Booksellers

In this guide, we look at company ethics in each of the key publishing markets (print, eBook and audiobooks), highlight the brands seeking to consolidate and survive, and make the case for including authors in our ethics.

Print revival?

After years of fluctuations, the market for books seems to have found a new equilibrium. The book trade is managing to (just about) hold on in the face of Amazon, eBooks are losing their shine and the demise of independent bookshops may have been halted.

Print still dominates the books market (over 80% share) but its growth from year to year isn’t steady. After booming in 2015 and 2016, sales of print books flattened out in 2017, growing by only 0.1%. Despite appearances this could actually be positive news. In 2017, there were no smash hits (‘Go Set A Watchman’, ‘The Girl on the Train’, yet another ‘Fifty Shades’ instalment ...) as there had been in the previous two years. Nevertheless, print books still managed to register growth, which market researchers Mintel interpret as a sign that the print revival is a long-term trend.[1] Amazon continues to dominate the market in print books, with over half of people buying them doing so through the retail giant.

Bookshops on the brink

Waterstones on the high street and Blackwell’s on university campuses are the only remaining nationwide, dedicated, bricks and mortar bookshops in the UK, although Foyles may be added to this list for those living in London, Bristol, Birmingham and Chelmsford. WHSmith and The Works also have a high street presence but are not dedicated book retailers.

The decline of independent bookshops was arrested in 2017, with the total number actually growing, if only by one. The tally now stands at 868, which is over one thousand fewer than it was back in 1995. There are more hen harriers in the UK than independent bookshops!

You can find local bookshops at Independent Bookshop Week. Once you’ve gone in and purchased your 2019 diary, you should block out Independent Bookshop week, which is happening 15-22 June. This is run by the Bookseller’s Association and is part of their ‘Books Are My Bag’ campaign: booksaremybag.com. Follow @booksaremybag on Twitter for news and updates.

Buy or borrow?

Buying second hand books is good for the environment because you’re reusing a thing that has already been made, rather than chopping down trees to create a new thing. If you’re buying used books from a charity shop, then you’re also doing something philanthropic.

The downside to buying used books is that the authors receive no royalty or other payment from these sales. This is less of a problem if the book you’re buying is something by Homer, but it is an issue for living authors who don’t have salaries and, instead, rely on royalties to buy things like toilet paper and oat milk.

Borrowing from libraries is an excellent middle ground. Not only are you supporting another endangered species, but authors do receive payment when their works are loaned through a library. This applies to print, eBook and audiobooks. 

Free download sites and eBook swapping sites should be approached with caution. Some are illegal in the UK and may not be supporting authors or publishers. An exception is Project Gutenberg, which is run by the not-for-profit Project Gutenberg Literary Archive Foundation and provides free access to e-versions of books no longer under copyright. Another not-for-profit initiative is LibriVox, which crowdsources audiobook narrations of books in the public domain and makes them available for free.

There are also sites touting themselves as platforms for sharing new books to book industry professionals and enthusiasts. Above the Treeline and NetGalley give ‘readers of influence’ access to free copies of new releases in exchange for feedback and reviews.

eBooks

eBooks account for just under a fifth of all book sales in the UK and the sector is growing faster than print – eBooks grew by 2.9% in 2017, compared to 0.1% for print. There has been some debate in recent months about the future of eBooks after the CEO of global publisher, Hachette Group, described eBooks as stupid’: “It is exactly the same as print, except it’s electronic. There is no creativity, no enhancement, no real digital experience.”

eBook defenders rallied, citing the accessibility of eBooks in remote locations and their usefulness to people with visual impairments. Others pointed out that imaginative users have adapted certain eBook features, such as highlighting and public notes, for social networking, demonstrating that innovation isn’t only ‘top down’.

Price is queen in the world of eBooks. Mintel found that many eBook consumers immediately look for the cheapest offer and publishers and self-publishing authors are under pressure from retailers like Amazon to reduce their prices in return for more promotion and prominence. The heads of both the Society of Authors and the Publisher’s Association find this trend alarming:
“The routine discounting and implied devaluing of printed books – often at the authors’ expense – is already a big problem. The last thing we need is to encourage even more discounting on digital platforms.” – Nicola Solomon, Society of Authors.

“Amazon have a vested interest in lowering prices as much as they possibly can because it helps them maintain their market share. Effectively, they’re saying, ‘In order to promote your book, we’re going to dictate the price’ ... [Our members] invest a lot of money in authors and feel that they price their books appropriately. We are not seeking to sell very low [priced] commodities.” – Stephen Lotinga, Publisher’s Association.

In short, normalising low prices devalues the market and squeezes author incomes even further. Factor in the 20% VAT charged on eBooks (but not on print books) and it’s barely worth putting finger-tip to keyboard. If you are an eBook reader, check out our guide to Tablets and eReaders.

Audiobooks

The big new market is audiobooks. Attempting to capitalise on the popularity of podcasts and in an effort to take on Amazon’s Audible service, several publishers (Kobo, Google) have introduced audiobooks, while Spotify has done a deal with Bloomsbury for audiobooks, and the US company audiobooks.com recently launched in the UK. Hachette and HarperAudio have gone as far as creating a series of audiobooks pressed to Vinyl.

Speakers with voice-controlled ‘smart assistants’, such as Apple’s Siri, Google Assistant or Amazon’s Alexa, are described by Mintel as “potentially the most impactful new device on listening habits since the smartphone.” These speakers have arguably recentred audio in modern households and, when linked with audiobooks, could lead to a revival of collective listening. Those who are nostalgic for the days of gathering around the wireless could be in for a treat.
 

Table highlights

Tax avoidance

There was no middle ground when it came to Ethical Consumer’s tax avoidance rating of book retailers. Seven parent companies received a worst rating: Amazon (AbeBooks, Audible, Book Depository), Apple, Google, KKR (audiobooks.com), Aurelis Group (Wordery), Lynwood (Waterstones), Rakuten. The remaining 14 companies received a best rating.

The orange elephant in the room here is, of course, Amazon. Hardly a week goes by without a news headline on how little tax Amazon pays in <insert country here>, despite ever-growing profits. The latest story came in early August, when it was announced that Amazon’s UK services arm had a turnover of £1.98 billion in 2017, a 36% increase on the year before, and posted pre-tax profits of £72.4 million. The tax bill? £1.7 million. Incorporated in Delaware, Amazon has ten high-risk subsidiaries in jurisdictions on Ethical Consumer’s tax haven list, including Luxembourg-based Amazon EU S.à r.l., which owns Book Depository. A 2015 report by Citizens for Tax Justice estimated that the company had $2.5 billion hidden offshore. The company has been repeatedly named in the UK press and parliament as a tax dodger and has been investigated by HMRC and the EU over its taxes. See our Boycott Amazon campaign.

Ethical policies

Very few companies in this guide undertook policy reporting of any kind, environmental or supply chain. There were exemptions on offer for companies that only dealt in digital products (NearSt, ebooks.com, audiobooks.com) or only sold second-hand items (World of Books, Oxfam). Of those that were expected to have a supply chain policy, WHSmith (best) and Apple (middle) were the only ones not to get a worst rating.

Ethical Consumer expected companies involved in the physical book trade to have policies on timber sourcing and commitments to minimise the amount of paper sold from virgin sources. The string of orange dots in the Habitats and Resources column indicates how the companies fared against this expectation: only WHSmith had a policy and World of Books only retailed used books. The others were clearly leaving this issue to the book publishers themselves, which are making somewhat underwhelming progress.

Leather and vinyl

Lots of companies lost half marks under Animal Rights for selling new or used books bound in leather, and/or other products made from leather. We also docked half a mark under Pollution and Toxics from companies selling new vinyl records and/or other products made from PVC due to its negative environmental impact in production, use and disposal. Companies that were not marked down for either of these were: NearSt, World of Books, Ebooks.com, Audiobooks.com.

Company Ethos

Companies with a positive ethos are thin on ground. The Guardian Bookshop got its half mark for being one-third owned by the Scott Trust, Oxfam for its charitable status and Better World Books for being a B-Corp. That said, few companies in this guide were involved in political activities or were likely to be engaged in tax avoidance, which makes a nice change.

Authors’ royalties

A typical royalty is 10% of the recommended retail price on hardbacks and 7.5% on paperbacks. So, for a £16.99 hardback the author would receive around £1.70 for each copy sold and for an £8.99 paperback they would receive 67p.

This royalty usually drops when retailers demand discounts. So, if a major retailer offers a 52-55% retail discount (a common occurrence) the author gets four-fifths the full royalties, with a further drop on sales at even higher discounts.

Royalties for self-publishers are a proportion of any wholesale or retail receipts and are set by the wholesalers and retailers. For eBooks, the author receives 25% of the monies paid by the retailer to the publisher. Subscription services for eBooks and audiobooks are relatively new and the situation regarding royalties here is complex, contract-dependent and, in general terms, unclear.

Sunk costs

Before royalties can be used to pay bills, they are first used to pay off the advance given to the author by their publisher in anticipation of the profits to come. Self-published authors support themselves while writing and must pay to have their book published, so royalties need to cover these outlays and subsidise their next book.

Public Lending Right

PLR is a modest payment (around 8p) received by authors each time their work (written, eBook, audio) is lent through a public library.

Introduced in 1979 and recently expanded to include e-lending, it balances the social need for free public access to books against an author’s right to be remunerated for the use of their work. Although no substitute for royalties on purchased books, PLR is a valued part of many authors’ incomes. Over 22,000 writers, illustrators, photographers, translators and editors receive PLR payments of up to £6,600 each year.

Crowd-funding authors

Funding by the crowd offers aspiring authors the option to pre-sell a book or a book idea whilst gathering support and publicity in the process. A number of crowdfunding sites have developed that specifically target authors and include Unbound and Authr. All have slightly different focuses and crowdfunding models, but authors can realise a greater financial return per book than typical royalties. Kickstarter and Indiegogo also have publishing categories on their crowdfunding platforms.

Polyp, one of Ethical Consumer’s cartoonists (and a self-published, crowdfunded author) commented: “The book industry has been subjected to increasing corporate centralisation, meaning publishers are motivated more and more by profit, and take far less risks with new authors, or controversial subjects. But even without that influence, the world of publishing can itself be extremely elitist and fickle, with its gatekeepers essentially playing a game of ‘Emperor’s New Clothes’ when claiming to know what might or might not be a successful title.

“Crowdfunding is a superb way to bypass these barriers, if you have good reason to believe there’s an audience out there, and feel confident you have the means to reach them ... though our experience is that it’s fatal to assume crowdfunding is a sort of magic money tree – it requires real concentration, outreach and hard work to succeed.”
 

References

1. Mintel, Books and e-books – UK – June 2018