Mexico’s publishing industry highlights the risks of over-reliance on de facto government subsidies.
The National Chamber of the Mexican Publishing Industry (Caniem) recently presented an industry overview for the 2023-2024 period compared to 2022, that shows a 23.6% decrease in book production, a 22.4% drop in printed editions sold, and a 6.9% decline in total revenue.
Digital editions, previously buoyed by pandemic-driven growth, also saw a 13.7% reduction in sales.
The meeting, reports PublishNewsES featured key figures including Hugo Setzer (President of Caniem), Hugo Cejas (Coordinator of Data Management), Andre Breedt (Global Director of Nielsen Book Data), and Gvantsa Jobava (President-Elect of the International Publishers Association), alongside Antonio Alonso (General Director of Caniem).
Despite the downturn, Setzer expressed optimism about recovery efforts, emphasising the industry’s resilience. National reading statistics showed a slight increase in the literate population to 41.8% in 2024, although the average number of books read per person dipped to 3.2.
Impact of Educational Sector on Book Revenues
A critical factor in the decline of book revenues is the significant reduction in government participation, particularly due to the reduction in secondary school textbook purchases by the government, resulting in an 80% drop from 2022 levels. Educational publishers have felt the brunt of this policy change. Setzer highlighted the importance of free textbooks in the market, noting that basic education books make up 31.5% of sales. With the cut in textbook production, this segment has substantially impacted the overall industry performance.
Efforts are ongoing to collaborate with federal agencies to support educational initiatives and mitigate the impact on the publishing industry.
Market Adaptations and Opportunities
On a positive note, the report underscored the strengthening of bookstores as the leading sales channel, capturing 36% of the market share. Additionally, the rapid growth of electronic commerce, which increased its share from 3% to 6% within a year, presents a promising avenue for the industry’s future.
The TNPS Take: The Unhealthy Reliance on Government-Supported Book Sales in Developing Trade Publishing Sectors
In countries with less-developed trade publishing sectors, there is often a heavy reliance on government-supported book sales, particularly for educational materials. This reliance can be seen as a form of subsidy for the industry, which, while beneficial in the short term, can have long-term negative consequences. When government subsidies are withdrawn, as seen in Mexico’s recent policy change, the impact on the publishing industry can be devastating.
This dependency on government purchasing creates a disincentive for publishers to invest in other sectors of the industry, such as fiction, non-fiction, and other genres where demand is lower and distribution infrastructure is less developed. As a result, the industry becomes even more vulnerable to changes in government policy.
Examples from Other Countries
- Malawi: In Malawi, the lack of national book and reading policies has been identified as a major impediment to creating a robust publishing industry. The absence of a strong trade publishing sector means that educational publishers are heavily reliant on government contracts for school textbooks.
- China: In China, government subsidies have played a significant rol in the publishing industry. However, the reduction or removal of these subsidies can lead to significant challenges for publishers, as they struggle to adapt to a market without government support.
- European Union: While the EU has a strong publishing industry, there is a growing discrepancy between its position in traditional book publishing and its position in online distribution and e-book production. The reliance on government support in some member states has hindered the development of a more diverse and resilient publishing sector.
The case of Mexico’s publishing industry highlights the risks of over-reliance on government subsidies. To build a more sustainable and resilient publishing sector, it is crucial for countries to develop policies that encourage investment in a variety of genres and distribution channels, reducing dependency on government contracts and fostering a more diverse and robust industry.
Striking a Balance
That said, a robust and diverse industry also requires the key participants, publishers, to strike a balance between pleasing the shareholders, looking after the long-term interests of the industry’s content suppliers, and responding to consumer interest and demand.
But as we see time and time again, even in the mature book markets, most publishers struggle to achieve that balance, as for example ebook-pricing, resistance to subscription, and resistance to AI.
This post first appeared in the TNPS LinkedIn newsletter.
