Book business faces 'tectonic' shift: 2010 and beyond, part one

<p>The book trade will weather the recession, with digital and a resurgent independent sector providing the best opportunities for incremental sales in 2010, according to leading industry figures polled by <em>The Bookseller t</em>his week.</p><p>Many expressed optimism about the future, though 2010 was expected to be flat. Gail Rebuck, chairman and c.e.o. of Random House Group, said: &quot;There was an uplift in December but I am concerned about 2010. I don&rsquo;t see things getting worse or better this year, but remaining steady.&quot; Further ahead the trade was facing a &quot;tectonic&quot; shift, according to Rebuck, with HarperCollins UK chief executive and publisher Victoria Barnsley in agreement: &quot;The day when we sold only hardbacks and paperbacks will be looked backed at with wonder.&quot; </p><p>In part one, below, the publishers&mdash;Rebuck, Barnsley, and Penguin UK c.e.o Peter Field&mdash;have their say; part two follows tomorrow with views from the retail, digital and library sides of the trade.</p><p>&nbsp;</p><p><strong>Gail Rebuck, chairman and chief executive, Random House UK:</strong></p><p>What we&rsquo;ve learned about this recession is that everything is unpredictable.</p><p>We are in an unprecedented worldwide recession, the worst any of us have experienced. My view is that with consumer spending, the public&rsquo;s head is behind whatever the economic curve may be. We&rsquo;ve had a parsimonious Christmas with people looking for bargains. There was an uplift in December but I am concerned about 2010. I don&rsquo;t see things getting worse or better next year, it will remain steady.</p><p>At the same time the industry is going through a tectonic shift. We are seeing the transition to digital but the question is, how fast will our industry transition? Nobody knows, but there are no prizes for underestimating the effect of the digital revolution on publishing. Is the digital future mostly substitutional or in some degree incremental? There is no certainty on that.</p><p>I do think the next five years will be absolutely crucial for publishers. We will see the beginnings of a recovery, though not massive growth on the physical side, and the investment will be in new skills for staff. There are opportunities and we need to reskill ourselves. All publishers must be more creative and innovative than ever while keeping their core business, which is quite a complicated task.</p><p>I feel very optimistic about our 2010 list, which is full of interest and stimulation. I&#39;m particularly excited about <em>The Blasphemer</em> - an extraordinary and accomplished first novel - and Tim Parks&rsquo; <em>Teach Us to Sit Still</em>, a personal story of the power of meditation. People are looking for answers, looking for substance. But at the same time as focusing on 98.5% of our business, we are putting enormous effort into our digital future and there are some very exciting digital projects to be announced this year.</p><p>&nbsp;</p><p><strong>Peter Field, Penguin UK chief executive</strong></p><p>2009 wasn&rsquo;t as bad as I feared it would be this time last year. The market is only a fraction down, although the mix [of high street and online] has changed. It could have been a heck of a lot worse. Children&#39;s has done particularly well, and kids reading is very important looking to the future.</p><p>2010 will be a general election year which is always bad news. People get distracted, the media is dominated by election issues and it puts a dampener on the market. There will also be tax increases in April, which is not good news. And we&rsquo;re not in great economic shape as a nation which means people feel pretty miserable. Against that backdrop, I&#39;m cautiously optimistic. I expect a small upturn in 2010, very small growth.</p><p>There will be a bit of excitement around e-books and I think we will start to see e-books deliver significant sales to publishers and show the growth we&rsquo;ve experienced in the US. I&#39;m predicting at least a five-fold increase, off a low base.</p><p>A big question for the next decade in digital is where is the tipping point going to be and when do we get there? I think it&rsquo;s inevitable we will see massive growth year on year until we get to a significant percentage of the market, which will impact on physical publishing. Then there will be a consolidation of distribution channels and the supply chain, leading to decisions for all of us. There will be significant collaboration between the Publishers Association and the Booksellers Association in working out those challenges.<br /><br />Digital printing will also make an impact, allowing smaller print runs, which will be important as physical books are replaced by e-books. Although initially they may be a bit incremental, in the long run e-books will be substitional.<br /><br />In retailing, I don&rsquo;t think the mix adjustment we&rsquo;re seeing year on year can continue for much longer. All of us want to see bookshops out there, in small villages and the suburban high street. As an industry we need to see what we can do. There are a lot of retailers out there offering great service, which is key, as it&rsquo;s impossible to compete on price. The innovative retailers will survive.</p><p>&nbsp;</p><p><strong>Victoria Barnsley, chief executive and publisher, HarperCollins UK</strong></p><p>Nothing is predictable. Yes, the market is down but there were some real surprises like the success of [Booker Winner and Fourth Estate&#39;s] <em>Wolf Hall</em>. It was quite encouraging that even in the midst of a recession that people are prepared to pay for quality. Good books always sell and we need to put our money on quality.</p><p>I don&#39;t think we will see much growth next year. The market will be flat to down. I think it will be quite tough, market-wise but we will still see really good books continue to sell. There will be a continuation of the polarisation of the book market with midlist books continuing to decline.</p><p>There will be the very big hitters and the long tail but not much in between. There will be far more digital experimentation. Apple are coming into the market, which will be very exciting. I&#39;m cautiously optimistic. We have held our nerve but it will be tough out there. The high street will continue to be challenging along with the wider economy. Some of the independent booksellers have been doing a little bit better. There will be more of a focus on different retail channels. I hope the independent sector is starting to have a bit of a comeback.</p><p>Normally elections don&#39;t have a particularly beneficial impact on bookselling. People are a bit distracted but I don&#39;t think it will have a significant effect either way. The market for political books is down so I don&#39;t think there will be an anticipation for political titles.<br /><br />I think 50% of books will be read online by 2020. There will be far more variety for consumers across different formats with enhanced e-books for example. The business model will become much more complicated. The day when we sold only hardbacks and paperbacks will be looked backed at with wonder. </p>