Digital "may ease tough trading year" in 2011

Digital "may ease tough trading year" in 2011

<p>Growing e-book sales could lead to the Total Consumer Market being negative in 2011 as they hit 7% of the adult trade market, according to the head of the UK&rsquo;s biggest publisher.</p><p>Hachette c.e.o. Tim Hely Hutchinson made the comments as industry chiefs unaminously earmarked digital as a key area of opportunity in 2011, with trade leaders stressing that the main challenge lay in supporting retailers in an uncertain economic environment.</p><p>Hely Hutchinson said: &quot;For publishers, 2011 will see digital dominating again. We expect e-books to take perhaps 5%&ndash;7% of the adult trade market. That will cause TCM numbers to be negative again, even if the economy is picking up, and booksellers who are not getting a good share of e-book sales are going to find business tougher than ever.&quot;</p><p>Gardners commercial director Bob Jackson added: &quot;I&rsquo;m sure [retailers] can be as creative as they have been to date.&quot; </p><p>Booksellers Association chief executive Tim Godfray said that nearly 95% of all books sold in the UK in 2011 would be in print format. Booksellers would develop their offers, customer service and specialisations, he said.</p><p>Random House chief executive Gail Rebuck said: &quot;Digital sales have reached a tipping point and will grow further next year, bringing many terrific opportunities as well as organisational challenges.&quot;</p><p>The depth of writing talent and relationships with readers were seen as areas to build on, with Faber c.e.o. and publisher Stephen Page saying: &quot;A rich range of books is reaching readers in different ways, both traditionally and through online mediums.&quot; </p><p>Publishers also stressed that taking risks would be crucial. &quot;We must be publicly innovative and seize technological change,&quot; said Page. </p><p>His theme was picked up by Penguin c.e.o. Tom Weldon, who said: &quot;Publishing has always been about embracing uncertainty and if you get a kick out of that, then there has never been a more exciting year ahead. Change is everywhere. The one constant factor is that authors must remain at the heart of our business.&quot; </p><p>However, Macmillan m.d. Anthony Forbes Watson saw the accelerating e-book market, combined with the absence of one-off factors such as a general election or World Cup, as contributing to a less uncertain year. &quot;It&rsquo;s harder to launch and sustain writing talent but the rewards for doing so are great.&quot; </p><p>The tough economic climate, reinforced by public spending cuts and the recent VAT rise, was seen as a threat to high street health by HarperCollins chief executive Victoria Barnsley. &quot;We should all fight vigorously to support a broad range of retail options on the high street and online,&quot; she said.</p><p>The government&rsquo;s ongoing intellectual property review was hailed as a &quot;clear opportunity&quot; for publishers to demonstrate the essential role of copyright by Richard Mollet, chief executive of the Publishers Association. </p><p>IPG executive director Bridget Shine predicted, despite the quiet confidence of many indies, a tougher year for educational publishers selling to schools. The closures and staff cuts affecting libraries were highlighted by campaigner Desmond Clarke, who said: &quot;Few doubt that the service faces a severe crisis just as strategic responsibility for the sector is transferred to the Arts Council.&quot; Almost 400 libraries are now slated for closure nationally </p><p>&nbsp;</p><p><strong>Hachette c.e.o. Tim Hely Hutchinson</strong>: &quot;For publishers, 2011 will see digital dominating again. We expect e-books to take perhaps 5-7% of the adult trade market. I am afraid that will cause TCM numbers to be negative again, even if the economy is picking up, and booksellers who are not getting a good share of e-books sales are going to find business tougher than ever. </p><p>&quot;At Hachette, we will continue publishing each title with energy and flair, while simultaneously laying the foundations for a business that will be very different in the future. That strategic conundrum sounds and is difficult but we look forward to rising to the challenge successfully, without ever losing sight of the relatively straightforward aspirations of writers and readers.&quot;</p><p><strong>Gardners commercial director Bob Jackson</strong>: &quot;I don&#39;t think 2011 will be any easier than 2010. I think that the retailers who continue to focus on customer service and manage overheads will be doing the best they can. They need to stay very consumer focused. It won&#39;t get any easier in 2011. We launched our digital service three years ago, so it&#39;s available to every single retailer. I think the challenge might come more as retailers using e-books as part of their retail offering, I&#39;m sure they [retailers] can be as creative as they have been to date. That&#39;s the challenge.&quot; </p><p><strong>Booksellers Association chief executive Tim Godfray</strong>: &quot;This Millennium has seen a huge amount of change in the way books are sold and in the formats available.</p><p>&quot;As ever, booksellers have shown great resilience and those who have adapted have survived. When the deep snow fell last month, we feared the worst, but the BookScan figures, and the individual reports from many of our nembers&mdash;large and small&mdash;have been more encouraging than many of us were expecting.</p><p>&quot;As we enter a new decade, only further change is on the cards. We face in particular three challenges. First, the Government cutbacks and the statef the economy; secondly, the digital economy; thirdly, the consumer having fewer leisure pounds to spend.</p><p>&quot;But with challenges, there are opportunities. The tipping point concerning e-books has been reached and digital content is coming of age. The popularity of e-book readers demonstrates this. The selling of digital content is a threat to traditional booksellers, but it is also an<br />opportunity.</p><p>&quot;A lot has been written about the death of the printed book and the bookshop. Not far short of 95% of all books sold in the UK in 2011 will be in print format and booksellers will develop their offers, customer service and specialisations&quot;.</p><p><strong>Random House chief executive Gail Rebuck</strong>: &quot;Although we had a strong Christmas, it is almost impossible to predict 2011. Deep public spending cuts and a VAT rise will inevitably affect consumer spending. Digital sales have reached a tipping point and will grow further next year bringing many terrific opportunities as well as organisational challenges. The foundation of our business is storytelling, a passion for quality and new voices delivered in many different ways.</p><p>&quot;2011, with our incredibly strong paperback list, will also be a year for taking imaginative risks and thinking the impossible. We are becoming more agile as an organisation, working in flexible teams to steer our way through a fast changing landscape. Creative marketing will be key to our success in 2011 &sbquo; that point where insight and intuition meet. Despite the economic gloom, I feel very confident in our teams, our creativity and our future strategy.&quot; </p><p><strong>Faber c.e.o. and publisher Stephen Page</strong> said: &quot;Like last year, 2011 is going to be extremely interesting. Change will be at the forefront, change that is happening right now. There is a very healthy reading market for our kind of publishing, both for Faber and the whole Independent Alliance. A rich range of books are reaching readers in different ways, both traditionally and through online mediums. The notion that there is a diluting of the writing and reading environment is nonsense. </p><p>&quot;We can see a growing and fertile community of indies and we have had a very strong year. The niche has become more marketable and very strong imprints and independents tend to be good at that. Smaller publishers identify intimately with readers and are close to their writers, and that model has worked well.</p><p>&quot;The big question is how retailers fared at the end of last year and how they will fare in 2011. Looking around the world I can see the retail environment changing and that change is not complete. Retailers are having to adapt to a world with very powerful mass market retailing and online retailing and now there is a digital component too. Look at the REDGroup in Australia, Borders in the US. Here we have had a narrowing of the specialist chains to Waterstone&#39;s and W H Smith, and it&#39;s a question of how they adapt. Waterstone&#39;s over the last nine months have been pursuing quite a different tack and it&#39;s a question of where that gets them to. We all want a healthy retail environment.</p><p>&quot;One of the big debates of 2010 was what do writers need publishers to be, what opportunities do they need publishers to move into, and what is a fair divvying up of the rewards? I&#39;m sure of two things, that publishers have a key part and that the clues are there of what they need to do - like being smart and savvy about marketing and supporting writers in the longer term.</p><p>&quot;In 2011 we will see a hardening of the e-book market and a lot of people becoming habitual about reading electronically. We will catch up quickly with America - I&#39;m estimating e-books will be 3-5% of the [UK] market in a year&#39;s time. The definition of publishing is in the process of changing, and by the end of 2011 there will have been another big leap. For our Solar System app we partnered with a terrific writer and also with [digital publisher] Touch Press. In the role of publisher, we are going to get much more used to being a partner as well as an impresario in our own right. Rather than a contracting role, the opportunity is there - if seized - for publishers to define a wider space for ourselves. Not everyone is seizing that opportunity. </p><p>&quot;Last year was among the most enjoyable and challenging in my working life and for many others who stepped forward boldly. We must define the space and not leave it to others, and be very publicly in the space of being very innovative and seizing technological change.&quot;</p><p><strong>Penguin c.e.o. Tom Weldon</strong>: &quot;Publishing has always been about embracing uncertainty and if you get a kick out of that, then there has never been a more exciting year ahead than 2011. Change is everywhere. The one constant factor is that authors must remain at the very heart of our business, and we need to think about them every moment of the day. We will live and die by our books (in whatever format), our creativity, and our lack of fear.&quot; </p><p><strong>Macmillan m.d. Anthony Forbes Watson: </strong>&quot;A contracting market framed by public service cuts is an austere context for 2011 but it&#39;s not 2010: neither election nor World Cup to distract and depress us, surely less snow and ash, and an accelerating e-book market combine to provide a less uncertain environment this year. People say their priority in these times is to spend more time with friends, and books facilitate and enrich friendships, further enabled by digitization and increasing links to all sorts of media. </p><p>&quot;It&#39;s harder to launch and sustain writing talent but the rewards for doing so are great for all and looking beyond the travails of high street retailing and non-fiction publishing, what people want more than ever is a valuable reading experience, which remains ours to provide, in one way or another.&quot;</p><p><strong>Victoria Barnsley, HarperCollins chief executive</strong>: &ldquo;Digital developments continue to present both the challenges and the opportunities for our industry. E-book sales more then trebled over the Christmas period as people rushed to buy e-books for their new gift devices. <br /><br />&quot;For the year ahead, I remain excited by the new opportunities to develop a close relationship with readers, to really understand our consumers and to provide them with even more of what they want. And, unlike some, I really do think the growth of the digital market is a huge opportunity for bookshops&mdash;not only to provide a unique and personal service to book lovers, which is hard to replicate online, but to capitalise on the new readers these devices are creating. <br /><br />&ldquo;As the number of ways we can read explodes, demand for content increases and now surely is the moment for us to ensure that the creators of that content continue to be justly rewarded for their efforts. That&rsquo;s why we are pleased that the Government is taking a close look at Intellectual Property with a view to tackling piracy and preserving the value of content. <br /><br />&ldquo;And finally, I believe that we should all fight vigorously to support and encourage a broad range of retail options on the high street and online which hugely benefits consumers, retailers and our own industry. That is the best way to preserve a thriving, creative sector for which the UK is justly famous.&rdquo;<br /> </p><p><strong>Richard Mollet, chief executive of the Publishers Association</strong>: &quot;2011 presents a clear opportunity for publishers in the form of the Hargreaves Intellectual Property Review, which will report to Ministers in March,&quot; he said. &quot;The Review may be perceived as a challenge to the industry, as once again IP rights are put under the critical spotlight. However, it provides a chance for the sector to highlight the merits of a robust copyright framework, and to demonstrate its essential role in incentivising creativity and ensuring remuneration is paid to creators. Overall in 2011, the more that the creative sector can respond to the challenge of working collaboratively with technology companies, the more we can all enjoy the opportunities of the digital age&quot;<br /> </p><p><strong>IPG executive director Bridget Shine</strong>: &quot;Many independent publishers had a strong 2010 and are starting 2011 feeling quietly confident or even out and out bullish. They will be pursuing digital and international opportunities this year. Challenges will be the inevitable changing face of the high street, increased costs for paper, affecting printing costs, an increase in overheads and the increased VAT affecting e-books. </p><p>&quot;It will be a tougher year for educational publishers selling to schools, with the impact of budget cuts&mdash;and with the changes to the national curriculum schools may be reluctant to buy. Independent publishers, of course, tend to be nimble and therefore able to respond to both opportunities and challenges with alacrity&quot;.</p><p><strong>Library campaigner Desmond Clarke</strong>: &quot;We can look forward to a year when library service managements will struggle with widespread closures and the proposed transfer of responsibility for many libraries to volunteers. Ironically, the actual savings may prove to be small as expensive overhead structures and IT networks are left in place. Few doubt that the service faces a severe crisis just as strategic responsibility for the sector is transferred to the Arts Council. </p><p>&quot;Their first challenge must be to appoint people to a task force with the vision, the courage and the experience to re-build the service. And appoint a chairman with the ability to listen and bring together the diverse interest groups to the benefit of the millions who rely upon the service. We must ensure that the Arts Council does just that.&quot; <br /><br /> </p>