Thursday, October 25, 2007

Australian publishing and decreasing opportunities for authors

There are some worrying trends in the sales of books in Australia. Sales of books declined by 19% after the introduction of the goods and sales tax (GST) in 2000, but GST cannot be regarded as the only as sales also fluctuated downwards by 20 million or 15% in 1997-98. They surged back in 2001-02, but operating profit for publishers continued to decline, particularly for the top 20, and sales again declined in 2002-03. The value of sales, however, has increased year by year, except in 2000-01 when GST was introduced, until 2003-04. The proportion of Australian books making up these sales has also increased to 64% in 2002-03, a proportion much the same for consumer books as education books (the figure is about 1% lower for educational books), but the figure dropped in 2003-04 to 60%. Sales of educational books also declined and sales of Australian fiction plummeted.
There are some in the publishing industry who look at these figures with alarm and argue that publishing is in decline, under threat from electronic competition from DVDs and computer games. But it should be remembered that the number of books published in Australia plummeted 20% in 1981, with consequent loss of sales, and the market recovered, even under the threat of videos. Books have shown remarkable resilience, even as the level of readership appears to be decreasing. What is remarkable is that readership levels maintain a relatively high standing despite the increased demands on leisure time provided by electronic alternatives.
Even so, there is plenty to be concerned about regarding the publishing of books relevant to Australia’s literary culture. The sale of Australian-originated books declined by $50 million in 2003-04 after healthy increases in previous years. The industry has only been subject to this degree of analysis since 2000, but the ABS does not propose to continue to survey the industry in such detail any longer, so this snapshot, inconclusive as it is, may be the only information retrievable on the state of Australian-originated publishing. The Australian Publishers’ Association, whose membership is dominated by large, overseas-owned corporations, interprets this information differently in the September 2005 APA Update. The APA records “the news is pretty good” and so it is for overseas-owned publishers. Profitability increased in 2003-04, a result of lower costs, even though sales dropped $18 million on those in 2002-03 and the hardest hit part of the market was Australian-produced books.
The publishing of Australian originated fiction publishing appears to have reached a peak of $125.2 million in 2001-02 when the category outsold imported fiction ($102.5 million) and is declining. Only $73.1 million in sales of Australian fiction were achieved in 2003-04 compared to $116.6 million for imported fiction. Generally, figures show mass market paperbacks have the highest sales value compared to trade paperbacks and hardbacks. Because the unit price of mass market paperbacks is much lower, however, the return to an author per copy is much less, assuming that all authors receive a royalty of 10% of recommended retail price (and publishers like Penguin are trying to drive the royalty rate even lower).
The decline in sales of Australian-originated books is reflected in the fact that royalties and fees paid by publishers in 2003-04 declined 11% on the previous year.
Sales of the nonfiction category, which covers cookbooks, self-help, and a diverse range of other subjects, is increasing. This is supported by data from Nielsen Bookscan which shows that nonfiction titles make up 53% of the market for books while fiction makes up 28% and children’s book make up 18%. ABS data show non-fiction books, both Australian and imported, were worth 59% of general content sales in 2003-04.
Sales of Australian originated childrens’ books increased in 2003-04, but this market segment is still dominated by imported books.
Of concern to all authors is the fact that the average selling price of Australian titles dropped from $11.36 to $9.10 (a 20% decrease) between 2002-03 and 2003-04. For royalties calculated on the selling price, this represents a drop in income for authors. In contrast, the average salary of a publishing company employee rose 9% to $52,300. Editors also had an award increase.
The market share of imported books is also a threat to Australian authors. The increase in non-fiction is not compensating for the drop in sales of fiction.
While the number of new titles in 2003-04 is marginally greater than the previous year, these titles appear on the face of the sales information to have lost market share.
More information is available in my publication Current Publishing Practice.

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