Page last updated at 15:41 GMT, Thursday, 12 February 2009

Media revolution: title fight

By Sarah Murch
BBC Money Programme

Hillary Clinton
The power of celebrity marketing has long been known

The once genteel world of publishing is going through a huge transformation with constant advances in technology and an increasingly competitive market.

More than 200 million books were sold in the UK in 2008, but both the types of books sold and the way people buy them are changing.

One of the most obvious boom areas in publishing is the rise of the celebrity book.

Every year, during the countdown to Christmas, this market explodes.

But the stakes are high, and each year some publishers will make huge losses if they do not get it right. In 2008, Transworld Publishing's celebrity book offerings included Paul O'Grady's autobiography. Managing director Larry Finlay signed up Mr O'Grady and insists there is a lot of money involved in backing celebrity titles.

"Seven figures. Loads. A lot. But it's going to generate more than that," he says.

"We've not had a really big expensive mistake for a long time, but they do happen.

"Every year, there are too many books chasing the same Christmas present pound and some won't work."

Cross subsidies

Many believe that the popularity and success of celebrity titles not only has an effect on the economics of the book trade but is also affecting what is being published.

Ian McEwan
Katie Price's profit may well be helping the publisher who publishes Ian McEwan or the next Ian McEwan
Neill Denny, The Bookseller

"It's like the BBC," says author Fay Weldon.

"I suspect you know a lot of money goes to a few people and that keeps a lot of other good people out.

"It happens everywhere if ratings are what you are worried about. If money and profit is what you're worried about rather than history or standards or whatever, this is bound to happen, things will go downhill."

But another way of looking at the success is that these titles help support less commercially appealing books.

The Bookseller's Neill Denny believes there's a balance

"If everyone bought Katie Price, that would matter," he says.

"The point is, some people are buying Katie Price and some people are buying Ian McEwan and Katie Price's profit may well be helping the publisher who publishes Ian McEwan or the next Ian McEwan."

The Net Book Agreement

Until 1995, the sale price of books was fixed under the Net Book Agreement.

The agreement meant retailers had to sell at the price recommended by the publishers.

The collapse of the agreement meant the supermarkets could apply their discounting skills to books.

It was the first time the full commercial pressures of the market were introduced to the book trade.

"The very morning after the Net Book Agreement went, I got a phone call from a publisher saying we've got a chance to get X author's books into supermarkets. 'They'll take 10,000 copies but only if we agree to supply at a minuscule price. Will your author take a lower royalty than is in the contract?' It's a compromise and it feels a bit like blackmail," she says.

Since the net book agreement ended in 1995, about 500 independent bookshops have closed down. They cannot compete on price as they cannot buy in bulk like the supermarkets and other mass retailers.

Price wars

Since the collapse of the agreement, price wars, aggressive marketing and discounting have come to characterise the book trade.

Amazon worker
Amazon is constantly working to reduce book prices

Consequently, the price of books has come down as consumers shop around for better prices.

"There has certainly been a reduction in the price of books," says Gerry Johnson, managing director of book store chain Waterstone's.

"A really good example of this would be an author like PD James where we've seen her titles that she sold in 1994 in hardback would typically have been 15 or 16. Her latest title this year is typically around 10."

Marketing

The success of a title can boil down to how prominently it is placed on the shelves in a bookstore.

Books that are selected for a place at the front of a store are picked on merit, and those books can sell hundreds, even thousands more copies, explains Mr Johnson.

In return, some publishers have to pay a "small marketing fee" that covers the cost of marketing the book, he adds, though not all of the best shelf space in the stores comes at a price.

There are tables in each store that carry books of specific interest to local readers and there is no fee to publishers to get their books on these tables, he explains.

Marketing fees for promotion by book stores can be significant, agrees Mr Finlay.

"Depending on the level of promotion and the level of retailer," he explains, payments can range from 1,500 to as much as 100,000 "for a really big title".

"A lot of money to get the book selected, to get it space, and it usually works."

Richard and Judy

Television, and one show in particular, has had a dramatic effect on the book industry.

The Richard and Judy book club has had a phenomenal impact and it has created several millionaire authors.

Behind the show is the most powerful woman in British publishing, TV executive, Amanda Ross.

Ms Ross started the book club in 2004 on Richard and Judy's show.

She personally selects the books for their lists.

"I'll pick up a book and read a few chapters," she says.

"If I like it, it's through to the next stage.

"I tend to read more of the books I don't like to make sure they should be pushed out and not go through."

The internet

Another revolutionary change that has affected the book trade is the rise of book-sales on the internet.

Amazon, which is particularly powerful, is constantly trying to convince publishers to sell books for less.

"Amazon's discounting is very much in line with what the other large retailers do," says spokesman Chris North.

"I don't think we're talking about a uniquely Amazon phenomenon. Price is important to customers."

Foreign Sales

The book trade increasingly requires new revenue streams to survive.

Exports make up about 40% of British publishers' overall book sales, according to the Publishers Association.

Literary scout Jane Southern attends the Frankfurt Book Fair to tip foreign publishers off about the British books they should be looking to invest in.

"The book fairs act as a focus for the year," she says. "One in April or March and one in October."

The agent will gear the delivery of manuscripts for those times so they will try and encourage the authors to deliver the month before."

Winners and losers

After years of upheaval, the traditional book world has been transformed.

With sweeping changes brought about through advances in technology, the advent of tougher competition and exposure to the full pressures of the market, many are clear about who the winners are and who has lost out from the revolution.

Some think that the profits in the book trade are increasingly being shared amongst fewer big players.

"I think the winners are the big commercial houses, the big multi-national conglomerates," says literary agent Carole Blake.

"The winners are certainly some of the big bookselling chains.

"I think the people who have lost most are probably the independent booksellers and the authors whose careers have been brought to a stop prematurely because they haven't produced a best-seller."

Author Will Self believes the book revolution benefits everyone.

"Books have become cheap," he says. "They are fabulously discounted, they'll be delivered to your house the next day. What's not to like?"

Neill Denny of The Bookseller believes the seismic changes in the book world have led to a more democratic list for readers.

"The market is better reflecting the tastes of the entire population rather than an educated elite that went to bookshops," he says.

"That educated elite are still going to bookshops and buying books, but loads of other people are buying books now that weren't 10 or 20 years ago.

"I think that's a good thing."

Figures suggest that as many titles are being published now as ever before. Readers still have an appetite for quality.

Media Revolution: Title Fight. Broadcast 1930, BBC 2, Thursday 12 February 2009.



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