Sherry Redux
Since I posted on Nick Sherry’s prediction that physical book shops will largely close within 5 years, a few others have weighed in on the conversation.
Bruce Guthrie used the Age commentary pages he formerly controlled to engage in a moment of reminiscence about growing up with a milk bar and a book shop in every suburb. Nothing particularly enlightening was written, however - his argument was simply ‘gee I like book shops and I wish they weren’t all going to disappear’.
Following this was a rather more complicated piece from Blanche Clark. Clark holds the rather anachronistic title of Herald Sun Books Editor. Like many people who have weighed in to declare their outrage at Sherry’s comments, she didn’t address what he actually said, but rather what she thought she’d heard. Sherry stated that he didn’t think there would be much of a market for bookshops "outside of a few specialty stores in capital cities," and that book retailers needed to get online fast. Clark attacked Sherry, stating that
Small Business Minister Nick Sherry's prediction that bookshops in capital cities will be gone in five years, thanks to the internet, is ludicrous.
Now, perhaps when reviewing the latest Masterchef book or Underbelly #257 you don’t come across many large words, but attacking someone for saying the opposite of what they actually said is pretty inept for someone whose job, presumably, is to read and understand the written word.
Ironically, Clark’s piece actually goes on to predict exactly what Nick Sherry was saying. That is, there is likely to be two separate markets for ebooks and print books in the near future:
What we are facing is a parallel market and those publishers and booksellers who adapt will survive.
Clark suggests that genre fiction will thrive in eBook format, but that ‘tactile puritans’ like herself will keep bookstores alive. Well, the first may be true but I’m unconvinced on the second point.
Ross Gittins explained why in his excellent piece on 1 June, about price discrimination. Gittins pointed out that Australian retail across the board has higher prices than overseas markets - even for exactly the same item. Price is not just determined by the production and distribution costs, but also the price that the market is willing to bear. Unfortunately for Australian retailers, so used to gouging consumers, the rise of internet sales is reducing the price Australians are willing to pay in a physical store. When you can get it for 20%, 40% or even 50% cheaper online, why would you go out to the shopping mall?
A book is not a dress
Clark makes the argument that others before her made in relation to Sherry’s comments - why is he singling out books? It’s not as if whole CBDs worth of retailers are closing down. I have a few suggestions for Clark and friends. You see, a book is not a dress. Whilst it is true that some people are willing to buy dresses and other clothes online, generally speaking for things like clothes people like to be able to try the item on and see how it looks on them. You can’t really get that online (yet). The same rule does not apply for books. If I want a physical copy of a new book there is (unless its an out of copyright title) only one publisher, generally producing only one or two versions. I know what I’m getting and if I’m really hanging out for the next book in the series I’m probably not going to care too much what binding it uses or the picture on the cover. That’s the reason for book sales being so easily poached by overseas retailers. No-one thinks too much about the poor little newsagent going out of business when they fill in their subscription for home delivery of the local newspaper or their favourite magazine, but the principle is the same: why pay more to collect the product yourself when you can pay less for someone to deliver it to your door?
That is, of course, assuming that you’re willing to wait for a physical dead-tree book when you could have it instantly downloaded cheaper.
The death of publishing
Robert McCrum discusses this in a recent piece in the Guardian. He predicts a dual market, much like Clark did, but I think McCrum is more on the money. He suggests that the entire paperback market will be taken over by eBooks, leaving a high-priced hardback market for the collectors. Ironically, this may mean that bookshops will go back to the way traditionalists will like, with leather lounges and wooden shelves, no longer filled with novelty paperbacks and cheap stationery.
The interesting thing about Clark, Guthrie and even McCrum is that they all assume that current publishers will still be in business in the future market. I’m not at all convinced about this, and J K Rowlilng’s announcement that she will be selling Harry Potter eBooks through her own website (sans publisher) highlights one aspect of the problem for publishers.
There are at least two problems for publishers. The first is that going to a traditional publisher is no longer the only way to get a book published without a large capital outlay. If you’re already famous, like J K Rowling, you can simply use the book text that your publisher helped to produce, keep your electronic rights for several years, and then self-publish.
Secondly, if you’re an unknown, you can register with an online publisher like Lulu, or Amazon’s Kindle Direct, who simply take a percentage of each eBook sale. Unlike the traditional paper book model, these ‘publishers’ don’t edit the work or pay advances. Since it costs a fraction of a cent to sell each copy, they can distribute and sell as many books as authors wish them to. These online publishers aren’t really publishers in the traditional sense. They are more akin to distributors and retailers - for electronic publishing, the roles traditionally played by publishers can be unpacked - editing can be outsourced and paid for by the author, marketing can be taken on by a separate company, either taking a percentage or charging a fee, and the physical publishing and printing is no longer needed.
The distribution is of course online, and there is absolutely no reason that traditional publishers or booksellers will have anything to do with online distribution of electronic entertainment. The winners here will be companies that have existing relationships with customers, and easy to use distribution networks. It’s likely that companies like Apple, Amazon, Google and Microsoft will end up at the forefront of book distribution globally, but the other possibility is the continuing growth of large communications companies like Telstra. Last week’s announcement that NBN Co and Telstra have agreed on a price for Telstra to move its fibre network to NBN Co and shut down the rest, as Alan Kohler explains, will produce a huge windfall for Telstra, which will move further towards being simply a huge communications retailer and media company. There’s no reason to think Telstra won’t seriously look at eBooks in the near future - as a distributor providing service for authors to sell straight to readers.
So stay tuned for Telstra Books, coming to an eReader near you...