Publishing revenues to plunge and thousands of jobs at risk, report says

Publishing, including books, newspapers and magazines, could see a £7bn fall in revenue and 51,000 jobs axed due to Covid-19's effect on bookshop closures and print sales, a report claims.

In total, 400,000 jobs could be lost across the creative industries amid projected weekly revenue losses of £1.4bn a week in 2020, according to research by global forecasting firm Oxford Economics. It predicts publishing will see a 40% decline while 26% of jobs could go.

However, its definition of publishing includes directories, newspapers, periodicals and other activities alongside books—a total sector employing 177,000 people with a total turnover at the start of the year of £16.3bn.

That is substantially more than the £6bn the PA says book publishing brings in alone each year. Figures for book publishing have not been broken out in the Oxford Economics report.

The Creative Industries Federation, which commissioned the research, has warned of a “cultural catastrophe” facing the entire creative sector. It predicts the sector will be hit twice as hard as the wider economy, with a combined revenue drop of £74bn this year and one in five jobs expected to be axed.

Belinda Budge, vice-chair of Creative England and Creative Industries Federation, and a former group publisher at HarperCollins, said: "The UK’s creative sector brings joy to millions, plays a key role in maintaining the nation’s mental health and is also a huge driver of economic growth. However, the report today projects a catastrophe for our creative ecosystem, with sectors projected to lose around half of their revenue.

“Publishing could lose £7bn in revenue and 26% of jobs, affected by the closure of bookshops and decline of print sales. As we emerge from lockdown, we will need imagination and creativity more than ever. We will need those who can take specks of ideas and carve them into a vision for the future. But for that, we need our creative industries.”

Despite the Job Retention Scheme, the report projects 119,000 permanent creative workers will be made redundant by the end of the year. The impact on employment could be felt twice as hard by creative freelancers with 287,000 roles expected to be terminated by the end of 2020.

Budge told The Bookseller: "The freelance community has been hit really badly by Covid-19 and many freelancers haven't been supported by any of the government schemes. People are losing their jobs and their businesses. I worked in publishing for 30 years, and know there's an incredible creative and innovative eco-system in publishing, in and out of house, from editors and agents, to production, sales and designers. I think what's been proven is those jobs aren't going to go anywhere, they're not going to be automated. The industry is still going to need that ecosystem and it will impact publishing if we lose it.”

She said publishers needed to continue innovating, adding: “The creative industries really need to look to the next generation of creatives and designers and makers to understand what their industry is going to look like to them in ten years time. Things are going to be different and it's really important that we hear their voices.”

And she said the crisis should serve as a “call to action” for more publishers to engage with the wider creative industries, which they often engage with for recruitment, revenues and ideas.

She said: "It's important that publishers do feel part of the £117bn the creative industries contributes to the economy and also the two million people it employs. We all need to be invested in asking the government to put the creative industries at the heart of their conversation and support it in any way they can. That's the work the Creative Industries Federation have been doing so brilliantly during Covid.”

Before the coronavirus crisis, the UK’s creative sector was growing at five times the rate of the wider economy, employing over two million people and contributing £111.7bn to the economy.

Regionally, London is projected to see the biggest drop in overall creative industries gross value added (GVA), with a £14.6bn (25%) shortfall. However, Scotland and the North East are expected to be hit hardest relatively, with projected GVA decreases of 39% (£1.7bn) and 37% (£400m) respectively.

The report, based on a survey of 2,000 creative organisations and industry forecasts, comes after the Creative Industries Federation wrote an open letter to government in April calling for urgent funding for the sector, signed by over 500 leading figures including Tom Weldon of PRH and Hachette UK's David Shelley.

Caroline Norbury, c.e.o. of the Creative Industries Federation, said: “We urgently need a Cultural Renewal Fund for those in the creative sector who will be hit hardest, including those industries who will be latest to return to work, those businesses unable to operate fully whilst maintaining social distancing and those creative professionals who continue to fall through the gaps of government support measures. We must also avoid a cliff-edge on vital measures such as the Job Retention Scheme and the Self Employed Income Support Scheme, which have been a financial lifeline for many parts of the creative industries and cannot be cut off overnight.

“It is time to both imagine and engineer our future. We will need our creative industries to do that. They are too important to ignore.”