Anna-Maria Rimm

Survival in Publishing: Terms, Conditions and Positioning Strategies in the Contemporary Swedish Book Industry

The aim of the project is to study business tactics and strategies of small independent publishers as well as larger publishing corporations in the contemporary Swedish book business. In Sweden, as in many other European countries, the book industry is dominated by conglomerates which have consolidated exceptionally during the last decade.

These conglomerates operate through vertical integration, where different companies within a supply chain (in this case, the book business) are controlled by the same owner. This phenomenon is often accused of causing unfair terms of competition, and is frequently cited as the main reason for the current plight of many small independent publishers in Sweden.

A significant part of the study will consist of comparisons between the Swedish book industry and the recent development in other countries - including the United States, Germany and Great Britain. This investigation will also include interviews with publishers, booksellers and journalists with the aim to examine their views on vertical integration in the book industry as well as on commercial legislation, resale price maintenance/fixed pricing, trade discounts, etc.

The project also includes a rhetorical analysis of how different publishers, from multi-national businesses to specialist academic publishers and small independents, establish ethos in order to position themselves in the publishing industry.

Final report

The purpose of the project was to investigate the strategies of larger and smaller publishers in order to survive and compete in the modern Swedish book market. Like many other countries in the western world, the Swedish book market is dominated by a few large media groups through consolidation and conglomeration, that is, mergers of companies and large-scale acquisitions of smaller companies. They are examples of so-called vertical integration, where the entire lead from production, distribution, marketing and sales is controlled by one and the same actor. The phenomenon is often referred to as an aggravating factor for competing on fair terms, for both small and medium-sized publishers, as well as for the independent bookstore.
Due to the Swedish book market being extremely small, I chose to work with an international comparative perspective with Germany as a benchmark. The German and Swedish book markets carry both similarities and differences. In Germany, for example, the book prices are fixed while in Sweden we have free pricing.

Another difference is that Germany is the world's third largest book market, and that the American e-commerce giant Amazon has been established on the market for over 20 years, which is not the case in Sweden. Common to both countries, however, is a similar view of the book and literature as phenomenon and artifact, as well as similar reading habits.

In the first part of the study - published in two different international peer reviewed articles - a number of comparable industry actors views on the phenomenon of vertical integration in Sweden and Germany respectively are analyzed. The survey was based on interviews, but also contained an analytical overview of the financial and material conditions of both markets, primarily from the perspective of ownership concentration. The first part of the study thus followed the original survey plan very well.

The project later came to incorporate questions about whether actors in the book industry regard vertical integration as something that affects "literary quality", accessibility and diversity. For several reasons - primarily the digital development that continued to overturn the book market during the project period, but also the tasks I performed as in house-researcher and e-book analyst for ten publishers - my project eventually moved towards digitalization and digital strategies for publishers of various sizes, including self-publishers.

Due to this the survey thus changed in part. Furthermore, drastic transformations took place on the Swedish book market. Publishers merged at a quick pace. The digitalization of the book market and its sales channels, the strong development for audiobooks and e-books, as well as an increase in self-publishing, quickly prompted new marketing strategies. Additionally, and perhaps most centrally, Amazon strengthened its position on the global bookmark. The project needed to be modified to be relevant.

The second part of the project came to focus on different strategies in various fields of the Swedish book market. Focusing on self-publishing and smaller publishers, my research resulted in a themed double edition of "Tidskrift för Litteraturvetenskap" (the largest peer review journal for literature in Scandinavia) called "Förlag". I was the chief editor and also wrote the initial article "Förlag i teori och praktik".

Since statistics on the Swedish book market are difficult to access and not very reliable, I mainly used a qualitative perspective in the research project. The empirical basis consisted of interviews with Swedish, German, French, American and British professionals in the book industry, primarily publishers, but also journalists, booksellers, politicians and representatives of interest groups such as The European Federation of Booksellers. Networks were created through participation in a number of international and national book fairs and conferences, as well as through my daily work as an in-house researcher focusing on e-book analysis for ten medium Swedish publishers.

In addition to this, previous research, which unfortunately but naturally is quite sparse due to the current nature of my project, has been used as well as EU-statistics and OECD reports on market competition and cultural policy.

The project resulted in several key results. The Swedish Literature Investigation 2012 (Litteraturutredningen), a study commisioned by the Swedish government, states that "the biggest change [vertical integration entails] is that the large publishing groups move their positions to incorporate the retail chain." In the future it is likely that more and more international retailers and distributors such as Amazon move their positions forward in Sweden. This has already happened in Germany: even though there are fixed book prices, Amazon's market share is steadily increasing.

A clear result of my study is that publishers in Germany are not particularly worried that national publishing groups will buy up retailers, which is the case in Sweden. Why would publishers do that, when it is probably going to be a financial loss anyway? Instead, Amazon is viewed upon as the great threat to "literary quality" and diversity.

When it comes to the Swedish pubishers, they draw similar conclusions. Almost every publisher predicts the same thing: it's no use to even try to compete against Amazon when - not if - they come to Sweden. Unlike Germany, in Sweden there is also the system with free book pricing, which means that Amazon's impact on the Swedish book market is likely to become even more noticeable than in Germany where prices are fixed.

However, the book trade is contradictory and surprising in its nature and it is not only the giants' market. Hand in hand with the increased digital development, small, innovative companies in the book industry have managed to get large market shares through niche strategies. The most obvious Swedish example is the - until recently - quite small publishing company Storytel, which provides a streaming service of audio and e-books, who recently bought the prestigious publishing house Norstedts from the vertically integrated media owner group KF.

The study also shows that you can see a parallell "counter-movement" strategy against large publishing groups - in Sweden as well as globally - through various forms of cooperations between independent actors. For instance, this can involve sales, distribution and retail in general. These collaborations are not apparent to the book buyers, however. Outwardly, the individual publishers retain their niched brands even if they in reality heavily rely on collaborations with other independent companies as a survival strategy.

It has also become more common for publishers to handle several steps in the bookchain themselves, for example through direct sales from their own websites. An important result of the study is therefore that a key strategy for medium and small publishers on a vertically integrated book market is that they become vertically integrated themselves.

Another strategy that the study shows is that many independent publishers aim to launch their brand as strongly niched and focus on, for example, "quality literature", "activist literature", literature translated from certain language areas, educational literature etc., to name just a few examples. They have realized that it is not possible to compete with the big giants. A pure profile, at least seemingly, is the way ahead along with collaborations. Ultimately, all publishers, regardless of size and ownership, need income to survive.

Collaboration was central to my project and I communicated my results continuously in academic contexts, to the book industry and the rest of society. In addition to monthly presentations of my research for the publishers I worked for, the following can be mentioned:
• Lectures at Swedens largest universities (UU, SU, GU, LU) and international universities such as Yale (USA) and Copenhagen (Denmark).
• Assignment as expert advisor on a report on e-books commissioned by the Swedish government.
• Public debates with politicians, including Christer Nylander (lib) and Lars Ohly (v).
• Joint arrangements with the Swedish Author's Association.
• Several appearances at the Gothenburg Book Fair.
• Teaching assignments in Publishing Studies at Stockholm University.
• Participation in media (including SVT, TV4, SR, Dagens Nyheter, Svenska Dagbladet, UNT, Filter, Vi läser, Att skriva).
• Regular seminars at the Section for Sociology of Literature at Uppsala University.

In addition, together with RJ and Uppsala University I organized the conference "A Book Trade in Crisis? Risks and opportunities " at the publishing house Natur & Kultur in Stockholm on March 18, 2013 (150 participants, 20 speakers and moderators). The conference was funded by RJ within the framework of the Flexit project. Among the speakers were representatives from both academia and industry, including Eva Bonnier (Bonnierförlagen), Richard Herold (Nature & Kultur), Kristina Ahlinder (The Publisher's Association) and Johan Svedjedal (Uppsala University).

Grant administrator
Ordfront Förlag AB
Reference number
RMP11-1481:1
Amount
SEK 1,882,000
Funding
RJ Flexit
Subject
Unspecified
Year
2012