Trade publishing update

February 2024

The IPG’s new correspondent Will Atkinson shares the latest news and views from trade publishing, with expert analysis of sales trends, pricing, channels, independent publishing successes and the outlook for 2024

As a new and anxious correspondent I thought I should do some homework and read all the reviews of publishing in 2023 and predictions for 2024 from those who are paid to know stuff. I found the usual reassuring mix of sensible concern and high optimism that seem to be required to keep this glorious industry going.  

Sales and RRPs

One aspect that seemed genuinely good news, albeit accompanied by an understandable slight wringing of hands, was the rise in value of book sales in 2023 and the retreat of volume. Nielsen BookScan’s stats show the value of the market was 1.3% up, while volumes were down 5%. Recommended Retail Prices (RRPs) were up 6%. This, it strikes me, is a victory. It would be folly to argue that fewer customers buying books is a good thing, but there is a silver lining. 

In the realpolitik of the industry, RRPs are the only thing that trade publishers control, so this is important. Trade discounts have at least been stable in the last few years, but I hear that Amazon might be on the march again. Bricks and mortar retailers have been cautious to the point of self-harm in resisting higher RRPs until last year. Book prices have risen 19% since 2002, and compound inflation in that time is 75%. You begin to wonder how we are all still in business until you add in that volume sales have risen 45% in that time, and ebook and now audio make up the difference for us publishers. And of course the latest figures are only through BookScan’s Total Consumer Market. Nevertheless, making less money on each book sold in real terms can’t be a good long term strategy for publishers, or indeed retailers. 

What were seen as acceptable RRP points were, I think, established by WH Smith after the Net Book Agreement went in 1995, and a whole host of price points were deemed unacceptable. Why no £13.99 to this day? And if the 40% of all books sold in the UK by Amazon have ill-rounded prices because of their discounting, what is the problem in having more elastic pricing protocols? This has always struck me as madness. I was thrilled last year when £22 finally became an accepted RRP for hardbacks, and non-fiction paperbacks moved above £10. The grey area between £15 and £20 now seems to have solidified at £20 with not much in between. Maggie O’Farrell’s new novel at £25 seemed greedy, but it did show Hachette’s intent. 

Academic publishers in a simpler pre-Open Access world took their costs, multiplied by ten and hey presto—that was your price. At least trade pricing has the benefit of conformity and consistency for retailers. But to repeat, if RRPs are the only things we control and our pricing protocols are rigid, this is to our detriment. As Tom Tivnan noted in the Bookseller as commentary to these figures, discounting off RRPs hit its lowest level in 20 years in 2023. Discounts still average a whopping 23.5%, so last year’s rise is a corrective to the deep discounting era of the mid-Noughties, and I think there is more adjustment to come.

Supermarkets, Amazon and Waterstones

This is because supermarkets, who discount more than any sector, continue to find space for other things besides books, whilst demanding even higher terms from publishers—if that were possible! I can’t see a time when supermarkets abandon bookselling entirely, but if their flight from books continues at its present rate we will find ourselves in a time close to the era of the Net Book Agreement when discounting is tactical and applied to certain books and specific locations, as opposed to a strategic part of the brand offering. Low-priced books now live in The Works, which could be equated with the old remainder outlets.  

Amazon, despite years of deep discounting and loss leading, has not had everything its way, and other book retailers remain in business. Amazon will continue to want to be seen as the cheapest in the market, but as fewer books are discounted they will be matching fewer, lower prices. One could argue that the excellent margin that publishers have had from ebooks has been used to subsidise print prices, to the supposed benefit of bricks and mortar booksellers.   

Talking recently to Bea Carvalho, head of books at Waterstones, has rather strengthened my impression that the industry was in a settled place. Christmas ‘did what it needed to do’ without any outstanding break-out books and some supply chain issues—not of its own making this time. We are incredibly lucky that we have a strong, self-confident and large chain that is dedicated to books, committed to quality publishing and believes in our products enough not to use price as the only means of selling. A quick check of the product offering of FNAC and Eason in France and Ireland respectively is enough to make a publisher weep. 

Bea agrees that the increase in pricing is overdue and needed, and that books remain very cheap compared to other products. Her issue was that the change was sudden rather than gradual and that the landscape seemed uneven. For example, the spike in non-fiction prices will seem starker for consumers who are looking at products that seem similar—novels and non-fiction—and see differences like £18.99 versus £35. This may feel odd, even though it makes sense to us.  

Two independent publishing hat-tricks

The independent publishing sector produced 2023’s Christmas number one in GT Karber’s Murdle. It’s the third time Profile has achieved this feat, which some commentators noted is more than either HarperCollins or Macmillan. I am wary of trumpeting independents as always swift, entrepreneurial and nimble, and ever since Tom Weldon took over, Penguin has often moved faster and with more money during acquisitions than any of us. They can publish quickly too when required. However, in this case I think the boast is justified, and it’s an inspiring story.  

This time last year the Murdle contract had not even been signed. With apologies to Quarto, the Wordle books had not been a huge success, probably because the experience was better online, and perhaps that deterred some publishers when it came to Murdle. Souvenir Press’ editor Cindy Chan bought the book from Karber and St Martin’s Press in the US for ‘appropriate’ money, given it had not been sold it in the UK and US publication was imminent. St Martin’s in fact published in June—not ideal for a puzzle book in the UK, but as we all so often have to, the UK went along with the US’ timing. The rest, as they say, is history. Even more notably, Profile has sold far more copies than the Americans, and all at a very good price of £14.99. Now that is quick to market, entrepreneurial and financially astute. Respect.   

Another independent triple crown is a third Booker Prize for Oneworld in eight years with Prophet Song by Paul Lynch—and a tenth for independent publishers this century. Again, too much can be made of indies being groundbreaking and more dedicated to the cause of literature than our corporate cousins. Ali Smith is not a bad writer because she is published by Penguin, and she is hardly alone. However, taking Nobels, Bookers and International Bookers in the round, it would be foolish to deny that this is an area where our kind of publishing flourishes and where we contribute considerably to culture. Consider the 5% market share of the Independent Alliance and their garnering of 50% of these major prizes in the last 22 years. Nuff said. 

2024 in publishing

So what about this year? The complexities of Artificial Intelligence loom large… SWOT analysis anyone? No doubt I will write more about AI in the coming months, but I am encouraged by what various parties are saying in public and to each other. This is an opportunity for all players to come up with UK and hopefully global industry standards, policies and rules to the benefit of all and detriment of none, especially the author. Even the Society of Authors, who can be a bit screechy sometimes, are talking about collaboration. When ebooks appeared there was little common ground for what felt like ages, and all of us—publishers, agents, authors, government—wanted the biggest slice of the pie. Arguably it was not until the merger of Penguin and Random House that a bulwark was established against Amazon’s monopolistic designs on the ebook space, and order has reigned since. With this digital revolution, we have the chance to do better with arguably even bigger results.  

I can’t see much in the way of change in publishing trends in 2024. I like the way BookTok has moved some genres onwards and upwards: it has put a spring in the industry’s step and made books newly appealing. Without it, 2023’s volume figures could have been worse. And for the cynical, who think it is only for dumbed-down rom-commers, Atlantic’s In Ascension got plenty of traction on TikTok, along with the rest of the Booker longlist on and after the announcement. 

If this all feels a bit optimistic, particularly set against economic hardship, political uncertainty and global horrors, here is some anxiety. Distribution isn’t going to get any easier. For those of you who still have pre-Ukraine and Liz Truss mini-budget contracts, enjoy a moment of smugness. For the rest, you have either renegotiated at a higher level or are about to. The rise in costs for our partners—diesel, heating, cardboard, personnel—is unarguable. Being sensible, they are passing these costs on to their publishers, who finally appear to be passing these costs on to their customers (see above). Built-in inflationary rises are becoming the norm, so there is no let-up. 

PRH moved all its client publishers from TBS to GBS some time back (yup—it was allowed for in the small print), making it a profit centre as opposed to subsidising costs, which Hachette, HarperCollins and Macmillan do with their warehouses. Once isolated from the mother ship, it was easier to close if costs rose, which they duly did. GBS clients have been moving out since the announcement, with Faber and their Independent Alliance clients due to go live in May at HarperCollins, and Oneworld at MDL in April. Although PRH has given over two years’ notice, there was an unholy rush to find new distribution, which didn’t give those publishers a strong hand in negotiations. The demise of Orca and Turpin and Marston’s ongoing difficulties don’t exactly fill this correspondent with much hope that this will get better. It remains to be seen whether the ‘strategic plan’ that Joe Matthews is putting in place at UID, parent of Marston, includes paying publishers on time, if at all. 

Distribution capacity in the UK is now limited, with the worst effects being felt by the independent sector. This seems to be in direct contrast to printing, which is one of the surprising areas of relief. An unforeseen result of price rises was that long run-on print runs were no longer affordable. A leading printer’s throughput in September 2022 was down by 40% year-on-year, creating significant capacity at a busy time of year. Sure, costs and prices have risen and aren’t dropping, but you can get a reprint more quickly and there may be advantages to shopping around if you have the time to do so. 

Finally, my best wishes for a happy and prosperous year. The Dragon as a Yang Earth sign possesses resilience and confidence, and is naturally lucky and successful due to its intelligence and strong intuition. That will be us then….

Will Atkinson

IPG Trade Publishing Correspondent