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July 1, 2014

Auf Wiedersehen, German book clubs

by

auf widersehenWe mentioned this briefly two weeks ago, and the Wall Street Journal reported yesterday with more details: Bertelsmann is closing its retail division in Germany, Austria, and Switzerland by the end of next year. This will be the end of its stores, but it’s also the end of the book club model that helped to build the publisher into what it is today.

Reinhard Mohn invented the Bertelsmann Lesering, or reading circle, in 1950. His business acumen is impressive: by publishing new editions four to six months after the book’s original publication, the price-fixing regulations were no longer in place and all of those books could be sold at a steep discount.

Bertelsmann opened its first store in 1964 and had three hundred branches operating by 1992. In the same year, the book club had seven million members, but it swiftly declined to three million by 2005, and members are now under one million. (Which is still more than you expected, right?)

Only fifty-two bookstores are still in operation, and sales have fallen from €700 million in the mid-1990s to €100 million, or about $136 million.

Obviously the publishers’ retail business is crashing down because of internet retailers who can read minds, right? We’ve discussed that here before.

But if you look closely, there’s more to it. The model was founded during the postwar economic boom in Germany. It was a new way to reach the thriving middle class. Yeah, it’s more efficient for book club members to order a specific title online instead of trusting a recommendation service. But the German economy has shifted considerably since 1950.

But just like the U.S., the German middle class is shrinking, and it’s been shrinking since the ’90s. The Lesering is a perfect example of the way those of us in the book business have to study its readers (not in a creepy Facebook way, in a normal business way) and adapt to how and what they buy.

This isn’t a sign of any major decline. Random House is still Penguin Random House. Bertelsmann is the fifth biggest retailer in the world, according to Publishers Weekly yesterday. But it’s the end of a certain bookselling campaign, one that was successful for half a century.

 

Kirsten Reach is an editor at Melville House.

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