Report: The economic importance of the book trade

27-03-2019

On instructions from KVB Boekwerk, SEO Economisch Onderzoek has mapped out the importance of the book trade for the Dutch economy. The researchers did this by looking at the turnover, added value, employment opportunities and wages in the production chain for general books in 2017. That supply chain has been simplified so that it consists of the authors and translators, the publishers, and the booksellers. Intermediaries such as the literary agents, the distributors and the illustrators have not been examined separately. The economic effects of reading books – the consumer side – have not been included.

Overall picture

This analysis is all about general books and the products and services derived directly from them, such as appearances by authors and films based on books. The analysis covers an estimate of the proportion of the turnover, the added value, employment opportunities and wages that are associated with producing and selling general books and the derived products and services.

With a turnover of €34 million for the authors and translators, €244 million for the publishers and €498 million for the booksellers, the overall added value of the book trade for the Dutch economy (gross domestic product) in 2017 was nearly a quarter of a billion euros.

Turnover – summary table

Turnover of authors and translators€34 million
Turnover of publishers€244 million
Turnover of booksellers€498 million
Source: SEO Economisch Onderzoek; see also sections 3, 4 and 5.

 

Added value – summary tabel

Added value of the economic activity of authors and translators€16 to 21 million
Added value of the economic activity of publishers€109 million
Added value of the economic activity of booksellers€88 million
Total added value€213 to 218 million
Source: SEO Economisch Onderzoek

 

Employment opportunities – summary tabel

(lower limit)(upper limit)
Employment for authors and translators22,070 people
Employment for publishers1,227 people
Employment for booksellers*1,568 people2,845 people
Total employment opportunities (in numbers of people)24,865 people26,141 people
Source: SEO Economisch Onderzoek
Note: * = for converting between numbers of people and FTE, the average FTE factor of 0.81 for the Netherlands as a whole was used (Statistics Netherlands, 2018).

 

Income from work – summary table

(lower limit)(upper limit)
Employment for authors and translators22,070 people
Employment for publishers1,227 people
Employment for booksellers*1,568 people2,845 people
Total employment opportunities (in numbers of people)24,865 people26,141 people
Source: SEO Economisch Onderzoek
Note: * = for converting between numbers of people and FTE, the average FTE factor of 0.81 for the Netherlands as a whole was used (Statistics Netherlands, 2018).

The turnover of the book trade (booksellers) is highest, followed by that of the publishers and then that of the authors and translators. This is a logical consequence of the way the production chain is set up. The publishers pay the authors and translators, incur other costs as well and must recover that all from their turnover. An additional role is played by the fact that booksellers’ turnover also includes general books in other languages, whereas only books in Dutch count for authors and translators.

The overall employment level in the sector has been estimated at 25,000 to 26,000 people in 2017. The majority of that employment is represented by authors and translators. The turnover and added value of this link in the supply chain is in fact lowest, though. That is because many authors publish books without being motivated by obtaining income directly from them.

Studies have previously been carried out in Great Britain and Ireland into the economic impact of book sales. The added value in Great Britain was determined to be £540 million (approx. €635 million in 2017). In Ireland, the added value to the Irish economy was calculated as €132 million. These studies cannot however be compared like-for-like with the study of the market for books in the Netherlands. The study of the Dutch market used a conservative estimate of the market. The turnover, added value and employment opportunities are probably all higher. In the report by SEO Economisch Onderzoek, the lower estimates are marked “+PM”, signifying that some of the turnover has not been included because it could not be estimated within the terms of the study.  The results should therefore be read as “at least”.

Authors and translators

Only 55 authors earn a modal income or better from their royalties. A further sixty authors earn royalty amounts of between the minimum wage and the average wage. They have many other kinds of income, however: income from ancillary rights for the use of the book (lending rights, reproduction rights, remuneration for loans of e-books in libraries, the home copying levy and income from subscriptions to e-books), subsidies and prizes from the Literary Fund, income from readings, appearances, performances and fees, plus income from selling the rights to books (e.g. for book editions, translations or theatrical adaptations). The overall turnover for the authors and translators is thus estimated at €34.3 million. The turnover for authors and translators is comparable in scale to the turnover of Dutch films in Dutch cinemas.

The added value for the authors and translators together is estimated at €16 to 21 million, of 47 to 60% of the turnover. An added value of 47% seems to be on the low side, given that authors and translators ‘consume’ relatively little in the way of goods and services while writing and translating. This also makes it difficult to determine which sector they can be compared against. For comparison: Statistics Netherlands states the added value for Advertising and market research as 37 per cent, for Legal and management consultancy as 52 per cent and for Architectural and engineering agencies as 59 per cent. The added value is also difficult to estimate because the distribution of income (the turnover) is very skewed among the authors and translators.

The added value of the authors and translators is the lowest of the distinct links listed in the book supply chain. This is associated with the fact that the costs of writing and translating are only one component of the overall picture of book production and sales. For the comparison between the links in the chain, as with the turnover, allowance should also be made for the fact that booksellers’ turnover also includes general books in other languages, which is not the case for authors and translators (and publishers).

There are employment opportunities for over 22,000 people: 19,175 authors and 2,895 translators.

Publishers

The total turnover of the publishers of general books is €244 million, an amount that is equal in size to the gaming sector in the Netherlands. Sales of general books generate turnover of €237 million for publishers; the remaining turnover comes from lending rights (€3 million), licences for e-books and audio books (€2 million), e-book subscriptions (€1 million) and sales of other rights (€0.5 million).

The added value to the Dutch economy (gross domestic product) is estimated at €109 million, which is 45% of the turnover.

The publishers who are affiliated to the GAU (the General Publishers Group of the Media Federation) employ 1227 people, including staff who are hired in. Converted to FTE, the number is 990. The total wage bill is €52 million.

Bookstores

The total turnover of general books in bookstores is a least €498 million; according to Statistics Netherlands this is 0.1% of the overall turnover in the Commerce sector and 0.4% for the Retail sales sector (excluding cars). €1.0 million of that is accounted for by digital subscription services. This turnover figure is well higher than the turnover of the cinema sector (revenues from Dutch and foreign cinema films in Dutch cinemas was approximately €302 million in 2017) and is the same order of magnitude as the revenues of e.g. shops selling carpets and curtains (€450 million in 2016). The turnover is incidentally less than the book trade usually reports (€530 million in 2017), given that the turnover figures in this report are stated without VAT.

The added value to the Dutch economy (gross domestic product) is at least €88 million, which is 18% of the turnover.

Employment opportunities are estimated at 1,568 to 2,845 people (of 1,265 to 2,296 FTE). The lower limit of this wide margin is the number of employees in bookstores that are affiliated to the KBb, the Royal Booksellers Association. The upper limit is the number of employees who are estimated actually to be selling general books. The total wage bill for bookstore staff is at least €62 million.

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