Wednesday, October 20, 2004

Sutherland's view

While I was off sick, Professor John Sutherland wrote a piece in the Financial Times magazine (9 October) about the state of the British book trade. (It's hard to get at FT stuff on the web unless you subscribe, so no link here.) Sutherland's article was essentially a review of a book by Eric de Bellaigue called British Book Publishing as a Business since the 1960s, plus a few recent bestsellers.

Sutherland describes the UK book trade as 'extraordinarily successful' on the grounds that it generates some £4bn a year.

Well, first of all, it is hard to find accurate figures about book-trade income, and I think the £4bn figure may be a little high. But even if we accept it, it doesn't mean that the trade is 'extraordinarily successful'. The British public spends about £11bn a year on lawyers' fees, and £10bn a year on the care of old people, and we don't normally regard those commercial enterprises as whizz-bang successes.

If we assume that publishers receive approximately half of what is paid into the bookshop tills, then publishers are generating about £2bn a year. This is rather less than the public spends on supermarket chicken.

Furthermore, Sutherland claims that 'every year the money turnover of the trade enlarges healthily.' I doubt whether this is true, at least as far as publishers are concerned, and after adjustments for inflation. Publishers are being squeezed hard, both by the high-street bookselling chains and, especially, by the supermarkets.

A few years ago, the Bookseller published an article listing typical profit margins in various fields of publishing. The term ‘profit margin’ can of course mean almost anything, but we will assume that on this occasion like was being compared with like. For business books, the average figure was 17.2%; for scientific publishing, 29.3%; and for consumer (trade) publishing 4.1%.

In other words, the part of publishing which makes the least money is the flashy part that everyone hears about: the big biographies and the Booker-winning novels. But since this is a world in which (as was reported on Monday) an editor can cheerfully pay £600,000 for a pair of books by Greg Dyke and Jon Snow, who can be surprised by the lack of profit?

Your attitude all depends how you look at things, I suppose. The good Prof may well see the book trade as bursting with health (at least for the moment; he has doubts about the future). Personally, when I look at it, it often strikes me as being sick unto death. Sometimes it looks as if the only signs of life are in the small firms. And long may they flourish.

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