Are the kids all right?

<p>A steady upward trend in children's book sales over the past decade has failed to stem publishers' concerns about the children's market. While sales continue to grow, it is at a much slower pace than in previous years.</p>
<p>Nielsen BookScan's Total Consumer Market figures show that between 2001 and 2002 total children's sales rose by 18.6% in volume (excluding Harry Potter sales), but only by 2.6% between 2006 and 2007. Meanwhile, Book Marketing Limited (BML) figures show a discernible fall in the value of children's sales, from &pound;382m in 2006 to &pound;369m in 2007.</p>
<p>This year the market has been &quot;robust, if not outstanding&quot;, says Mike Richards, head of marketing and publicity for Egmont Press. Supported by National Year of Reading publicity and government-backed initiatives including Boys into Books and Book Ahead, book sales to date are up by 9.9% on the same period last year, growing from &pound;30.4m units&nbsp; to &pound;33.4m units.</p>
<p>Waterstone's has emerged from the turmoil of its integration with Ottakar's with &quot;stellar&quot; children's sales driven by fiction and picture books, says Toby Bourne, category manager for children's and fiction.</p>
<p>&quot;There's a lot of work we have quietly been getting on with this year which is now paying off, and will carry on for a long time to come&mdash;housekeeping work on our sections and core stock that helps keep our children's sections and booksellers on top of their game,&quot; he says. <br />
Borders has also introduced a number of innovations to its children's departments, including the role of children's specialists.<br />
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<b>Looming recession</b><br />
The immediate concern, however, is for the coming months. Publishers and retailers remain bullish about the Christmas period, but they need to be&mdash;45% of children's trade book sales are made in the run-up to Christmas. Failure during this quarter will leave publishers and retailers exposed in what promises to be a tough 2009.</p>
<p>As the UK slips into recession, publishers are not pessimistic, but nor are they overly optimistic. &quot;Children's books offer a remarkable amount of escapism for a cheap price,&quot; says Richards. &quot;But while bookshops themselves should be fine, they may suffer from a fall in passing trade if people are not going into town.&quot;</p>
<p>Francesca Dow, m.d. of Puffin Books, says that while there is still excitement around new titles and names, housekeeping is a priority in planning for 2009. &quot;Margins are being squeezed in all directions and we have to think very carefully about our top spend and marketing budgets&mdash;much of which are taken by retailer discounts.&quot;</p>
<p>Hand in hand with the economic downturn is the rising cost of production abroad and transportation. &quot;We are looking hard at our production prices and possibly putting up our cover prices,&quot; says Dow. The high street may be forgiving of some price increases believes John Packard, senior children's buyer for Borders. &quot;Books still represent great value for money so, in many cases, a small increase in price to cover production costs shouldn't have a negative impact on sales.&quot;</p>
<p>However, in the library and institutional market some recent price rises are already affecting sales, says Moira Arthur, m.d. of Peters Bookseller Services. She adds: &quot;We have seen picture book prices increase to &pound;10.99 and quite a few are coming in at &pound;11.99, while hardback fiction has risen to &pound;12.99 or &pound;13.99. The latest two big fiction titles, Christopher Paolini's <i>Brisingr</i> and Terry Pratchett's <i>Nation</i> (both Random House Children's Books [RHCB]), were priced at &pound;16.99.&quot; This has made library buyers much more cautious about what they are buying. &quot;Buyers will select more expensive books for their main libraries but wait for the paperbacks for smaller libraries,&quot; says Arthur. &quot;More price rises will mean people will just focus on what they really need and buy fewer books.&quot;</p>
<p>Hardback fiction is already feeling the pinch and more titles are likely to go straight to paperback&mdash;which is where the market was in the late 1990s. Philippa Dickinson, m.d. of RHCB, puts this into historical perspective. &quot;We used to think it was fantastic to sell 3,000 copies of a children's hardback&mdash;that was a bestseller 20 years ago&mdash;so things are very different today.&quot;<br />
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<b>A shrinking high street</b><br />
Today's retail environment is more positive towards children's books but also less likely to take the kinds of risks it once did and the consolidation of retailers is having a real impact on the kinds of books that will make it to the shop floor. Where our high streets were once home to Waterstone's, W H Smith, Dillons, Hammicks, Borders and Ottakar's, book retailing has consolidated into the biggest chains. W H Smith and Waterstone's are estimated to hold 13% and 20% of the book market respectively (including adult titles), with Borders holding 8%. Amazon is estimated to have some 16% of the book market and supermarkets share 11%. For many publishers, this consolidation is the major challenge facing them as it reduces the amount of choice available and gives the chains enormous buying power.<br />
It is easy to see that dominance reflected in the figures. Discounts on the r.r.p. of children's books have grown from 13.47% in 2001 to 22.01% in 2007 as retailers' muscle grows. For some &quot;big books&quot;, the discount can reach 60% of the cover price. And the focus is increasingly on the frontlist. Last year, the top 10 children's titles accounted for 7% of children's sales and the top 100, nearly 20% of the market. Around 1,000 titles&mdash;or about 10% of those published&mdash;account for half of all high street children's sales.</p>
<p>Most books will sell fewer than 400 copies a month. &quot;Fewer and fewer authors are doing well,&quot; claims one publisher. &quot;There has been a long period of modest growth in the children's market that has been contained in a small premiership of top authors and an increasingly long tail of authors who can't make a living from writing for children,&quot; says another, although most were reluctant to discuss what impact these market conditions were having on their authors. For publishers, in turn, there are many books that never make back the money they cost to publish and launch.</p>
<p>Publishers recognise the need to communicate more directly with their readers rather than intermediaries as a way to introduce a greater variety of books to consumers. This includes using their own websites to build direct sales and to develop communities of readers, as well as working more closely with their readers to find out what they want.<br />
<b><br />
Age rage</b><br />
One particular piece of research among consumers indicated the difficulties parents were having in choosing books for children, leading to the introduction of age guidance on books this autumn, although not without significant protest from authors.</p>
<p>For many writers, the &quot;imposition&quot; of age guidance was the last straw, says author Celia Rees, chair of the Society of Authors Children's Book Writers and Illustrators Group (CWIG). &quot;Most authors are used to being treated very badly in some ways. Advances still average between &pound;2,000 and &pound;5,000, a figure that hasn't changed in a decade, and yet a handful of authors receive an enormous amount more than that,&quot; she says. &quot;It all comes down to sales and authors have always blamed themselves for poor sales&mdash;but they are beginning to realise that without marketing or proper sales reps behind them, their books won't sell.&quot;</p>
<p>While authors are unlikely to be vocal about issues surrounding their sales figures and discounting, age guidance was an issue that united them as no other had. As a result of this intensity, publishers and authors are now in discussion over new ways to help expand the children's market. The first meeting was held earlier this week, with the CWIG and the Children's Book Group of the PA sitting down together for the first time ever. &quot;It was very positive and we are looking into a number of ideas, both large and small,&quot; says Rees.<br />
There are, however, other challenges ahead, such as new technologies biting into children's reading time. Research by the University of Oxford indicated that, by 2004, more than two-thirds of children aged four to 10 years had a computer, games console or TV in their bedroom. &quot;Today's diversions are more easily achieved and stimulating to children,&quot; says Dr Luci Wiggs, research fellow at Oxford's child and adolescent psychiatry unit. &quot;These days it appears that children do not go to bed to read, or be read, a bedtime story.&quot;</p>
<p>Publishers' institutional customers, including libraries, school libraries and school library services, are already facing cuts and closures. They now have to support the Single Status agreement under which councils agreed to harmonise pay and conditions across a local authority. Since the government has agreed to give back-pay to those who have been paid too little, local authorities need to find significant resources to cover this. As libraries are part of the equation, they are likely to suffer.</p>
<p>Kate Wilson, m.d. of Scholastic UK, argues that publishers themselves need to do more as advocates for the educational and social benefits of reading for pleasure, something that Scholastic itself is already doing, but often alone. The PA is now turning its attention to a lobbying role and there are a number of corners in the children's books world that are worth fighting for. Libraries campaigner Tim Coates, for example, wonders why publishers are so silent over the loss of library services. As parents as well as business people, publishers could also do more to lobby for a national school library policy and school library services. <br />
Supporting a vibrant institutional market, including reading environments in schools, could do more than anything else to ensure that the market for their books stays healthy.</p>