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Macroeconomic situation

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It is a perect storm the one that started

gathering in 2011, the more so in the

rst hal o this year. Perect because it

lines up many o the possible negative

and change actors and lets them

interact and strengthen each other:

• Technology: not only the evolution

(and the necessity o investments

in human, organizational, publishing

resources etc.) o the market o 

e-books, but the more general change

o some (many?) traditional publishing

rules, challenged by the act that

the traditional (linear) value chain o 

the book is turning into a network.

The business drivers (like readers’

habits) will no longer be (will be less

and less) sequential and linear (it’s

already happening with new titles

published contemporarily as paper

and e-book, such process is much

more advanced in proessional

publishing). Contents and authors

will have to restructure according to

criteria o reusability, ragmentation,

sharing, being (partially) ree o 

charge, multiplatorm, longer lie cycle

and repercussion o products etc.

with avoidable nancial investments.

The new orms o transmediality, o 

granularity in the «unwrapping» and

new packaging o contents will play

an important role in both editorialproduction and the market o rights.

• Habits: the swit growth in 2011

o e-commerce isn’t but the most

evident aspect o the changing habits

o clients/readers: e-commerce o 

traditional products but also (and

at the same time) o e-books. First,

the way the reader gets inormation

on which book to buy and read.

Sometimes as impulse download

on his/her device because the

writer is on TV or a new travel or

ood application is advertised in a

magazine; sometimes as member o a

dedicated social network. Sel-printing

itsel draws a new kind o relation

between author and reader. For the

rst time the author «knows» or which

reader he/she is writing, he/she

can read reactions and comments,

can relate to, it is no longer a dark

gure to talk to, nor to try to deal with

implicit complicity.

• The sentiment o consumers

The perfectstorm

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Macroeconomic situationturns social, political, economic

uncertainties – will the euro survive,

will the spread rise – into delay and

suspension in purchases (or search

or «better oers»).

• Last but not least, the general

economic scenario.

The general economic scenario, the

slowing o the international cycle, the

uncertainty o the ongoing cyclical pha-

se and the businesses investment deci-

sions, the diculties in accessing credit

(especially or SMEs, as most o the pu-

blishing and retail structures), lower pur-

chasing and saving power o amilies, it

was the mix o all this to generate the

combination o actors that largely helps

to interpret economic and sales results

or 2011. The same, let’s say, or 2012.

The more so i we consider that in 2011

the infation rate (+2.9%) almost doubledcompared to the previous year (+1.6%).

The increase in the prices o the

products most intensely purchased was

even higher, thus infuencing the overall

budget allocation o amilies.

All these elements – along with the

domestic political and government rame

– are deeply infuencing the sentiment

o consumers. At the end o the ongoing

crisis, when it ends, anticipated as it is

by a long period, ull o ups and downs,

o nancial and real estate bubbles,

nothing will ever be as it used to be.

Alongside conjuncture dynamics the

infuence o some long term changes on

purchasing habits also plays a role. It’s

mostly about the new ways consumers

can get inormed, gather material and

exchange it through the web.

It is evident that or the rst time in

the last 3-4 decades the book market,

historically anti-cyclical (perorming

better in the worst moments o the

economic and social picture and vice

versa), is getting in line with the generalcontext o consumptions.

The weakness o the amilies’

expenditure or consumptions was

determined by a progressive erosion

o their purchasing power. Regardless

o the lower propensity to saving, at its

bottom level since 1995. Even i, with

the worsening o the situation that took

place between April and June 2011, the

psychological attitude o amilies started

to change, moving to precautionary

saving. The eort to recover savings led,

in a moment o weak conjuncture, to a

urther depression o the overall system

o consumptions, eeding a process

whose eects are hardly quantiable.

In 2011 GDP in Italy grew by 0.4%,

with a marked slowing compared to the

result – indeed not a good one – o theprevious year (+1.8%). In 2012 orecasts

indicate –1.9% (Fimi), -2,0% (Bankitalia).

Forecasts or 2013 – in a Eurozone with

increasing internal tensions also on

its overall resistance – vary rom -0.3%

(Fimi) to +0.2% (Bankitalia).

In current values, the available revenues

did go up by 2,0% (+1.1% in 2010),

but expenditure or nal consumptions

increased by 2.9% (+2.7% in 2010). This

means that ollowing the contemporary

increase in prices the amilies’

purchasing power shrank (meaning

the amilies’ revenues available in real

terms) by 0.6%. The trend in amilies’

expenditure or nal consumptions

highlighted, ater stagnation in the

rst quarter o 2011, a continuous

and progressively higher drop: -0.1% in

the second quarter, -0.4% in the third

and -0.7% in the ourth. The amilies’

purchasing power went down all year

long: more noticeably in the rst quarter

2011 (-1.0%), more mildly yet constantly

(some -0.3%) in the ollowing ones.The all o purchasing power in Q1 2011

has not immediately turned into a all

in consumptions, only due to a sensible

drop in propensity to saving (8.9% vs

9.9% in Q4 2010), then proceeding

more slightly (8.7% in Q2 and Q3). Then,

in the last part o last year, propensity

aintly went up (to 9.1%), determining

however an acceleration in the all o 

consumptions.

Anticipating markers indicate that

weak consumptions will go on. The

monthly marker on consumers’

condence, ater a minor recovery in

the rst months o 2012, ell again

in April, getting to a level lower than

the bottom reached during the crisis

(the lowest since 1996). The negativetrend in consumptions infuenced retail

commerce, whose turnover recorded, in

2011, a signicant reduction in value, in

spite o a large increase in prices: total

sales dropped by 1.3% (+0.2% in 2010).

Diculties aected mostly traditional

distribution, which in 2011 went down

by a urther 1.4%; however, also large

retailers experienced a reduction in

sales (-0.9%).

Figures were less avorable or non-

ood (yearly average -1.8%), while ood

products recorded a «zero variation».

In 2011 the trend o infation, like or

the other economies o the Euro zone,

was determined by tensions in the

prices o energy, industrial and ood raw

materials, which had already started

at international level in 2010, and by

the depreciation o the Euro, leading

to higher costs or purchasing base

commodities.

Furthermore, the situation in our country

was infuenced by country specic scal

measures: taxes on uel were increased

repeatedly and ordinary VAT went rom

20 to 21% ollowing the mid-September

implemented nancial adjustment.

In 2011 the consumption price index

increased by 2.8%, almost doubling the

previous year’s growth.

The questions or the sector involve

mostly:

• its nancial soundness (in a context

with high technological innovation on

some spaces on one hand and sale

modalities on the other) in a sector

largely composed by small and tiny

companies (or both production and

distribution);

• the ability to intercept new

consumption habits o customers

(growth o e-commerce) but also

the recovery – properly adapted – o 

discount solutions;

• the identication o new products,

genres, authors, price ranges not

necessarily limited to low price or

e-books..