Culture
How the war changes the Russian book market?
November 21, 2022
- Vladimir KharitonovDirector of Association of Internet Publishers
Vladimir Kharitonov writes on the troubles that book publishers in Russia are experiencing today: printing houses lack high-quality paper and necessary supplies, Western publishers refuse to work with Russian partners, and new censorship is further weighing on sales.
Due to the refusal of the largest Western publishers to work with their Russian counterparts, translations of books by JK Rowling, Stephen King and others began to disappear from digital stores and book services. Source: Wiki Commons
Russian book publishing has been in decline for years. From the outside, it may not be very noticeable, as industry-wide revenues have been stable. Yet that masks the sustained slide in physical production that began during the global economic crisis of 2008–09.
Pre-war literature
In 2008, Russian publishing houses printed 760 million books, while in 2021 that figure had nearly halved to 389 million – approximately the level of output in the USSR in 1940. Nevertheless, the overall assortment has remained fairly stable, with the book industry putting out approximately 110,000–120,000 titles every year. The average number of copies of books is declining as publishers try to adjust to dwindling demand and lower sales by raising the average price per book.
Bigger publishers also have another way to adapt to the shrinking market – taking over smaller publishers. And they haven’t been shy about doing it. Over the past decade, a kind of duopoly has formed on the Russian market: in each of the two largest book niches of fiction and educational literature, two holdings have emerged, each of which has a monopoly position. Four fifths of all fiction printed in the country is now put out by Oleg Novikov's publishing holding, which owns (or controls) the publishers Eksmo, AST, Mann, Ivanov and Ferber (MIF), Azbooka–Atticus and others. Besides publishing houses, Novikov controls the only nationwide chain of bookstores, Chitai-Gorod, along with several major book printing houses. The niche of textbooks has been filled by the Prosveshchenie publishing house, which prints about 70% of all textbooks in the country, with the state buying about RUB15-17 billion every year. Note that the infamous oligarch Arkady Rotenberg figured among the owners of Prosveshchenie for a long time.
The already-not-so-healthy book industry was hit hard by the pandemic, as production dropped by almost a quarter in 2020. It began to recover last year and looked to 2022 with cautious optimism – in the first half of 2022, publishers launched significantly larger print runs and expanded assortment. And their expectations proved fully justified. Sales in the first two months of the year showed strong growth.
War and books
On February 24, Russia found itself in a state of war both with the world and with itself. And this of course impacted the book market. The initial response was a jump in sales (readers began to buy up books, as if stocking up), while the largest Western publishing houses halted cooperation with Russian publishers.
Pre-war literature
In 2008, Russian publishing houses printed 760 million books, while in 2021 that figure had nearly halved to 389 million – approximately the level of output in the USSR in 1940. Nevertheless, the overall assortment has remained fairly stable, with the book industry putting out approximately 110,000–120,000 titles every year. The average number of copies of books is declining as publishers try to adjust to dwindling demand and lower sales by raising the average price per book.
Bigger publishers also have another way to adapt to the shrinking market – taking over smaller publishers. And they haven’t been shy about doing it. Over the past decade, a kind of duopoly has formed on the Russian market: in each of the two largest book niches of fiction and educational literature, two holdings have emerged, each of which has a monopoly position. Four fifths of all fiction printed in the country is now put out by Oleg Novikov's publishing holding, which owns (or controls) the publishers Eksmo, AST, Mann, Ivanov and Ferber (MIF), Azbooka–Atticus and others. Besides publishing houses, Novikov controls the only nationwide chain of bookstores, Chitai-Gorod, along with several major book printing houses. The niche of textbooks has been filled by the Prosveshchenie publishing house, which prints about 70% of all textbooks in the country, with the state buying about RUB15-17 billion every year. Note that the infamous oligarch Arkady Rotenberg figured among the owners of Prosveshchenie for a long time.
The already-not-so-healthy book industry was hit hard by the pandemic, as production dropped by almost a quarter in 2020. It began to recover last year and looked to 2022 with cautious optimism – in the first half of 2022, publishers launched significantly larger print runs and expanded assortment. And their expectations proved fully justified. Sales in the first two months of the year showed strong growth.
War and books
On February 24, Russia found itself in a state of war both with the world and with itself. And this of course impacted the book market. The initial response was a jump in sales (readers began to buy up books, as if stocking up), while the largest Western publishing houses halted cooperation with Russian publishers.
"Being sensitive to public opinion, major Western publishers one after another began to refuse to conclude new contracts with their Russian partners."
It isn’t easy to cancel a paid contract for a print run, but it is possible to say no to renegotiating a new one or licensing new books; meanwhile, it isn’t so hard to revoke permission to distribute digital books, as there are no advances at stake. Thus, translations of books by JK Rowling, Stephen King, Neil Gaiman and others began to disappear from digital stores and book services.
The position taken by the official book industry institutions was generally predictable. The Russian Book Union head Sergei Stepashin unequivocally spoke out in support of the “special military operation” and at the same time for friendship with the Ukrainian people: “The special operation taking place now is the result of Western political games, to which Russia can no longer respond in another way. And it is by no means directed against the Ukrainian people, because Russians and Ukrainians are brother peoples.” But Ukrainian publishers, according to the board of the Russian Publishers Association, didn’t behave brotherly at all, calling for a boycott of Russian publishing houses. In a public letter, the association brought up old grievances and accused Ukrainian publishers of calling for "discrimination on the basis of nationality and citizenship." Evgeni Kapyev, the CEO of Eksmo, Russia's largest publishing house, distanced himself from the conflict, peaceably suggesting: “Let's think together how we can help make our world a better place. What our tomorrow will be like depends on each of us today: will we build walls or bridges?”
Western publishers turn away from Russia
The idea of building bridges while walls are being blown up didn’t find much understanding among the Western book community, and following the example of Western publishing houses, all major Western book fairs announced that they wouldn’t cooperate with Russian official institutions.
The problems with licenses have affected small independent publishers to a lesser extent. Many of them have long-standing informal and quite friendly relations with foreign partners, and they have more opportunities to personally explain and clarify their position on what is going on. Moreover, many of them signed a letter from the Alliance of Independent Publishers and Booksellers against the war in the very first days after the Russian invasion. A few days later, however, the alliance website closed the form to collect more signatures and hid those already affixed to protect signatories from persecution on the basis of the law about discrediting the Russian army passed at the very beginning of the war. Still, almost 1,500 book publishers, booksellers, editors, translators and other bookmen managed to state their view.
Yet even the publishers who managed to maintain a working relationship with Western rights holders quickly discovered that it wasn’t so easy to pay for the rights. This was due both to sanctions against the Russian banking system and to the Russian government’s countermeasures that put in place a complex authorization mechanism to make payments to licensors from "unfriendly" countries, which led to a stoppage in foreign-currency payments.
Russia’s being cut off from international card systems complicated the operation of digital content services. The departure of Visa, MasterCard and PayPal drove a significant drop in sales, though an even bigger blow was the refusal to work with Russian counterparties on the part of Apple and Google payment services, as well as services like Stripe, which ensured not just the security but also the recurrency of payments – especially important for subscription services. The Russian subscription services that had partnered with them simply lost their users and were forced to spend a good deal of time and money on restructuring their billing systems.
A considerable number of the users themselves (and readers) preferred to go abroad as well. According to various sources, hundreds of thousands left Russia during the first wave of emigration (after the start of the war) and the second (after the draft was announced). And among them was a considerable number of publishers. Most of them didn’t stop doing business in Russia, though some took care to move at least part of their business to Europe, following the readers who left – and their children, as you can’t take your entire home library with you, while Russian emigrants won’t stop buying children’s books. Specially for them, the Samokat and Boomkniga publishing houses organized the online bookstore Samtambooks with a warehouse in Riga and worldwide delivery. How long the current Russian emigration will last no one dares to guess, though emigre publishing houses inevitably appeared in each of the Russian emigration waves of the 20th century. It can be assumed that this one won’t be an exception. Moreover, the current exodus from Russia doesn’t seem to be over yet.
The financial sanctions were just the beginning. The next packages of sanctions cut Russian publishers off from high-quality printing houses in Europe and Russia off from European – primarily Finnish – paper, as well as European inks and spare parts for printing machines, a significant number of which in Russian printing houses are German-made.
To be fair, until about the middle of the year these sanctions didn’t have a big impact on the book industry. The decent stocks of imported paper and other supplies began to run out only in the summer. Suppliers sounded the alarm: UV varnish, self-adhesive film, colored ribbon for bookmarks, light Finnish paper, cardboard for bookbinding were running out. They are to be replaced by simpler (and heavier) paper and Korean or Chinese inks (not German); the ribbon, meanwhile, looks like a lost cause. We’ll have to get by without ribbon. A solution for maintaining and repairing complex printing equipment was also found, inspired by the experience of Russian airlines, which have been forced to cannibalize their fleets.
The position taken by the official book industry institutions was generally predictable. The Russian Book Union head Sergei Stepashin unequivocally spoke out in support of the “special military operation” and at the same time for friendship with the Ukrainian people: “The special operation taking place now is the result of Western political games, to which Russia can no longer respond in another way. And it is by no means directed against the Ukrainian people, because Russians and Ukrainians are brother peoples.” But Ukrainian publishers, according to the board of the Russian Publishers Association, didn’t behave brotherly at all, calling for a boycott of Russian publishing houses. In a public letter, the association brought up old grievances and accused Ukrainian publishers of calling for "discrimination on the basis of nationality and citizenship." Evgeni Kapyev, the CEO of Eksmo, Russia's largest publishing house, distanced himself from the conflict, peaceably suggesting: “Let's think together how we can help make our world a better place. What our tomorrow will be like depends on each of us today: will we build walls or bridges?”
Western publishers turn away from Russia
The idea of building bridges while walls are being blown up didn’t find much understanding among the Western book community, and following the example of Western publishing houses, all major Western book fairs announced that they wouldn’t cooperate with Russian official institutions.
The problems with licenses have affected small independent publishers to a lesser extent. Many of them have long-standing informal and quite friendly relations with foreign partners, and they have more opportunities to personally explain and clarify their position on what is going on. Moreover, many of them signed a letter from the Alliance of Independent Publishers and Booksellers against the war in the very first days after the Russian invasion. A few days later, however, the alliance website closed the form to collect more signatures and hid those already affixed to protect signatories from persecution on the basis of the law about discrediting the Russian army passed at the very beginning of the war. Still, almost 1,500 book publishers, booksellers, editors, translators and other bookmen managed to state their view.
Yet even the publishers who managed to maintain a working relationship with Western rights holders quickly discovered that it wasn’t so easy to pay for the rights. This was due both to sanctions against the Russian banking system and to the Russian government’s countermeasures that put in place a complex authorization mechanism to make payments to licensors from "unfriendly" countries, which led to a stoppage in foreign-currency payments.
Russia’s being cut off from international card systems complicated the operation of digital content services. The departure of Visa, MasterCard and PayPal drove a significant drop in sales, though an even bigger blow was the refusal to work with Russian counterparties on the part of Apple and Google payment services, as well as services like Stripe, which ensured not just the security but also the recurrency of payments – especially important for subscription services. The Russian subscription services that had partnered with them simply lost their users and were forced to spend a good deal of time and money on restructuring their billing systems.
A considerable number of the users themselves (and readers) preferred to go abroad as well. According to various sources, hundreds of thousands left Russia during the first wave of emigration (after the start of the war) and the second (after the draft was announced). And among them was a considerable number of publishers. Most of them didn’t stop doing business in Russia, though some took care to move at least part of their business to Europe, following the readers who left – and their children, as you can’t take your entire home library with you, while Russian emigrants won’t stop buying children’s books. Specially for them, the Samokat and Boomkniga publishing houses organized the online bookstore Samtambooks with a warehouse in Riga and worldwide delivery. How long the current Russian emigration will last no one dares to guess, though emigre publishing houses inevitably appeared in each of the Russian emigration waves of the 20th century. It can be assumed that this one won’t be an exception. Moreover, the current exodus from Russia doesn’t seem to be over yet.
The financial sanctions were just the beginning. The next packages of sanctions cut Russian publishers off from high-quality printing houses in Europe and Russia off from European – primarily Finnish – paper, as well as European inks and spare parts for printing machines, a significant number of which in Russian printing houses are German-made.
To be fair, until about the middle of the year these sanctions didn’t have a big impact on the book industry. The decent stocks of imported paper and other supplies began to run out only in the summer. Suppliers sounded the alarm: UV varnish, self-adhesive film, colored ribbon for bookmarks, light Finnish paper, cardboard for bookbinding were running out. They are to be replaced by simpler (and heavier) paper and Korean or Chinese inks (not German); the ribbon, meanwhile, looks like a lost cause. We’ll have to get by without ribbon. A solution for maintaining and repairing complex printing equipment was also found, inspired by the experience of Russian airlines, which have been forced to cannibalize their fleets.
Katerina Silvanova and Elena Malisova's book about the love between a pioneer and a pioneer leader caused a big scandal, leading to new censorship. Source: Wiki Commons
Who is cancelling Russian culture?
But no matter how severe foreign sanctions are, our own government can always make the life of citizens and the conditions for business even more difficult. For example, in the first reading at the end of October, the Duma considered bills on banning "LGBT propaganda,” which vaguely formulate what constitutes a violation and suppose a heavy punishment (up to stopping the activities of violators). This all means not only a reduction in the assortment but also a significant increase in the risks for already-published books, which will have to be withdrawn from sale.
And it will be big circulations. In the first half of 2021, the book with the largest – and by Russian standards, simply gigantic – circulation in Russia was Summer in a Pioneer Necktie by Katerina Silvanova and Elena Malisova, about the love between a pioneer and a pioneer leader, with 237,000 copies (data from the Russian Book Chamber). The "patriotic" community made a big scandal about this, accusing the publisher (Popcorn Books) of every deadly sin. But it is hard to deny the obvious:
But no matter how severe foreign sanctions are, our own government can always make the life of citizens and the conditions for business even more difficult. For example, in the first reading at the end of October, the Duma considered bills on banning "LGBT propaganda,” which vaguely formulate what constitutes a violation and suppose a heavy punishment (up to stopping the activities of violators). This all means not only a reduction in the assortment but also a significant increase in the risks for already-published books, which will have to be withdrawn from sale.
And it will be big circulations. In the first half of 2021, the book with the largest – and by Russian standards, simply gigantic – circulation in Russia was Summer in a Pioneer Necktie by Katerina Silvanova and Elena Malisova, about the love between a pioneer and a pioneer leader, with 237,000 copies (data from the Russian Book Chamber). The "patriotic" community made a big scandal about this, accusing the publisher (Popcorn Books) of every deadly sin. But it is hard to deny the obvious:
"The cultural interests and attitudes of young people contradict the backward-looking, traditionalist official quasi-ideology being imposed on society by the authorities."
The scandal prompted the tougher legislation, while the former owners of Popcorn Books – the Irish company Bookmate Ltd and its directors Andrei Baev and Alexei Dokuchaev – were named foreign agents on October 28, 2022, taking an honorable spot next to other well-known Russian cultural figures. Note that they were just the former owners, having sold Popcorn Books to an individual close to Eksmo back in the summer.
The sale wasn’t an accident: there aren’t so many books with a clear LGBT focus, though that is the market niche that has been growing over the past few years – probably outperforming all the others and thus making it attractive for even the largest publishing houses of the Eksmo holding. Once the new censorship laws are passed, they will obviously have something to lose. Moreover, the censorship won’t be limited to Summer in a Pioneer Necktie, the Chinese novel series Heaven Official's Blessing and other books with boys on the cover. Gender issues have already become (or they are surely becoming?) a normal part of mainstream literature, meaning that “gay propaganda” could be found in every second translated novel without much difficulty.
The current Russian regime, like the Soviet one half a century ago, has completely different norms. And publishers, as well as readers, will likely have to get used to it. For many years, the state tightened the screws in other areas, bypassing books and the book industry – maybe because officials and the siloviki simply don't read much. But books are now on their agenda and are unlikely to be taken off it.
In addition, among public figures who have dared to speak out against state policy, there are not only journalists but also writers. Some of them have already been named foreign agents, while others may soon be. One reason is that on December 1 the bureaucratic procedure for inclusion on the lists will be radically simplified: the state will no longer have to prove anything – it will be enough to declare that so-and-so "is under foreign influence." The restrictions on foreign agents will also be tightened. In particular, they won’t be allowed to “produce information products for minors” – simply put, all children’s books by writers who are foreign agents will need to be marked and wrapped in plastic so that, God forbid, minors don’t read the latest by Glukhovsky or Akunin. Of course, there is no reason to expect that the state will stop at that and won’t introduce further restrictions and prohibitions.
At the last book industry conference, Eksmo CEO Evgeni Kapyev forecast a 6% drop in the number of physical books sold in 2022 – while the overall sales are expected to grow by 19%. I think this is an overly optimistic forecast: the overall economic situation continues to deteriorate, which cannot but affect consumer sentiment and the purchasing power of readers. Publishers are already reporting a tangible decline in sales, while printers, which were flooded with work just a year ago, are seeking out orders. Meanwhile, the quality of book production, given the lack of supplies, is falling. Books themselves – due to the jump in costs for inputs from more distant countries – are noticeably rising in price. The Russian book market, along with the entire country, is facing hard times.
The sale wasn’t an accident: there aren’t so many books with a clear LGBT focus, though that is the market niche that has been growing over the past few years – probably outperforming all the others and thus making it attractive for even the largest publishing houses of the Eksmo holding. Once the new censorship laws are passed, they will obviously have something to lose. Moreover, the censorship won’t be limited to Summer in a Pioneer Necktie, the Chinese novel series Heaven Official's Blessing and other books with boys on the cover. Gender issues have already become (or they are surely becoming?) a normal part of mainstream literature, meaning that “gay propaganda” could be found in every second translated novel without much difficulty.
The current Russian regime, like the Soviet one half a century ago, has completely different norms. And publishers, as well as readers, will likely have to get used to it. For many years, the state tightened the screws in other areas, bypassing books and the book industry – maybe because officials and the siloviki simply don't read much. But books are now on their agenda and are unlikely to be taken off it.
In addition, among public figures who have dared to speak out against state policy, there are not only journalists but also writers. Some of them have already been named foreign agents, while others may soon be. One reason is that on December 1 the bureaucratic procedure for inclusion on the lists will be radically simplified: the state will no longer have to prove anything – it will be enough to declare that so-and-so "is under foreign influence." The restrictions on foreign agents will also be tightened. In particular, they won’t be allowed to “produce information products for minors” – simply put, all children’s books by writers who are foreign agents will need to be marked and wrapped in plastic so that, God forbid, minors don’t read the latest by Glukhovsky or Akunin. Of course, there is no reason to expect that the state will stop at that and won’t introduce further restrictions and prohibitions.
At the last book industry conference, Eksmo CEO Evgeni Kapyev forecast a 6% drop in the number of physical books sold in 2022 – while the overall sales are expected to grow by 19%. I think this is an overly optimistic forecast: the overall economic situation continues to deteriorate, which cannot but affect consumer sentiment and the purchasing power of readers. Publishers are already reporting a tangible decline in sales, while printers, which were flooded with work just a year ago, are seeking out orders. Meanwhile, the quality of book production, given the lack of supplies, is falling. Books themselves – due to the jump in costs for inputs from more distant countries – are noticeably rising in price. The Russian book market, along with the entire country, is facing hard times.
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