This post was written by guest blogger Andy Fine.
Even Chinese Marxists see impending death in the global publishing industry:
The latest book of Harry Potter series, “Harry Potter and the Half-Blood Prince” is bound to shatter all publishing records. Every installment of the saga enjoyed ready markets and three of them have been made into movies, and money has been flooding in for the author, J. K. Rowling. For the global publishing industry that is troubled by limited profit growth, the “magic” of Harry Potter is real and dazzling, said a report of China Business News.
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Viewed from every angle, the miraculous sales of Potter books do create a phenomenon across the world publishing industry. By now 270 million copies from this series have been sold globally, which is quite rare on the sluggish book publishing markets.
Potter cannot reverse the downward trend
J. K. Rowling deserves the glory and wealth, for she dragged children back to reading from e-games and TV with her books. Movie copyrights and books have earned her 500 million pounds, put her among the only two writers on this year’s Fortune list, the other being Dan Brown, author of The Da Vinci Code. However, such a victory alone cannot cover up the downturn of the publishing industry as a whole.
According to PwC statistics, in 2004 the global book sales were 107 billion US dollars, only 1.5 percent higher than the previous year. The growth this year may reach 3 percent considering Harry Potter and the US President Bush’s No Child Left Behind Act.
But all publishers must be clear about one thing: their leadership has drifted away. During the past few years, controlling power of this sector shifted from publishers to booksellers. Booksellers expanded through mergers have grown rapidly, with large chain stores, such as Britain’s Waterstones and American Barnes & Noble, leading book selling and eyeing the publishing. More and more booksellers ask publishers for more discounts, which cut the profit margin of the latter. Publishers suffer another heavy blow as custom requires publishers to take back unsold books. Statistics show that in 2003 34 percent of hardcover books on American markets were eventually returned to publishers.
Publishing vs. movie and TV
The publishing industry has long put economic returns above artistic achievements. But Bloomsbury stands out by clinging to its traditional regime despite dramatic changes in this sector, untouched by the hot wave of cooperation between publishers and multi-media groups. Heidelberg predicts that by 2010 printed media will only take up a 48 percent market share with the other 52 percent held by e-media.
Profit driven, many publishers choose to bind themselves with competitive multi-media groups and cut staff and costs at the same time. Cooperation between Viacom and Simon & Schuster and that between News Corporation and HarperCollins are of this kind. Despite that, many publishers remain in the red, for everybody knows a sales miracle like Potter is rare. The United States saw 195,000 kinds of books published in 2004, but only a limited number of them turned out profitable.
The success of Harry Potter on the other hand reveals the disadvantageous position of publishers: they are not given economic returns other than the copyright once a book turns out a blockbuster, such as those brought by book-turned movies and TV series. Bloomsbury depends on the 16 million pounds brought by Potter last year for its other commercial plans. But in contrast, Time Warner, who brought Potter’s movie copyrights and the right to put it into other commercial operations, reaped 984 million US dollars in the box office of Harry Potter and the Sorcerer’s Stone alone.
By the way, if you click on that link, your name is going to end up on a Dept. of Homeland Security list. I’m not personally worried — the fact that I spent two days listening to other lawyers debate the vagaries of commercial drug store development in return for obscene hourly compensation establishes pretty conclusively that I am not a communist. Fuck, I may even be a Republican at this point. If only I could reconcile my weed habit with the war on drugs, I’d be the next junior congressman from North Carolina.