TRADE PUBLISHING UPDATE

MARCH 2024

The IPG’s trade publishing correspondent Will Atkinson takes a close look at UK book distribution and the European market, and hands out his IPG Spring Conference awards

Right my lovelies! Regular readers of my column (there are many!—Ed) know of my anxieties about distribution capacity in this country and what that means for smaller publishers. Hard on the heels of that commentary, Penguin announced it would keep GBS open, from where it will distribute its US titles to Europe and beyond.

On the face of it, this is a smart move. UK publishers have always had the whip hand in Europe and most open market territories. American publishers miss out on European sales because of supply time issues. If I am a Danish bookseller and want a Kazuo Ishiguro title, it will take me a week to get it from Faber’s new distributor HarperCollins in the UK, and three weeks to get it from (Knopf) Penguin in the US. Culturally, the UK covers are likely to be more appealing, and in some corners of the continent there is more anti-US feeling than anti-Brit feeling. Almost all export customers in the open markets will have a freight forwarder based in the UK but not everyone will have a US-based one.

The game changer was the seven European Amazon companies coming down firmly in favour of supplying British English-language editions as opposed to US editions, because of speed and reliability—good Amazon mantras. If the local wholesaler doesn’t have it, then cascade to Gardners, and if they don’t have it they’ll get it within a couple of days. Finally, the Germans started complaining about too many English-language books in their bookshops, thus letting everyone know that there was a big market there. The US was now missing out on something meaningful, and something needed to be done. In one fell swoop, there is now a level playing field for Penguin US titles into Europe.

What happens next

The knock-on effect might work something like this. One: if Penguin is doing this, the other big four will follow. Penguin will have worked out that it has more copyrights that will benefit than be harmed by this power play. Two: of course, UK publishers have always competed in the open markets, so in some respects nothing has changed, but this will mean extreme competition between the big five in Europe. Three: most UK indies will lose out because they don’t have American companies who can come in and compete against UK editions they don’t publish. Our existing sales will be challenged and we will have no retaliatory fire power. Four: European booksellers will have a like-for-like choice between British and American editions, meaning lower prices, which will mean lower revenues for publishers and for authors, because most European royalties are on net receipts. (I once calculated for Paul Auster’s agent when lobbying for exclusive European rights that he was losing £30,000 of royalty per book because we, at Faber, competed against Picador in Europe.) To conclude, I can’t see any upside at all for independent publishers who don’t have world rights in their biggest properties and don’t publish their stronger books in the US.

This is all starting to look very messy. However, the copyright protocols exist and are, for the most part, robust. In the end, it suits everyone to play the game, so I think it will be tidied up going forward, and the island of Ireland will be left out of this particular crap shoot. Publishers will pay for European exclusives in the advance or in the royalties at acquisition. If a particular American company is being super-aggressive, you simply don’t buy the book (from them or if the American sale happens first). A monetary amount will be assigned to that European copyright, whilst at the moment it isn’t really a part of the materiality of the deal. This still leaves the backlist being hyper-competitive, and I can’t see these author contracts being retrospectively negotiated—and this is where the problem for us independents lie.

I have never quite understood why large American companies use third-party warehousing and sales for titles where the rights haven’t sold. For example, Turnaround sell both American Penguin and Simon & Schuster. Speaking with my friend from Turnaround at the IPG Spring Conference, he seemed relaxed about the GBS news. I guess, either Penguin move books out of Turnaround and pop them into GBS, thereby freeing up valuable distribution space in their warehouse, which would be good for distribution capacity in the UK; or keep the status quo and use GBS as the D-Day launch platform for the heavyweight copyright fight on the European continent. Ishiguro, George R.R. Martin, Maggie O’Farrell and Chimamanda Ngozi Adichie are a few examples of authors published by Penguin in the US and different publishers here.

The value of world rights

At the Spring Conference dinner I had the joy of sitting between Amanda Ridout from Boldwood Books and Sophy Thomson from Thames & Hudson. They have led their companies to exceptional success in the past few years from totally different places: Boldwood is essentially a digital start-up with zero stock inventory, and T&H a legacy super-analogue business—'a museum without walls’. And of course, the thing they have in common, apart from being exceptionally good at their jobs, is that each company had world rights in all that they publish. Go figure.

I had a nose around Penguin’s more successful titles of the last twelve months and—sacre bleu!—it holds world rights in almost all of them. So maybe trade publishing has already moved into a world rights environment and I hadn’t noticed. This would mean the GBS move and subsequent European battleground may be about sorting out the past rather than organising the future.

Which just leaves us with the coda of German publishers being upset about English-language sales in their country—4.5% of their total retail market at the last count on the back of the TikTok wave. No one seemed to mind that the smaller markets of Scandinavia and the Lowlands have had to battle this out for the past few decades, but when Germany stamped its foot, people (pretended to) listen. My rather childish reaction is that we don’t seem to mind driving around in German cars as opposed to British ones, so a few English books being sold in their country seems a small price to pay for the globalization and free(ish) trade that has served Germany so well since 1945. I think they just have to get over it. At least they aren’t competing with any other German-language publishers in their export territories. Humph.

The more adult, medium-term view might suggest that the answer is again in copyright acquisition and management. There is absolutely nothing stopping German publishers buying European rights for English-language titles. They might even pay well, initially, to get the ball rolling and the practice normalised, which would get agents onside. They and their author charges have always been keen to have more publishers rather than fewer. This may all fizzle out as the Germans adapt to the new normal, but this is a space worth watching.

My friends in most of the houses tell me it has been a quiet start to the year. The old adage that books do well in recessions misses the bit that it is relatively well, not well. Ideally, we would be in a consumer boom with zero interest rates. Not so. Speaking at the Conference with Hazel Broadfoot, current president of the BA, rather backed up this impression. It really wasn’t so bad out there, but neither was it joyous. “Christmas did what it needed to,” echoing Waterstones’ Bea Carvalho’s verdict. Poor old hardback fiction comes in for a shoeing at times like these, so the debut novelist out in hardback this Spring isn’t heading for riches any time soon. The flight to certainty in all things continues apace!

My Spring Conference awards

Finally, the IPG Spring Conferences continue to get better. That’s a downbeat way of saying that last week’s was the best yet. It’s a big programme of a generally high standard and I thought the vibe was upbeat and very focused. Nobody could complain that AI wasn’t covered, and the traditional topics were tackled in a very engaging way. As usual, the biggest value is being with our brothers and sisters in arms. It is one of the few moments of the year where we garner the information and opinions that then becomes the context we need to run our businesses well.
And so to my Conference prizes.

• Best dressed: Sanjee de Silva (no competition). A rose between two thorns in the final session.
• Best voice: David Graham (no competition).
• Best joke: David Schneider, quoting a DM: “For a cast member of Friends, you have a really good knowledge of British politics”.
• Second best joke: David Taylor: ‘We have known about Artificial Intelligence for ages in the Midlands. We finish every sentence with ai? As in “are you coming down the pub ai?” (works better with sound).
• Most inspiring: Sohpy Thompson. The story and meaning of Thames & Hudson are just fantastic.

On to The London Book Fair! See you in the corridors. Keep well, keep publishing and mind those copyrights.

Will Atkinson

IPG trade publishing correspondent