The first crisis of the book industry during the invasion: causes and consequences

"What a crisis," readers, journalists, and everyone else who sees this word repeat. "Unlike other businesses, you are growing," "look at how many bookstores have opened, it must be that Folio is not keeping up with the market, you are losing, so you are hysterical," they say. "Statistics show a huge growth," says the Ukrainian Book Institute .

Let's see if this is true.

Let's start again from the starting point. The last two years have seen the closure of dozens, if not hundreds, of bookstores. eSupport that saved the industry in the first months of the invasion. It also allowed the Russians to take half of the "extra" money out of Ukraine and fill warehouses on our territory.

This has actually shaped the behavior of buyers for 2022 (many have forgotten about it): to buy up all the remaining Russian books before they are banned, to buy old leftover books by Ukrainian publishers at low prices, to be interested in new books from the Ukrainian classics, buying mostly the Big Three: Bahrianyi, Pidmohylnyi, Khvylyovyi.

The story of 2023: bookstores begin to remove the remains of books originating from the aggressor state from the shelves, fakes of Russian books published there after the invasion appear on the markets, and smuggling also finds ways. Be careful, because smugglers are watching the behavior of the controlling authorities. They are silent. Publishers are taking over the largest niche at the time: books on Ukrainian history and culture. Publishers are cautiously buying the rights to world bestsellers in Ukrainian, still not understanding the potential of our market.

Fall 2023. The market, after the psychological trauma of society due to the unsuccessful Ukrainian counteroffensive, is experiencing a complete reboot of the bestseller list, with American adult fairy tales-fantasy, romance, erotica-taking the place of everything Ukrainian. Those who bought the rights in time win the market. Gold embossing, loose paper, color cuts.

The escapism of society finds its way into the top ten on the book market. It is better to read about the love of dragons than to see real dragons every night in the Ukrainian sky. Power outages only accelerate the growth of this part of the market.

A year and a half later, the Ukrainian bestseller holiday takes place: publishers, in the struggle for the rights to favorite books of the 15-35 audience, start buying them at auctions, raising the bar for advances, thus increasing the average circulation. Those who lost the fight for the front-row bestsellers buy secondary books. Bookstores are increasing shelf space for these genres, making huge returns of books in other categories, especially children's and nonfiction, and not all Ukrainian classics, which have become too numerous, even make it to the shelves.

New bookstores are opening – the increased assortment requires new shelves. The holiday lasts until the first months of 2025.

To their credit, publishers are slowly but surely filling the market space that has been left by the Russians. But the limited number of qualified translators and editors makes them extremely cautious .

Now we'll look at the picture in the most lucrative market niches. All figures are conditional, please look at them only as a ratio.

We started with 100 titles and an average circulation of 2500 copies. The rights cost $1000-1500. Reprints, new reprints, rising prices along with quality. The reader likes it. Stage 2. 200 titles. The average circulation is 3500, the rights already cost $2000, and market participants are cautious. But everyone is waiting for the new season's offers. Readers are also getting the hang of it. Readers' clubs are emerging. Printing houses buy equipment for color cutting.

stage 3, 1000 titles, rights prices $3000-4000. The print run is 5000. There are hundreds of beautiful and interesting books in the queue for translation and printing. Readers begin to "sort through" the goods, each looking for something different. The first illiquid titles in the genre appear. The waiting list for printing reaches four months. Other genres are also gradually developing. Bookstores make huge returns. Discounts begin. For now, seasonally and cautiously.

Stage 4: Book prices rise due to expensive rights and rising translation costs. Readers reduce their demand – they have piles of books at home that they bought for future reference. Publishers are looking for money to pay off the printing houses, make big sales and systematic discounts through their own websites. Bookstores are losing demand and are also making discounts. Not only for one genre or products of several publishers. For everything (and which publisher would refuse to stop their own sales amid the general holiday?).

Readers buy again, sometimes without money, free shelves, or desire. But it's free. Freebies don't make money. Publishers are working to return the money they have invested, bookstores are losing money .

NOW WE ARE HERE.

What will happen next? Next up will be Black Friday, which will not produce systemic growth-where else, if there were already three books for the price of two, five for the price of three, and even seven for the price of four. It is impossible to reduce prices further. They showed the bottom. Even on the Internet, the price of Google promotion is already higher than the possible profit. Bestsellers and long sellers have already been printed.

If there is no full-fledged Black Friday, at least some, it will eat up the traditional December growth. After the holidays, the hangover will begin, with the closure of those businesses that saw the fall and winter season as their last chance. Those who are strong will continue to enter the market. This applies to both publishers and bookstores .

Who will be responsible for everything? The printing houses that will be forced to shut down. Today, the four-month waiting list has dissolved. Now it is two to three weeks long. There are foreign orders. There are expectations that the production of textbooks-26 will begin not in the summer, but at least in April. This is all.

Someone can tell me where I am wrong in my calculations?

And the solution. There are three of them. None of them will appeal to the public reading.

The first story is about traditional medicines. The state is finally launching a library program for the first time in five years. uAH 500 million is a cautious figure, a third of the minimum restoration standards laid down in the rules (5% of the funds). To be honest, we need UAH 2 billion (which is the average annual write-off).

Plot two. A delayed crisis. The government removes restrictions that prevent publishers from receiving loans under the 5-7-9 program like other producers. Some will use the resource to fill the last niches in the market, others will self-destruct. We'll see .

Plot three. A large roundtable discussion between publishers, sellers, printers, and the government. A package of laws: a single price, discount rules, a stock replacement program, the same lending, but most importantly, self-restraint for survival.

Original