Delivers Grim Statistics
By Cheryl Bolen
The man Romantic Times CEO Kathryn Falk called the most
powerful man in publishing told authors, booksellers and readers that
publishing is virtually a no-growth industry.
Random House president Phil Pfeffer delivered his
remarks recently at RTís San Antonio "Booked on
Though dollar sales of books went up 2.9 percent to $20.1 billion
in 1996, price increases exceeded unit growth, Pfeffer said.
Decreases have also been seen in number of mass market book sales,
number of storefront book retailers and mall chain booksellers and in
planned purchasing of books.
One of the reasons for no growth is that consumers' leisure time
is declining. "Americans are working more hours than they ever
worked before," Pfeffer said.
Another factor contributing to a decline in reading is
acceleration of book prices, which increase faster than other
leisure-time products such as VCRs and computers. (Contrary to
speculation, computers are not stealing readers. "The reality is
reading long passages on the screen is difficult," Pfeffer said.)
Poor promotion can also be blamed for lackluster book sales. Books
are not promoted well compared to other consumer products. Pfeffer cited
Disney spending $40 million to promote Toy Story. Reviews, talk
shows and especially Oprah have helped to promote the book industry, but
the industry needs to find better ways to promote itself.
"There are plenty of people in this country
who really enjoy reading," Pfeffer said. "We just have to
figure out how to get to them."
Pfeffer said editors, publisher and authors "fly blind,"
only haphazardly guessing at what the public wants to read.
Of course, one of the reasons publishing cannot spend tons to
promote is because they are having a tough time making money. Pfeffer
blames the following for some of the publishers' financial woes:
During the Depression, as an incentive for booksellers to take new
books, the publishing industry began taking back unsold books and eating
the losses-a practice which continues today. Between 35 and 40 percent
of the books going into the industry today are destroyed. "Heaven
knows how many trees have been destroyed in the process," Pfeffer
said. "I have no silver bullet to solve the returns problem."
In addition to absorbing the cost for the wasted books, the publisher
also is forced to pay for the return shipments.
Out-of-control author advances C
Spurred by the demand for best-selling authors, publishers are paying
exorbitant advances, which fail to earn out. Pfeffer said unearned
advances are the biggest expense at Random House, the world's largest
publisher (which owns Ballantine and Fawcett). Formerly, best-selling
authors carried a publishing house, subsidizing beginning authors. This
is no longer true.
Excess inventory C
The stock 'em high theory of book selling is declining, Pfeffer said.
Shrinking shelf life C
Contrary to what a lot of people think. superstores (which now account
for 25 percent of book sales just six years after being launched) did
not create additional shelf space. Pfeffer even said the superstores
"created a difficult environment for our industry." The
superstores put pressure on publishers to pay for positioning in
Pfeffer had no easy solutions on how to increase shelf life and
profitability, but if anyone can do it, industry watchers say he can.
He's the man who built Ingram's book wholesaler into the industry
leader it is today. No wonder he put his volunteer work at Habitat for
Humanity on hold to come out of early retirement and steer publishing
into the 21st century.
This article first appeared in BAWL Point Pen in