The book sector felt very strongly the impact of the Covid-19 crisis. The Federation of European Publishers activated its network of members right at the beginning of the crisis to set up a daily exchange of information on the effects of the pandemic on the book market.
This allowed us to draw an early picture of the situation – patchy and uneven, but still meaningful – and to keep it reasonably up to date throughout the worst of the emergency. The exercise highlighted the value of such a network in these difficult times, as a means to collect and share information – information that was the object of a publication back in July and upon which the present article is based.
So, what did the data collected reveal? Clearly, the immediate and most visible effect of the situation was the closure of bookshops in many countries, something unprecedented. This was the case in the five biggest markets in Europe – Germany, the UK, France, Italy and Spain – as well as in many other territories, from Portugal to Bulgaria, from Romania to Ireland.
The impact on sales was instantaneous and dramatic. Brick and mortar bookstores are everywhere the main channel for book sales, and the one most used by readers (in Italy, for example, they generate 66% of sales and are used by 74% of readers). The chilling effect on demand was obvious: sales in bookstores dropped anywhere between 75% and 95% wherever a lockdown was in place.
The impact was felt already strongly on the sales of March, despite closures having come about mid-month: in France, larger bookstores and culture superstores) had a reduction of sales of more than 50% for the whole month, and in Germany bookstores lost more than 30% of sales; by the end of March, for the lockdown period, booksellers’ sales in Italy had shrunk 75%; around the same time, sales were down 78% in Portugal, 80% in Spain and 85% in Romania.
The whole value chain expected losses of 500 million € per month in Germany, and 200 million per month in Spain. The loss of the main distribution channel, plus the restrictions to movement and activities, meant for many publishers a massive reduction in the level of work, and in numerous cases a total cessation.
This meant the postponement or cancellation of many planned new titles – which in turn further affected revenues. Once again, a few examples: in the second half of March alone, French publishers postponed publication of 5,236 new titles and new editions, and by mid-May they planned to postpone on average 18% of titles scheduled for 2020 altogether; title production dropped 75% by end March in Greece, and the estimate for the whole year is a reduction of around one fifth of the total; Czech publishers postponed some 15% of their titles so far. Most strikingly, in Italy by the end of March some 23,200 titles had been cancelled or postponed (about one third for the yearly production), corresponding to 48.9 million fewer copies printed, and during the whole lockdown period title production was down two thirds. Pretty much all countries experienced some kind of disruption in publication plans.
Moreover, this happened after a series of costs had been already sustained and could not be recovered: rights acquisitions, translations, promotion, logistics and so on. Some publishers were also affected by disruption of supply chains and by a decrease in exports. A further consequence of the situation was the impossibility to organise public events, which meant that book fairs could no longer take place – nor public readings, festivals and other events that are key for authors’ revenues and sales of books. Fairs affected so far include Paris, London, Bologna, Prague, Antwerp, Tallinn, Thessaloniki, Budapest, Turin, Gothenburg, Lisbon, Rome and a few more, and there is uncertainty for other events scheduled for the autumn and winter.
By the time April arrived, the book sector had basically ground to a halt in many countries, and with bookstores still closed for most if not all of the month in most areas, the crisis had its biggest impact. Sales in larger bookshops in France were down 96%, 89% for smaller local bookstores. Retail bookselling lost 47% in value in Germany (bookshops reopened on 20 April in most regions), while in Italy, by mid-month, sales in bookstores were down 85% on average since the beginning of the lockdown. By early May, booksellers in the UK were making on average 18% of their normal sales, and publishers experienced a reduction of 60% in turnover (90% for the small ones relying mostly on bookshop sales).
The booksellers that managed to keep selling books throughout the lockdown did so by strengthening their presence online, but also by finding creative ways to still reach their customers – and this was not even always possible at the worst of the crisis.
Of course, online sales increased sharply in many countries: they were up 52% in March and 180% in April in Flanders; many online platforms doubled or tripled their sales in France in early April; in the year up to mid-April, online sales in Italy for the first time ever overtook sales in stores, reaching a 47% share, and by June they had become 40% of total book sales in Romania. In the UK, in April, WH Smith’s in-store sales dropped 85%, whereas online sales went up 400%.
E-book and audiobook sales also increased significantly in many countries. However, in none of the countries where bookstores had to close did online or digital sales compensate for the loss of sales in shops. Even cultural superstores, which usually have a well-established online presence, managed in most cases to contain the losses, but not to improve their sales – in France, for example, their turnover was down 30% in March and 50% in April.
What about the countries where bookstores did not have to close? The crisis still had an impact on the book market there, too, as safety measures and the reluctance of many people to go into shops translated into lower sales. Physical sales were down 30% in Denmark in March and April; and by the end of April, one of the largest bookstore chains had gone bankrupt. From March to May, sales in bookstores were down 40% in Finland, with individual stores ranging from -20% to -90%. In Latvia, where bookstores were closed on weekends, in April and May sales were down 42.3%, and 45% fewer titles were published. In Norway, by mid-April, physical sales from publishers to bookstores were down 59%; sales were down 29% overall in April. In Sweden, between mid-March and mid-April, sales in physical bookstores were down 36.3%. In the Netherlands, most bookshops remained open or reopened shortly after the crisis outbreak; however, physical sales were affected, too, shrinking by 30% in the first two months of the emergency.
In all these countries, too, online sales experienced sharp growth, as did digital sales – in the Netherlands, for example, online sales were up 30% from the beginning of the crisis until the end of April, when they overtook offline sales for the first time. However, reports consistently pointed out that the spike in online and digital sales was not enough to compensate for the loss of physical sales.
Between April and May, bookshops were allowed to reopen almost everywhere – in UK and Ireland they had to wait for June. By then, a huge damage had been done: by end May, book sales were down 22.1% in France, 11.9% in Germany (17.5% in brick and mortar bookstores) – where turnover during lockdown shrunk 50% (70% in brick and mortar bookstores); bookstore sales had lost 38% in Spain.
Sales picked up somehow when bookstores reopened, but in most cases remained lower than pre-crisis levels, except maybe for the first week – occasional spikes in sales did not last long. So, for example, sales in May were down 20% in France, and 2.2% in Germany (-6% in retail bookselling). The first week of deconfinement, sales more than doubled in value in France in comparison with the previous week, and were also 2.7% higher than the year before; however, they dropped 8% the following week, being also 11% lower than the year before. The first week of full reopening, sales were up 0.5% in Germany through all channels – but still at -6.8% in brick and mortar bookstores. The first week of June, bookshop sales were up 37.5% in Spain compared to the previous week, but still 5.2% lower than in 2019. The week bookshops reopened in the UK, sales were up 30.4% year on year in value, and 9.3% the following week – a 14.1% value drop-off week on week. By the end of June, this slow recovery process had brough sales in Germany at -8.3% compared to the previous year (-13.9% in brick and mortar bookstores).
In countries where bookshops did not close – or not completely – the situation remained difficult, especially for brick and mortar bookstores. The total market was down 5% in May in Norway, and 4.6% in Sweden.
Still, in a few of these countries the value chain managed to limit the damage quite significantly, or even to maintain a positive result overall, thanks to the shift in sales. In Finland, growth in online sales, and in particular e-books and audiobooks, ended up more or less offsetting the losses in physical sales. In Sweden, by early June, it appeared that the market, including the ever-growing subscription services for audiobooks, had been at the level of the previous year altogether. And in the Netherlands, the market for trade books between mid-March and mid-June was down just 1%, with online sales up 33% and offline sales down 24%; Dutch books were up 1%. Altogether, sales until mid-June for trade books were up 2% by value, and 4% for Dutch books; online sales were up 20%, and offline sales were down 11%. In those countries, in any case, bookshops suffered a lot, and this may affect them in the mid- to long term.
It is difficult as yet to make forecasts for the whole year, but it is clear that the crisis has damaged the sector severely, introducing an element of great fragility in an industry that had a healthy but delicate balance. On one hand, there is the loss of sales and revenues that has already materialised, often very significantly. On the other, there are the wider range of dynamic effects of this fragility and of other circumstances related to the crisis, that might further disrupt the sector, including in countries so far left relatively unscathed.
Estimates of the possible impact for the whole of 2020 have been attempted in a few countries; the earliest estimates, made in March and April, give an idea of the gravity of the situation when the pandemic hit many European countries full on. In Spain, initial estimates pointed at potential losses of 50% of the yearly turnover in the home market, plus 70% of exports. In early May 66% of French retailers anticipated a loss of turnover of 20 to 40% over 2020.
With the easing of restrictions and the relative improving of the situation, expectations became less pessimistic, but the outlook remained worrying: according to market surveys, the annual trend for sales in France is -7% by value, but a recent government study estimates the loss for the year rather at 23% for publishes and 24% for booksellers; in Greece, annual sales are estimated to shrink by between 10 and 30%; in Slovakia, brick and mortar bookstores’ turnover is deemed to take a 15% drop. In Italy, a country hit particularly hard, it was estimated in May that the entire book industry could lose between 650 and 900 million € for 2020, i.e. 20 to 30% of the total market for the year.
The reprise of activity has been difficult for many bookshops and sales outlets, with falling demand from readers and insufficient financial resources identified as the main factors of fragility for the resumption of activity. If many bookstores end up shutting down for good, the damage will be both amplified and made more permanent.
The shift of sales towards online and digital channels, in addition to not compensating in most cases for the loss of physical sales, means that a higher volume of sales stems now from less profitable segments. The postponement of many titles will also have lasting effects on the market, with the choice often being between a crowding of new releases, to the detriment of individual titles, and further delays and cancellations, which will eventually dampen the overall production for years to come.
Finally, the overall economic situation will also play an important part in how the sector is affected in the coming months. If many people lose their jobs and salaries, a reduction in consumption will be inevitable and will significantly affect book sales. Publishers indicate this as a reason for concern in many countries, including those in which the market has not experienced significant downturns.
For the time being, the only thing certain is that the book sector has sustained a serious blow from the COVID-19 pandemic, of which the precise amplitude is not yet clear. Targeted support measures would greatly help to address the fragility of the value chain and to bolster the sector’s resilience, because the impact of the crisis will be felt over the months and maybe years to come. It is indispensable for public authorities to take appropriate measures to repair the damages and rebuild the future. FEP, and many of its members – AIE has been at the forefront on this – have made several suggestions to this end to decision-makers at national and EU level.
This article was originally published in the October issue of Giornale della libreria. The full issue in English is available for download here on AIE website.