[an error occurred while processing this directive]
BBC News
watch One-Minute World News
Last Updated: Thursday, 22 September 2005, 21:14 GMT 22:14 UK
Publishers fear lost grip on book world
By Guy Robarts
BBC News business reporter

Ottakar's branch
Publishers pray for a happy ending to the Ottakar's takeover saga
A nail-biting saga is gripping the world of publishing as the Ottakar's bid battle threatens to shift the balance of power over to booksellers.

Last week's 96.4m ($177m) takeover offer for Ottakar's from HMV - which already owns Waterstone's - is likely to land the enlarged retail group with a near 25% market share.

Concerns are mounting from publishers, both large and small, that if the deal goes through Waterstone's and Ottakar's would have an unfair advantage.

Friday is the deadline for submissions to the OFT and publishers are expected to rally strongly against HMV's bid in the hope of winning a referral to the Competition Commission.

The whole power dynamic has shifted towards the retailers
Joel Ricket, The Bookseller Magazine

An enlarged group would enable cheaper deals from publishers - Waterstone's has 194 stores across the UK while Ottakar's has 137.

Opponents of the deal fear new authors and books would be given less of a chance to do well and that retailers would have a bigger say as to which authors or books are rewarded the loudest fanfare.

"The whole power dynamic has shifted towards the retailers," says Joel Ricket, deputy news editor at The Bookseller Magazine.

One book chain could, theoretically, have the power to destroy an author's life.

Low risk market

Commentators say the industry is starting to resemble the movie business where the window of opportunity for selling has shrunk.

If a film fails to grab the audience in the first weekend it can find itself going straight-to-video. It is becoming rarer for a book to be on the shelves long enough to take off purely on word-of-mouth, which many great works have relied on in the past.

Ghost writer
Money talks through ghost-written celebrity masterpieces

This in turn, has hit advances paid to authors. Publishers will pay smaller amounts for quality writing because they no longer feel the need to take a long term view of its sales prospects.

"Publishers have to hold their nerve. One of the worst things to have happened recently is that you give authors a couple of books and if they haven't made it within those two books then you have to move on," Victoria Barnsley, chief executive of HarperCollins UK told the FT this week.

Meanwhile, as upcoming and established authors are pushed aside, the market for celebrities with no track record has grown.

"New books are offered less of a chance to do well, particularly new authors or more difficult books" says Joel Ricket.

At the moment Ottakar's and Waterstone's push different offers for different books. An HMV takeover could "reduce the airtime for different authors", Mr Ricket says.

A new chapter

Ottakar's, which has recently suffered a like-for-like sales slump, is counting on books from the forthcoming TV series by chef Jamie Oliver, TV personality Sharon Osbourne and a book about England Ashes hero Freddie Flintoff to boost sales in the all-important Christmas trading season.

And these are perfect fodder for supermarkets which are keen to get in on the mass-market act as they steer away from simply selling groceries.

Large chains - 39.7%
Other bookshops - 15.9%
Bookclub/mail order - 15.9%
Other retail - 12.4%
Supermarkets - 9%
Internet - 7%
Source: TNS

"The supermarkets do hold a lot of power because they can shift hundreds of thousands of those," says Mr Ricket.

On the plus side for writers, supermarkets have been credited with helping these books and authors reach the biggest possible audience, encouraging people who rarely set foot in a bookshop to walk into Ottakar's or Waterstone's.

The flip side, however, is that supermarkets are very aggressive on pricing and have reduced the perceived value of books in the eyes of consumers.

When customers see they can buy the latest Harry Potter more cheaply at Tesco or Sainsbury while they fill up their grocery trolley they are unlikely to migrate back to bookshops.

While the industry will always need publishing houses to churn out new authors with new yarns, the real power struggle in the final chapter could be between supermarkets and traditional bookshops.

"The High Street is mesmerised by the supermarkets," one unnamed publishing house told the FT this week.

"They are like rabbits staring at a snake. They can see that the supermarkets are achieving something and they are trying to figure out how to do it."

Ottakar's suffers new sales slump
22 Sep 05 |  Business
Ottakar's backs HMV takeover bid
13 Sep 05 |  Business
Bookshop bidders raise the stakes
06 Sep 05 |  Business
Ottakar's founders launch buyout
26 Aug 05 |  Business
HMV makes move on Ottakar's chain
25 Aug 05 |  Business
Cheap Harry Potters hit Ottakar's
21 Jul 05 |  Business

The BBC is not responsible for the content of external internet sites

Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit


Americas Africa Europe Middle East South Asia Asia Pacific