Reprinted with permission by Dave Wolverton. To receive more newletters like this, email Dave at davidfarland (at) xmission (dot) com.
One of our readers, Mark Greer, asked me to write a Daily Kick on “How the Recession Affects Writers.” Wow, did he open a can of worms! Especially when you consider much of the news that is out today, with articles in several major newspapers reporting how terribly the economy is affecting book sales.
Now, I’m going to say something that most new writers won’t understand and probably won’t believe: There is no recession for fiction writers. The articles have got it all wrong. I’ll explain why in a moment.
But lets start first with some of the bad news in the past few days as reported in today’s Publisher’s Marketplace, Variety, and The New York Times:
“Scholastic (a company with over $2 billion in annual sales) eliminated approximately 110 positions through early retirement packages as part of a broad cost-cutting program.
“Thomas Nelson (valued at $473 billion in 2006 when it was taken private) has eliminated approximately 115 jobs this year, or nearly 20 percent of their workforce.
“In June, Borders eliminated 274 corporate jobs both in Ann Arbor and throughout the country.” (Publisher’s Marketplace, 12/4/08.
Meanwhile, there’s also news of shakeups at a couple of major publishing conglomerates―entire lines being consolidated in one case, and worry about layoffs elsehwere.
New authors and even some old pros are wondering what is going on.
Well, guess what? There is no recession in the book industry!
Despite the news above, there are some positive points, as mentioned in today’s column in Publisher’s Marketplace:
As the NYT notes today, in outlets monitored by Nielsen BookScan, “sales for the year are actually up slightly,” even as “sales in October and November had weakened drastically.” (I’ll tell you why the weakened in those tow months in a moment.)
Consider this: North American “media” sales at Amazon will be up about $700 million for the year, which will be significantly more than the expected drops in sales at BN, Borders, and Books-a-Million combined. (Which simply means that Amazon as a competitor is trouncing these others, taking their online revenue).
BookNet Canada, which tracks point-of-sale data covering approximately 75 percent of the market, says that for the four weeks ending November 23, dollar sales rose 2 percent and unit sales rose 4.9 percent, concluding that “Canada might be the only English book market still in positive territory.”
On this last bit of information, Publisher’s Marketplace suggested “Unfortunately, that could be due in part to the relative cheapness of books in Canada compared to the US, with the Canadian dollar still trading at under .80 against the US dollar.”
As often happens in this industry―and every other for that matter―the analyst here was wrong in that last statement. The strong market in Canada has nothing to do with currency exchange rates.
There is a saying in our industry that the book business is “pretty much recession proof.” People may stop going on vacations, but they’ll still want some good escapist literature to read on their day off.
Overall this year, we’ve seen many publishers saying that they have seen a slight decline in sales―as much as 7%, but that fiction sales are up modestly―about 1%.
Let me explain what is really happening, because this hits precisely on a point that I’ve been worrying about all fall: you see, my novel The Wyrmling Horde came out in early October, and I have been worried about the release date. Why? Because it is coming out in an election year, and every time that we have a presidential election in the United States, the book sales drop that month by a significant percentage–as much as 20 percent! The more fierce the political race, the steeper the decline in book sales for that month.
A similar decline will occur any time that a huge national “event” occurs. if you had a book that came out during 9/11, your sales dropped through the floor. I had a novel that came out during the first Gulf War, when pictures of missiles exploding over Baghdad played on television every night. Sales were down by more than 32 percent across the country on books, and I took a hit. If your book comes out during the Olympics, you need to worry. Similarly, when O.J. Simpson was on trial, people were glued to the television, and book sales plummeted.
In short, any huge, extended national event like this will cause authors some grief: but it has nothing to do with the recession!
That’s why in Canada, as cited above, sales were up modestly at the same time they were down in the United States. The Canadians weren’t glued to the television trying to figure out which politician to vote for.
So the sales on fiction books are fairly stable. Only in England are we seeing a modest decrease, and I’d tell you what is going on there, but it would take more time to explain than I would like.
So my most recent novel came out in October. I think that it may have taken a hit. But the good news is that it will still be on the shelves through the Christmas season, so I’m likely to make up the losses for the months of October and November.
Similarly, there was a report recently that a large book chain that services the airports had disappointing sales a couple in September and October―about a 12.6% decline that affected mostly nonfiction, while fiction sales were actually up by one percentage point.
But guess what? Another report by mainstream news organizations mentioned that air travel in the United States was down that month by about 12.8 percent. So of course book sales were down in airports proportionally!
Meanwhile, I’m wondering if there is a recession at all in my business. I went out on my book signing tour from mid-October to November 11, about three weeks. In that time, Brandon Sanderson and I visited dozens of stores. At each of our signings, we had record crowds―twice as large as what they were last year, sometimes 250 percent larger. So sales on our books were strong.
I can also often judge how well sales are going by the volume of fan letters that I get, and I’ve gotten record numbers from The Wyrmling Horde, about 140% higher than normal. Now, that’s not scientific; it’s anecdotal. It might simply mean that people liked this novel more than some of my past books. But over the past ten years I’ve seen a strong correlation between fan mail and sales.
So here’s the long and short of it: I don’t believe that there is a recession in the fiction industry. There are some layoffs and transitions―primarily reactions to the slow sales that we were bound to have during the elections anyway―but I’m going to predict that we’ll have a strong rebound in December. Gas prices are going down, freeing up readers’ money, and as gas prices go down so will the prices of food, clothing, and everything else. That means that people will treat themselves to some books.
Now, having said that there isn’t really a recession in fiction book sales, I’m sure that I’ll get a lot of reaction from authors who disagree. I’m reminded of something that happened back in about 1989. Book sales went up through the roof. Hardback sales were up something like 21 percent that year, and everyone wondered what was going on. The analysts were asking, “Do older Americans have more disposable income? Does this mean that we are going to see a dramatic surge in hardcover sales in the future?” Some publishers believed that they would see more hc sales, and went out on buying sprees.
But I thought back on the year and had to laugh: you see, there had been a lot of good books that came out that year, and I’d probably spent twice as much on hardcovers as normal! So I predicted that sales would drop back down to previous levels the following year, and they did.
So what does an author really do in a recession? Does it affect you? Sure. Here’s what happens.
1) If publishers don’t have money coming in, they will typically begin to drag their feet in making payments. For example, I normally get paid my “On Publishing” money when a book goes to print in England on or before the week when the book goes into print. With my last five books, they put the book out and cut the check on the official release date. But, hey, my last book there came out in October and here we are in December and Dave’s family is getting hungry. Where’s my check? Well, it might take a little extra time. I’m not worried.
2) If publishers don’t have money, they will freeze buying. They can’t freeze for much or for long without going out of business. They have to keep putting out product or else their overhead will kill the company. This means that the boss will come in and say to his editors: “You can’t buy any new books for two months.” This is often done quietly, and then when the editors can buy again there will be a big buying frenzy. Guess what? It happens all of the time. If you pay attention you will notice that publishers frequently quit buying for a couple of months just before their annual sales reports are released. This happens for two reasons. First, the editors themselves may not know how much they have to spend on books. Second, if the editors don’t buy anything for two months, the profit reports will look better, which makes stockholders happy. So if you’re a new author, you might imagine that this is a terrible time to be trying to publish. But it’s not. By following the numbers of sales to publishers, one can see that hardly anyone is slowing down their buying right now. In fiction at least, things are moving apace.
3) If things get tight, editors will do a number of things to cut costs on books. First, they might offer lower advances on new books. Or they can cut production costs by using smaller fonts and lower-quality paper. Or maybe they’ll cut two percent off of each print run of their books. In short, many times you don’t even notice what publishers are doing to books when their budget has shrunk by five percent.
3) If things get dramatically bad, publishers will cancel contracts. They might go from publishing ten books a month to eight. I’ve had that happen, too. I had an offer on a novel last spring, but the publishers found themselves to be a little short on cash, so the offer was rescinded. Did it hurt me terribly? I just took it to another publisher and had a second offer within four weeks. That’s the good thing about a book. If I write one and have it just sitting around, the chances are that I’m going to sell it someday.
4) Of course, if the economy gets terrible, a publisher could go out of business. I had a little startup company that asked me to pen a book, and I found out last week that they are probably going to go out of business. They were reliant upon investors, and a couple of investors just found themselves in a pickle. Once again, I’m sorry for them, but the book just got shipped out to another publisher, so I’m certain that I’ll get paid for my work eventually.
As an author, I learned years ago how to weather a recession: you put your tush in a chair and your hands to the keyboard and write like mad!
Back in 1992/3, Bantam Books had the largest science fiction division of any publisher in America. They got purchased by Bertelsman, a German conglomerate that had bad luck with science fiction back in Germany. The conglomerate decided to kill Bantam’s science fiction and fantasy line, throwing more than a hundred science fiction and fantasy authors out of work. Many of those authors seemingly disappeared into cracks in the earth, never to be seen again. Lots of them tried floating proposals to other publishers, but because they were just selling proposals, they didn’t sell much.
Meanwhile, Kevin J. Anderson went to work, writing as if the recession had never come. At the end of the year he had something like four books that he had written on spec―and he sold them and some proposals all in a period of perhaps eight weeks. Since the novels were already completed, the editors didn’t have to worry about whether or not they would turn out well. They could see the quality. As a result, Kevin sold the books for perhaps twice as much as he would have gotten the year before, just selling the proposals. (If you want to make more money on a book than you’ve ever made before, don’t try to sell it based upon a proposal: write the book!) Kevin’s a brilliant guy. I’m going to follow his example.
So that’s how you get through a recession. I expect this year to be a great one. I’m going to hunker down and get back to writing my twenty pages for the day!
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