the Internet as the main source of sales. But as Iain points out things are not all rosy here either for publishers or their authors. Amazon has too much power. We surrender 80% to Audible (an Amazon owned company). Just in case you think you didn’t read it right they take 80% of net for every audiobook they sell for us. They do drop to a very generous 75% once you meet certain criteria, giving the publisher a few pennies back for all the investment in producing an audiobook. Amazon’s stranglehold on ebook pricing, especially subsidising ebooks and selling them at 20p to match Sony’s equally mad promotion is harming the industry, just as much as the large publishers do by virtually giving away it’s over run stock to supermarkets. Readers are being constantly reinforced with the idea that paper books cost nothing to produce so ebooks must be worth even less. Value is intrinsically linked with perception.

Waterstones and WHS need to realise that many of its problems stem from its association with the cartel of publisher known collectively as the big five, or is it four or three these days…who knows. Either way they have the whole game stitched up. People will say that talk like this is biting the hand that feeds but occasionally that hand needs to be bitten to make it wake up before it’s too late. If Waterstones and WHS were to collapse tomorrow I would be devastated as I genuinely think there is a place and a need for them on the high street. I just feel that they have lost their way despite James Daunt’s somewhat strange methods of operating. I have already been planning life without Waterstones and WHS through necessity brought about by their restrictive trading methods. So while I will be sad if they went the way of so many of our well-known high street stores, the impact for us will not be anywhere near as harsh as it will be for the big five. Will I be sorry though…that’s a different question.

Rigged charts; rigged sales charts; promotions pushing celebrity TV personalities favourite reads where a publisher’s only criteria for selection is coughing £25K to get a book on the list; leading book award competitions where publishers have to pay £10k out of the prize money if they win…it goes on and on and all the time the reader is being conned and cajoled into believing talent rises to the top.
Congratulations Mr Dale for saying what you have said far more eloquently than I have. I applaud you.

Iain Dale may well be talking sense and large retailers may have publishers over a barrel and while many publishers might not have willingly put themselves in that position they haven't done a great deal to avoid ending up where they have. Mostly they've chased volume and so failed to support the myriad smaller retailers that once sold their books and who have now gone out of business. Now we have Amazon moving into publishing but publishers have been far slower to move into etailing - something they should have been doing 10 years ago at least. If they had they be less dependent on a few large outlets and so harder to hold over that barrel.

Caffeine Nights.

I have never agreed more with any post I've seen on here. Well said. I assume from your post that you too work for a small/medium indie publisher. The old boys club that exists between WHS/WS and the "Big" 5/4/3 has long been a source of frustration, but like you we have had to build strong enough existing relationships outside of the big chains to survive. Therefore, if the worst were to happen (not that we want it to whatsoever), we have other irons in the fire.

When I read that 'Dale also hit out at industry practices such as paying to have books included in bestseller charts' I wondered whether he was doubting the integrity of Nielsen BookScan. It is clear, however, from the text of his speech on his website that he had WHS's charts in his sights, not Nielsen's. I am rather surprised you didn't make that clear!

Nick Polkinhorne
Sevenoaks Bookshop

Bruce - while what you are saying might be the case with the big trade houses (in fact, I know it is), the publisher I work for still maintains an extremely active and supportive relationship with indies. We try to offer generous terms and offers and promotions customers won't find elsewhere.

In fact, you could say the closed-door attitude of the big chains towards many small to mediun sized publishers has been something of a benefit to indies, as customers can now find great, interesting books on thir shelves that they won't now necessarily find in WHS, or sadly even Waterstones these days.

Yes, we are a small crime and contemporary fiction publisher. I am amazed that elements of the publishing industry have not come into closer scutiny by the monopolies commission. I have been amazed at some of the practices employed in this industry. While digital is levelling the playing field it's still a 1 in 10 climb for little guys.

And if bookselling is to survive Waterstones need to stop exploiting young staff at near starvation wages.

Good point Nick, I've changed the text to make it clearer. No one should doubt the veracity of the BookScan charts!

Nielsen BookScan is extremely limited. I know this for certain as I sell many thousands of books through outlets which don't contribute. You don't have to sell a book through a wholesaler or online......

If you want a survive as a publisher start charging Amazon and Supermarkets a proper price so they make a bigger loss.
Here's a glimpse of the future! As it goes Amazon will eventually take over direct with the author publish it and cut you out. Anyone wanting to be published will be held to ransom. That's what they can do without competition. WS and WHS and those Indies were your last shot. Once they go sooner or later you'll go to. Don't you realise when you have no competition you become the dominant species. Amazon may be that next species. Because of you they will be holding all the cards. But lets not forget you the public will pay what the new species put them out for, no more cheapies as there is no one to compete with. You want it; they got it, so you'll pay for it.

Well done to Iain Dale for having the balls to come out and say these things. A lot of publisher-bashing goes on on here, and this redresses the balance somewhat. A lot of what he says is spot on, especially with regard to WH Smith and their book "selling" practices. They want ratecard for pretty much everything and their compliance is shocking. Many publishers are pushing back on this now and not before time.

I agree wholeheartedly with what Iain has to say. There are huge issues here at stake and Iain talks about things that are particularly pertinent to independent publishers and the industry in general. Waterstones has become almost impossible to deal with especially for book events. London branches have become a no-go zone with store managers demanding authors sell 80 books in 3 hours. It’s fine if you are a big publisher with a line of celebrity authors but Waterstones must live in the real world and realise we can add value and much needed revenue to stores. It is becoming increasingly difficult to get unknown, up and coming talent into the stores. They have started demanding that we hold launch events there instead, getting the authors to invite all their friends for an evening event, conveniently when the store is closed to actual customers. Why on earth would we want to do that and sacrifice a large percentage of sales when a local room above a pub would equally serve that purpose and not steal half the sales?

WHS are even harder to deal with. It’s no wonder publishers are turning to the Internet as the main source of sales. But as Iain points out things are not all rosy here either for publishers or their authors. Amazon has too much power. We surrender 80% to Audible (an Amazon owned company). Just in case you think you didn’t read it right they take 80% of net for every audiobook they sell for us. They do drop to a very generous 75% once you meet certain criteria, giving the publisher a few pennies back for all the investment in producing an audiobook. Amazon’s stranglehold on ebook pricing, especially subsidising ebooks and selling them at 20p to match Sony’s equally mad promotion is harming the industry, just as much as the large publishers do by virtually giving away it’s over run stock to supermarkets. Readers are being constantly reinforced with the idea that paper books cost nothing to produce so ebooks must be worth even less. Value is intrinsically linked with perception.

Waterstones and WHS need to realise that many of its problems stem from its association with the cartel of publisher known collectively as the big five, or is it four or three these days…who knows. Either way they have the whole game stitched up. People will say that talk like this is biting the hand that feeds but occasionally that hand needs to be bitten to make it wake up before it’s too late. If Waterstones and WHS were to collapse tomorrow I would be devastated as I genuinely think there is a place and a need for them on the high street. I just feel that they have lost their way despite James Daunt’s somewhat strange methods of operating. I have already been planning life without Waterstones and WHS through necessity brought about by their restrictive trading methods. So while I will be sad if they went the way of so many of our well-known high street stores, the impact for us will not be anywhere near as harsh as it will be for the big five. Will I be sorry though…that’s a different question.

Rigged charts; rigged sales charts; promotions pushing celebrity TV personalities favourite reads where a publisher’s only criteria for selection is coughing £25K to get a book on the list; leading book award competitions where publishers have to pay £10k out of the prize money if they win…it goes on and on and all the time the reader is being conned and cajoled into believing talent rises to the top.
Congratulations Mr Dale for saying what you have said far more eloquently than I have. I applaud you.

Iain Dale may well be talking sense and large retailers may have publishers over a barrel and while many publishers might not have willingly put themselves in that position they haven't done a great deal to avoid ending up where they have. Mostly they've chased volume and so failed to support the myriad smaller retailers that once sold their books and who have now gone out of business. Now we have Amazon moving into publishing but publishers have been far slower to move into etailing - something they should have been doing 10 years ago at least. If they had they be less dependent on a few large outlets and so harder to hold over that barrel.

Caffeine Nights.

I have never agreed more with any post I've seen on here. Well said. I assume from your post that you too work for a small/medium indie publisher. The old boys club that exists between WHS/WS and the "Big" 5/4/3 has long been a source of frustration, but like you we have had to build strong enough existing relationships outside of the big chains to survive. Therefore, if the worst were to happen (not that we want it to whatsoever), we have other irons in the fire.

Yes, we are a small crime and contemporary fiction publisher. I am amazed that elements of the publishing industry have not come into closer scutiny by the monopolies commission. I have been amazed at some of the practices employed in this industry. While digital is levelling the playing field it's still a 1 in 10 climb for little guys.

When I read that 'Dale also hit out at industry practices such as paying to have books included in bestseller charts' I wondered whether he was doubting the integrity of Nielsen BookScan. It is clear, however, from the text of his speech on his website that he had WHS's charts in his sights, not Nielsen's. I am rather surprised you didn't make that clear!

Nick Polkinhorne
Sevenoaks Bookshop

Good point Nick, I've changed the text to make it clearer. No one should doubt the veracity of the BookScan charts!

Nielsen BookScan is extremely limited. I know this for certain as I sell many thousands of books through outlets which don't contribute. You don't have to sell a book through a wholesaler or online......

Bruce - while what you are saying might be the case with the big trade houses (in fact, I know it is), the publisher I work for still maintains an extremely active and supportive relationship with indies. We try to offer generous terms and offers and promotions customers won't find elsewhere.

In fact, you could say the closed-door attitude of the big chains towards many small to mediun sized publishers has been something of a benefit to indies, as customers can now find great, interesting books on thir shelves that they won't now necessarily find in WHS, or sadly even Waterstones these days.

And if bookselling is to survive Waterstones need to stop exploiting young staff at near starvation wages.

If you want a survive as a publisher start charging Amazon and Supermarkets a proper price so they make a bigger loss.
Here's a glimpse of the future! As it goes Amazon will eventually take over direct with the author publish it and cut you out. Anyone wanting to be published will be held to ransom. That's what they can do without competition. WS and WHS and those Indies were your last shot. Once they go sooner or later you'll go to. Don't you realise when you have no competition you become the dominant species. Amazon may be that next species. Because of you they will be holding all the cards. But lets not forget you the public will pay what the new species put them out for, no more cheapies as there is no one to compete with. You want it; they got it, so you'll pay for it.