Publishing Trendsetter is a production of Market Partners International and Publishing Trends.

What Brexit Means for the Publishing Industry

General Response

Citizens of the world were shocked when the United Kingdom voted to leave the European Union on Thursday, June 23rd . Many have likened the scenario to one of doomsday fiction. English novelist Robert Harris wrote on Twitter, “Feel as if I’m living in a bad dystopian political thriller.” However, despite people’s shock, British feelings of separatism from the EU are not new. According to the New York Times, Britain was initially reluctant to join with its neighbors in Europe when the European Economic Community was founded in 1957. After only two years of membership, Britain held an exit referendum similar to the one that just occurred, but one that resulted in a “Remain” majority vote.

After the landmark “Leave” majority vote was announced this past June, financial markets experienced immediate impacts. The value of the pound plummeted, and stocks fell worldwide. In contrast, the effects of Brexit within the publishing industry will be slower to reveal themselves, but those working in the book business have already expressed their pessimism. In this article, The Bookseller commented on a poll they ran online between June 10th  and 14th . Their polling revealed that 78% of people in the book trade opposed the EU Referendum, and that a quantifiably similar majority thought that a “Leave” vote would have negative-to-catastrophic consequences for the book business.

A general dismay concerning the UK’s decision was immediately apparent within the industry. Many British authors, including J.K. Rowling and Kazuo Ishiguro, publicly voiced their frustrations online, and several UK publishing professionals have also spoken out. Chief executive at Faber & Faber, Stephen Page, condemned the UK’s decision on Twitter, along with Canongate’s Jamie Byng. The Guardian reported that Gail Rebuck, chair of Penguin Random House UK, referred to the passing of Brexit as “a disastrous night,” and that Hachette UK Group Chief Executive Tim Hely Hutchinson confessed that he was “disappointed.” The Bookseller commented that it has “become clear” that few people in publishing endorsed the “Leave” campaign.

Possible Effects

…On Profitability

Some effects on the publishing industry have already been observable. Literary agent Barry Goldblatt revealed immediate losses on June 24th, only a single day after the “Leave” vote.

brexit tweet

Some in the book business have expressed fears of an impending recession, such as Philip Jones, an editor for The Bookseller, who wrote that the publishing industry is “not so healthy that it could easily survive another recession.” A seasoned publishing journalist writing for Publishers Weekly, Liz Thomson predicted a destabilizing of consumer spending, due to an increase in the cost of living in the UK. If this reveals itself to be a true consequence, British citizens will be less likely to purchase discretionary goods, which will most likely mean a drop in book buying according to Thomson. With less money being spent on books, jobs in the book trade will also be put at risk. Employment loss is to be expected, according to James Daunt, the Managing Director at Waterstones, a UK-based chain of bookshops. In an email to his employees sent days before the vote occurred, Daunt warned of impending job cuts if the UK were to vote to leave the European Union. His reason: he expects “significant retail downturn.”

…On Trade

BBC News detailed how Brexit will affect the current status of trade in the European Union. Currently, countries in the EU are part of an established single market, in which one sees the free distribution of goods, such as books. This fluid market allows the EU to function as if it were a single country. With the UK’s decision to exit the EU, however, international boundaries will need to be respected where they were previously essentially invisible.

Attorney Ivan Hoffman explained that a publishing deal made in the EU requires that the publisher have the right to sell the book in all member states. Thus, publishing deals made in the UK will now have differently defined territory rights, with UK publishers no longer having the automatic right to sell their books in all member states. In an article previously cited, Liz Thomson expressed her prediction of the forthcoming rewriting of UK copyright laws. According to Thomson, with UK publishers no longer automatically acquiring exclusive English-language rights for the entire EU market, Europe will become a “battleground,” where the cheapest translated edition triumphs.

In the meantime, a low-value British pound reduces the prices of exported goods, according to Michael Cader in an article for Publishers Lunch. Currently, countries in Europe, Canada, and Australia can purchase British goods at low costs, while these sales are worth more in pounds. However, Cader warned that despite the reduction in price of exported goods, exporting books to EU countries might become more expensive in the long run. He wrote, “Advances (and royalties) are worth less to trading partners,” which will make British publishers pay higher prices for new properties. Juliet Mabey, co-founder of Oneworld Publicationstold The Bookseller that this depressed exchange rate is a “huge blow to the [publishing] industry.”

Founder of her own literary and talent agency, Diane Banks also reflected on these issues but came to a more optimistic conclusion in an article for The Bookseller. She argued that translation rights would not be affected, as their sales to the EU are already frustrated. Instead, Banks perceived it favorable that UK publishers will no longer have to make trade agreements that must be accepted by twenty-seven other nations. She predicted that the effects on the publishing industry would be beneficial to young people, who do not belong to the “protectionist regime” of their predecessors. Another promising effect of the Brexit vote, according to Banks, is the new possibility for elimination of VAT (Value-Added Tax) rates on e-books. In a Global Special Report, the International Publishers Association (IPA) recommended a zero VAT rate across formats, claiming that a zero VAT rate encourages readership and education. Thus, the IPA would likely argue that the United Kingdom would see this result if they choose to eliminate the tax.

Still, according to Neil Denny in an article for BookBrunch, UK publishers will experience the loss of EU grants for translations and research. British science publishing and academic presses might experience total dissolution, as the majority of their investment comes directly from Europe. Times Higher Education recorded that UK universities receive about 1.2 billion pounds per year from the EU. Though the UK publishing sector will hopefully survive, it will likely experience diminution. Philip Jones (previously quoted) asserted, “Those at the bottom of the food chain, authors, illustrators, small businesses, start-ups, and suppliers will get it worst.”

Moving Forward / Suggestions Offered

Jones advised workers in the book trade to cater to the emotional underpinning of the industry, for optimism powers the industry. Publishers’ optimism, thus, should encourage readership, and thereby continue sales in the UK. Waterstones’ Book Blog encouraged distraction from the political hostility, in the form of reading. They suggested light-hearted titles, as well as more serious books that provide historical context to the UK’s decision. According to an article on The Bookseller, Waterstones’ commercial manager Andy Rowe urged publishers to inspire customers, by speaking excitedly “with a smile and a spring in your step while putting great books in people’s hands.”

A couple upcoming books whose subject will concern the referendum have already been advertised. The Bookseller reported that William Collins and Biteback have both announced books to be published this autumn concerned with Brexit and the politics that led to the vote’s passing. By monetizing the event, publishers can fight back against expected income decreases.

Many publishers assert that their response to Brexit will be to continue doing business as usual, especially as the vote’s full consequences are not yet understood. This response has been heard from Simon & Schuster UK’s CEO Ian Chapman (in a statement provided to Publishing Perspectives), the London-based Quarto Group’s CEO Marcus Leaver, and Hachette UK’s CEO Tim Hely Hutchinson (according to The Bookseller). However, this “business-as-usual” approach is perhaps less realistic for small British publishers who will need to be more cautious. The Bookseller reported that Prestel Publishing UK even plans to expand its children’s book business, aiming for this genre’s sales to increase more than double. If this is possible, perhaps the future is not as ominous for the industry as might be imagined.

Central to many publishers’ plans is the fight for diversity. The UK’s vote to leave the EU is considered by most in the book trade as a decision that is indicative of xenophobia and racism. Independent publisher Influx Press released a pledge online to fight for those “under threat” from such hate by publishing their voices. Also, Jones, in an article for The Bookseller, commented that, in publications, the benefits of immigration should be demonstrated, and that through diverse reading, Britons will become more in tune with society around them.

Many have also reached out in support of the British book business. In a statement they released on June 27th , the Society of Authors promised to continue fighting in Europe for authors’ rights; they vowed to make UK authors’ voices heard. Noting that the referendum will “undoubtedly” have massive impact on the UK publishing industry, the Publishers Association also pledged to support its members, to protect their interests and address concerns, according to The Bookseller. Even an independent bookshop located in the UK, Mr. B’s, vowed its support of translated fiction following Brexit in an open letter to publishers of this genre. Yet despite such pledges, the full effects of Brexit are yet to be revealed; thus, what might be needed in terms of long-term support is essentially indeterminable at this time.

To come

Today, it seems impossible to imagine what the publishing industry will look like in the UK within a few years. Many, such as James Daunt and Liz Thomson, fear a fall in consumer spending and thus impending lower sales. However, according to The Guardian, recently released figures from Nielsen Book Research revealed, that in the first half of 2016, Britons bought four million more books than they did during the same period in 2015. With book sales up an impressive amount, should UK publishers be worried about the coming effects of Brexit? Regardless, many have their minds set on “fighting.” Some plan to fight back against expected slower sales; some have vowed to fight for diversity. The British book business is aware of the potential for trouble to arise as a result of Brexit, but it will hopefully remain strong, while encouraging its patrons to continue reading.

3 Trackbacks

  1. By Internview: Goodbye from Margo - Publishing Trendsetter on September 19, 2016 at 11:30 am

    […] Definitely!  In researching for potential Trendsetter article-topics, I learned just how much the book business is an evolving industry.  Publishing is influenced by so many factors: politics, the economy, cultural trends, and etcetera.  For example, the Brexit “leave”-vote was cast at the beginning of my internship, so I have been able to follow articles, as they appear, that detail how this decision is affecting the publishing industry.  Though many long-term consequences of the British vote are still yet to be identified, it is undeniable that such political decisions affect the book business, as I continue to read in many articles (besides my own). Editor’s note: Margo wrote a great piece about what Brexit means for publishing. […]

  2. […] of its business from London, and has concerns over the impact on intellectual property rights. A Publishing Trendsetter report outlines the potential impact of losing access to the single market and customs union as the EU is […]

  3. […] of its business from London, and has concerns over the impact on intellectual property rights. A Publishing Trendsetter report outlines the potential impact of losing access to the single market and customs union as the EU is […]

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