Book Publishing
SIC 2731
NAICS 511130
The international book publishing industry includes publishers of mass-market, trade, academic, reference, electronic (e-book), and specialty books. For discussion of other print publishing trades, see also Newspaper Publishing, Periodical Publishing, and Printing, Commercial.
Global spending on books US$85.3 billion in 2000, and was expected to continue its growth of 4 percent annually to reach US$104.6 billion in 2005. The international book publishing industry faced significant challenges in the early 2000s. World demand for books, which had once topped US$80 billion, dropped significantly in 2002. Numerous factors in 2001 and 2002, most conspicuously the terrorist bombings of September 11, 2001, had thrown the industry into one of its worst downward spirals ever, threatening independent booksellers in particular and causing layoffs even among Amazon.com and the large independent chains. In response, some publishers, notably German giant Bertelsmann AG, owner of U.S.-based imprint Random House, engaged in unprecedented slashing of costs and employees in all sectors—including dictionaries and travel books, as well as high-ranking Ballantine imprint editors, executive editor Peter Borland, and nonfiction editor Jeremie-Ruby Strauss. The company's actions, and its unwillingness to provide the business press with exact information, led to fears that defensive strategies and cost slashing had replaced aggressive marketing as the new strategy for book industry survival in the 2000s.
In contrast to Random House, however, two other prestigious book publishers questioned the Bertelsmann budget and staff cuts, arguing that an aggressive but more positive strategy was needed in spite of two soft budget years. The two publishing houses that planned "business as usual" for the immediate future were the Penguin Putnam division of Pearson, the world's second largest book publisher; and the prestigious HarperCollins book division of News Corporation. Following the publication of the Penguin Putnam and HarperCollins strategies, a Bertelsmann-Random House spokesman told Publishers Weekly that he defended what appear to be the industry's most all-encompassing budget slashes in the face of hard economic accounting realities since 2000, in general, and September 11, in particular.
Though book sales began to improve slightly by late 2001, as consumers returned to the stores by Christmas, profits remained elusive for many industry players, as sales grew tepidly through 2003. Not until 2004 did the situation appear significantly brighter, as the global economy improved and book sales picked up in several major markets: weekly sales in the United Kingdom in May 2004, for example, rose 11.1 percent over revenues for the corresponding period in 2003. Guardedly optimistic that a leaner, better-managed book business might indeed rebound, industry members nonetheless admitted the need to contain rising production costs and attract a wider customer base in order to boost growth and profits.
With the worst of the slump apparently over in 2004, analysts Veronis Suhler Stevenson predicted that sales of consumer books in the United States would grow at about 1.9 percent through 2008. The United States led all nations in book shipments, with a value of US$19.53 billion in 2003, but the jarring side of that statistic is that only five conglomerates publish 80 percent of U.S. trade books, according to former Pantheon book executive Andri Schiffrin, author of The Business of Books: How International Conglomerates Took Over Publishing and Changed the Way We Read.
In the early 2000s, the increasingly interlinked world economy coupled with an increasingly educated and affluent global book-buying public suggested that—predictions of the death of the book as a medium notwithstanding—the international book publishing industry could look forward to steady, if unspectacular, growth in the remainder of the decade. The global adoption of U.S.-style intellectual property and copyright principles, the solidification of English as the lingua franca of world commerce, and the opportunities offered by new electronic formats (including the Internet) and distribution channels (such as online booksellers) gave the world's book publishers cause for some optimism. Major challenges, however, include:
controlling enormous advances for new titles (which may be US$5-$10 million or more for sought-after writers and up to the US$8 million paid celebrity politician Hillary Clinton by Simon and Schuster in 2001);
acquiring and protecting rights to foreign editions and fighting textbook piracy in Asia;
rising book prices;
escalating paper costs;
managing excessively large print runs;
rising return rates from booksellers; and
escalating costs associated with development of electronic books.
However, along with big expenses can come big profits if customers can be lured into stores by blockbuster books and celebrity writers such as John Grisham and Stephen King. As a result of 2001 releases of movies based on J.K. Rowling's Harry Potter books and the J.R.R. Tolkien's The Lord of the Rings series, stores did high global business with both authors, including boxed books sets by each author. Houghton Mifflin tallied sales of US$4.5 million for The Lord of the Rings in 2001, a tenfold sales increase over 2000 sales for that title. Even before the release of the sixth Potter book, Harry Potter and the Half-Blood Prince, in July 2005, Rowling's total sales had reached 250 million copies. Ever looking for prodigious receipts from tie-ins of best-selling books with hot-draw films, Viacom Inc. merged Simon & Schuster books with its film division in 2002, hoping for more cinema successes based on Simon & Schuster books such as A Beautiful Mind, by Sylvia Nasar.
The publishing industry deals in content development and marketing more so than in formatting the content on pages, which many times is done by independent typesetters or compositors, or in physical manufacturing of books, which may be outsourced to independent printers and binders. The book publishing process begins with an idea proposed either by a querying author (or a representing agent) or arising from the publisher itself. Once a concept is proposed, the publisher normally performs a market analysis to determine, for example, whether other books in the market cover the book's subject matter, and reshapes or rejects the book's concept accordingly. After it has been determined that the book's projected sales, minus anticipated production costs, can generate a profit for the publisher—and even sometimes when this is highly uncertain—a final decision is made to proceed with the project, and the development or acquisition of the book's content is secured through a cash advance to the author or some other form of book contract. As the author completes the actual writing or rewriting of the book—or responds to the editor's changes—the publisher's design and marketing staffs determine the book's type specifications, size, artwork, cover design, and marketing/distribution strategy. When the content of the book reaches its final form, the book is sent to a typesetter or is composed in-house. The typesetter may produce camera-ready copy (a high-resolution, formatted print copy of the entire book), film, or a digital file for the printer, who then creates plates of all the pages for use in a printing press. Plates also may be engraved by a specialty firm rather than the printer. After a book's pages come off the press, they are bound and the cover is attached. The finished books are usually shipped back to the publisher's warehouse for distribution.
Some 10,000 book publishers in 180 countries constituted the international book publishing industry at the beginning of the 2000s. The products of this industry can be divided into five major categories: 1) trade books; 2) textbooks; 3) technical, scientific, and professional (TSP) books; 4) mass-market paperback books; and 5) all others.
In recent years, the largest segments of the world book industry were publishers of college textbooks (approximately 1,750 publishers worldwide); directories and reference books (1,600 publishers); children's books (1,500 publishers); juvenile and young adult books (1,400 publishers); scholarly books (1,300 publishers); and professional books (1,250 publishers). A substantial number of the world's book publishers also published hardcover general trade books (1,250 publishers) and paperback trade books (1,250). Other book categories widely represented internationally included secondary textbooks (approximately 775 publishers); foreign language and bilingual books (700 publishers); mass-market paperback books (700 publishers); belles lettres (or literary) books (700 publishers); and dictionaries and encyclopedias (625 publishers).
As the book industry became more global in the 1980s and 1990s, the issue of copyright—the legal protection accorded to an author for his or her intellectual product—grew in importance. The global book industry is governed by various conventions regulating the protection of book copyrights in the world market. The Universal Copyright Convention of 1952 requires that each signatory nation provide foreign works with the same copyright protection given to books published within its own borders. Similar copyright protection agreements observed by various countries worldwide...
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