Turning the page

Last year Poles bought and read fewer books than the previous year, and market turnover decreased - a trend which could be made worse next year by a rise in taxes on books. Still, Poland's plucky publishers aren't worried. The key to surviving the tough conditions, they say, is finding the right niche, and looking beyond paper to opportunities in new technologies

Interest in books among Poles is a hard thing to measure. On the one hand, the recent Warsaw International Book Fair (MTK), held between May 17-20, featured 700 exhibitors from 30 countries and attracted 45,000 visitors, up from 44,250 in 2006 and 42,000 in 2005.

On the other hand, according to research conducted every two years by the National Library of Poland (BN), the percentage of people over the age of 15 who claimed to have had contact with at least one book in 2006 was only 50 percent, eight percent fewer than in 2004. When it comes to purchasing books, only 33 percent declared that they had bought one in 2006, four percent fewer than in both 2004 and 2002, according to BN data.

The total revenue from book sales in Poland dropped from zł.2.460 billion in 2005 to zł.2.340 billion last year, according to data from Biblioteka Analiz, a Polish book-market research company. Potentially contributing to the trend could be growing book prices. In 2008, an exemption for books from the seven-percent value-added tax (VAT) will expire. The exemption was negotiated as part of Poland's entry into the EU, and it is unlikely that member states would approve of an extension.

Don't judge a bookmarket by its cover

However, this does not necessarily portend a grim future for the publishing market. According to Anna Franaszek of the National Library's Book and Readership Institute (Instytut Ksiàżki i Czytelnictwa), it is too early to draw radical conclusions based on the aforementioned eight-percent drop in contact with books, because the research isn't conducted annually. "Only if the next survey shows another decrease will we be able to talk about a steady decrease," she points out. "Besides, the 50 percent who declared contact with books is still a considerable target for publishers," she notes.

According to Kuba Frołow, the editor-in-chief of Biblioteka Analiz's bi-weekly newsletter of the same name, it was natural that book sales in 2006 appeared lower than the year before. As a matter of fact, 2005 saw a huge jump on the market of religious publications and albums, many of which related to the late Pope, John Paul II.

Rafał Skàpski, the director of state-owned publishing house, the National Publishing Institute (PIW), and president of the Polish Association of Book Publishers (PTWK), does not seem to be alarmed by the lower readership figures either. Though he points out that books have to compete with a whole range of leisure activities these days, he says interest in books isn't in any danger of dying anytime soon.

"It is necessary to look at the issue from a broader context," Skàpski explains. "For example, the recent drop in CD sales does not mean that people have stopped listening to music," he concludes.

Stumbling blocks

Still, publishers do face serious challenges. According to the chairman of the Polish Chamber of Books (PIK), Dr Piotr Marciszuk, the two greatest obstacles are the demographic decline and emigration.

"It is the best-educated ones that are leaving, which is why this is the biggest threat for readership," says Marciszuk. "When I saw a girl reading a Polish book in the London Underground, I understood the reasons for the eight-percent fall in readership last year," he explains.

Another issue that worries the publishers and distributors is the introduction of the seven-percent VAT next year. Skàpski and Marciszuk agree that the tax would have an immediate negative affect on the market.

"In Sweden a rise in VAT on books from five to 25 percent resulted in a 20-percent drop in sales," says Marciszuk, adding that the tax would be detrimental to libraries as well. Moreover, it would affect not only books, but also low-circulation, regional magazines. "These magazines are often the only contact with culture for less affluent people living in remote areas. [If they become] more expensive, they will become inaccessible to these people," warns Skàpski.

The chance that Poland will renew the VAT relief are considered slim, since such a move would require the consent of all EU countries. However, not everyone sees the prospect of VAT application to be harmful in the long run. "Of course there would be a drop, but sales would level off," says Kuba Frołow. Meanwhile, Anna Franaszek stresses that people who want to read books will buy them regardless the price. "Price is not the only factor that affects book sales," she says.

Spreading the word

What are other factors then? As in any business, one key is publicity. All the experts interviewed by WBJ stress the need for a pro-book promotional campaign to be run with help from the government, NGOs and media. "Readership in society depends on the hierarchy of values and priorities, so its necessary to motivate people to read," says Franaszek. "Books should be present everywhere in the media, they should appear in every TV series," argues Marciszuk. He also stresses the need for state subsidies for the publishing of "ambitious" books which demand more from the reader and have a smaller audience.

Fortunately, the climate is changing. Grzegorz Guzowski, the president of Ars Polona, which is the organizer of the Warsaw International Book Fair, says, "I am happy that books are receiving special attention in the media and are not perceived as purely commercial goods like cars." He adds that the industry's perceived woes do not necessarily mean there is no profit to be found. "A market worth over zł.2 billion is still worth investing in," assures Marciszuk.

Knowledge is profit

However, much of the profit that the market generates comes from a few specific segments. Paweł Pakuła, the director of the book division at Empik, Poland's largest book retailer, says that his firm's top sellers are fiction books (30 percent), followed by maps and guidebooks, children's and teen books, self-help books and history books.

Ars Polona's Guzowski puts it frankly: "What always sells well are books by well-known names."

Academic, professional and specialist-knowledge books are also lucrative. In fact, the Scholastic and Pedagogical Press (WSiP), a publishing group controlling 26 percent of Poland's educational-materials market, saw a zł.21-million net profit last year, as compared to a zł.4.64-million loss in 2005. In 2006 the company also launched a subsidiary, Academic and Professional Press (WAiP), which specializes in academic and professional publications. WAiP aims to publish 70 books by the end of this year.

"The segment of such publications in the West makes up 40-45 percent of the market, while in Poland it is 20-25," notes Marek Rostocki, the president of WAiP's management board. "This will grow as more and more people want to improve their qualifications," he adds.

But these publishers will have to overcome several challenges to bring figures up to Western levels. "Many university graduates are still not aware that they need to learn even after their studies," says Rostocki. Book piracy at universities is also proving an obstacle. Still, despite these hindrances, success is possible in this market. "It is just necessary to meet the demands of the market," he claims.

While the market for professional publications is growing, literary works will remain in demand. "Today, proper education plays a crucial role on the labor market, and general knowledge of the world is also highly advantageous," says Marcin Garliński, the president of the management board of Muza, a publishing house. "I doubt if books will go out of fashion," he says.

Finding your niche

To sell well, any publication needs an appropriate distribution channel and some titles are not as attractive as they used to be, even compared to the recent past. According to data from book-market portal wirtualnywydawca.pl, the sales of firms that sell books which are bundled with newspapers, or which are distributed via book clubs, have dropped.

In traditional distribution, the major player is Empik, whose bookstores noted an 18-percent growth in sales last year despite the total market's three-percent drop. Paweł Filar, the co-owner of Platon, a distribution company, admits that the market is seeing consolidation and that only the biggest players see profits. Filar points out that internet sales may help smaller distributors and publishers to survive and develop, especially since the potential for growth in this channel is so large.

In fact, more and more publishers see opportunities beyond paper. "In the publishing market, especially in educational publications, one needs to think in terms of content rather than carrier - it does not really matter what the form is," says Stanisław Wedler, CEO of WSiP. "The winners will be those able to predict what information and content will be needed by certain groups of clients."

Another publisher thinking outside the page is PPWK, Poland's oldest publisher of maps, atlases and guidebooks. "We have a large database, and we can sell it in various ways," says Wojciech Górski, the vice president of PPWK's board. "We use the same data for a paper map, an online map, GPS and GIS systems," he says. This year the company will launch an integrated offer for tourists, which will combine digital and paper devices. "[In publishing] it is necessary to find a niche," says Górski.