What went wrong at Westland Books?

On Tuesday 1 February, Amazon India announced that it was shutting down publishing house Westland Books, a wholly owned subsidiary of Amazon Eurasia Holdings SARL, effective 31 March 2022. “After a thorough review, we have made the difficult decision to no longer operate Westland…” an Amazon spokesperson said in a statement shared with Mint.

Since then, speculation has been rife on social media and in Indian publishing circles as to what went wrong at Westland. Its demise has evoked intense interest for a number of reasons. While bookshops shut routinely, it’s rare for significant publishers to shutter.

India is a relatively small market for books—only about 60 million people in the country purchase any books in a year. Most of that would be academic books, text books, guides and so on. Publishers who deal in non-academic books and bring out works of fiction and non-fiction, are referred to as trade publishers. In this segment, 15% of the industry in volumes but a giant in prestige and influence, three stand out for size and range of local fiction and narrative non-fiction publishing in English—Penguin Random House, HarperCollins and Westland. All three publish upwards of 200 domestic titles a year. They straddle the gamut of genres across fiction and non-fiction, have enviable backlists and celebrated authors—all amounting to a sizeable combination of sales volumes and cultural cache. The loss of one of them has sent ripples through the industry as numerous books and authors will now have to find other homes, and fewer surviving major publishers could mean the balance of power in negotiations tilting against authors.

Another reason for the disquiet is that Westland has tremendous heritage. It started life as Affiliated East West Press —a distributor of books—back in 1962. It has since been a distributor of books, a publisher and a book store operator. The long years in the trade means tremendous goodwill across the publishing ecosystem. It was acquired by the Tatas in 2013 and by Amazon in 2017, but is still led by Gautam Padmanabhan, son of the founder, KS Padmanabhan, an icon of Indian publishing. So it was one of India’s oldest independent publisher and retained elements of that spirit even as it came under the ownership of larger corporations. Its editor V.K. Karthika is well regarded in the industry and inspired loyalty among staff as well as authors. With Amazon’s backing, in recent years, the publisher could also afford to be aggressive with advances.

In 2017, it lured India’s most successful writer of commercial fiction, Chetan Bhagat, from Rupa Publications. Anuja Chauhan, another popular writer, migrated from HarperCollins. Amish Tripathi was all along with Westland. It published popular authors such as Ashwin Sanghi, Devdutt Pattanaik and Rujuta Diwekar. It ran imprints such as Tranquebar and Context (for literary fiction and narrative non-fiction), Eka (books in Indian languages and translations) and Red Panda (children’s books).

But changes in reader preferences meant that many of the authors the publisher bet big on, started witnessing flagging sales. Bhagat and Tripathi, particularly, witnessed a precipitous decline in relative popularity, according to multiple industry sources, who spoke on the condition of anonymity. While Bhagat still makes the bestseller lists, his sales volumes have fallen dramatically from its peak, when his books have sold more than a million copies.

“That whole genre of commercial best-sellers—Chetan Bhagat, Ravinder Singh, Durjoy Dutta—are just not working anymore. Chetan Bhagat created new markets. People who never bought books might have read a Chetan Bhagat book. But that reader is now hooked to YouTube. That’s the industry consensus. Now, good non-fiction is selling. A lot of the global best sellers are selling in droves here. So the market is growing, Indians are buying and reading more books than ever before. But there are shifts,” said a publishing executive who runs a boutique firm, who asked not to be named.

Another genre that appears to have lost some of its appeal is mythology-based fiction, of which the two top practitioners—Amish Tripathi and Ashwin Sanghi—are Westland authors.

An analysis of the top 20 best-selling books for the last five years, shows that Westland’s bets were increasingly missing the leader-board.

Data from Nielsen BookScan India shows that in 2017, Sita: Warrior of Mithila by Amish Tripathi, the first book in his new series following on the heels of the success of his Shiva Trilogy, was the no. 1 bestselling title that year (it was published by Westland) with a few other Westland authors like Savi Sharma (This Is Not Your Story and Everyone Has A Story) making it to the top 20. In 2018, Westland had one book in the top 5: Chetan Bhagat’s The Girl in Room 105 at no. 3. This was Bhagat’s first book with Westland after the author signed a six-book deal with the publishing house that year, for three fiction and three non-fiction titles. In 2019, Amish and Bhagat were again in the list of top 5 bestselling books of that year with Raavan: Enemy of Aryavarta by Amish at no. 1 and Bhagat’s The Girl in Room 105 at no. 4. In 2020, Westland had only one book in the top 20 — Bhagat’s One Arranged Murder at no. 6 — and had no other books in the top 20. In 2021, One Arranged Murder slipped to no. 16 in the top 20 list, and Westland had no other books in the top 20 that year.

Reader tastes are notoriously fickle, and publishing waves ebb and wane. It’s the nature of the business. “Look at the whole vampire obsession in international publishing. It has faded finally. That genre used to sell in the millions,” said one publisher.

Part of the mystique and glamour of trade publishing is indeed that it’s a business that bets on taste. Obscure bets go on to become best sellers and celebrated authors lose steam inexplicably.

What cushions publishers from big bets going wrong are two factors—international titles and strong back-lists. Indian outposts of global publishers, such as HarperCollins or Penguin Random House, benefit from global rights acquisitions by their operations in the US or UK. So when some of those titles become bestsellers, the Indian unit profits, without having had to spend much on that title.

While Westland was owned by Amazon, they were not integrated with its global publishing business or the imprints it owns in other countries. It mostly published domestic titles. This meant it had to bear the full cost of acquisition and marketing. Global bestsellers also bring the tailwind of publicity, amounting to a discount on marketing expenses for the local units.

The other cushion is a well-performing back-list, which refers to the titles you published in the past and continue to earn income from. Penguin and Harper both have a 30-year-old publishing history in India and consequently a much bigger backlist. Westland has a relatively modest backlist as their quest for scale is a relatively recent one.

“For a publisher to be financially successful, you need your biggest names to do really well, your backlist to perform well and have a diverse list of authors to cushion you from shifts in reader tastes,” one publisher, who asked not to be named, said. “In Westland’s case, all of those did not quite come together.”

A combination of these factors meant losses began to mount.

It’s clear from the progression of the company’s financials that post the acquisition, it was set up on a path of expansion and acquiring scale. The company’s revenue grew 10X and its costs expanded, too. This sudden change in course could only have happened under the direction of the new owner. And going big is a risky bet—backlists take time to build, some bets will go sour. Westland in fact caught the domestic non-fiction wave quite brilliantly, churning out a series of best-sellers. The question is, having set its new acquisition on an ambitious quest for scale, why did Amazon lose appetite for the battle mid way?

“Penguin made losses in India for ten years before it started to make profits. But they stayed the course. It takes time to build an enduring publishing business. Goutam (Padmanabhan) is a seasoned executive. He would never accumulate losses on his balance sheet unless it’s under a clear direction to do so. After having first told them to spend to acquire scale, someone changed their mind—that’s the likeliest explanation. This could be due to a change in top-level strategy, it could be a change in thinking because some key executive left and a new person came in. But the accumulated losses are too small to have forced the hand of a company the size of Amazon,” said a CEO of a global publisher, who spoke on the condition of anonymity.

The person added that while Westland certainly might have got some bets wrong, it’s not as if they behaved very differently from others.

“They are getting blamed for big advances but it’s not as if they are the only ones. It’s not as if they were winning every auction. The other big publishers also pay big for their big bets. May be Westland was paying 15% more than what others were paying. But you have to do that if you are developing a list and trying to acquire scale. And that difference is not significant to sink a business.”

Questions to Amazon spokespersons as well as the CEO and editorial head of Westland have not received responses.