Independent publishing sector is 'thriving' says IPG report

The UK’s independent publishing sector is growing and “thriving”, a second annual independent publishing report has found.

However, Brexit has materialised as the most significant issue facing members now, with staffing resources and cash flow issues high among the concerns.

Intended as a “comprehensive” overview of and analysis into the state of independent publishing in the UK, the report, this year sponsored by law firm Harbottle & Lewis, has revealed that nearly half of the Independent Publishers Guild’s (IPG) members (48%) surveyed believe that their business is growing – marginally down from 51% last year.

Devised by the IPG, the research was undertaken by Nielsen Book and compiled from the results of a questionnaire sent to all IPG publisher members between 29th June to 7th September 2016. The questionnaire received 184 responses, up from 157 in 2015.

According to the report, 48% of publishers said that their company was “growing”, 40% reported stable sales, while 13% said their business was contracting. In contrast, in 2015, 51% of publishers said their company was growing, 34% said it was stable, while 15% said it was contracting.

Growth was particularly strong in children’s publishing sector, with 56% of businesses reporting rising sales in this area - although this is down from 73% in 2015.

Growth was also strong for the academic sector, with 41% of businesses seeing rising sales this year, up from 35% in 2015. However, only 47% of educational book publishers said their business was growing, down from 73% in 2015, and only 46% of professional book/journal publishers said their sales were rising, down from 62% last year.

The emergence of new channels to market was one of the main forces having a positive impact on business for 40% of publishers, although this number was down from 48% in 2015. The stabilisation of the e-book market and improving economic situation have also helped with growth, the indie publishers said. Meanwhile, only 6% of publishers said Open Access was having a positive impact on their business, down from 8% in 2015.

In terms of digital, most publishers (59%) said e-books accounted for between 1% and 20% of their overall proportion of sales, though just over a quarter (26%) said e-books made up none (0%) of their sales. Just 2% of those surveyed said e-book sales made up 81% to 100% of their sales.

Promising new channels to market include online retailers, with 52% of publishers reporting increased sales through this channel over the past two years, however this is down from 2015 which saw 61% of publishers report increased sales through the web.

Last year, sales to library suppliers were identified as being the most reduced channel, with 35% of respondents noticing a reduction in orders. This year, it is still the most reduced channel but only 27% of respondents have noticed a decrease in orders.

Meanwhile, supermarkets are increasing as a channel to market for indie publishers, with 41% saying that this route is becoming more open to them, up from the 31% of respondents in 2015.

Export markets are also strong for UK indie publishers, with 22% saying the majority of their sales were exports (excluding rights and co-editions). The UK market, however, is still the strongest for most, with 67% saying most sales originate here –down from 69% in 2015.

Forces impacting negatively on customers includes price erosion, with 43% complaining about the impact of this on their business, up from 41% last year. Gaps in knowledge also have a negative effect, according to 37% of IPG members surveyed, up from 32% in 2015, while 25% cited staffing gaps as a cause for concern, up from 24% last year.

Brexit – and its impact on print costs and the UK economy in particular – has emerged as the most significant issue facing members now, with staffing resources and cash flow issues high among the concerns.

However, the survey also revealed indie publishers had many reasons to feel optimistic, including their agility to respond to the market, niche expertise and growing opportunities in selling directly to consumers. The quality and passion of staff, strong publishing and support from loyal and engaged customers were also cited as reasons to be “cheerful” about the state of independent publishing.

IPG chief executive Bridget Shine said: “The report provides some fascinating insights into our members’ achievements. There is no doubt that publishers face significant issues, not least since the Brexit vote, but it is hugely encouraging to see so many signs of growth and optimism among out members. We have always known that independents are creative and resilient, and this report proves it.”

IPG chair, Caroline De la Bedoyere of Search Press, told The Bookseller the fact that businesses were reporting a positive growth was “very exciting”.

“In both last year’s report and in this year’s report independent publishers cited new channels to market as the primary positive impact on business,” she said. “This once again proves that this is a publishing sector that never sleeps, a sector responsible for endless innovation and a group of publishers that never stops finding new ways to sell their books.”

She added: “The picture continues to be a rosy one. The Independent sector is not gloomy and depressed but continues to be nimble, reactive and very successful.”