Publishing Market Update; Vol. 3, Issue 3
David beat Goliath!
At least in the 4th quarter of 2021. While Amazon’s online sales fell 1% in Q4 of 2021, brick-and-mortar bookstores saw an increase of over 43%. Bookstores finished the year up 28% over 2020—a year when all of the retail sector was up only 19.3%. Though that jump still left bookstores short of pre-pandemic 2019 by 1%.
2021 Corporate Reports
The 2021 year-end results are rolling in from the Big 5 (or 4, or 3, or whatever it is this week).
Simon & Schuster continues to increase its resale value – even though they are technically in escrow to Penguin Random House (pending a legal contest from the DoJ). S&S ended 2021 up 10% in sales and a whopping 52% increase in operating income.
Hachette's parent company, Lagardere, reported a 9.4% revenue increase, with earnings up a phenomenal 42.7%. Hachette’s US division was up 3.7% for the year. The company is, however, forecasting a flat 2022, as it anticipates that people will be reading less as the pandemic winds down and frees them up for other activities.
HarperCollins, which has a June 30 fiscal year, reported a Q4 sales increase of 13% over the prior year. For the first half of their FY 2022, Harper saw revenue jump 16% and profits up 10%.
Supply Chain Strain Continues
Paper shortages continue to be an issue for publishers. According to the Ingram Content Group, paper prices increased 10-12% in 2021, and they expect more of the same in 2022. Contributing to the shortage, one domestic paper mill closed last year (can someone explain that to me?), and many others have converted to making cardboard for all those online shopping boxes you’ve been getting. Ingram also reported that some printers have already allocated all of their press time for 2022.
In addition to the printing problem, shipping is likewise problematic. Shipping container costs are up 50-70%, and FedEx and UPS are predicted to raise their rates by up to 6%.
Weekly Numbers—February 2022
After print sales for January 2022 ended down 5.6% for the month compared to 2021 numbers, sales dipped again for the first week of February—down 3.9% for the week ending February 5. But print sales for the following week posted the first gain of 2022, up 2.8% from the same period a year ago. Sales stayed positive for the week ending February 19, 2022, climbing 4.3%.
Stay tuned next month to see if the rally continues.
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