Publishing News of the Week (28.09.2020)
Can Bookshop.Org, the New Indie Online Bookshop, Compete Against Amazon?
In recent news, Bookshop.Org, the online indie bookshop platform, announced that they are now available for UK trade and will be open to consumers this November. In the US, Bookshop.Org has already raised over $6.5 million for independent bookstores that are affiliated with the online store.
This is an exciting time for the UK independent book market. Bookshop.Org say that they have a mission to “financially support local, independent bookstores.” It is also worth noting that Bookshop.Org was set up for the public good with bylaws that state it can never be sold to a major US retailer, including Amazon. With this in mind, Bookshop.Org should be a powerful force and ally for indie publishers and bookshops alike.
The founder and CEO, Andy Hunter, said that Bookshop.Org was created to counter Amazon’s monopoly on online book sales. He stated:
“Amazon is rapidly acquiring more and more market share and independent bookstores, in particular, don’t have the resources or the means to compete with Amazon.”
The current way that Bookshop.Org operates will be similar to its UK counterpart: independent bookshops will be able to create their own online shop profile for the site and share recommended book lists for customers to browse. Stores will earn 30% of the cover price on any sale that comes through their links, book lists or shop page.
Additionally, the site has a scheme to rival Amazon’s own. Currently, the US retail giant pays media sites and other platforms for linking through to its website in their books coverage. Bookshop.Org does the same, paying affiliates 10%. The indie retailer will also offer discounts of up to 10%, which will not affect the amount paid to stores.
It is interesting to see Bookshop.Org branching beyond the US at a time when online sales are crucial. Perhaps in the future, the indie online retailer may become global, and potentially become a strong contender with Amazon.
For now, the plans for the UK launch are set to look formidable, with Nicole Vanderbilt, the former international VP at Etsy, to be appointed as UK Managing Director. Bookshop.Org is also working with UK wholesaler Gardners, who will be managing the packaging and distribution of all books.
Hunter has said that the goal for the UK is £10m sales annually, though he added that he would be happy to hit half of that in the first year.
Bookshop.Org’s venture into the UK market has received lots of positive responses, namely from Meryl Halls, the Managing Director of the UK’s Booksellers Association, who stated that
“Bookshop.org emerge as an innovative partner for U.S. indie booksellers, and its mission to support and empower bookshops online is ever-more important in the U.K. – especially now, as the high street rebuilds, consumers tentatively return to shops, and retailers need to continue to offer a hybrid model to their customers."
Before the pandemic, many indie bookstores did not have any kind of online retail operation and struggled to compete with Amazon. As COVID-19 continues to loom, Bookshop.Org are offering a wonderful alternative for readers and those who are passionate about the survival of independent bookshops and publishers and the diversity that they offer.
As Halls concludes,
“A high-profile alternative to Amazon in the lead up to Christmas can only help high street independents achieve increased cut-through online with Amazon-averse consumers, authors and others who want to support their local high streets and shop independently.”
Bertrams Blames Amazon for Struggles
The Bertram Books saga continues as a statement reveals the reasons behind the distributor’s collapse. Previous speculation had been rife, but in light of the recent statement, it appears that Amazon’s aggressive practice has been blamed.
Administrators Martin Armstrong and Andrew Bailey of Turpin Baker Armstrong revealed:
“The Group began experiencing increased financial difficulties in September/October 2019 when Amazon began purchasing from publishers directly instead of buying from distributors.”
Undoubtedly, Amazon’s decision to improve its profit margins with disregard for distributors, reflects the extent to which Amazon continues to disrupt the traditional book supply chain. However, if this played a major role in the collapse of Bertrams then publishers themselves must share part of the blame for taking away some of their business.
Amazon was only one of many contributing factors as the statement went on to reveal that in April 2020, the company was issued a demand over a three million debt owed to Hachette UK.
In light of this statement we now have a deeper insight into the state of Bertrams’ finances before the company collapsed. Although distributors play a valuable role within the supply chain, the industry is likely heading in the direction of a more streamlined process with increased direct contact between publishers and retailers.
Frankfurt Book Fair Set to Be a Virtual Event
As the largest book fair in the world, Frankfurt is one of the main highlights on the publishing calendar. For months, confidence had been high that the fair would be able to go ahead as planned despite the disruption caused by COVID-19. Whilst large publishers including Penguin Random House had already pulled out of the fair, organisers were hoping that physical exhibitions would take place alongside a digital programme.
Back in June, the fair was confirmed to be unaffected by Germany’s mass events ban. However, on 8 September it was announced that these plans have now been abandoned except for a small number of live events that will take place around the city. How will this affect rights sales?
Karin Schmidt-Friderichs, Chairwoman of the German Publishers and Booksellers Association, commented:
“Frankfurter Buchmesse is not only the world’s largest book fair, it is also a constantly evolving enterprise. Lively, agile and adaptable. Given the current situation, this means a fair without an on-site exhibition in 2020 because of the more stringent corona restrictions being imposed once again. However, events in Frankfurt am Main and other cities will allow people to experience the thrill books can provide – live in Frankfurt, as well as through live streams and recordings accessible at the viewer’s convenience.”
In the past there has been much debate over whether we still need physical book fairs, and undoubtedly the impact of COVID-19 will take this debate in a new direction if Frankfurt’s digital programme proves a success. In a digital age, much of the activity involved in a book fair can be done online and will save smaller publishers the time and expenditure. However, it will prove difficult to capture the spirit of the physical affair in a digital event, as opportunities for networking outside of publishers’ pre-arranged meetings will be greatly reduced. Publishers spend months organising their schedule in advance for the fair, so although they may miss out on some opportunities, rights deals are unlikely to be significantly affected.
Ultimately, there is no substitute for the face-to-face contact that enables publishers to develop new working relationships, and whilst Frankfurt’s new plans are making the best out of the situation, we will all look forward to a time when publishers can gather together again.
Strong Acquisition Activity Among Publishers Post-Lockdown
We all tightened our belts a little during lockdown. Big publishers, though, seem to doing fine…
In August, ViacomCBS announced their plan to sell Simon & Schuster, one of the big five publishers here and in the US. This comes in a move to focus on streamlining the business and the desire to move away from trade publishing. Robert Bakish, CEO of ViacomCBS, confirmed the desire to streamline their assets “is not a core asset. It is not video-based. It does not have significant connection for our broader business.”
According to ViacomCBS, publishing revenue dropped 1.3% in 2019 to $814million and this only accounts for 3% of the company’s total revenue. Despite the drop, they are expected to seek more than $1.2 billion for the publisher. The cash is likely to be more useful than a publisher in changing their new business efforts, and will provide one buyer with a reputable company and a rich backlist to exploit.
The buyer is looking to be Bertelsmann, the parent company of Penguin Random House. We all remember the merger of Penguin and Random House in 2013, and its creation of the largest global publisher, but since then they have also been “the most active player in the consolidation of the book publishing market”, according to Thomas Rabe, CEO of Bertelsmann.
This would undoubtedly entrench the rest of the market and make the race to buying one similar to one between Usain Bolt and myself! With an acquisition like this, the UK’s Competitions and the Markets Authority (CMA), US’s Department of Justice (DoJ), and other competition organisations are likely to be interested in evaluating the outcome of the purchase for the book market.
In other Merger and Acquisition news, on 31 August 2020 Hachette UK announced the acquisition of Laurence King Publishing (LKP). LKP is the leading gift publisher and one of the company’s top three art publishers. This is part of Hachette’s goal to diversify their specialist areas, by acquiring those who are already leaders in the field, such as Bookouture and Jessica Kingsley Publishers.
Laurence King, MD of Laurence King Publishing, has said “I have no doubt that it will… preserve LKP’s culture” and David Shelley, CEO of Hachette UK, has said that “there is a huge amount we can learn from LKP” and that he looks forward to working with the whole team.
LKP will be split into three different imprints: the gift, trade and art will move to Orion; student and professional publishing will move to Quercus; and LKP’s children’s publishing will become part of Hachette’s children’s.
No price has been revealed at this time.