A Look Back at 2019: The Most Notable Stories We Covered

One key theme: long-brewing polarization between major publishing-industry players is approaching critical mass

We reviewed every issue of Hot Sheet published this year and expect the following stories to retain their relevance in the years ahead.

Increased tension between traditional publishers and libraries
One continuing story stands out from all others, and it’s particularly striking because it’s something we barely covered in years prior: the debate over library ebook lending.

Industry rumblings surfaced in 2018, when Macmillan began experimenting with a four-month embargo on new Tor ebooks. That same year, Penguin Random House changed their ebook lending model from perpetual access (pay once for indefinite access) to a metered model (titles expire and must be repurchased). Meanwhile, libraries have been reporting extraordinary patron demand for ebooks as well as digital audio, and their budget increases can’t keep up. The libraries’ heaviest users may in fact use only the digital collections and not visit their branch library.

When we attended the DPLAfest this year (a gathering of primarily librarians), the increasingly adversarial relationship between libraries and publishers was plain. Librarians talked of tearing down communication barriers and wanting to work more directly with publishers on licensing terms. At the same time, outside of DPLAfest, the Authors Guild announced a desire to establish a public lending right (PLR) in the US to help better remunerate authors. In other countries, such schemes are funded by the government and do not increase costs for libraries.

Libraries quickly recognized they needed data—and a better PR game—to demonstrate the sales and marketing value they provide and to avoid being seen as the enemy. The Panaroma Project, established in 2018, has now kicked into high gear; a panel at BookExpo shared case studies showing how library activity bolsters book sales.

However, by July 2019, Macmillan had announced that in November it would begin imposing a two-month embargo on library ebooks across all imprints. So far, only Macmillan imposes any embargo. The American Library Association responded by circulating an online petition, #ebooksforall, to demand Macmillan cease the embargo, while some libraries even announced a boycott of Macmillan ebooks. However, a policy change appears highly unlikely.

Whether authors are losing out on sales due to library lending remains a divisive issue, and it doesn’t help that authors’ royalty statements rarely separate out library sales from retail.

Digital audio grows, grows, grows (and: keep your hands off my audio!)
This is a well-known phenomenon already, so we’ll keep it brief. What you need to know: the audio market is still dominated by fiction sales (crime and thrillers are especially popular), but both nonfiction and children’s categories are experiencing significant growth as publishers mine their backlist for audio gold. Traditional publishers now demand audiobook rights as part of any publishing contract, and audio is integrated into the publishing and marketing plan from acquisition.

Not least because publishers are now clutching tightly to any potential opportunities arising from audio, Audible’s announcement of its Captions feature was met with fierce resistance. Captions displays the text of the book on the screen a few lines at a time as the audio plays—something the publishers say is copyright infringement when done without explicit licensing or permission. (Of course, Audible—owned by Amazon—did not ask permission before moving ahead with Captions.) In August, a group of publishers filed suit against Audible. The case is still in court.

Nonfiction grows, grows, grows while fiction suffers
Adult nonfiction continues to drive sales in traditional publishing, with 5 percent growth since 2015. However, the growth in political titles has stopped. In fact, during the first quarter of 2019, political book sales were down 28 percent compared to the prior year despite an increase in the number of titles on the market. In the YA market, the top growth categories are in nonfiction: history, sports, people, and places. Fiction remains on the decline in both adult and YA markets, although comics and graphic novels are a strong growth area—up 33 percent since 2006.

The burden and necessity of Amazon advertising
Amazon now ranks third in the US for online advertising revenue, behind Google and Facebook, and 2019 has felt like the year when every self-publishing author tried (or wanted to try) Amazon ads, despite the difficulty of setting up a profitable campaign. As with so many things in online marketing, you’ll hear varied reports from authors about whether Amazon ads work, but everyone seems to agree that some form of paid visibility is necessary, given how saturated and competitive the market is. When Amazon opened up Amazon Advertising in the UK and Germany, some authors started advertising outside of the US, where it may be easier to compete, at a lower price.

Amazon and Big Tech are increasingly under government scrutiny
Speaking of Amazon: The Association of American Publishers filed a statement with the FTC this year, laying out the industry’s grievances against the Big Tech company. It believes Amazon exercises extraordinary market power in book distribution, is a threat to competition, imposes most-favored-nation clauses and other provisions that stifle market entry and innovation, and ties distribution services to the purchase of advertising services. (The desire to take Amazon down a peg may be one of the only areas where leaders in book publishing are on the same page as the US president, who is famously inimical to Amazon CEO Jeff Bezos, who also owns The Washington Post.) Efforts are also intensifying in Europe to challenge Amazon—and not just Amazon, but also Google, Facebook, and Apple.

Big industry changes that will take time to play out
Two enormously important changes hit the traditional publishing industry this year: Barnes & Noble was taken private and a new CEO was put in place, and we were left with just one national book wholesaler (Ingram) after Baker & Taylor decided to focus on the library market. It’s way too early to say how these changes will affect the health of the book business, but we anticipate this year will become a bellwether for the industry.

Bottom line: How does this year compare to 2018? A year ago, we were talking much more about digital subscription services (Kindle Unlimited, Scribd, and Storytel). Those are still an important part of the market, and perhaps more important than what headlines suggest for some genres. One reason fiction ebook sales might be down is that consumer activity has shifted away from outright purchase. Yes, publishers may blame libraries for that, but Kindle Unlimited undoubtedly plays a role, along with its competitors. Malfeasance in the romance author community—such as the plagiarism scandal early this year—signifies the immense pressure to feed reader demand in channels like KU, as well as the sizable earnings at stake.