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Hunting new books, publishers haunted by used ones

October 18, 2005

By Jeffrey Goldfarb, European Media Correspondent

LONDON (Reuters) – Just as publishers embark on their
annual hunt for the hottest new titles, they are being
confronted with worrying evidence about how easy it is for
readers to buy those same books secondhand on the cheap.

A first-of-its-kind study on used books reveals that sales
last year topped $2.2 billion in the United States — an 11
percent gain from 2003 — and represented 8.4 percent of total
consumer spending on books.

“I wouldn’t be surprised if we could double that 8 percent
over the next five years,” said Boris Wertz, chief operating
officer for online book retailer Abebooks. “I don’t think
that’s unrealistic.”

Though used book sales have traditionally been associated
with quaint and musty shops, growth on the Internet surged by
33 percent to $609 million in 2004, according to the study,
while bookstore gains were only about 4.5 percent.

That compares with relatively flat sales of new books over
the past few years.

“The real story is the dramatic growth of used trade books
through online channels,” said Jeff Hayes, the principal
analyst for the study released earlier this month.

“Used books are becoming mainstream as the Internet
provides transparency into the industry inventory and consumers
become more comfortable buying them,” he added.

The ease of selling online is transforming the used book
trade from boxes full of tatty, dog-eared paperbacks to a cyber
market where unblemished hardcover volumes are hawked just days
after they have hit the bookstores.

Industry executives are baffled about how to tackle the
issue on the eve of the Frankfurt Book Fair, the publishing
world’s biggest annual event being held this week.

About 7,000 exhibitors and more than 250,000 visitors are
expected as editors descend on the German city to buy rights
for prospective bestsellers from around the world.

“It’s very troubling,” said Patricia Schroeder, head of the
Association of American Publishers, of the used book data.

“But it’s one of those things where you say, ‘How many
hours are you going to spend worrying about something you can’t
do anything about?”‘ she said. “Maybe people will buy and read
more new books if they can turn around and sell them so
quickly.”

HEAD-SCRATCHING ISSUE

Although the study focused only on U.S. sales, online
retailers said they see used book sales in Europe outpacing
annual growth in the United States, where electronic commerce
took off quicker. They predicted volume in Europe will match
that of North America in two to three years.

“It’s definitely an issue on everyone’s mind,” said Kerr
MacRae, a deputy managing editor at Headline Book Publishing in
London, a unit of Paris-based Lagardere. “We all keep
scratching our heads thinking if everyone keeps buying used
books, how are we going to sell more new books?”

The analysis commissioned by the Book Industry Study Group
trade organization was based on sales data from 500
booksellers, including Amazon.com, Barnes & Noble, eBay,
Alibris, Abebooks and Powell’s.

It was the first to calculate the size of the used book
market.

The data tell a cautionary tale for the consumer book
industry, now facing the same fate as textbooks, which spawned
a robust secondary market years ago.

Educational publishers have fought the shift by markedly
raising prices and frequently issuing new editions, which are
untenable options for thrillers and biographies.

Instead, publishers could reduce print runs to limit
returns and cut back on the number of advance and review
copies, which often find their way into the resale market.
Publishers might consider becoming resellers themselves or
revisit prices.

“I think pricing will become more flexible and cut into the
used book market, but publishers have not historically been
very aggressive on pricing,” said Wertz of Abebooks.

Book buyers told the study’s researchers that for a used
book in very good condition they would generally be unwilling
to pay more than about one-third of the cover price.

Because of the stark price differential, some argue it is
still open for discussion whether sales of used books are
cannibalizing those of new ones or if it’s a complementary
market of buyers who otherwise wouldn’t buy books at all.

“I’m not sure if I buy that,” said Adam Rothberg, spokesman
for publisher Simon & Schuster, owned by media conglomerate
Viacom Inc. “This is clearly another issue on our plate now
that we’re either going to have to deal with or just live
with.”




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