A team of independent publishing consultants with broad and deep experience in the industry have produced an excellent report on the effects of the past year’s pandemic on the book publishing business called “COVID-19 and Book Publishing: Impacts and Insights for 2021”. Cliff Guren, Thad McIlroy, and Steven Sieck are real pros and they have been systematic and rigorous in their methodology. The report is free (here) and is bound to be among the most widely-read papers in our industry very quickly.

The notion was to look at the changes that have taken place in the worlds publishing lives in and work back to the impact on the publishers. This approach makes sense. You can’t analyze or predict the future about trade publishing without looking at what is happening in the world of retail. You need to understand what the impact of change is on schools and colleges to gain insight into how publishers will have to adjust. Indeed, that’s how publishers themselves will approach the challenge: they will try to understand the environments they have to live in to formulate their go-forward strategies.

And the authors have captured the reality that the pandemic was not really bad for the book business. In fact, for many publishers it has been a boon. The authors amply document that most book sales have been sustained and that most book publishing operations have managed to shift staff to working remotely and are still able to continue to produce effectively.

Anybody who works in book publishing or cares about it will find a lot of value in this report. In this post are some reflections on some of their points and thoughts on some relevant aspects of trade publishing, the part I know best, that this team and this methodology didn’t explore.

One impact of the pandemic on retailing that was thoroughly appreciated by Guren, McIlroy, and Sieck (and seldom remarked on elsewhere) is the rise in importance of the brick-and-mortar “equivalents” to Amazon: like Target, Walmart, and Costco. Those stores have long had the in-store presence of a limited number of book titles but in the online environment, with Ingram in the background, they can sell just about any book except some proprietary Amazon titles. Online non-book consumers can put books in their grocery basket with these retailers as readily as they can with Amazon and more and more of them appear to be doing that. Although it is more likely that many of these new book customers for them were filched from local brick and mortar retail rather than from Amazon, the net effect has been to really grow books in importance to them.

The team did a pretty thorough job of looking at what kind of books are selling by category. But my hunch is that the more interesting shift has been from frontlist to backlist. That is something that has been occurring for quite some time — one of the things I identify as part of the “end of the trade publishing concept” that I’ve written about — but it is definitely accelerated by the pandemic. Discovery that shifts from bookstores to online favors backlist. And publishers have been challenged to deliver new titles with the same marketplace impact in the readjusted book marketplace. Some new title production has continued, to be sure. But there are anecdotal reports of postponements with some publishers choosing to hold back quite a bit until things change.

The “Covid Impacts and Insights” report talks about the Bookshop.org initiative, also powered by Ingram, that has enabled independent retailers to capture decent margin on online sales without having to invest in capabilities. It is pretty lucky timing — for Bookshop.org and for the many bookstores that use it — that it opened for business just before Covid arrived.

“Covid Impacts and Insights” discusses the relative ease with which publishers have maintained their operations without using their offices. Discovering how to work this way is bound to have implications on the future of offices — where they’ll be, how full they’ll be, and what percentage of each employee’s time will be spent in them — in our business. The report notes the fact that a lot of publishers spend big money on Manhattan real estate. In a margin-challenged business like ours, that is bound to come under closer scrutiny as the pandemic fades.

There are two aspects of how trade publishing is changing which are almost certainly accelerated by the pandemic and are worth more consideration than they get in “Covid Impacts and Insights”.

One is touched on in the Executive Summary at the top and not returned to: the efforts by publishers to compensate for a declining infrastructure of intermediaries (particularly bookstores) with more D2C — direct to consumer — efforts. For well over a decade, even the most general of the general trade publishers have been building those efforts. They all have databases with millions of consumer names that they are able to use with varying amounts of success. This creates subtle distinctions between the sales capabilities of the houses based on their different abilities to reach direct audiences.

So when Penguin Random House acquires Simon & Schuster (assuming the sale is allowed to proceed), the chances are that they will both get some new books that are appropriate for some of their “captive” audiences and, conversely, that they will acquire some D2C reach that S&S developed that can now be applied to PRH books. Not much is known about the specific proprietary D2C capabilities the houses have, but those sales assets, however slowly they grow, become increasingly important as bookstore opportunities shrink. Both the publisher marketing efforts and the brick-and-mortar erosion are accelerated by the pandemic.

There is another change that has been slow and inexorable over the past decade or more and which the pandemic can only exacerbate. Since the center of gravity has shifted away from bookstores, a domain publishers “controlled” and which shielded them from competition from books that had no powerful publisher, it has become increasingly difficult for publishers to make new books “work”.

One collection of stats that was not recovered by the “Covid Impacts and Insights” team would shed on light on this. How does new title production of the established trade houses today compare to what they issued ten or twenty years ago? (One hint: it is almost certain that the combined new title output of PRH and S&S will be less after the merger than it was before.) And how do sales of new titles compare to sales of backlist? And how much of the new title output survives to become contributing backlist?

This is a tough set of facts to compile, but it is almost certain they’d show that big publishers are living off their backlist and not making it grow like they did in past decades. The “moat” around established publishers was always the bookstores; real publishers could put inventory into them and mere aspirants could not. When there were thousands of bookstores carrying tens of thousands of titles (or even hundreds of thousands) and almost all the books were sold through brick-and-mortar retailers (a fair description of the world before 1995, or even before 2005), the big publishers had an advantage that no number of D2C names can win back for them.

The one topic that wasn’t covered by “Covid: Impacts and Insights” that might have been worth a chapter is the trade publishing “supply chain”. Like so much else, it was already changing but Covid has accelerated the change. The big news here is Ingram’s print-to-order capability tied to their direct connection to just about every customer for books in the world (institutional or personal).

Even before the pandemic hit, Ingram was encouraging publishers to set up their books for print-on-demand “just in case” there was a spike in demand that required instant inventory at Ingram and that the publisher itself might not have. Waiting a week for publisher replenishment or perhaps longer for a reprint can cost valuable sales when a book gets a break. But that’s in “normal” times. In pandemic times, when output is constrained in many ways, the ability to print at the point of distribution changes everything. The striking example of how much this matters was a NY Times paperback bestseller list at the end of June which had a majority of the titles being printed and distributed by Ingram.

Having learned the many benefits of being able to meet substantial demand without inventory in place, the publishers aren’t likely to forget it. The fact that a unit costs more to deliver when you print one was always well understood; now it can also be seen that shipping and handling and returns costs are avoided so the difference in profits is not as great as the difference in unit cost. Publishers know this now. It will change things going forward.

Those of us in book publishing are mostly among the lucky ones in this difficult time. Our product is still in demand and the consumer is still able to get it. We can work without being in offices. It will be an interesting set of challenges to create the new normal when the vaccines take hold and we can go back to maskless and indoor social interaction again. The authors of this report will be among those helping publishers figure out what the “new normal” will be. The report definitely gets things started.

If you’ve never picked up a copy of the book I wrote with my late friend Robert Riger, “The Book Business: What Everyone Needs to Know”, I’m going to bet you’ll thank me if you accept this suggestion and do so. It’s a couple of years old but still oh, so timely.