Business Books and the Economy

With all attention now centered on the economy, many have asked me if there is a relationship between business book sales and the economy. The answer is a definite yes.

When the economy is soft, as it is now, business book sales suffer. When the economy is in crisis, as it has been over the past two weeks, business book sales can really suffer. That’s because potential book buyers, usually managers, business professionals, and educated consumers, are glued to business websites and their televisions to see if and how the $700 billion bailout package turns out. In many respects, the comparison to an economic 9/11 these last weeks has been an apt one: that’s because so much of what needs to go on in the business comes to a grinding halt. I have heard from some close to the market that “nothing is selling.” Of course, that’s an overstatement. Good quality business books sell no matter what, just not in the same numbers when events overshadow everything else. (we are fortunate at Portfolio, as our books stayed strong even during the weeks when the overall category fared the worst). 

What about financial books? Are they even more affected by the soft economy? Once again, the answer is yes. That’s particularly true when the financial markets sink. Here we see even a stronger relationship between book sales and the economy. The performance of the Dow Jones Industrial average is an excellent indication of book sales. When the Dow goes up, people love financial books. And the opposite is true as well. Publishers recognize this, and when there is real fear in the market, we try to counter it by publishing “what-to-do-when-the-markets-crash books.” Historically speaking, many of these crash books have done very well. 

One of the early examples of a crash book was a book published more than two decades ago entitled The Great Depression of 1990 by Ravi Batra (S&S, 1985). That book was a New York Times #1 bestseller when the financial markets were doing great (1986), as well as when they crashed (October, 1987).   

However—with few exceptions—publishers cannot and should not attempt to change their overall publishing strategy every time the market lurches one way or another. But there are exceptions. The two most obvious examples took place in the last decade. In 2000 the multi-million-dollar-market for day trading books died almost literally overnight. In 2006, after many years of a record run, the market for real estate books experienced a similar demise. But those examples involve business book categories or niches.

When we look at the business category as a whole—with the exception of instant books—it is clear that books are a poor medium to chronicle the headline-making events of the day. Business books are much more effective when they stand back and give measured perspective on a particular event or era. Examples include Barbarians at the Gate (the greed-is-good 1980s) and The Smartest Guys in the Room (Enron).  We already know that there will be several books detailing the events of today’s financial crisis—likely to be published in the fall of 2009 all the way through 2011 and later. The book that will win won’t necessarily be the first book to hit the market, but the one that provides the clearest explanation of what happened; that takes us behind-the-scenes of the primary participants, and explains in clear and compelling fashion, what happened, why it happened, and how to avoid similar crises in the future.  

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