The First Half of 2018: Traditional Publishers Stand Strong with Nonfiction and Backlist

BookExpo 2018

BookExpo 2018

As one of the editors of the The Hot Sheet, produced in collaboration with journalist Porter Anderson, I regularly read and report on publishing industry developments that affect writers. Here are the stories and trends that stand out so far in 2018.


Traditional Publishers Doing Well—Despite Decline in Ebook Sales

Globally, for the Big Five publishers, print and ebook sales currently stand at 80-20 in favor of print when averaged out across all categories. (Fiction has the highest percentage of ebook sales, with a 50-50 split between print and digital.)

The Big Five CEOs at BookExpo this year publicly commented on how pleased they are with the fairly stable business model that has developed despite pressures of the digital age and online retail. For example, the number of units sold in physical outlets, as a percentage of their overall business, has remained solid. But the CEOs admitted that it will take work to keep it that way in the face of a competitor like Amazon. John Sargent of Macmillan said, “There are some serious issues we will face in the coming years over changing consumer buying behaviors … and the issue of discoverability. … What we need to protect is lots and lots of shelf space in America for people to browse books.”

Side note: Just because ebook sales have been declining for traditional publishers doesn’t mean ebook sales are down for the entire industry. This article from Quartz discusses what is an increasingly confusing issue.

The strongest category this year for traditional publishers: political books

According to reports from NPD BookScan—which tracks traditional publishing sales—the number of political books (in print format) sold following the 2016 election is nearly double the volume following the 2012 election. It’s not that more books are being published; each title is just selling better. Political books are also showing digital growth and are up 22 percent compared to a decline of 5 percent for all ebooks tracked by NPD. The biggest selling title of the year thus far—in any category—is Fire & Fury by Michael Wolff.

The political landscape is also boosting other categories, such as dystopian fiction (where sales have doubled—led by Margaret Atwood’s The Handmaid’s Tale) and prescriptive nonfiction. Personal growth and motivational/inspirational titles (such as The Subtle Art of Not Giving a F— by Mark Manson and You Are a Badass by Jen Sincero) have seen double-digit print sales growth, and the latest era of self-improvement titles has been driven by younger consumers—millennials in particular—in what NPD called “adulting with attitude.”

The weak spot for traditional publishers: fiction and ebooks

Broadly, traditional print book sales continue to grow at about 2 to 3 percent per year, but growth is driven by nonfiction, backlist titles, and children’s/YA. Fiction sales have been flat for several years now, with frontlist fiction down 5 percent due to a lack of big titles. Five years ago, ebooks were at 28 percent market share for traditionally published books; today they are at 20 percent. NPD’s explanation for the drop: people are shifting from e-readers to tablets and phones that offer more distractions, and ebook pricing has gone up, which they call “the biggest barrier to entry.”

Whatever you would like to believe about traditional publishing’s performance, it’s quite easy to find the statistics to support your story. “Print is back!” is the story favored by mainstream media and the publishers themselves, especially when looking at the strength (or “return”) of independent bookstores. However, a frequent talking point is now the frontlist-backlist divide in fiction sales, or how new fiction titles are not selling as strongly as in past years. Simon & Schuster finished 2017 with record profits but admitted to declining sales of “important” authors. CEO Carolyn Reidy of Simon & Schuster commented, to Publishers Marketplace, “We’re talking about these real powerhouses that have fueled the industry for a lot of years. It’s still a challenge to help an established, bestselling author maintain and grow his or her audience.”

The Challenges of Fiction Frontlist May Put Additional Marketing Expectations on New Authors

Once upon a time, it was relatively safe to say that, prior to a book deal, novelists weren’t expected to know much about the marketing process—or to have a platform in place. Novelists would be expected to market and promote their work once a publication date was set, but manuscripts would be sold primarily on their storytelling merits and appeal in the marketplace; the marketing discussions would come later. But that may be changing.

Carly Watters, VP & senior literary agent at P.S. Literary Agency, tweeted in April that because the industry is changing, so are her fiction submission requests. Aside from a synopsis, any author asked for a full manuscript will have to provide a list of five comparable titles from the past five years, a short marketing plan, a description of the next work in progress, and a list of alternate titles for the work being submitted. She added, “This reflects the seriousness authors need to take when launching their career & it starts with you.” If there was any good news for the debut novelist, it was that this request applies only to writers being asked for a full manuscript, not to writers sending initial queries.

This tweet landed right during London Book Fair, where nonfiction deals were riding high and fiction deals weren’t. As discussed above, fiction performance is weak globally, and backlist is driving sales. When NPD BookScan released their first quarterly summary for 2018, adult fiction was down 3 percent.

When I reached out to Watters about her Twitter thread, she illuminated more of the thinking behind her request. First, she said this is more of a “test” of mindset and understanding than anything. “I care about how the author responds to my request, that they engage with it, and that they have some idea about how their book fits in the marketplace.” The marketing plan is the most test-oriented part of the equation; Watters wants to see that writers have given the marketing of their work some thought, even if their points are off the mark or things the publisher would do. “I just want to learn what they know at this stage,” she said. “What I don’t want to see is a short list of things that they ‘will do in the future once they get a deal.’” She’s most interested in what they’re doing now to grow their platform and brand.

Watters says one thing that’s working for her lately is pitching a book with blurbs already in the pitch package. Therefore, she’s interested in knowing if the writer has author-friends who could lend a blurb to help her create the best possible package. She says, “With debut [novelists] I don’t send a marketing plan, but I often try to get them blurbs before submission—even if it’s just my pubbed clients helping each other out.”

I asked other agents active in the industry to see if they or their agencies are looking for more marketing information from querying novelists. Donald Maass, president of Donald Maass Literary Agency, said, “I know that publishers are these days thinking ahead to marketing of fiction, so it’s natural for ideas of comp titles, next work, and so on to pass up the line.” He said his agency works with writers to come up with the information, then added that this process applies mainly to debut fiction, and that after the first book, acquisitions decisions turn more on prior sales than anything. He cautioned, “Marketing bullet points reassure bookstore accounts but have little influence on book consumers. For fiction consumers, the most influential factors are in-store display, word of mouth, and page one.”

Jeff Kleinman of Folio Literary said, “Platform, for both novelists and memoirists, seems more and more important. It’s not the deciding factor for taking on a novel—that’s still the premise and voice—but it’s definitely a major consideration to know that an author actually has a plan to get the novel to consumers.” He said that plan could involve things as varied as email newsletters, radio, or TV shows, but it might also be as simple as being a good literary citizen—being engaged and interacting with other writers and the writing community. Like Maass, he was quick to add that writers should not focus primarily on platform: “It’s still all in the writing: the book itself has to deliver a great read.”

Watters emphasized that, like any good agent, she collaborates with her clients to assemble a convincing package for editors. She doesn’t write off anyone who has a fantastic manuscript but no platform or marketing expertise. But she does have to do a lot more work on such books, so it becomes a time-management issue.

If the market for fiction becomes more competitive and risk-averse due to continued dwindling sales, it’s natural for agents and publishers to shift their preference to authors who appear better positioned to sell—or at least to authors who demonstrate they have a vision for their career and the marketing work involved in that career.

Barnes & Noble’s Struggles Continue

At the end of 2017, the biggest chain bookseller in the US reported a worse holiday season than anticipated. Their sales fell 6.4 percent compared to the prior year. And the news hasn’t improved since then.

Just before Valentine’s Day, Barnes & Noble announced a “new labor model” that eliminated certain store positions to save $40 million annually. Even though the store claimed to be “pivoting” back to books in November 2017—emphasizing discoverability and bookselling interactions with customers—the layoffs appeared to target long-standing and full-time staff who would likely be essential to that goal. Their earnings report last month reflected a 6 percent sales decline during the most recent fiscal year, but B&N continues to grow its membership program and focus on the benefits of its new national book club launched in May.

So, are Barnes & Noble’s struggles preventable or inevitable—and who’s to blame? This is where you’ll find considerable debate. There’s a reliable contingent that argues Amazon is to blame or points a finger at bad government policy (see the Department of Justice case against Apple and the Big Five). Others see the resurgence in independent bookstores and believe B&N has failed to innovate or at least capitalize on its strengths. In a presentation at BookExpo on the future of retail, Kristen McLean of NPD said that the retailers who are losing right now are those swimming in debt, those who can’t innovate or don’t have the leadership to innovate, and those who don’t have the right footprint (they’re locked into particular real estate contracts, for example). She said physical retail is not dead, but retailers have to give consumers a reason to visit stores—there has to be an “experience”—and that highly local businesses will compete.

In a podcast from Knowledge@Wharton, a few marketing professors discussed what the future holds for the beleaguered retailer. Wharton’s Peter Fader said, “They’ve tried lots of different things from devices to experiences to broadening the merchandise. Nothing’s working. At this point, they haven’t found that hook to save the business; nor have they found the vision or leadership to give people any confidence in it.” Wharton’s Barbara Kahn said that while the retailer probably does a good job overall, “The problem is they’re not the best at anything.”

Digital Subscription Services Help Publishers with Discoverability and Backlist Profits

In the US ebook subscription landscape, two services compete against one another for market share: Kindle Unlimited and Scribd. KU offers more than a million titles for $9.99/month; many titles are from Amazon Publishing and self-publishing authors, with limited participation from the Big Five publishers (only Harpercollins as of this writing). Scribd, meanwhile, has deals in place with the Big Five.

Back in 2015 and 2016, Scribd’s model appeared wobbly: the unlimited model was showing strain. Scribd announced cutbacks to its romance selection and then limited subscribers to one audiobook per month and three ebooks per month. However, in 2017, Scribd announced it had become profitable and now has about 700,000 subscribers.

Earlier this year, Scribd returned to a (mostly) unlimited model for $8.99/month. The heaviest users of the service will continue to be limited in what they can consume. CEO Trip Adler says fewer than 10 percent of subscribers will experience such limitations, but those subscribers will receive recommendations for alternative reads if an “expensive” title is unavailable.

During a BookExpo panel this year, two publishers described how and why they sell ebooks through digital subscription services such as Scribd. The panel was moderated by Andrew Weinstein, a vice president at Scribd, and included Chantal Restivo-Alessi, chief digital officer of HarperCollins, and Nathan Henrion, vice president of sales for Baker Publishing Group, a Christian book publisher.

Both publishers agreed that digital subscription services increase reader reach and revenue. Restivo-Alessi said the “sales opportunity is endless” and it allows HarperCollins to be in as many places as possible with their content. “We see the subscription world as one additional way we can encourage competition and encourage discoverability and revenue generation for authors,” she said. “It is important to really realize how little actual visibility ebooks currently have in the retail environment. It is more and more focused on very limited slots and highly manipulated slots. Alternative channels are really important to allow the midlist and breadth of our work to be as accessible to as many consumers as possible. It’s our obligation to create that visibility to our consumers and to our authors. Not every author is a super high-caliber brand, and we need to build those authors over time. … We can only do that if we create visibility for their work.” Henrion agreed and emphasized that because they’re a midlist publisher with modest resources, subscription services like Scribd allow them to get their books in front of readers with the least amount of risk to the reader.

Weinstein shared Scribd statistics that indicate that 75 percent of reading activity on the site is from backlist titles. Both publishers said that 95 percent of their catalog has been read at least once on Scribd. Restivo-Alessi said of the consumption, “It can create a nice flywheel. Backlist discovery leads to consuming frontlist titles from the same author. … For midlist authors, it’s a way of helping discovery [for those] who might not have as much visibility at retail. … The reading is not really focused on just the top percentile. Seventy percent of the revenue is below the 50 top titles. It is very widespread in terms of reading and behavior, which is really good.”

In their closing comments, both publishers mentioned the positive experience they’ve had, and that subscriptions haven’t cannibalized their sales, with Restivo-Alessi saying bluntly that “just being opposed to subscriptions per se is really shortsighted, in that you’re really missing out on an additional [sales] channel. How you use that channel and what kind of content you put in and how much of that content—that’s obviously an individual publisher’s decision. However, not being in it at all seems strange.”

As far as whether digital subscriptions are sustainable as a business model, Henrion said all the kinks have been worked out. “It’s a win-win for the reader, the publisher—it’s gotten to that point.” Weinstein explained how services like Scribd pay traditional publishers: in the overwhelming majority of agreements, there’s a free preview (about 10 percent) that all users can access; then there’s an additional percentage—about 5 to 10 percent more—that only subscribers can access. Reading beyond the preview triggers a payout to the publisher that is equivalent to an ebook sale. In other words: authors are paid just as they would be for an actual sale through a retailer, although (of course) authors’ contracts may vary in the particulars.

For any indie author familiar with the continued frustrations of Kindle Unlimited, the conversation was striking for what wasn’t present: any angst or concern about fraud or problematic payout systems. It’s concerning how authors have ended up in two separate-but-not-equal classes in Kindle Unlimited. Traditionally published authors whose books are in KU participate under a payment model similar to that of Scribd, assuming the author’s contract with the publisher treats those transactions as a standard ebook sales. But indie authors must accept a per-page-read earnings system that tallies payment after the fact, based on a variable pool of money.

Which brings us to Amazon …

Amazon Pulls Back on Indie-Favored Publishing Programs in 2018

Kindle Scout, the crowd-voting publishing program, closed down in the spring, right at the same time that Kindle Press stopped accepting manuscript submissions. (It told its authors to “consider Kindle Direct Publishing as one of your publication options.”)

Never heard of Kindle Press? You’re probably not alone, as it is not particularly publicized or promoted by Amazon—nor is it listed as an Amazon Publishing imprint. It was more “program” than publisher, primarily attached to Kindle Scout, which issued ebooks and audiobooks from successful authors coming out of that program.

Why the change? An Amazon spokesperson said, “So we can focus attention on our growing list of Amazon Publishing imprints.”

Related: Amazon Studios also closed to submissions, right on the heels of the Kindle Scout closure. (Amazon Studios was essentially an open call for script and concept submissions.) And Amazon’s CreateSpace merged into Amazon KDP.

Then, Amazon the announced that Kindle Worlds would shut down by September 2018. While some authors had noticed a decrease in support and marketing activity surrounding the program, the notice was largely seen as abrupt.

While Kindle Worlds has never been a widely known or talked-about program, for those in the industry, it was an interesting experiment, pointing toward a workable path for monetizing fan fiction. Here’s how Kindle Worlds worked, in a nutshell: Amazon reached out to specific, established authors or their estates (and other IP owners in the entertainment industry) to see if they were willing to make their “worlds” available on the Kindle Worlds platform, where other writers could publish and make money on ebooks based in those worlds. If the IP owners agreed, they had to create a world “bible” to indicate what restrictions, if any, applied to officially licensed works. (For example, the world creator might stipulate that certain characters could not be killed off.) The creators split the sales proceeds with the writers, with each receiving 35 percent; Amazon received its usual 30 percent. Prices were consistently $1.99 and $3.99.

In about five years, Kindle Worlds launched nearly 100 licensed worlds, some well known. Some of the authors and brands you’ve likely heard of: Hugh Howey, Kurt Vonnegut, G.I. Joe, Gossip Girl, and Pretty Little Liars. That said, the majority of worlds were drawn from indie genre fiction.

The Hot SheetAgain, why the change? No explanation has been forthcoming, but there are a few things in common among all these programs: they were populated by a cohort of indie authors, they required Amazon staff to be involved in some kind of reviewing/curation (but not as acquiring editors or hands-on editors), and they were driven primarily by low-priced genre fiction ebooks. Amazon Publishing titles, on the other hand, are acquired and edited following traditional publishing standards and sold at a higher price point (usually between $4.99 and $5.99). Without any other evidence, one assumes a low profit margin has driven these decisions.

What trends have you noticed in the publishing landscape this year? Share your insights in the comments.


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Posted in Publishing Industry.

Jane Friedman (@JaneFriedman) has 20 years of experience in the publishing industry, with expertise in digital media strategy for authors and publishers. She is the co-founder and editor of The Hot Sheet, the essential newsletter on the publishing industry for authors.

In addition to being a columnist for Publishers Weekly, Jane is a professor with The Great Courses, which released her 24-lecture series, How to Publish Your Book. Her book for creative writers, The Business of Being a Writer (University of Chicago Press), received a starred review from Library Journal.

Jane speaks regularly at conferences and industry events such as BookExpo America, Digital Book World, and the AWP Conference, and has served on panels with the National Endowment for the Arts and the Creative Work Fund. Find out more.

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Lisa Bodenheim

I wonder what kind of changes will come about from Barnes & Noble now that they’re between CEOs?

Patrick Witz

I still say B&N should partner with Starbucks, wherein B&N creates book kiosks to download e-books using a one-time use discount code listed on each Starbucks receipt. Coffee and an e-book of equal value would be a win-win for both companies… high visibility for authors, publishers, B&N and would help off-set the Amazon e-book monopoly. Do you think I could get royalities from the idea? 😁

Rose Kleidon
Rose Kleidon

Thank you for this report on the industry. It’s crucial for those of us at work out in the ether to have such information available.

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[…] Jane Friedman takes a look at the publishing trends for traditional publishers in the first half of 2018. […]

Lane Igoudin
Lane Igoudin

Excellent summary of the current trends in the publishing industry, Jane. Among other things, it has confirmed to me the value of including testimonials from professionals into my memoir/non-fiction pitch to the agents.