My guess is that, behind closed boardroom doors, inflation is considered – else we’d see far more companies fail – but the “real” figures do not make for good industry headlines.

Over on LinkedIn, publishing consultant Carlo Carrenho reported on the latest publishing stats from Japan, with the headline ” Japanese Publishing Market: Digital Growth Barely Beats 3.6% Inflation While Print Plunges“.

Carrenho explaind: “According to the latest market analysis by Japan’s National Publishers Association, Japan’s combined print and digital publishing market reached ¥1.57 trillion (€9.8 billion) in 2024, showing a nominal decline of 1.5%. However, when adjusted for Japan’s 3.6% inflation rate (Statistics Bureau of Japan), the industry experienced a more substantial real decline of 4.92%.”

He continued: “Digital publishing appeared strong with a nominal 5.8% growth, reaching ¥566 billion (€3.5 billion). Yet, after inflation adjustment, the real growth was a modest 2.12%,” adding “The print market’s challenges were more severe than initially apparent. The nominal 5.2% decrease to ¥1 trillion (€6.3 billion) translates to a concerning 8.49% decline in real terms.”

WTF?!

So what’s that all about? How can the industry be posting a 5.2% fall when the reality is 8.49%?

In fact Carlo Carrenho has made this topic a second home, challenging the comfort figures put out by publisher associations and countering them with the cold realities that inflation brings.

The View From The Beach

Should we even care?

Too right, we should. Here’s why.

Adjusting for inflation is something our industry has conveniently managed to side-step for far too long.

Why It Matters

Some consequences:

Distorted Growth Figures: Without adjusting for inflation, revenue figures might appear stable or growing, even if the actual purchasing power and market value are declining.

False Sense of Security: Publishers may assume the industry is performing well, leading to complacency and missed opportunities for strategic adjustments.

Unsustainable Pricing: Ignoring inflation might result in pricing strategies that do not reflect the true cost of production and market conditions, potentially eroding profit margins.

Skewed ROI Calculations: Return on investment (ROI) calculations that do not account for inflation may appear more favorable than they are, leading to suboptimal investment decisions

Misleading Stakeholders: Providing stakeholders, such as investors, authors, and employees, with nominal figures can mislead them about the company’s true financial health, affecting trust and decision-making.

My Guess is That…

My guess is that, behind closed boardroom doors, inflation is considered – else we’d see far more companies fail – but the “real” figures do not make for good industry headlines.

This post first appeared in the TNPS LinkedIn newsfeed.