Jane Friedman’s Hot Sheet Publishing Coronavirus Update

By Jane Friedman

https://hotsheetpub.com/

 

Virus-related changes in purchasing will create a chain reaction affecting the entire publishing industry

Each sector of the book-publishing industry faces unique challenges; here are the latest developments and reports from each sector.

US book sales update

So far, March has been a rollercoaster of results, with dramatic shifts in what categories of books now sell. NPD BookScan, which tracks the sales of print books (mainly those from traditional publishers), say that next week’s sales should indicate how resilient the book business will be.

Overall winners: Studying from home and what to do with the kids show the biggest gains, followed by reading for pleasure, including adult fiction. Workman  told The New York Times they have ordered reprints of about 3 million copies of their Brain Quest and Big Fat Notebook series in the last two weeks, along with a reprint of almost 1 million copies of their Paint by Sticker activity book series.

Overall losers: Adult nonfiction (except for those categories noted above), especially travel and business/economics, as well as Christian life books.

Chain bookstores

At this point, most chain bookstores are partly or entirely closed, and some have temporarily laid off staff. Some did not close proactively and have been forced to do so as a result of staff complaints or government mandates. James Daunt, head of Barnes & Noble and Waterstones, has argued that bookstores should be considered vital businesses and allowed to remain open (without much success).

Independent bookstores

Most face two immediate problems: paying the rent and paying employees. Some bookstores have been furloughing employees so they can collect unemployment and assistance while the shops are closed, and some have launched  GoFundMe campaigns.

The silver lining: online ordering is way up, which will help stores survive in the short term. Powell’s in Portland, Oregon, was even able to bring back some employees due to strong sales. (Don’t celebrate quite yet; the store recalled 49 of its union workers, not 100 as popularly reported—and it is not currently paying its vendors.)

Other stores have had to pivot quickly to create online storefronts if they didn’t already have them. Publishers Lunch recently offered  instruction on how to do this quickly and efficiently using Ingram for fulfillment; we offered similar information in our  item from last fall.

Depending on their location, some bookstore owners cannot enter their store to fulfill online orders or offer curbside pickup—they must stay at home. Such orders must then be fulfilled through Ingram’s warehouses rather than through existing store stock, which can lead to a lower profit margin. (This  piece in SFGate with bookstore owner Pete Mulvihill is enlightening.) Some bookstores, however, have permission to  continue business on a modified basis.

In France, where physical bookstores have been closed for more than two weeks, the government is considering how and whether to reopen them, as well as a larger bailout to save the entire book sector. Unfortunately, France’s book wholesaler is not operating during the crisis, so even if stores could reopen, it’s unclear how much good it would do. Meanwhile, there’s Amazon.

Amazon

Amazon continues to operate much as before, and despite claims of it deprioritizing certain products, such as books, many nonessentials have reasonable shipping times; your experience may vary. (For example, a new hardcover edition of the bestseller  Where the Crawdad Sings can be delivered within roughly three days and for $5 less than the ebook edition.) Expect the situation to remain fluid.

At least one Amazon warehouse has  closed due to workers testing positive for coronavirus, and Amazon warehouses and Whole Foods both have seen employees protesting inadequate safety measures and demanding hazard pay.

Meanwhile, the smaller publishers of PubWest have made a  public appeal to Amazon to reduce its fees on sales through the site. No word yet on whether Jeff Bezos has been moved.

Wholesalers, distributors, and suppliers

For bookstores to keep selling online or off, they need to get their stock and supplies from somewhere—and that somewhere is often Ingram, the biggest book wholesaler and distributor in the world. Fortunately, Ingram’s services have been considered essential, and it so far continues operations. In a conversation with Publishers Weekly, one of Ingram’s executives  said, “We have built in a lot of redundancy into our operations.” Even if business is disrupted in one distribution center, it can be shifted to another. Plus it operates Lightning Source, allowing publishers to keep titles available through print-on-demand if standard supply chains are disrupted.

But  should Ingram and other wholesalers be allowed to continue operations? One US-based writer  considers both sides of the argument. While smaller book wholesalers and distributors Independent Publishers Group (IPG) and Bookazine have been deemed as essential businesses in their states, the largest comics distributor in North America, Diamond, has voluntarily decided to halt comics shipments with a release date of April 1 or later. (They’ve also stopped paying their vendors due to cash flow problems.) Large US publishers that operate warehouses and distribution centers across the country have mostly remained operational.

UK’s wholesalers Baker & Taylor, Bookspeed, Gardners, Bertrams, and Hive have closed, although B&T is keeping one facility open for urgent matters. B&T says it reached its decision “to abide by the UK government’s directives and to not risk the health of staff, our families, and the general public.” (Note that the US-based Baker & Taylor remains open.)

Publishers and agencies

In times like these, we often think of the popular Warren Buffett quote: “Only when the tide goes out do you discover who’s been swimming naked.” In other words: when circumstances shift to a more unfavorable environment, some—such as large publishers that are highly leveraged or have systemic weaknesses—don’t have sufficient strength to continue business as usual. Keep that in mind as you browse the following list of developments.

Small publishers may be most threatened

As with small, independent bookstores, small, independent publishers that rely on steady monthly income to pay employees and freelancers—and keep the lights on—are vulnerable. Anne Trubek, the founder of Belt Press, is writing regularly about the situation in her newsletter. She  says orders from their distributor have flatlined and returns have jumped: “I expect that the crisis that indie bookstores have been under this month will be echoed by small presses in two to three months. It’s one big chain.” However, just like the stores, Belt Press has seen online orders surge.

This raises an uncomfortable question: Should authors be concerned about advance and royalty payments? So far, we have every reason to believe that publishers, especially the big houses, will continue to pay authors as contractually obligated. However, publishers that were under financial strain before the crisis may now find themselves exactly as Buffett describes: with their pants down. And of course long-term revenue shortfalls for even stable players have inevitable consequences. Here’s an  excellent thread from Alex de Campi with specific steps to take if you have a book under contract but not yet published. While she’s speaking specifically to authors of comics, the same applies if you’re working with a small or independent publisher that might be vulnerable.

For more insights into the effects of coronavirus on the independent publishing community—and for tools and resources for dealing with the crisis—we recommend this recent  IBPA roundtable, which includes representatives from Ingram.

Events

BookExpo is postponed until July. Originally scheduled for May 27–31 at Javits Center, the show has been postponed to July 22–26. None of the Big Five publishers in the US will attend the postponed BookExpo, and it’s unclear if Javits will even be available, as it has been turned into a temporary hospital.

The ALA annual conference is also canceled. The event was planned for June 25–30 in Chicago. It will be the first time in 75 years the event has not been held.  Learn more in Publishers Weekly.

Offers and Resources

Bottom line: Between issues,  visit our website for a continuously updated list of coronavirus links and resources.