FutureBook’s top stories reflect a year of transition for the sector as the continuing softening of e-book sales gave way not, alas, to any great new digital innovation, but instead to rising print sales, and a broader but blended future.
At the beginning of the year there was recognition that the e-book plateau first reported in 2013 had become a reality for many trade publishers during 2014, and this was already informing their thinking about 2015.
In January, with numbers provided by all of the big trade publishers, The Bookseller noted that the rate of growth of the big trade publishers continued to fall with volume sales up 15.3% year on year. Some now see the market further dividing as the bigger publishers dust off their agency deals, providing room for the small and nimble. Yet though there remains this growing shadow market of untracked e-book sales, 2015 was also a year when print book sales began to rise again:
Rather than seeing the print book and e-book markets as two countervailing forces, it may be wise to figure out how they are working together. If the big fiction bestsellers are now predominantly being bought digitally, then has this created space within book stores to focus on different books? For journalists looking to report on this sector, the narrative might be how digital has helped revive and reinvent print, rather than the other way round.
Yet, this view also needed to be modified by acknowledgement that the e-book market could still be driven by self-published authors and by stand-alone e-book publishers such as Endeavour, Canelo and Bookouture. The inevitable splintering of the digital marketplace became one of the more important narratives over the year, as the launch of Canelo in January suggested it might:
Digital-only publishing has become the movement that never quite happened—at least as far as the traditional publishing is concerned. Blackfriars, the Little, Brown digital imprint, or Carina, the Harlequin Mills & Boon unit, are honourable exceptions but in general for front-list publishing the traditional publishers have preferred to publish across all formats - or none. Eighteen months ago I might have said the most new start-up presses would be digitally focused, but outside of Endeavour Press in the UK, the trend among the new micro-publishers has been as much about print as it is about digital, good examples being The Do Book Company and September Publishing. In that respect Canelo arrives at a perfect time for a market that needs a venture that can combine the talents from the old world with a vision for the new one.
In May, the annual Publishers Association’s Stats report provided more background on sales, confirming that consumer e-book sales have softened for most trade publishers, with sales growing just 5.3% in 2014, and in the UK alone by 6.8%. It also confirmed another of the themes of the year: that the bigger publishers may be eschewing volume business for value, an analysis many other commentators later picked up on as the big trade publishers in the US, and latterly in the UK, used their new agency deals to raise e-book prices.
If volume sales are rising ahead of value growth then we can surmise that average prices are shrinking—and that publisher margins are being squeezed. In other words growth comes at a cost. The backdrop to this is the reintroduction of agency pricing in the US (but not yet in the UK), and one might further deduce that while publishers are continuing to experiment with pricing, they are watching the value of their e-book business like hawks—providing further opportunities for those willing to chase volume at the expense of turnover. In the UK, this will only be exacerbated by the imposition of VAT on e-books at the UK rate of 20%. What looked like a high margin business for sometime, now looks like a race for the bottom (agents take note). In fact, since the average selling price of printed books is on the rise, publishers might actually be banking on print to back up their e-book growth.
Yet if straightforward e-book business was becoming tricky, the new models did not rise to the rescue—at least not yet. US subscription companies Oyster and Scribd drew a lot of attention at the beginning of the year, as did European start-ups Mofibo and Blloon. Oyster eventually announced a shut down and move to Google in September, while Blloon admitted in October that it would close (or pivot) its operation. Scribd had its own problems, pulling a number of romance titles from its service, precisely because it could no longer maintain the heavy readers drawn to those titles. It was a fundamental move and recognition of just how tough it will be to make subscriptions work in the book field, which has traditionally focused on heavy readers.
As Smashwords' Mark Coker put it at FutureBook:
Obviously, Scribd's new policy is disappointing. The subscription model is a great thing for the digital book market, and especially for independent authors who benefit from the visibility and discovery it provides. We've seen strong growth in that sector, and we're optimistic about the future, but setbacks like the one we've seen today are probably inevitable. Clearly the business model is wrestling to find a sustainable shape as Amazon also recently announced an abrupt and significant change to their subscription payment calculations.
Of the remaining players, Mofibo seems about the mst confident, both in terms of understanding its business model, but also not trying to over-expand into territories already too established for the subscription model to work. As an interview with founder, Morten Strunge made clear in May, “The key to success, Strunge says, is to get enough customers who read occasionally or very seldomly. All of Mofibo’s advertising is aimed towards this market.”
The narrative that Oyster was chasing a market that didn’t exist, with an offer that was too thin, and based on a business model that was fundamentally flawed is now well established, and in burning through millions of dollars of investor cash in search of digital nirvana, the company hardly helped itself. Yet the reasons behind the shuttering are complex, and, as ever with the book business, contradictory.
Beyond Mofibo, there are also other versions of the subs model that look more sustainable, though they do not necessarily look like Netflix. Audible, for example, charges a monthly subscription of £7.99 for access to one new audio title a month. Its store-front is well curated, and at £7.99 it is maintaining a high price that other e-booksellers must look enviously at. It is not an all-you-eat model, of course, and its dominance of the sector clearly allows it to cut deals that would be unavailable to most start-ups, but I would not discount its approach. In professional field there is Safari, which pays publishers a fee based on usage, the so-called pool approach, that has so far proved unattractive to trade publishers. And the grandaddy of these services 24 Symbols remains defiantly alive.
Audio, of course, was one of the successful digital stories of 2015: and it was no coincidence that The Bookseller introduced an audio download chart, with data supplied by Audible, into the weekly magazine. FutureBook’s own Digital Census confirmed this in October, ahead of the FutureBook Conference that was itself packed with speakers from the audio sectors. We will undoubtedly hear more about this bit of the new market in 2016.
The audio download market has grown exponentially in recent years as listeners have moved from purchasing CDs to downloads, and the survey reinforces this: in 2014 audio was ranked as the 9th fastest growing area, this year it has moved up to second place. In July, Pandora White, audio publisher at Orion, told The Bookseller that audio was the "fastest-growing genre in publishing”.
Yet beyond audio what were the new story-telling visions that arrived to beguile us into new ways of reading? The FutureBook awards highlighted many of these, with (I would venture) renewed interest in this area, despite the withdrawal of Touchpress. It was Faber’s launch of the Ian Pears novel Arcadia as an app that drew a lot of attention mid-way through the year. The book, first announced in 2012 was originally planned for digital launch in autumn 2013, with a revised print and e-book edition in spring 2014. Its final coming was, therefore, something of a moment for this mature and yet still nascent area.
Three years on from the original announcement and two years on from the hype, Arcadia arrives into a slightly more circumspect environment. It was only when I spotted the 600-page proof copy on a colleague’s desk at The Bookseller that I realised the book was finally coming. The irony here is wonderful, of course. With a beautiful and arresting front cover (pictured), and the heft of an ambitious literary masterwork, Arcadia has the look and feel of many of the other traditionally-published novels arriving into a packed September. But though late, the app remains central to the novel’s publication. The novel is published on 3rd September, with the digital version arriving in August—still ahead of the book, but only just. Nevertheless, Faber says it hopes to open a “debate of how fiction will be read in the future”.
Beyond this, a few of our popular blogs hint at a brighter and more expansive future for digital as it meets publishing. Indie author Joanna Penn looked at how virtual reality could be used to bring personalised digital bookstores to life:
Imagine walking along a street of bookstores, each one with an enticing window display of eye-catching new covers that appeal to readers of a certain genre. You walk inside one with the dark, brooding atmosphere of the crime/thriller lover and find yourself in a bookstore with shelves of books configured just for your tastes. You’re drawn to a cover, pick up the book and start to read. You turn the pages, feeling the quality paper, smelling that new book scent. You continue browsing and when you’re ready to purchase, you choose your format and the book is sent to you in the format you choose. Then you take off your VR headset and carry on with your day.
Today I’m leaving behind 13 years of editing over 200 children’s books to become a web developer. I want to be able to build tools that help readers find great books. Ideally, I’d be able to channel all my years of trying to make books happen into projects that actually make books happen. And I want to help break down the walls of resistance to digital still inside publishing. I think there is still a fear of digital in publishing -- not of the ebook “revolution” or some mass-destruction mass-disruption drama, but of the actual process of code and digital development: a general “I can’t do that” or “it’s too hard” or “it’s not really necessary”.
While Emma Barnes, who has become a regular contributor to FutureBook, wrote about how publishing’s recruitment policies seems to have come straight out of the 1950s. “‘Word’ and ‘Excel’ are not ‘IT skills’. They are typing. We recruit young, pretty women (go on, deny it), and we give them secretarial jobs.” Her point:
Better-specced junior roles could underpin a technically-expert publishing industry.
The success of the book tech strand at the FutureBook Conference this year shows that outside of the industry's purview innovation continues to take shape; while beyond digital publishing the re-imagination of bookshops, from the new Waterstones on Tottenham Court Road to Rohan Silva's new Brick Lane bookshop, suggests that the way the trade thinks about blending digital with physical, books with apps, insight with intuition, coding with editing, will only get more interesting and more exciting. If 2015 was something of a bridge, or as Kobo's incoming c.e.o. Michael Tamblyn put it in his reader manifesto at the FutureBook Conference,
This is a bit of a pivotal FutureBook, in a way. It’s about the end of the beginning. We now have four ways to sell a book - bricks-and-mortar, print online, audiobook, e-book. None of them are going anywhere.
Then what of 2016? I am hoping we can put aside the arguments about the e-book marketplace, or at least encourage Amazon to release the data that will finally give us the clarity the book sector needs, keep investing in innovation and looking to new ways of doing business even if the returns seem miles away, and embrace the creatives as the lightning rods of future thinking.
In short, if the first wave of digital really is over, then now is the time to figure out where we want to be and how we get there. And then do it. Ironically, if we were only talking about the physical book market publishers would rush forth to own these new spaces, gathering together their colouring pencils and printing contracts to create books for all occasions, all types of customer, and all types of retailer. In digital though, there remains a diffidence that should long since have been vanquished and a reluctance that must now be put aside, for if you do not build it, those customers that you thought of as your own will simply go elsewhere.