For publishing, 2009 is shaping up to be truly ugly. The publishing industry has faced a number of factors that, individually, provided quite a challenge, but collectively they may end up likely significantly altering the industry profoundly over the course of the next year.
If you take a look at the magazine rack of any grocery or drugstore, not to mention book supermarkets like Barnes and Nobles or Borders, what you will see is a nation awash in newspapers and magazine publications. What you may not see is the fact that each of those magazines typically exists on fairly thin margins achieved primarily through the sales of targeted advertisements. A significant proportion of such magazines (perhaps as much as 80% in some places) may actually sell only one copy for every four copies that are displayed on the newsstand, and subscription rates continue to decline for most magazines.
Indeed, one of the most disturbing phenomenon in that sector has been the rise of a whole class of magazines that are essentially distributed for free and are paid for only by specialty advertising. Such magazines have been around for some time, but until comparatively recently these magazines were usually focused in specific trade sectors, such as magazines specifically devoted to electrical line workers. The last decade has seen the rise of a large number of very narrowcast magazines that nonetheless appear on newsstands, at the ragged edge between trade magazines and general interest magazines.
One of the most badly hit areas in the recent financial crisis has been advertising - companies pulling back on their marketing, reducing ad buys, especially for products that have most recently come to market. This will have a domino effect, one that is already discernable if you're watching the racks - magazines being folded, fewer issues being produced, magazines shifting away from monthly to bimonthly publication. Retail shelf space for magazines in outlets such as Barnes and Noble are already noticeably barer than they were a year ago at this time, and it is likely that this trend will accelerate as advertising revenues continue to drop.
This same phenomenon is hitting newspapers even more dramatically. The last year has seen continued consolidation in the newspaper sector as organizations such as McClatchy buy up regional dailies and weeklies, and the merger of McClatchy and Gannett late in 2007 has left the newspaper industry dangerously entrenched. Now McClatchy is laying off reporters, editors and production staff and is reportedly facing problems financing its debt in the acquisition of Gannett. Should McClatchy fall, it could very well take dozens or even hundreds of city newspapers down with it. Similarly the Chicago Tribune went into bankruptcy in hopes of reorganization, but in the tough economy it may have a hard time getting back on its feet.
In addition to the poor advertising climate, newspaper and magazine publishers both are being challenged by the growth of the Internet, which is not only becoming increasingly competitive for advertising dollars but also is becoming the primary news providers for a significant segment of the population. In general, publishers have made the transition from print publication to the Internet with only moderate success, and the costs assocated with producing news and editorial content make the move to Internet-only publication a dicey proposition at best for many publishers. Recently, Forbes become one of a number of companies that consolidated their online and print publication staffs, generally to the detriment of print, and this model will likely become the norm for many companies that had maintained distinct units before.
Book publishing is coming under similar pressures, in part because book sales are declining with personal disposable income. The common wisdom that books are "recession proof" is being significantly challenged ... with book retail costs now in the $25-$40 range for most hardbound books and in excess of $10 for paperbacks, books are no longer "inexpensive" alternatives to other forms of entertainment, especially since the cost of a couple of books is now on the same order as most broadband internet connections.
University and academic publishers are facing even more problems in this regard. Textbook costs in excess of $100 are not uncommon, and the last year has seen returns for textbooks exceeding 90%, serving to drive up prices even more. Meanwhile there has been a quiet revolution in universities as professors move the content for their courses online, in order to keep the costs manageable for their students.
Technical book publishing is under the double whammy of facing the same costs as other book producers while at the same time facing a technical audience that is becoming increasingly comfortable with finding documentation and related content about technology on the Internet. In some respects, the technical publishers may have an advantage - being closest to the technology, they have also been most active in experimenting with alternative delivery mechanisms and different business models, but it is likely that such technical book publishers will increasingly seek to position themselves as providers of online instruction, perhaps as the new breed of certificate oriented online universities. [Editorial note: O'Reilly is doing this with it's O'Reilly University programs - more information on this shortly].
Amazon and related companies are also beginning to finally hit their stride, and in many ways are effectively becoming the virtual surrogate of the publishing world. Amazon recently acquired Victoria, BC based Abe Books, one of the largest online distributors of used books, and has been heavily pushing its e-publishing and print on demand services. The Amazon Kindle meanwhile seems to be succeeding to become the "must-have" platform for the e-book reader (a lack of a single consistent platform has been one of the biggest detriments to adoption of e-books), and it is likely that as the price point for the Kindle drops, it may very well become the defacto standard for e-book publication.
2009 will almost certainly be the breakout year for e-books. Already a number of specialty fiction publishing companies, such as romance publisher Ellorah's Cave and science fiction publisher Moonlight (?) have emerged as major players in the e-book space, either in conjunction with publication of print books or exclusively specializing in e-books and print-on-demand titles.
Publication on the Internet continues to grow, and its worth noting that while even online publishing staffs are being cut, in general they are not being hit anywhere near as badly as their print counterparts in either book, magazine or newspaper publishing. It's likely that 2009 will see online production reduced slightly, but there's a fair amount of anecdotal evidence that publishers generally see their online divisions as being growth sectors once the economy stabilizes (companies such as Electronic Arts have announced some consolidation in their studios and layoffs, but they have been comparatively small compared to their overall workforce)
A similar phenomenon is occuring in specialty markets. Game publishers such as Wizards of the Coast have been increasingly shifting their focus towards their online gaming divisions, and overall interactive networked gaming seems to be the biggest growth area for many game companies, while comic book publishers such as Marvel or DC have been actively working to develop their commercial properties into interactive online games and related products (as well as increasing the synergy with their movie and animated production units).
The landscape at the end 2009 and into 2010 will likely look considerably different than it does today, with far fewer newspapers and magazine publishers still standing, and many book publishers having either folded imprints or gone under completely, while self book-publication, e-books and hybrid electronic forms (games and interactive media) will end up being far more prevalent. Indeed, it is likely that 2009-2010 will be seen by many in retrospect as the year that traditional publishing finally "died".