This comes to you from very genteel Henley-on-Thames where I'm staying at the contemporary posh Hotel du vin. The people here at the front desk disagree with my description - they prefer words like beautiful, comfortable and friendly. It is a great hotel but I'm fixated by the fact there were 39 stairs between the door of my room and the bed. A record I think, although someone will probably correct me.

I'm here for the Publishers Association international strategy meeting. In spite of the importance of the UK book trade, British publishers would not exist without their exports. And we do it really rather well in spite of having to contend with a very strong currency (vs our major competitor, the US dollar), threats from territorial erosion, piracy, dodgy dealers and restrictive practices in some countries.

The latest statistics show export growth of 14% in units and 10% by value with fastest growth in children's books and educational programs. Academic unit sales actually fell as a result of people switching to digital delivery but revenues held up. This year, subject to the usual provisos about political events and natural disasters should see further growth in Asia, Eastern Europe and the emerging markets in general.

The biggest issue (and cost) continues to be piracy and the Publishers Association (whose website will shortly reflect more obviously its merits!) leads the world's publishing industries in taking action where necessary and supporting legal and consitutional routes to the protection of authors' copyrights. It is expensive but vital. It is another example of a cost which commentators from within and without the industry tend to forget when calculating profits.

I rather liked this cartoon from the New Yorker.

In the 1990s when I worked at Reed International Books my office was in the spectacular art deco Michelin House building in Fulham Road. Apart from the publishing businesses, the building also housed (and still does) several other businesses. When we first moved in there was a deal with the Conran Shop whereby our employees got a discount at the shop and theirs got a discount on our books. Terence Conran rapidly realised he was getting the worse end of the deal and cancelled it. On the first floor was the glamorous Bibendum restaurant with a less formal Oyster Bar on the ground floor. Outside there is a fishmonger on the left and a florist on the right. It transpired that by far the most profitable and most stable of all the businesses was the florist which exceeded its budgets through the booms and busts of the economic cycle and all the other vagaries of retailing. Is there a lesson?

In those days the production director of the trade division (Heinemann, Secker, Methuen etc) was Peter Kilborn. He convinced me of a publishing rule which I now know to be immutable. If you want a thorough and sensible analysis of any publishing-related problem (or maybe any problem at all) ask your production director. Anyway, since then he has worked constantly in the book trade and is now head of the Book Industry Communications organisation which we all know as BIC. BIC is the unsung hero of the book trade and it has been responsible for the successful implementation of many of the most significant industry initiatives. He has been following a number of the debates on this blog and is convinced that solutions lie in improving efficiencies rather than trading insults. I agree. He sent this contribution and I hope that this might move the debate from the sterility of differential discounts to the real gains to be made from technological investment and implementation.

Richard – and Macmillan Distribution - have long been supporters of electronic trading and I'm grateful to him for the offer of a guest blog on e-commerce and BIC’s e4books campaign.

As an industry we have a good record of exploiting new technologies. Which publisher, small or large, doesn’t use email or sell from a web site or use desktop publishing or use computerised accounting? Why then does supply chain e-commerce provoke so much hostile attention? Why are telephoned orders and paper invoices the sacred cows of our industry?

For instance, readers may be interested to look at Simon Edwards’s article in last week’s Publishing News (I cannot link to the article direct because the archive search isn't working properly - ed) about the costs and complexities of running a telephone hotline. This is a huge expense for distributors, both in terms of personnel as well as disruption to working patterns, yet they still feel the need to offer them for fear of upsetting both booksellers and their third party clients. And one of the biggest users of telephone hotlines is also the bookselling chain which has put the most resource into persuading its suppliers to trade electronically!

Nielsen’s recent decision to stop sending out thousands of Teleorders by fax or post – to publishers who may or may not even still exist – and set up an order collection web site instead has met with a mixed reaction. This has to be a step in the right direction but sadly Nielsen can do little to persuade the thousands of publishers who still keep title records and product information in manual (even hand-written) form to submit it electronically.

There are many similar examples of old practice which give our trade a much higher than necessary cost base and of course lower profits. As an industry, we need a much better understanding of what the real cost is of doing business inefficiently - and how easily this cost can get neglected when it comes to negotiating booksellers’ discounts or the terms under which distributors contract with their third party client publishers. For example, it is perfectly possible for one bookseller who trades electronically, returns very little and is altogether a model customer to get lower discounts than a bookseller who orders on paper, pays late and has high returns. Armed with some cost-to-serve analysis and a willingness to question the way we do business, much could be done to make the book trade more efficient, more profitable and more resilient.

I was sent this link today by the US media investment bankers DeSilva and Phillips. It is an in-depth review of mergers and acquisitions activity in the media sector. They conclude that:

“the year 2006 has turned out to be not merely strong, but also a year of extraordinary deal-making in both quality and quantity.  A dollar volume of $20.5 billion in media transactions makes 2006 the strongest year since 2000, and close in volume even to that year’s total.” 

Within the report they predict that there will be trends towards the privatisation of public companies and the acquisition of US media companies by Europeans on the back of improved European economis and a strong euro. They also predict that 2007 will be even more active than 2006.

It is, of course, great to know that we are involved in an industry with so much activity. The trouble is that all this wheeling and dealing comes with significant costs - lawyers, bankers, accountants, disruption, redundancies, strategy consultants, headhunters, stockbrokers. At the same time the industry needs to invest more in transforming its activities from print to digital and customers are demanding ever better value for money. Somewhere there is a mismatch.

On a more parochial level it is remarkable that a blog I did recently about independent bookselling in the UK has generated 24 comments and quite a deal of heat addressed at publishers, supermarkets, Internet booksellers, and the Booksellers Association and its executives. It's good to see the debate and I understand the fears and concerns of independent booksellers. I do wish, however, that some of the commentators would try to understand the issues facing those they attack.

Publishers owe it to their authors to maximise sales of their books. In the 21st century this must involve sales through supermarkets, through Amazon, through chain bookshops as well as through traditional independent booksellers. The value chain and costs for each of these channels is different and complex. Publishers don't grant higher discounts than they need to and they certainly want to see the continuance of as many routes to market as possible.

Supermarkets need to serve their customers. Part of that service involves the supply of books as well as magazines, food, clothes etc. They also need to offer best value. They can achieve this by being able to sell very large quantities efficiently and that is certainly the case with best selling books. Publishers would be seen as very elitist if they didn't see the supermarket shopper as a potential customer for books.

Amazon and other Internet booksellers have generated new sales for authors by the re-invigoration of the 'long tail', by sophisticated algorithmic market research, and by heavy investment in customer service, technology and marketing.

The BA tries to represent all those organisations who sell books in the UK and Ireland. To shun certain booksellers because they are not 'independent' or 'traditional' would be daft. Of course it must be difficult for its executives to satisfy all its members all the time but that's true of every organisation from the local Parish Council to the United Nations. I think the BA gives booksellers a fantastic service and deserves 100% support from all interested in the security and development of the book market.

If you have half an hour - or even a few minutes - to spare, go to BBC Radio 4, switch on the volume control, scroll down to 'You've never had it so good' and listen to a fascinating programme written and narrated by Peter Hennessy about our former chairman, Harold Macmillan. If nothing else (but there is plenty else) it's worth it for his delivery.

Over the weekend I read the proofs of a book we are publishing in April. It is by the journalist and sports writer Matthew Engel and it is a selection from his obsessive collection of red notebooks. Every page had something on it which made me smile or think. Great lines such as 'Australia, the land that foreplay forgot' (Germaine Greer);'In the history of the world, no one ever washed a rented car' (Lawrence Summers); 'After two years in Washington, I missed the sincerity and genuineness of Hollywood' (Fred Thompson); and so much more. Place your orders now.

I wrote yesterday about Jeffrey Archer's new book. Here is the cover. It is the first time his name does not appear on the front of one of his books.

There's a story in today's Sunday Times about Jeffrey Archer's next book, The Gospel According to Judas, which he is writing along with the distinguished theologian and author, Frank Moloney.

I'm pretty certain that a significant number of people will demonstrate their unshakable prejudices about Lord Archer but I am proud to be publishing this book (on March 20th worldwide) and I know it is ruthlessly scholarly, entertaining and important.

Perusing the print edition of this week's Bookseller I came across this wonderful sentence:

There is much gnashing of teeth in the trade press about the future of independent bookselling. Indeed, whenever I write anything about sales of books in the UK I get a lot of comments and correspondence attacking us (and other publishers) for undermining independent booksellers by granting too high discounts to chains, supermarkets and Amazon. The Bookseller magazine has carried many excellent articles on the subject but I think this angry and forthright letter published by them yesterday deserves to be widely debated and I've appended a few paragraphs from it. I don't agree with Mr Foster's conclusions (nor his views on the Booksellers Association)  but I do think we need to address the issue more formally than through the Bookseller or this blog:

Independents are the key

I refer to Jonathan Spencer-Payne's recent letter (The Bookseller, 1st December) in which he forecast that there would be no independent bookshops in 20 years. While I agree with most of what he says, I do think he's being rather optimistic. I know of three which have closed relatively recently and two that are in difficulty in our region...

...The independents are the seedbeds of the business and the custodians of our literary culture. They subsidise the discounts given so generously by the publishers to the chains, supermarkets and internet booksellers. They are the de facto agents (unpaid) for Book Tokens, which are hidden by the chains (which prefer to sell their own vouchers), and they keep the wholesalers in business.

They are run in the main by sensible people who do not owe the banks hundreds of millions of dollars. They support a comatose and ineffectual trade organisation whose chief executive is never heard or seen promoting bookshops in the media.

When the independents go, the lot goes, and it'll be sooner than you think. The chains will never, ever be able to compete with the supermarkets and the internet. Happy New Year.

Philip Foster
Owner, The Tolsey Bookshop & Stationers
Tetbury, Glos GL8 8JG

I'm indebted to Peter Collingridge for pointing me to a cost-free solution to analysis of visitors to this blog. I'm also grateful to Google and the Macmillan IT department for making it possible. Here are a couple of the charts available.

The surprise here is that I'd assumed a significant proportion of visitors were coming from India but the pattern is very similar to the standard geographical distribution of sales of an academic monograph.

What can I say about this one? Thank you Susan Hill and thank you Grumpy.

On a very sad note I have just heard of the death of William Armstrong, formerly Managing Director of Sidgwick and Jackson and a great publisher and mentor to many. There will be in-depth obituaries in the trade press by people who knew him intimately. All I can say is that he never once lost his enthusiasm for publishing good books well and commercially. As a result of William's retiring style, there are no pictures of him on Google Images so I'll have to wait for the Bookseller archives to dig something up.

And finally, Publishers Weekly has reported on the AMS Chapter 11 which I wrote about last week. What I hadn't realised was the quantum of potential damage. Random House is owed $43m and the next four (Simon & Schuster, Hachette, Penguin, HarperCollins) around $80m between them. I'm not sure what the total profitability of these top five businesses in the USA is but I'd be surprised if it exceeded the sum of these liabilities. Let's hope that AMS keep their word and allow the non-US parts of the business to trade without depriving them of cash to pay suppliers.