AAP Press Release: publisher net revenues down

[fjtorres]

Via Digital Book World:
http://www.digitalbookworld.com/2015...-half-of-2015/

Publishers’ book sales for the first half of the year (Jan. – June 2015) were down 4.1% at $5.58 billion compared to $5.82 billion for the first six months in 2014. These numbers include sales for all tracked categories (Trade – fiction/non-fiction/religious, K-12 Instructional Materials, Higher Education Course Materials, Professional Publishing, and University Presses). Publishers net revenue is tracked monthly by the Association of American Publishers (AAP) and includes sales data from more than 1,200 publishers (#AAPStats).

Some of the trends noted during the first half of 2015:

• Trade books (fiction/non-fiction/religious) were down from the first half of 2014, but began showing signs of improvement in June
• Trade eBooks declined 10.3% from 2014
• The bulk of eBook year-over-year decline comes from the Childrens/YA category, which was down 45.5%
• The decline comes after tremendous growth in 2014 and challenging comps against blockbuster titles, including Frozen and the Divergent series
• Paperbacks and downloaded audiobooks within the trade category grew in double digits
• Sales declined for Educational and Instructional materials

This of course only reflects the tradpub side of the business and the bulk of the decline comes from the BPHs.

Since the report only goes to June it does not reflect the full impact of Agency 2.0, since PRH was still wholesaling ebooks until Sept.

More at the source.

The usal caveats about press releases apply.

[Cinisajoy]

This makes me wonder what the best sellers were during those times.

[fjtorres]

Originally Posted by Cinisajoy

This makes me wonder what the best sellers were during those times.

Frozen picture books.

[Cinisajoy]

Oh and I don't think less than 5% is that much of a loss.
That statement depends on the number of zeroes before the decimal point.

[fjtorres]

Originally Posted by Cinisajoy

Oh and I don't think less than 5% is that much of a loss.
That statement depends on the number of zeroes before the decimal point.

Remember, that is off the gross.
From that $5B or so you have to subtract salaries, operating costs, royalties, overhead, and all their other expenses (a lot of which are fixed year to year). And then remember how they got to that point: 10% drop in ebooks (50% net margin) and a sight growth in pbooks (20% net margin).

On a year to year basis, the BPHs get to pocket maybe 9-10% of their gross so that 10% drop in ebooks could conceivably cut their net profits in half. Their bosses across the pond are not going to be writing that off as just a glitch.

[Cinisajoy]

Originally Posted by fjtorres

Remember, that is off the gross.
From that $5B or so you have to subtract salaries, operating costs, royalties, overhead, and all their other expenses (a lot of which are fixed year to year). And then remember how they got to that point: 10% drop in ebooks (50% net margin) and a sight growth in pbooks (20% net margin).

On a year to year basis, the BPHs get to pocket maybe 9-10% of their gross so that 10% drop in ebooks could conceivably cut their net profits in half. Their bosses across the pond are not going to be writing that off as just a glitch.

The article says NET revenue. So that is after all bills are paid.
Either way if something drops 5% then it is mathematically impossible for something else that depends on it to drop 50%.
Note I said mathematically.
Doing a little quick math here. With 2014 being 100. That makes 2015 being 95.
So for income we have 100-90% for bills and miscellaneous tax deductions.
The next year we have 95-90%.
2014 saw the guy make $10.
2015 saw the guy make $9.50.
That is nowhere near 50%. That is a loss of 50 cents on the hundred.
Slight difference but it is a 50. That is .50% not 50%
My apologies to Diap for the math.

This post does not take into account, creative accounting.

[rkomar]

Originally Posted by Cinisajoy

The article says NET revenue. So that is after all bills are paid.

I think NET REVENUE is sometimes used that way, but it's more often used to mean the GROSS REVENUE minus discounts (coupons), returns,... I'm not sure how the article uses the term, but it makes a big difference which one it is.

[Cinisajoy]

Originally Posted by rkomar

I think NET REVENUE is sometimes used that way, but it's more often used to mean the GROSS REVENUE minus discounts (coupons), returns,... I'm not sure how the article uses the term, but it makes a big difference which one it is.

I was taught Net is after all tax deductible stuff and gross is before tax stuff.
So yes there can be at least a 25% difference unless one makes under I think 15,000 now.
Oh and a married couples net should be more than a singles net at the same pay.

[Apache]

in business, Net is after all expenses have been taken out. What is left over is net profit. Movie Stars learned a long time ago to get a percentage of gross not net. The ones who settled for net never received any money because, on paper, even the most financially successful movie could be made to show a loss.
Apache

[fjtorres]

The trade business grossed $9B last year. Full year.
Their net profit was slightly above $1B.
The press release is talking sales, not profit.

(I doubt they want to go public with profit numbers this year. Just like they no longer discuss mmpb and trade paperback numbers separately.)

[Cinisajoy]

Ok so they misspoke but looks like my math was pretty accurate.

[fjtorres]

They misspeak all the time.
They're AAP. "It's what they do."

But every once in a while the spin slips and reveals a few nuggets.