Reading Matters

Book Stores Under Fire But Don’t Shoot Back

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Book store chains aren't dead after all.
  • Why it matters

    Why it matters

    Germany’s book industry is one of the strongest in the world, but its past strength means that publishers are unwilling to face the threats they face head on.

  • Facts

    Facts

    • The world’s larges book fair takes place in the city of Frankfurt once a year.
    • The Frankfurt book fair first began in 1949 and is expected to attract more than 300.000 visitors in 2014.
    • Around 65 percent of those who attend come from outside Germany.
  • Audio

    Audio

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In this age of digitalization, declining newspaper circulation and a struggling print business, it is amazing that publishers, booksellers and book-lovers still gather to celebrate reading. But they are heading to Frankfurt this week to attend the world’s largest book fair.

The fair has always been a place where writers, literary agents and publishers come to show off their skills, bid for new work and sign contracts. In many ways it still is, but it is also fast becoming a place where the industry gathers to lament its decline.

It seemed bleakly appropriate that the world’s largest online retailer, Amazon, chose the opening day of the fair to announce the launch of a flatrate-book-app in Germany, where customers pay a monthly subscription to then “borrow” from its electronic library of 650,000 books, of which 40,000 are in German.  The new Amazon app – the literary equivalent of Netflix or Spotify – is giving customers access for €9.99 per month. The service includes best-selling authors such as Hera Lind and Nele Neuhaus.

In many ways the Frankfurt Book Fair, which opens to the public on Saturday and Sunday, is more of an international than a German event. Around 65 percent of the 7,000 exhibitors are foreigners.

The German market does at first glance be relatively immune to global changes in the e-book and digitalization sphere.

And the German book industry appeared keen to point out that the book market in Germany is in fact in better shape than the rest of world.

Juergen Boos, head of the Frankfurt book fair, dismissed the Amazon offering, telling delegates at the fair that “every public library has a flatrate so to speak.”

The German market does at first glance seem relatively immune to global changes in the e-book and digitalization sphere. Revenues from retail book sales in 2013 rose by 0.2 percent to €9.5 billion, ($12.5 billion) according to the German Publishing and Bookselling Association, based in Frankfurt.

The organization estimates the revenue to remain unchanged for the year of 2014. By comparison, in the United States book revenue shrank to €21 billion in 2013 from €21.12 in 2012. In the United Kingdom, book revenue also declined by a small margin, to €4.3 billion in 2013 from €4.4 billion in 2012.

The industry in Germany is helped, in many ways by the fact that the country benefits from a fixed book price agreement – a form of price maintenance agreed between publisher and bookseller that keeps the book from falling under a certain threshold.

Certainly compared to other countries, the German book market is holding up well. Southern European book lovers have been hit hard by the financial crisis, and  small bookstores in the United States are struggling to sell to a widely dispersed population that prefers to buy books online.

 

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Amazon chief executive Jeff Bezos is launching a new book-flatrate. Source: bloomberg

 

The German Publishing and Bookselling Association chief executive Heinrich Riethmüller said he believed German customers placed greater value than other European shoppers in the individual advice and treatment they received in the country’s 6000 independent book stores – the largest number of independent bookstores in any European country.

The number of customers buying books online declined in Germany by 0.5 percent in 2013 compared to the year before. Mr. Riethmüller predicts that these online sales, which do not include e-books, will continue to fall “by one to two percent” this year.

Holger Ehling, former deputy head of the Frankfurt book fair and publishing analyst points out that German customers became less willing to shop at online retailing giant Amazon, but he added that while “the bad image of Amazon” is good news for Germany’s retailers, it is bad news for the country’s publishing houses that rely on online shopping and Amazon to sell their content to a wider customer base. Amazon came under fire for its tax avoidance strategies and harsh working conditions for warehouse staff.

In general, there seems to be little doubt in Germany that digitalization poses a threat to the industry, despite the fact that the market share of e-books in Germany is rising steadily. During the first six months in 2014, 4.9 percent of all books sold were e-books, a leap from 3.9 percent for the entire year of 2013.

But it is also clear that large book sellers in Germany are struggling. Hugendubel or Thalia are losing customers and have reduced their overall sales space in Germany. It may well only be a matter of time before the threats engulfing the world book trade come washing over Germany too.

 

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Franziska Scheven writes for Handelsblatt Global Edition, based in Berlin, and is covering a variety of topics including the publishing industry. Kai-Hinrich Renner covers the media industry at Handelsblatt. Hans-Peter Siebenhaar in Vienna contributed to this story. He also covers media and telecommunication topics for Handelsblatt. To contact the authors: scheven@handelsblatt.com, renner@handelsblatt.com and siebenhaar@handelsblatt.com 

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