The Business of Books 2019: Publishing in the Age of The

BUSINESS. C L U B . The Business of Books 2019

Publishing in the age of the attention economy

Frankfurter Buchmesse’s Business Club.

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This white paper provides a global analysis of consumer book markets today, summarising key trends and relevant data on book markets around the world. The paper examines recent digital innovations and examples of transformation, such as e-books and audiobooks, as well as the use of streaming and subscription models, and the increasing segmentation of publishing. It identifies new opportunities and challenges arising from publishing models such as self-publishing, audiobooks and streaming, and it highlights new forms of competition resulting from screen-based approaches to storytelling, with content shared through online and TV streaming platforms like Netflix, Amazon and Disney. To conclude the paper explores detailed data, a market analysis and the lessons learned about the business of books in today's new format-neutral and media-agnostic contexts.

1. The Businessof Books 2019...... 03 2. Changing reading habits (and cultural consumption)...... 04 2.1. The complicated case of digital consumer books...... 05 2.2. Digital books – Widening the horizon...... 07

3. How changing cultural practices reframe book markets...... 09 3.1. Turbulence beneath the surface...... 09 3.2. Consolidation and structural change...... 10

4. Where are the books in the new storytelling? ...... 11 4.1. Books: new opportunities, new practices and new roles...... 11

5. The outlook: stormy weather or climate change? ...... 12

About the author...... 14

2 / 14 The Business of Books 2019: Publishing in the age of the attention economy – presented by Frankfurter Buchmesse Business Club The Business of Books 2019: Publishing in the age of the attention economy.

1. The Business Germany: Book market in nominal m€ vs. new title output, 1990 to 2017 of Books 2019

Are we simply experiencing difficult weather, or do we need to acknowl- edge the fact of climate change? This is the most succinct way of summarising the debates surrounding the book industry in recent years. The best response to that question might be: We must learn to live in an entirely transformed climate. A wake-up call was sounded in Germany, in June 2018, when the German Publishers and Booksellers Association released Figure 1: Book market in Germany: value in nominal euros and annual title output, 1990 to 2018. their study “Book Buyers – quo vadis?” Source: Data by Börsenverein, analysis by RWCC. That call is still resonating. One simple number made the headline: the claim that Germany had lost 6.4 million book buyers from 2013 to 2017. About a year Germany: Market evolution 1992-2018 (deflated, in % year-on-year) after the publication of that study, 300,000 of those lost consumers seem to have returned, bringing a small sigh of relief to the German publishing industry. In a long-term perspective, however, the trend is clear. After achieving an all-time high in 2010, in terms both of turnover from book publishing and in the output of titles, the industry has now come under pressure. A comparison of the book market and the overall economy, as expressed by the annual growth of the GDP indi- cates a shift. Although year-on-year Figure 2 Germany: Comparing year-on-year growth in the book industry with the overall economy, market growth (positive or negative) in pub- evolution, real growth 1992 to 2018. Analysis by RWCC. lishing echoes some of the ups and downs of the overall economy, the France: Market evolution 2010 to 2018 (deflated, in %, year-on-year long-term trend lines have begun to diverge. While the overall economy has grown slightly, publishing has experienced a steady decline. In the past decade, similar diver- gence between book trade growth and overall economic growth could be seen for countries as different as the United Kingdom, a leading English-language market with a huge export business, and France, which, like Germany, is a market strongly dependent on its national consumer Figure 3 France: Comparing year-on-year growth in the book industry with the overall economy, market evolution, base. real growth, 2010 to 2018. Analysis by RWCC

3 / 14 The Business of Books 2019: Publishing in the age of the attention economy – presented by Frankfurter Buchmesse Business Club 2. Changing reading habits (and cultural consumption)

2. Changing reading habits (and cultural consumption)

“Books are increasingly considered with the rapid increase in communi- million customers. (Enders’ Analysis, exquisite, destined for a small elite. cations through social media, and in May 2019, and The Information, Literature could disappear from the particular, the consumption of www.theinformation.com/articles/ public sphere.” Morten Hesseldahl, streamed digital media. The impacts chinas-video-craze-drives-growth- Gyldendal Publishers, Denmark, of the positive economic develop- for-bytedance) September 2018 ment on these new middle classes In the United Kingdom, 60% of adult In the autumn of 2018, the World have been multiplied by a genera- consumers watched on-demand or Data Lab, a think tank based in tional shift, as younger people have streamed content in 2018, up from Vienna, Austria, calculated that around adopted the technological innova- 55% a year earlier (Ofcom Adults' half the world’s population could tions much faster than the others. media use and attitudes report 2019). be classified as middle class, and It is estimated that, by 2018, around The generation gap is huge, even in to a smaller percentage, upper class 41% of the global population were societies with relatively conservative (www.brookings.edu/blog/future- under 25 years of age. More than half user habits such as Germany. Here, development/2018/09/27/a-global- the people in the world are now some 83% of the 14 to 29-year-old tipping-point-half-the-world-is- mobile Internet users: 60% in East Asia; age group (which corresponds now-middle-class-or-wealthier). 62% in Southeast Asia; around 50% in roughly to Gen Z and Millennials watch It identified upward social mobility, northern Africa and in South Africa; films on video portals (e.g. YouTube) particularly in Asia. From Mexico and but just 12% in the rest of sub-Saharan and 67% make use of streaming video Brazil to Turkey and the Gulf region, Africa. services, compared to 39% and 31% and even in Africa, new middle classes Overall, 92% of Internet users watch respectively among the older genera- – or, in the case of Africa, “consumer videos online, 58% stream TV content tion (ARD/ZDF-Onlinestudie 2018). classes” – have emerged (qz.com/ and 30% play live streamed games. In broad strokes, that is the competi- africa/1486764/how-big-is-africas- (WeAreSocial Yearbook 2019) tive environment in which, in Morton middle-class). In North America and in Europe, the Hesseldahl’s bleak prognosis, reading From a publisher’s point of view, these transformation of the non-linear TV must find its place or risk marginalisa- numbers are important but also puz- market is obviously in full swing, too. tion. Given the dynamics involved, zling. That is because growing wealth This has impacts along the entire reading habits have remained in a society has traditionally been value chain, from how authors are remarkably constant over the past accompanied by a similar growth in hired and which companies compete two or three decades. Between demand for both learning and enter- for the most attractive productions regions and societies, and between tainment. Logically, this has also and distribution rights, to the con- social classes, age groups and gen- always gone hand-in-hand with a sumers themselves, whose attention ders, there have always been signifi- strong upswing in book sales and and time budgets are clearly limited. cant differences in the amount of time reading. people spend reading. In Europe, for By far the biggest deal to date, with a instance, people living in Nordic coun- Indeed, in the regions mentioned transaction value of 71 billion dollars, tries and Central Europe have typi- above, the publishing industry and has been the acquisition by Disney of cally had stronger appetites for read- some of the domestic publishing Rupert Murdoch’s film and TV studio ing than the southern Europeans, houses have recently gained in business, 21st Century Fox. Apple and whose bookishness has always com- momentum. Book market structures Google are also investing heavily in peted with other popular pastimes. are perceived to have raised their their respective streaming projects, In the US in 2017, around 53% of adults professionalism, and the local pub- as is Netflix, which reportedly ear- had read a book in the preceding lishing and distribution of books have marked around 12 billion dollars for year that was not for educational been strengthened in countries such content development alone in 2018. In purposes (down from 55% a decade as Mexico and Turkey. At the same China, Beijing ByteDance Technology earlier). In France, 92% claimed to time, the larger global corporate Co Ltd., the world’s most valuable have read a book in the past 12 industry leaders have acquired or start-up, is channelling money from months (though without specifically integrated local enterprises and global investment leaders, such as excluding educational reading), and gained in efficiency and profitability. Sequotia Capital China, General 88% considered themselves to be Nevertheless, the scale of this upswing Atlantic and SoftBank, to produce readers. In Germany, 61% of adults pales against the spread of the inter- short-form video apps for its user read books regularly in 2017. The net, especially through mobile access, communities that number over 100 strongest, most engaged readers

4 / 14 The Business of Books 2019: Publishing in the age of the attention economy – presented by Frankfurter Buchmesse Business Club 2. Changing reading habits (and cultural consumption)

were seen everywhere as a relatively readers: quick reads. More recently made through Amazon. These combine stable group. In a remarkable devel- it has backed this up and extended physical and digital formats, and use opment in Spain, reading and book it with additional business models an algorithm – unfortunately kept buying have both increased steadily (“Unlimited”) and channels (“Prime”). private – that factors in the time over the past two decades, with 74% // In the mostly non-English-speak- spent reading with Amazon Prime and now claiming to have read a book in ing European markets, trade titles Kindle Unlimited programs. We took the previous year, and 62% consider- were finally picked up by traditional the top-25 titles in selected categories ing themselves readers. publishers as a modest source of (books, fiction and literature, romance, The situation is much more fluid extra income, especially in bestsell- fantasy and sci-fi, downloaded among younger readers, however, for ing fiction, which has rarely been audio, Kindle), and marked them whom most reports suggest the time pushed, but instead kept small and according to a simple process: the they spend reading is in decline. This tight by relatively high pricing. authors earned 25 points for a first- is the case in Spain, just as it is in the // All these actors quietly agreed placed title on these charts, 24 points USA and the UK. Only in Germany not to disturb the digital niche any for no. 2, and so forth. The table on have young people aged from 12 to 19 further by innovating, and they page 6 summarises the highest sustained a level of leisure-time read- maintained especially clumsy, placed authors across all the cate- ing more-or-less unchanged over the unchanged technical standards for gories included. past two decades. There is, however, a decade and an almost complete While some of the methodological a significant difference between girls lack of smart product design. detail underlying these charts (half of whom read regularly) and remains uncertain, we can assume boys (only one third of whom are Further complicating this analysis, that they are consistent within them- steady readers). Despite this, the 2017 the lack of detailed data on digital selves and across territories. This survey by the German Publishers and sales, at least for the non-English allows an analysis from the point of Booksellers Association, mentioned e-book markets, means it is particu- view of a relevant group of consumers above, identified a considerable larly challenging to measure the self- who use Amazon occasionally or pre- increase in time spent using the Inter- publishing segment (including Ama- dominantly as their point of access. net among all consumers under 50, zon Kindle Direct). In a broad snapshot, repeated sev- which coincided with a drop in book To project a panorama beyond the eral times over the past two years, we purchases by that broad age group. horizons of traditional publishing models, traced and analysed the mix of top- new approaches are required. selling products in the main category Assessments of bestselling books and of ‘books’. 2.1. The complicated case authors are usually based on charts aggregating point-of-sale informa- The snapshots very clearly reveal a of digital consumer books tion, while filtering out certain types number of patterns: of publication (e.g. self-published // The frequent use of non-traditional Interestingly, the younger generation books) or revenue streams. This some- publishing models, such as self-pub- does not seem particularly keen on times ignores e-books altogether, lished titles sold through Kindle Direct digital books. In this regard several but almost always overlooks subscription or Amazon Media, for the top authors, factors might be working together, and similar distribution models, as whose works are now mostly available mostly unintentionally: well as titles that are not available in in both digital and print general retail, such as those from // A significant presence of titles from // A decade after the launch of Amazon Publishing or Kindle Direct. the curated catalogues of Amazon contemporary e-books, and espe- Publishing, and a big following for J.K. cially the Amazon Kindle ecosystem, However, as the products on offer, as Rowling’s Potter series in audiobooks, corporate publishing groups in par- well as the consumer preferences which are published and distributed ticular, but also specialist niche and consumption patterns are through her Pottermore platform (the publishers, have learned how to becoming more fluid and segmented relevance of audio overall) exploit profitable formats in addi- by various factors, it makes sense // The remarkably modest presence tion to the print versions of the mass also to include different perspectives of traditionally published fiction market titles they have acquired. on books, reading and audio con- authors, mostly in Germany if at all // Amazon began offering authors sumption. Easily available for such an Differences in the mix between the and readers many genres of fiction approach are the charts provided by four selected non-English-language (romance, thriller, fantasy and sci-fi) Amazon for their various thematic markets, Germany, France, Italy and through its Kindle Direct, and has and format-based categories online. Spain since opened a second, largely new, These charts include all volume (or digital segment to authors and unit) sales, regardless of format,

5 / 14 The Business of Books 2019: Publishing in the age of the attention economy – presented by Frankfurter Buchmesse Business Club 2. Changing reading habits (and cultural consumption)

Germany Rank Total Author Category Publisher (Main) Original Series Average price points format language (€) 1 169 David Hunter Fiction, crime Argon, Wunderlich Print + audio EN y 21,75 2 154 J.K. Rowling Fantasy Pottermore Audio EN y 2 7, 76 3 83 Marc Elsberg Crime Audible Audio DE N 8,1 4 73 Marcus Hünneberg Crime, fiction Amazon Media Kindle DE Y 2,99 Amazon 5 70 Emily Bond Romance Kindle DE Y 4,99 Publishing 6 65 Emma Wagner Romance Self-published Kindle + Print DE Y 0,99 Amazon 7 64 Mary Ellen Taylor Romance Kindle + Print EN Y 4,99 Publishing 8 60 Daniela Arnold Crime Self-published Kindle + Print DE Y 0,99 Self-published 9 59 Catherine Shepherd Crime Kindle + Print DE Y 2,99 (Kafel Verlag) Amazon 10 56 Rachel Caine Crime Kindle + Print EN Y 4,49 Publishing

France Rank Total Author Category Publisher (Main) Original Series Average price points format language (€) 1 310 J.K. Rowling Fantasy Pottermore Audio EN Y 16,65 2 144 Axelle Auclair Romance Self-published Print FR Y 5,99 3 87 Camille Deneuve Romance Amazon Media Kindle FR Y 0,99 4 62 J.R.R. Tolkien Fantasy Audiolib Audio EN Y 24,2 5 55 Yuval Noah Harrari Non-fiction Audiolib Audio EN N 22,4

Italy Rank Total Author Category Publisher (Main) Original Series Average price points format language (€) 1 158 J.K. Rowling Fantasy Pottermore Audio EN Y 8,99 Federico Maria Amazon 2 119 Crime Kindle + Print IT Y 4,99 Rivalta Publishing Fantasy, Mozaica 3 84 Dima Zales Kindle + Print IT Y 4,86 fiction (Genre publisher) Fiction 4 75 Alessia Gazzola Longanesi Kindle + Print IT Y 9,9 9 (TV series) Amazon 5 70 Jenny Anastan Romance Kindle + Print IT N 2,99 Publishing

Spain Rank Total Author Category Publisher (Main) Original Series Average price points format language (€) Amazon 1 180 Lorena Franco Romance Kindle + Print SP Y 3,52 Publishing 2 121 Olivia Kiss Romance Amazon Media Kindle + Print SP Y 1,99 3 111 J.K. Rowling Fantasy Pottermore Audio EN Y 8,86 4 79 Phavy Prieto Romance Amazon Media Kindle + Print SP N 3,02 5 78 Marcos Chicot Fantasy, Crime Amazon Media Kindle + Print SP Y 3,99

Table 1 Snapshot of top-selling titles on Amazon, in selected digital genre and format categories (e.g. books, fiction and literature, romance, fantasy, downloaded audiobooks, Kindle) in Germany, France, Italy and Spain, on 13 June, 2019. Analysis by RWCC.

6 / 14 The Business of Books 2019: Publishing in the age of the attention economy – presented by Frankfurter Buchmesse Business Club 2. Changing reading habits (and cultural consumption) SHARE OF ALL SALES IN % ALL SALES SHARE OF

Figure 4: E-books sell at widely differing prices in different countries and in different genre categories. Source: Digital Consumer Book Barometer 2019, www.global-ebook.com

The strong presence of local authors in ditional publishers have also learned paperback, but something that the genre fiction categories, to the dis- to use this segment for promotional complements all the various existing advantage of a globalised offering of purposes. manifestations and the value propo- internationally branded authors. In most countries, publishers have sitions that books stand for. A second “deep dive” approach has chosen to keep their new digital Three approaches serve to illustrate been undertaken with the recently releases at prices close to those of the transition and its driving forces: published Digital Consumer Book the print editions. We can easily iden- // Learning platforms Barometer 2019. In a broad collabora- tify two sweet spots: between 8 and // The advent of streaming and tive effort involving digital distributors, 10 euros, and at a lower level around audiobooks it was possible to develop a detailed 13 euros. For Canada, the lower value // Scientific research on the differ- and more realistic analysis of the of the Canadian dollar must be taken ences between reading a book in extremely segmented set of digital into account for assessing relevant print or on a screen, and listening to niche markets, with sample snapshots sales above 10 Canadian dollars. or watching a story been told. based on aggregated sales data in A lesson that immediately suggests Educational publishers learned early largely French-speaking Canada, itself is to recognise how deeply seg- on, often from their peers in profes- Germany, Italy, the Netherlands and mented digital consumer book mar- sional and academic publishing, that Spain (including Spanish exports into kets are. They are shaped by price, their content can be broken down Latin America). but also, as will be shown below, by into “learning objects”. This means it The two juxtaposed charts highlight genre category and by new formats can be offered to a community of several patterns in the e-book market like audiobooks. users on a platform, mixed up some- segments in Canada, Germany, Italy, times quite randomly – with user- the Netherlands and Spain. In all generated pieces, and monetised these markets a low-price segment 2.2. Digital books – through subscriptions rather than by has formed, in which often huge vol- selling items one-by-one from a shelf. umes of unit sales occur, producing Widening the horizon This development has been driven appreciable income at prices strongly by the declining revenues of between three and four euros. This is By 2019, however, a broader view was the US textbook market, as well as where self-published authors have opening up of what digital books the replacement of overpriced text- found a strong niche, but even in mar- could evolve into: not just a new books by lending services. kets with regulated prices, some tra- format, like hardcover print, and then After recovering from bankruptcy, the

7 / 14 The Business of Books 2019: Publishing in the age of the attention economy – presented by Frankfurter Buchmesse Business Club 2. Changing reading habits (and cultural consumption)

US company Cengage implemented and fantasy/sci-fi does not constrain design better digital tools, improve a radical turn-around. Now, rather the more playful audiobook world. the reading and learning environ- than addressing teachers as their key Finally, science also has a word to say ments, and more carefully to balance clients, it speaks directly to learners. about why, if they are to work with the use of the printed page and Subsequently, to balance the sales the users, digital books must be more electronic screens in reading. (Stavan- lost to lending schemes, Cengage than a bland copy of the print ver- ger Declaration: http://ereadcost.eu/ managed to create a subscription sion. Recent research has shown wp-content/uploads/2019/01/Stavan- service for its clients, who pay a flat- convincingly that reading is a hugely gerDeclaration.pdf) rate fee for all textbooks, study tools complex exercise involving an array In the context of consumer book and related content. of very different cognitive processes publishing, which is the focus of this Many other digital platforms, big and in the human brain. Between reading white paper, the E-Read project pro- small, in multiple markets, have been printed texts and texts displayed on a vides helpful evidence on why created to bring together teachers screen, the results engage the reader e-books, as simple and direct digital and learners, and to monetise digital in significantly different ways, and copies of printed books, have found content in combination with social have a strong impact on comprehen- only limited success so far. Indeed, interaction and scoring. Unsurpris- sion and retention, especially when the gap between reading physical ingly, major publishers have increas- reading long-form, informational text. and digital formats emphasises why ingly targeted professional learning This has a direct influence on the and how e-books quickly became and vocational training, rather than effectiveness of learning processes. popular with readers of certain nar- work in the more regulated – and E-Read, a four-year research project rative genres, yet remain much less cash strapped – school environment. that systematically compared current popular for content more heavily Probably the most important lesson reading studies, across disciplines loaded with factual information. to learn from the digital approaches and methodologies, concluded that E-Read also provides rich and to education is a simple one: that it the differences that derive from detailed evidence on how the design could pay off to break up the tradi- modes of reading and different of devices and usability can deeply tional workflow and model of pub- media are factors often “underesti- influence the reading experience. lishing, to allow entirely different mated by readers, educators and After the first decade of mainstream models, and even to risk cannibalis- even researchers.” The Stavanger digital reading, publishers, designers ing existing old businesses in an Declaration, with which the research- and marketers might be well advised experiment that suggests the tail ers concluded the E-Read project, to return to the drawing board and wagging the dog. strongly emphasises the need to reconceive their digital approaches.

Audiobooks are different beasts altogether. In many cases, certainly, an audiobook can bring an already proven story, from a bestseller or a well known, long-selling author, to the attention of the customer. Adding a voice not only entails extra costs, but it changes everything from the listeners’ point of view: the way of getting a story into their heads, the activated regions of the brain, the price-point and thus the marketing approach, and even – as streaming and subscription models kick in – the distribution and the business model. Market research on audiobooks provides convincing evidence that customers listen to stories at different moments in their daily routines. They experiment readily with new gadgets (“Alexa, read my book!”), and are open to a much broader set of genres. The e-book trap of being caught in Figure 5 Audiobooks in Germany by genre, evolution between 2016 and 1Q 2019. Data from Bookwire, analysis low-price romance plus serial crime Digital Consumer Book Barometer 2019, www.global-ebook.com

8 / 14 The Business of Books 2019: Publishing in the age of the attention economy – presented by Frankfurter Buchmesse Business Club 3. How changing cultural practices reframe book markets

3. How changing described in the introduction to this AS. Unsurprisingly, China’s publishing cultural practices survey, revenue generated through sector continues to expand, albeit at publishing and bookselling was flat the much slower pace of 11.3%, com- reframe book markets from 2017 to 2018, but has been in a pared to just a few years ago. long-term decline since the peak of The Indian sub-continent is practi- 2010. cally a continent in its own right. Over the past twelve months, leading In France, the market value shrank by This is especially true of the publish- international publishing markets have 1.7% in 2018, and the volume by 3.5%. ing sector, due to the many lan- produced few surprises. Rather, trends This, despite prices rising modestly by guages written and spoken there. have continued to show patterns one percent and some promising sig- With a publishing market worth an familiar from previous years: some nals early in the year, after negative estimated 6.76 billion dollars in 2017, growth, or at least stability, in English- growth in seven years of the past and growing at a compound annual language markets; a slight decline in decade. Consumer frequency fell rate of around 20%, the industry is Europe; continued growth, albeit at a across all physical sales channels, focused much more on educational slower pace, in China and India; and with the hypermarkets losing 10.5%. books than on trade titles. Primary flat movements in real terms in most Only children’s books and graphic and secondary school (K-12) text- emerging economies. At first glance, novels (bandes desinées) escaped books account for 71% of the market, not much new seems to have hap- the overall pattern, according to higher education titles 23%, and trade pened in the book universe. Livres Hebdo, with data from I+C. titles a modest six percent Below, we contrast some more In Spain, the country hardest hit by (Source: All About Book Publishing, detailed snapshots of market evolu- the economic crisis of 2008, having www.allaboutbookpublishing.com). tion with some more dramatic events, lost around one third of the value of its It is often overlooked that almost half adding greater depth to the obser- book market, the subsequent turn- (44.4%) of the turnover comes from vations. around since 2015 still persists. 2018 books in Indian languages. (Of these, In the USA, in the first quarter of 2019 brought an increase in value of 2.1 % Hindi accounts for 35%, Malayalam the publishing market was “extremely (after 4.2% in 2015, and 2.9% in both 8%, Bengali 6% and Marathi 4%. flat”, according to NPD Bookscan, 2016 and 2017, according to GfK and Other languages combined make up with early increases in print sales stall- the distributors’ association Fande). A 47% of the Indian language market). ing, after sustained increases over a mix of drivers for the recovery have Meanwhile English accounts for just six-year period. E-books continued to been identified. These range from over half the total turnover (55.6%, slide, as they have done every year improvements in the major publishing according to the Nielsen India Book since their all-time peak in 2014. The groups, like Planeta and Penguin Ran- Market Report 2015). Indian lan- big question was now if the recent dom House Grupo Editorial, signifi- guages continue to gain ground, a surge in audiobook and streaming cantly increasing their organisational fact corroborated by the growth of revenues would help the digital mar- efficiency, to sectoral growth, espe- non-English Internet use, from 234 mil- ket to grow, without eating into exist- cially for children’s books, and the lion users in 2016 to an expected 536 ing formats. continued strong emphasis on million in 2021 – an annual growth rate In 2018, according to Nielsen Book- exports into Latin America. of 18%. That compares to 175 million scan, the UK saw 2.1% growth in the In Latin America, against the back- predominantly English-language value of the print market for the drop of the industry’s generally Internet users in 2016, a figure “fourth year running”, and a “marginal increasing professionalism, domestic expected to grow by three percent volume increase, too.” The positive markets followed highly diverse tra- annually to reach 199 million by 2021. development was driven by rising jectories, from relatively consistent prices and a small number of strong market development in Mexico and bestsellers. These included Michelle Colombia, to renewed negative 3.1. Turbulence beneath Obama’s memoir, “Becoming”, which growth in Brazil, and a fall into deep was even topped in terms of copies crisis in Argentina. In each case, the the surface sold by British comedian Adam Kay’s developments in these countries’ secret diaries of a junior doctor, “This national book markets have reflected “We may be drowning, and not even is Going to Hurt” – a home-grown their recent overall economic paths. know it.” Philip Jones, The Bookseller success story. Moreover, according to Russia is another example of solid Deeper shifts in many of these markets Philip Jones of The Bookseller, the recovery after a dire situation, which require us to dive beneath the surface. turnaround of the Waterstones book- has since stood its ground for several From Argentina, Brazil and Mexico, to shop chain, and improvements at years, reporting an increase of 7% to the United Kingdom and, to a slightly smaller chains and independent book 8%, according to Oleg Novikov, owner lesser extent, even traditionalist Ger- retailers has helped. In Germany, as of its largest publishing group, Eksmo many, self-publishing has managed

9 / 14 The Business of Books 2019: Publishing in the age of the attention economy – presented by Frankfurter Buchmesse Business Club 3. How changing cultural practices reframe book markets

to establish itself as a new industry becoming a blockbuster market – at shift. The latter has resulted in a rever- segment of significant scope – one the expense of all the rest. sal of ownership for the second larg- that has achieved remarkable eco- est publishing entity in France, Editis. nomic success. However, due to a lack Editis was originally created in 2004 of data, our understanding of this seg- 3.2. Consolidation and when, in a complex series of manoeu- ment is appallingly incomplete. vres, a huge multimedia conglomer- In Argentina, for instance, three local structural change ate was created in France under the aggregators and service providers to name of Vivendi. This encompassed, self-published authors – Ediciones Other industry developments are among other components, the ad- Plaza, Dunken and Autores de Argen- more likely to generate headlines that vertising agency Havas, TV (with tina – are among the top-seven even a less specialist audience will Canal+), games and publishing. organisations with the highest number take note of: bankruptcies, mergers A ruling by the European competition of registered ISBNs. and takeovers. Indeed, the past year authority required it to sell off most of In Germany, as in Spain and Italy, the was rich in such developments. the publishing arm. After an interme- bestseller charts released by Amazon The sale of the largest bookstore diate step, this was acquired by bear hardly any resemblance to the chain worldwide, America’s Barnes & Planeta, the largest Spanish-lan- lists of bestsellers offered by tradi- Noble, was just the latest and most guage publishing and media com- tional publishers. And self-published spectacular change following a pany, based in Barcelona. literature has successfully established decline that had been broadly visible At the time, and following several a low-priced segment for e-books. for several years. The company’s other failed attempts in the early Achieving significant sales for books takeover by the Elliott Management 2000s to combine TV, films, music priced below five or even three euros, Corporation was not necessarily the and publishing in “convergence of this not only accounts for an amazing most remarkable part of the news, content and media” strategies, trade volume but also generates significant but rather the fact that Elliott had publishing largely adhered to the turnover. However, little light has so far already bought another ailing chain, conviction that books should be kept been shed on this thriving and Waterstones in the UK. James Daunt, separate from audio-visual media. expanding market segment. the CEO largely credited with the The return of Editis under the umbrella Overall title production is skyrocketing turnaround of Waterstones, will now of Vivendi in late 2018, this time given pretty much everywhere in the world. oversee a similar task at Barnes & a green light by Brussels, shows there In the USA, we lost track when Bowker Noble. The most surprising aspect of has been yet another shift in these announced that over a million books the move could therefore be that the fundamentals. had been self-published in 2017 alone. new owners want to find a solution Storytelling and entertainment, Discussing the UK, Philip Jones said in from within the trade itself. delivered through digital streaming The Bookseller that, “E-books, self- Only a month earlier, Baker & Taylor, channels to huge audiences of con- publishing and audio add to the glut, another big brand involved in the sumers, usually in a subscription as do the infinite bookshelves of wholesale distribution of books, model, is the new magical formula for online retailers. Where once we used announced that it would close that today’s “Netflix era”. to track this, the size of the problem part of its business so that it could has become unquantifiable. focus more on the educational and We neither know how many digital library services of Follett Corp, which books without ISBNs are published, acquired the distributor only in 2016. nor how many they are selling.” In Germany, the largest wholesaler As a result, even among Britain’s top and distributor by far, KNV, declared 5,000 list in 2019 average sales of its bankruptcy in February 2019. This each title had sunk to 2,800, such has triggered fears across the pub- that, according to Nielsen, a title sell- lishing industry, not only of imminent ing a mere 250 copies made it into the tremendous losses for many publish- top 5,000. ers, but also of deep structural dam- At the same time, in the USA a very age to the entire sector. In June 2019, small number of top sellers are it is still unclear if an investor can be expanding more quickly than ever found to keep the fulfilment provider before. The top 100 titles in 2018, afloat. mostly new front-list titles, achieved Distribution and retail obviously come 23% higher sales than in 2017. At least under pressure when the value chain in some markets, book publishing now of an industry and, more broadly, the shows a high-risk trend towards preferences of many of its customers

10 / 14 The Business of Books 2019: Publishing in the age of the attention economy – presented by Frankfurter Buchmesse Business Club 4. Where are the books in the new storytelling?

4. Where are the for building their positions as provid- with the sale of books by the chapter. books in the new ers of media content to consumers. Planeta, the largest publisher in Already many of the biggest publish- Spanish, is investing in “transmedia storytelling? ing groups have entered into cross- storytelling”, a shortcut for content media content exploitation, with and authors that stand out in chan- activities that would have been nels such as Wattpad and YouTube. “This revolution in bookselling is about regarded as exotic only a few years And at Penguin Random House, an books vs. Everything Else.” ago. For several years now, for entire division has been created for Michael Tamblyn, Kobo Rakuten instance, Hachette has been cooper- “platform driven” fiction and non-fiction, In a talk at the annual meeting of the ating with the authors’ platform Watt- targeting a young adult audience, US Book Industry Study Group, in New pad. In 2018, Wattpad was rebranded and tapping directly into that group’s York in April 2019, Kobo Rakuten’s Wattpad Studio, underlining its inten- changing media preferences. Michael Tamblyn raised some eye- tion to exploit formats well beyond In the context of shifting consumer brows when he divided the history of books and reading. This has already habits and media practices, there are bookselling into five waves, starting materialised in deals with the huge new opportunities for books, with “independent bookselling”, and Hachette parent company, Lagardère, too, with adaptations as films, TV followed by “big box and chain book- through its own Studio division, and series and even games. However, this selling”, the arrival of the Internet, and with the Dutch NL Film, Singapore’s playing field has become utterly then the emergence of e-books. But Mediacorp and Sony Pictures. complex of late. now, he argued, the fifth wave is no Hachette, the book publisher, has From Boris Pasternak’s “Doctor longer just about formats, or some secured the global publishing rights Zhivago” and Tanja Blixen’s “Out of inventory management optimisation. for Fortnite, one of the hottest games Africa”, to the global craze earlier this Instead we are facing the “attention of the moment. In a similar move, Har- year surrounding the last season of economy”, in which books and read- lequin, HarperCollins’ romance fiction George R.R. Martin’s “Game of ing, authors, publishers and retailers arm, has created a Studio arm, the Thrones” – the unique case of a film find themselves competing against better to exploit its authorial brands. adaptation of a book that has yet to anything and everybody else that be written – there are so many ways connects with the audience. (Michael 4.1. Books: new for a book to make it onto the screen. Tamblyn: Money on the Table: Oppor- One new, and still unusual model of tunities Missed in the eBook Supply opportunities, new exploitation was seen in the adaptation Chain. www.michaeltamblyn.com) of Elena Ferrante’s global bestseller The result is truly complex. Publishers’ practices and new roles “Una amica geniale” in Germany, competitors, for instance, are not just where the film version was bought by other publishers, but also Netflix and a telecoms corporation. Written in YouTube. The change accompanying “No single model for success” Italian in Naples under a tightly the new frenzy for “on-demand tele- Hazel Kenyon, Nielsen, on book-to- guarded pseudonym, the original vision is in its very early stages,” says film adaptations book was published by the small Cindy Holland, VP Original Content at In Germany a year ago, a novel based independent Edizioni E/O. It was Netflix. (Deadline, 11 March 2019, on another game, Minecraft, authored quickly picked up for the American www.deadline.com/2019/03/netflix- by YouTuber and gamer, Patrick Mayer market by Europa Editions, the Italian cindy-holland-on-future-streaming- (aka Paluten), jumped to the very top house’s English language imprint in competition-1202573130) of the authoritative Der Spiegel best- the USA. After its worldwide success, In summer 2018, in a mega bidding seller chart in Germany. A sequel has “Una amica geniale” was unsurprisingly war, the global media leader Disney since been announced for this summer. chosen by HBO for a TV series adap- fought it out with Comcast, a cable The publisher of both books is Com- tation, with Italian RAI as a production TV and Internet provider, to acquire munity Editions, a joint venture bet- partner, and major TV companies the huge content libraries of Rupert ween Bastei Lübbe and a marketing buying distribution rights, such as Sky Murdoch’s 21st Century Fox movie and merchandising specialist, which in the UK, Canal+ in France and NPO studio. Disney won – at least this provides a platform for social media in the Netherlands. In Germany, the round – with a bid worth 71 billion dollars. influencers who want to enter the pub- phone and Internet service provider CNN, 19 July 2018, https://cnnmon. lishing industry. In this and in a grow- Deutsche Telekom secured distribu- ie/31MhogG. ing number of other examples, the book tion rights for the German translation Meanwhile, the technology giants, stands not at the beginning, but at of Elena Ferrante’s title, “Meine geniale Apple, Facebook and Google, as well the end of the storytelling value chain. Freundin”, for its on-demand video as Alibaba and Tencent in China, Litres, the leading digital publisher in service MagentaTV. Two years earlier, have all earmarked billions of dollars Russia, has started experimenting it had already done a similar deal,

11 / 14 The Business of Books 2019: Publishing in the age of the attention economy – presented by Frankfurter Buchmesse Business Club 4. Where are the books in the new storytelling?

acquiring the distribution rights for “authentic” foreign language proper- never reasonably suggest an interna- the “The Handmaid’s Tale” after the ties, as these can resonate well with tional book career with a traditional dystopian novel by Canadian Margaret “universal audiences”. This was publisher. Atwood. explained recently by Kelly Luegen- Ivica Dikic is a Croatian-Bosnian Film adaptations of books carry mul- biel, Vice President, Creative Interna- investigative journalist, who for tiple risks. They can be hugely suc- tional Originals at Netflix. “We’ll con- decades covered political scandals cessful, as demonstrated by the Ger- tinue to look to books to find new and corruption cases in the Balkan man series “Babylon Berlin”, by star voices,” she said, “especially as we’re region. He then turned the essence of director Tom Tykwer, with its fulminant expanding into the African continent. his cover-up stories into a book, which dive into Berlin’s legendary 1920s as There’s a lot of great literature there.” was initially selected for serialisation an early modern metropolis, bursting (Publishers’ Weekly, 12 April 2019, by a local TV channel, albeit in a fic- with political turmoil, sex and crime. www.publishersweekly.com/pw/by- tionalised adaptation. At some point, The series is loosely based on the first topic/industry-news/page-to- Netflix noticed. They found it interest- book in a series of crime thrillers by screen/article/79793-the-netflix-liter- ing for a wider audience, and turned German author Volker Kutscher (“Der ary-connection.html ) it into a “Netflix Originals” series, nasse Fisch”, or “The Wet Fish”, 2008). Or, as New York Times columnist Far- “The Paper”. Without doubt, it has brought the had Manjoo summarised it, when Adapting good journalism into a fic- writer recognition and solid sales, but Netflix’ Mexican production “Roma” tionalised story has become a com- nowhere near the top of the bestseller competed successfully at the Oscars mon process lately. Misha Glenny, a charts. in February 2019: “Instead of trying to seasoned British journalist, who started In France, Canal+ turned the bestselling sell American ideas to a foreign audi- his career reporting on the Balkan “Vernon Subutex” by Virginie Despen- ence, it’s aiming to sell international wars, moved on to explore interna- tes into a series. The three original ideas to a global audience.” tional organised crime. His non-fiction books were characterised by one (NY Times, 22 February 2019, account “McMafia” was subsequently critic as a “Condition humaine” about www.nytimes.com/2019/02/22/opin- fictionalised for a highly successful TV “France losing itself between hate ion/sunday/netflix-oscars.html) series produced by the BBC. and deprivation”. The celebrated One of the most unlikely examples of author chose to stay away from the local prose ending up as a global first screening, frustrated by the film 5. The outlook: narrative is the original story behind people, who “didn’t grasp a thing” one of the most popular historical about her story. (Allociné, 16 May 2019, stormy weather or role-playing games worldwide, “The www.allocine.fr/article/fichearticle_ Witcher”. In 1986, in the industrial city gen_carticle=18681360.html) climate change? of Lodz in then Communist Poland, Alienated authors are certainly a 38-year-old Andrzej Sapkowski won a common point of conflict, as directors competition run by the local maga- and producers often make decisions The book and reading markets have zine “Fantastyka” with his story in their adaptations that the writer already changed profoundly over the “Wiedźmin”, or “The Witcher”. That finds hard to accept. But today’s past few years, although many pro- short story introduced the hero Geralt working methods, especially for the fessional observers have hardly of Rivia. It laid the foundation for the production of serials, usually involves noticed the fact. For the main part, now iconic work that spans books, teams in a “writers’ room”, are trans- the transformation is not only about games and films. As Netflix summed forming what used to be a solitary new players, new perspectives or new up their reasons for turning the fran- process into an exercise of industrial competition involving Netflix or Ama- chise into a streamed TV series, three creation, with little room for manoeu- zon or Disney. Many outstanding film decades later, it caters to “legions of vre by individualistic authors. adaptations – and even more often, fans worldwide” (Netflix press release, Perhaps even more important is the TV series – do not derive from current 17 May 2017). The series is due for complex and competitive system of bestselling book titles, even though release in 2019, with former Superman sifting, filtering and framing a story or such multi-hit wonders do occur. actor Henry Cavill starring as Geralt. an idea before it is finally selected for Elena Ferrante’s “Una amica geniale” (See the “Diversity Report 2018” the screen, as a product that should is one such example. for a more detailed account: ideally attract audiences worldwide. Perhaps more often, hungry produc- www.culturaltransfers.org ) Paradoxically, this does nothing to ers and content developers pick up There are countless examples of produce more globally streamlined books of an entirely different charac- adaptations of hardly recognisable content. ter, often years or even decades after books, or of original TV series, which, The global player Netflix has reversed their original publication. These might at different moments over the past this approach, turning to more even arise from contexts that would decade or more, have tapped suc-

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cessfully into the zeitgeist and explored issues of relevance to global audiences, fully justifying their production as stories that resonate with people all around the world, in their daily lives and their aspirations. A number of provocative questions arise from this observation: // Do audio-visual creatives have better antennas, ingenuity or intu- ition than book publishers, enabling them to connect these stories with their audiences? // Or are book people somehow too detached from peoples’ minds and concerns? // Is this just a temporary irritation from some heavy weather front, a hyped up distraction, while, in the long run, publishers will always pre- vail as gatekeepers for the stories that matter, without getting their feet wet from the adversities of climate change? The challenge facing publishers is as exciting as it is demanding: Publishing is embedded seamlessly between all the other content and media industries, and it has to compete with them for the attention of the consumers. Readers are also always listening to, and watching out for stories that excite them. Authors can speak to readers and to other audiences more directly than before. And the consumers are only just starting to learn how to choose from the abun- dance confronting them. This dramatically changes the publishers’ responsibility. Not only must they carefully curate what they pro- pose to their customers, they must also learn to engage directly with their many different audiences, and to do so as individually and as profoundly as they can. This is a hard thing to do, certainly, but it is also a rewarding vocation.

13 / 14 The Business of Books 2019: Publishing in the age of the attention economy – presented by Frankfurter Buchmesse Business Club About the author

About the author andAbout the the materials author and research reports quotedrelated toin thethe Business of Books 2019 Business of Books 2018

Rüdiger Wischen- www.wischenbart.com bart is the founder Blog wischenbart.com/booklab of Content and Twitter @wischenbart Consulting (RWCC), which specialises in analysing the transformation of international publishing, and related cul- ture and media markets. He also co-founded the non-profit BookMap initiative. His reports include the “Global eBook” reports (since 2011), the “Digital Consumer Book Barome- ter” (since 2019), the “Global 50 Rank- ing of the International Publishing Industry” (since 2007), the “Diversity Report” series on translated fiction markets across Europe (since 2008), and “How Big Is Global Publishing?” Michaela Anna Fleischhacker, RWCC, contributed to this report.

Imprint Copy editor: Alastair Penny The white paper “The Business of Books 2019” Cover Design: Vier für Texas is presented by the Frankfurter Buchmesse Adaptation: www.weirauch-mediadesign.de Business Club.

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