The economy and publishingNow, what of publishing? The first point to grasp is that publish-
ing swings wider in either direction than the overall economy.
Second, publishing turns upward later in the economic cycle
than many other industries. Why is that? Well, books are technical-
ly "durable" goods, since they last more than three years (though
not, I must say, on bookstore shelves). But consumer book spending
patterns are more like those for nondurable goods. Nondurable
sales rise late in the economic cycle. In fact, book sales may grow
right into the start of the next recession. Thus, auto and home sales
will go up first. Sales of frivolous stuff like books go up only later.
On the other hand, when book sales go up it is usually with
greater oomph than for sales in other sectors. It is not surprising,
then, that while our overall economy is growing at a 3 percent annu-
al rate, book publishing is growing at 6 to 8 percent.
Looking more closely, we find that adult trade hardcover sales
will generally hold steady more than paperback sales. That is
because hardcover customers have higher and somewhat more reli-
able incomes. Paperback sales, though, are naturally more sensitive
to employment and income swings. However, when paperback sales
swing up they rocket up sharply. Paperbacks boom or bust.
Unfortunately, most of the growth we are experiencing is coming
from higher cover prices. Rising exports also help a bit, but remem-
ber that authors' share of export sales is lower than on domestic
sales. With the number of titles year-to-year 10 percent below the
1988 peak, that means that fewer titles are earning slightly more. In
other words, the business is a bit more competitive than before, but
authors who "make it" are more secure.
The picture is not entirely rosy. On the negative side, the retail
market is shrinking as a percentage of consumer spending. Our anx-
ious, downsized work force is spending less on "stuff." Superstores
have given a shot in the arm to new orders, but that pace is eventu-
ally going to slack off, too. In addition, reader demographics are
also changing. The prime book-buying age group, 35-44-year-olds,
will over the next ten years creep up into a less book-crazy age
bracket. The old and the young, both of whom spend less on books,
will grow in relative numbers.
Paper prices have also shot up sharply, and are not likely to fall