Last week, it emerged that Dorling Kindersley, best known for its cleverly illustrated graphic books, had axed 50 of the 350 staff in its multimedia division. Morale is said to be shaky, with the company warning that it will review the situation if sales over Christmas fail to deliver.
In recent weeks, big companies such as Marshall Cavendish, Penguin and HarperCollins have all pulled back from CD-Rom publishing.
Dorling Kindersley's retrenchment will be seen as a particularly cruel blow. It was widely viewed as the most successful of the book companies at bridging the gap between old-fashioned hardbacks and the electronic world of computers and video graphics.
Multimedia - where text, graphics, sound and video are combined - is a recent market. Launched only in 1993, it was initially seen as more for the specialised computer hobbyist. But several companies treated the medium as potentially the next great consumer electronics fad. Thereafter, companies from software developers to movie houses, consumer electronics groups, and publishing groups climbed on the bandwagon.
Among the entrants, the big book publishers saw the medium as an ideal format in which to repackage their existing titles. "A lot of people in the business assumed that these titles would sell like books as well," says Edward Forward, a close follower of the business at research consultancy Durlacher Multimedia. He sees the market as more like the one for hit singles. "There is only the current market for a CD-Rom and the cycles don't last very long." A publisher will be lucky to make 20 per cent of sales in the second year of a title's release, 10 per cent in year three.
Multimedia had a big presence at the Frankfurt Book Fair this month, but with the parlous state of the US market for "edutainment" CD-Roms, hopes of a bumper payout from their investment in this area are on hold.
While the book publishers review the situation, few believe the market for home reference and edutainment will wither away. Overall sales of CD-Rom titles continue to rise, and the number of households with CD-Rom drives is also growing sharply.
The great winners so far, however, are the games companies. Makers of hits such as Wing Commander IV, Doom and Command and Conquer can be assured of a merry Christmas. But titles with a more aspirational content will have to wait a while longer before they reach paydirt. Further report, Business NewsReuse content