A Look Back at 2017: Meaningful Themes That Jump Out

The end of the year always invites reflection, and here at Hot Sheet, we particularly enjoy looking through a year’s worth of issues to see what themes recur. Here’s a brief look at the stories we kept returning to in 2017—and expect to see again in 2018.

Traditional publishing’s current performance relies on growth in print backlist and audio. Reports of lower ebook sales from traditional publishers have led to unproven theories about screen fatigue, echoed once again in the fall by publishing execs at Frankfurt Book Fair. As we’ve been emphasizing all year, just because the major publishers see declining ebook sales doesn’t mean ebooks aren’t a growing market. The industry has a serious problem in measuring ebook reading activity: in the US and UK, much of it is taking place at Amazon, which doesn’t release sales figures for self-published titles, Kindle Unlimited, or its own publishing program (Amazon Publishing). Plus we must consider library ebook lending and OverDrive’s growth. So we can only guess at the current digital reading market, which brings us to perhaps one of the best pieces of publishing analysis written in 2017: Michael Cader’s four-part series, “Blending Statistics to See the Whole Market,” (subscription required) at Publishers Lunch. We find ourselves going back to these stats again and again, as they provide the clearest picture of what’s happening. If you missed our summary of his report, here it is.

Complicating the rosy, feel-good nature of the “print is back!” story: the decline of the long-suffering Barnes & Noble. We recently summarized B&N’s latest, disappointing earnings report for you. Here, we think industry consultant Mike Shatzkin offered the best clarity on what would happen to the US book market if the chain closed. Smaller presses would be hurt, and new books hoping for a spot on the bestseller list would likely have to launch through a disparate network of indie bookshops. And—of course—Amazon would gain even more of a stranglehold on the market. Read Shatzkin’s thoughts in more detail here on Nathan Bransford’s blog.

But Amazon isn’t without its Achilles heel. As Mark Williams at the New Publishing Standard frequently points out, Amazon is not a player in most emerging ebook markets, leaving a gap for other companies to step into. Most notably, we saw in 2017:

• A stunning $1 billion IPO for China Literature, a spin-off of the China tech company Tencent. Tencent is also an investor in Wattpad. Learn more.
• The launch of Kobo’s ebook subscription service in Europe (more) is part of a multi-market expansion that this year saw the Canadian retailer acquire Shelfie’s reader recommendation and bundling technology; a new ebook subscription program in collaboration with the Bol.com outfit in the Netherlands; the ebook consumer base of the defunct Exclusive Books in South Africa; and—most importantly—operation of the German-based Tolino digital reading system, which now has a credible presence growing in Austria, Switzerland, Belgium, the Netherlands, and Italy.
• Expansion of Bookwire (from Germany and its Spanish / Latin American subsidiary), PublishDrive (from Hungary), StreetLib (from Italy), Sweek and Bookchoice (from the Netherlands), 24symbols (from Spain), and Legimi (from Poland).

Speaking of international writing and publishing, it’s been a good year for the Toronto-based Wattpad. With more than 60 million users and support for more than 50 languages, it’s heavily weighted toward mobile-using Millennials. Wattpad is now profitable and has several revenue-generating programs (some of which benefit writers directly), in addition to partnerships with major media companies and several large trade publishers, including Hachette. Their end-of-year report has some fascinating statistics on what’s trending in the young adult market. (Side note: We imagine there must have been celebrating at the Wattpad offices when Amazon pulled the plug on their weak competitor site, Write On by Kindle, earlier this year.)

Bottom line: One more significant headline in 2017 sure to carry long-term ramifications: Pearson sold part of its stake in Penguin Random House to Bertelsmann—and is expected to eventually sell all of its stake. Penguin Random House is the largest US trade publisher, and Pearson is the world’s largest publisher; Pearson has been struggling as higher-education sales decline. Some predict the death of textbooks—which is a bit of hyperbole, but closer to the mark than not, since the market is clearly shrinking. Meanwhile, the CEO of Penguin Random House, Markus Dohle, expressed his company’s fundamental challenge as “moving from a business-to-business oriented publishing industry to one that is business-to-consumer oriented. In an online world, we publishers must become more reader-centric and we must establish direct connections with the reader. We need a completely new approach to marketing books. We have to be able to generate demand for our books, and at scale. We basically have to reinvent how we advertise and publicize new books.” Whatever that reinvention looks like, one player has held most of the cards for a while now: Amazon. Probably the one effort we saw in 2017 that indicated how the Big Five can effectively compete was the acquisition of Bookouture by Hachette UK, which we wrote about in March 2017.