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Number of publishing insolvencies climbs 42% 4 November 2013

The number of UK publishers entering insolvency has jumped 42% in the last 12 months, according to new figures from accountancy firm Wilkins Kennedy.

98 publishing firms became insolvent between August 2012 and August 2013, up from 69 in the same period a year previously.

Wilkins Kennedy partner Anthony Cork cites the rise of online publishers as the main reason for the jump in insolvencies.

He explained: “The growth of the Internet has accelerated a dynamic that started with the end of the ‘Net Book Agreement’. The rise of Amazon and other ‘discount’ sellers with massive buying power means the pressure on publishers’ margins is now immense.

“While publishers might be able to sustain relatively small margins on a best-seller, it is much harder for niche publishers.

“At the same time, the arrival of Amazon has transformed the second-hand book trade from a fairly minor nuisance to a serious threat.”

Wilkins Kennedy also found the market for electronic books (e-books) has grown at a “rapid pace”, putting further pressure on publishers to adapt to survive.

Cork said: “The e-books market is gaining a lot of momentum and publishers who are willing to and can afford to make the transition can really capitalise on this.

“However, the e-book market is now itself subject to fierce price competition and as with the music and film industries and the arrival of downloads, piracy is a serious threat.”

During the period under review, publishers including Evans Brothers Limited, Panos London, and Reel Art Press have all entered insolvency.

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