Report: Foreign Ownership of U.S. Book Publishing Reaches 50%

Posted on July 16, 1998

An aggressive shopping spree by European corporations will increase outside ownership of the $21.3 billion U.S. book publishing business from its present 33% to 50% by the end of this year, according to a new report, the 1998 Perspective On Book Publishing: Numbers, Issues & Trends. The study is published by Open Book Publishing, publisher of Subtext, a newsletter covering the book business.

German, British and Dutch players are vying for a foothold in all segments--consumer, education and professional. The acquisition of the two largest U.S. publishers--Simon & Schuster by British conglomerate Pearson, and Random House by Germany-based Bertelsmann--will spur overseas investors to pick off mid-sized companies, said Stephanie Oda, co-author of the report.

"In a sense, the U.S. is the last frontier," she said. "The European book market is mature, and anti-competitive regulations are stringent." The trend is not necessarily a negative one, but rather attests to the health of U.S. publishing, said Oda. "Despite some setbacks in trade, the American book market is the world's largest and most lucrative. Investors are not going to tinker with what works." Other key findings:

-- The quickening pace of consolidation will concentrate 93% of U.S. publishing revenues among the 20 largest publishers by 1999, while the top 10 will account for $16 billion, or 75% of sales.

-- Sales of consumer books dropped for the first time in a decade in 1997, down 2.8% to $9.7 billion from $9.9 billion in 1996. On a positive note, returns decreased about 5%.

-- In bookselling, revenues of the 10 largest North American chains totaled $6.8 billion, or 58% of the $11.7 billion trade retail book market. Independent booksellers continue to lose share, dropping from 32% in 1991 to 18.5% in 1997.

-- Driven by growing enrollment and improved funding, sales of educational textbooks, now $5.8 billion, will increase 19% to $6.8 billion by 2001.

-- Because language barriers are irrelevant, professional publishing--especially in the medical/science area, is becoming increasingly global. The three largest players--all foreign based--account for more than 90% of the $4.2 billion U.S. professional book market.

The 400-page report, which Oda refers to as "the bible of the book industry," includes 150 tables and provides analysis of the forces driving the business as the century turns. "Once relatively staid, book publishing has become dynamic and is changing profoundly," Oda said. "Our goal was to publish a definitive reference source essential to anyone connected with the business of publishing or selling books."