Publishers and booksellers are defying the crisis – books could become more expensive

With a good final spurt, the German book trade association expects the book market to close slightly below the previous year’s turnover of 9.6 billion euros. Overall, however, business would be robust. Despite all the prophecies of doom, sales of books in this country had not collapsed in previous years, but even grew by four percent between 2006 and 2021.

“We see that people still read a lot and that books are held in high regard in society,” says Thomas Rathnow, head of the German Penguin Random House publishing group (PRHVG), which belongs to the Bertelsmann media group. With a market share of around 13 percent, the publisher is the market leader in Germany for books for the general public, ahead of Bonnier and Holtzbrinck.

Additional costs of up to 50 percent

This year, the industry is not only struggling with cautious consumers, but also with rising costs, especially for paper. According to the Federal Statistical Office, companies had to pay 30 percent more for it this fall than a year earlier. Many publishers have passed on the costs: In the first nine months, books cost almost five percent more than in 2019, according to figures from Media Control.

The current developments in paper and energy prices are not yet included, says Rathnow. “The previous price increases are catch-up effects because, according to some observers, the industry has probably been too hesitant on the subject in recent years.”

Readers have to be prepared for further rising prices. According to the industry association, publishers are expecting production costs to rise by 50 percent this year and another 20 to 30 percent next year.

Because paper is scarce, printers have to plan for the long term. This makes it difficult for publishers to reprint books at short notice if demand is unexpectedly high. For this reason, bestsellers could become scarce in the coming year. The Christmas business should not be affected.

Searched digitally, but read it in print

The rising paper prices hit publishers particularly hard because they still make 80 percent of their sales with printed books. “Many people don’t want to read screens in their free time and prefer to read the printed book,” says PRHVG boss Rathnow.

Books are increasingly being searched for and ordered on the Internet: in 2021 the industry generated 28 percent of its sales from digital sales, in 2017 the proportion was still 20 percent. At the same time, the share of turnover from the stationary book trade fell from 47 to 39 percent. This can be explained by the changed buying behavior caused by the pandemic.

The book industry has benefited from Corona because many people spent more time reading during the lockdowns. Sales increased by 3.6 percent between 2019 and 2021. Because of the restrictions, sales of travel books fell during this period, while suppliers of cookbooks benefited.

escape from reality

This year, readers have increasingly resorted to fiction. In the first eleven months of the year, sales in this genre rose by 4.2 percent, and customers had already bought more popular literature during the pandemic. The industry earns every third euro with this genre.

For Verlagsmanager Rathnow, the plus in the area of ​​fiction is remarkable against the background of a flat market. “In times of many crises, this can be explained in part by the fact that many people want to escape from reality a little.” This is consistent with the fact that sales of non-fiction books fell by 8.7 percent, as did works from the natural sciences (minus 15 .7 percent) or the economy (minus 12.2 percent) lost ground this year.

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During the pandemic, sales of children’s and young people’s books increased, with a minus of 4.3 percent in the first eleven months of the year. Rathnow reports that young women and men are being inspired by book ideas on digital platforms such as the short video service Tiktok. When buying books, young people also pay attention to the aesthetics of the book, for example how the cover is designed. In addition, younger people would increasingly read English-language literature.

Fewer bookstores, fewer publishers

Overall, fewer and fewer Germans are reading. In 2020, 28.4 million people aged ten and over bought at least one book, but in 2021 it was only 27 million, according to figures from market researcher GfK. Rathnow says, for example, with a view to the growing competition from streaming services: “The competition for consumers’ time budget is increasing.”

Unlike many newspapers, the book industry was well advised not to offer high-quality content on the Internet for nothing, says publishing manager Rathenow. “Many readers will continue to be willing to buy books about the existing business models in the future, which are financially more attractive for authors.”

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In the future, however, there will be fewer bookstores and publishers. The stationary business with over 5000 bookstores in Germany is large in international comparison. However, many owners of smaller bookstores are closing their shops for financial reasons or because of old age. In addition, in 2019, the industry leader Thalia took over the regional chain store Mayersche. The market has thus become more concentrated: in 2022, ten percent of bookstores will generate more than three quarters of total sales.

The development among publishers is similar: 2000 still exist in Germany, but in this country two percent of the publishers account for 85 percent of the total turnover. Most recently, the world’s largest publisher, Penguin Random House in New York, tried to take over the world’s number four, Simon & Schuster. That failed in a US court because it was concerned that competition would be restricted.

More: The Bertelsmann subsidiary Penguin Random House has failed with the purchase of the book publisher Simon & Schuster.