Friday essay: thriving societies produce great books – can Australia keep up?

How healthy is the bookselling and publishing industry in Australia? And what are the key reasons for this state of wellbeing (or illness)?

These questions have been pondered by many people over the past decade. But they’re worth asking again, given that Amazon, the “everything store” that began as a bookstore, will soon be warehousing stock here and fulfilling orders from Australia, via a partnership between its subsidiary Book Depository and Australian logistics company DAI Post.

We’re also in the midst of a new round in the highly emotional argument over whether Australia should keep its parallel import restrictions on books.

As debate continues over the impact of digital technology and e-books on the industry, genuinely disinterested voices are hard to find and conclusive data harder still to locate.

Meanwhile, the federal government has decided to no longer count peer-reviewed publications in determining funding for universities. Funding for research will primarily reflect, instead, an academic’s capacity to attract business or other investment in her project.

The decision is expected to disadvantage humanities scholars and their publishers. It also illuminates our government’s general attitude to its role in the setting of cultural and intellectual policy frameworks - which should be of more than passing interest to publishers, booksellers and readers.

Kim Kyung Hoon

The Amazon factor

Amazon.com (as it was then known) entered the bookselling retail marketplace in the mid-1990s. Since then, Australian booksellers and publishers have been shielded to an extent from the competitive (and some would say anticompetitive) pressures it has imposed on the industry by one key factor: delivery of a book from the US took time and cost money.

Geographic isolation provided some comparative advantage to our book industry, even allowing for Amazon’s premium delivery rates and its sales being free from the GST. In 2011, however, Amazon bought the UK-based company Book Depository.

At the time, Book Depository was its biggest online bookstore competitor. Buying it meant Amazon could take advantage of what now seem arcane international postal union agreements between Australia and the UK, offering zero postage costs for Australian consumers.

Any comparative advantage for Australian booksellers will now go. Amazon setting up here is likely to mean a further drop in retail book prices, (which have been falling for the past five years), as it goes in search of a greater Australian market share.

In one sense, of course, that is good for consumers. And by providing new sales platforms and channels, the firm may also help some Australian retailers and publishers stay in business.

But others may find the new degree of competition pushes them to the wall. Over the last decade, many bookshops have gone under.

And readers who like visiting bookstores may be less impressed by Amazon’s arrival and its owner Jeff Bezos’s commitment to the “everyday low prices” example of Walmart and Costco.

Parallel import restrictions

Jo Yong hak

Parallel import restrictions prohibit retailers here from bringing in overseas versions of a title if an Australian publisher has released a version of it within 30 days of its initial publication and are able to supply the retailer with copies within 90 days of an order being placed.

In April 2015, the Harper Competition Policy Review recommended that the import restrictions be removed. If the federal government does so, what impact will this have?

Some retailers would prefer to have the option of importing a cheaper overseas edition of a book rather than risk losing sales to overseas firms selling books online.

Most publishers here, however – and not only home-grown ones but the Australian offices of multinational corporations – have stridently declared that the removal of the restrictions will seriously damage their business.

The Australian Society of Authors points to recent research revealing that authors are struggling financially to an unprecedented degree.

It positions the debate squarely as one between supporting Australian authors (and the import restrictions) or abandoning them (with the restrictions).

Perhaps the stridency of the general response by the publishers, authors, and to a lesser extent the retailers, is more a reflection of the difficult overall industry conditions than of the likely catastrophic effects of the restrictions' removal.

The Australian Productivity Commission, which has also examined the restrictions, has almost always tended to the view that the interests of the consumer should take precedence over those of the producer. It reasons that there are more consumers than producers.

Still, it’s interesting to note that while lower prices seem to trump all other concerns in the case of the book industry, when it comes to the Australian banking sector it is apparently essential for us to have a “strong”, or wildly profitable, handful of banks.

E-books are not saving the industry

Heidi Elliott, CC BY

Are ebooks replacing print? Is the book itself (in whatever form) in the last throes of life? What do consumers really want? And should we let them have it?!

With the possible exception of this last question, which may be heretical within our parameters of public debate, all of these questions have been asked in depth in recent years.

Indeed in 2010, a Book Industry Strategy Group, was set up by the then Minister for Innovation, Industry, Science and Research, Senator Kim Carr. Later, Greg Combet, in a slightly rejigged ministerial portfolio (Industry Innovation, Science, Research and Tertiary Education), set up the Book Industry Collaborative Council from 2012–13.

Sales of e-books and e-readers, which grew strongly for many years, may have plateaued over the last year or so.

But as there is no body with the capacity or authority to collate e-book sales (in the way that Nielsen BookScan does for print books in Australia) and most information we do have comes from industry participants, authoritative pronouncements on whether e-books are displacing print are not possible.

For most publishers, their profit margin is less on an e-book than it is on a print book – thanks chiefly to Jeff Bezos. In 2007, he wanted to sell e-books for his new Kindle at $9.99. He had the market power to enforce this price as a standard across the global market.

(E-book pricing in the higher education market, it should be noted, is completely different from the retail sector being referred to here.)

In general, e-books are only slightly cheaper to produce than print books. So, with Amazon tightening its percentage screws on publishers for the use of its Kindle channel, most publishers report that print sales remain much more important for them financially then e-book sales.

Print book sales fell in Australia across 2010–14, before bouncing back in 2015, partly with the help of the colouring-books-for-adults phenomenon.

Samuel Wong, CC BY-NC

But what does this mean? That no-one wants to read books anymore? That no-one has time to read books? That book readers are dying off and young people don’t like books? That books can’t compete with other forms of entertainment and instruction? Or only that print books have had a temporary period of … negative growth?

The Australian retail sector as a whole experienced very flat growth across 2010–14, before picking up, as bookstores did, in 2015. Owners of physical bookstores have had to contend with burgeoning online sales.

Meanwhile, Australians are working harder and longer. And government policy decisions seem to be made with increasingly little reference to intellectual, let alone cultural, considerations.

Joel Becker, CEO of the Australian Booksellers Association, told me in February that there has been a “small but noticeable growth in the presence of bookshops, coming either from existing stores expanding or from new stores opening up”, in the five years since Borders and Angus & Robertson closed.

He notes that sales in the US independent book retail sector were “buoyant … up over eight percent in December 2015 on the previous December, which was also not bad.”

Devaluing the humanities has ripple effects

The federal government making it harder for humanities scholars to demonstrate their value financially within their universities can hardly be viewed as a major index of the health of Australian publishing and bookselling.

The clear message it sends, however, is that the government does not regard cultural matters – questions of historic, literary, philosophic, artistic or social value – as of public significance.

The ancient Greeks saw attending theatrical performances as an important part of their responsibilities as citizens: a way of trying to ensure that political decisions were the result of shared understandings and values.

For our leaders, however, it seems such fundamental questions must be removed from life and made wholly subject to economic considerations.

For the Productivity Commission, tellingly, consumers’ interests are defined almost solely in terms of price. That which cannot be easily measured is simply ignored.

Orangeaurochs, CC BY

There is no evident government interest in encouraging a public conversation about shared or differing values. This is bad for book publishers and sellers because books are a – if not the – major vehicle for such a conversation.

This lack of interest raises a bigger, rarely asked question: just what we want our bookselling and publishing industry to do or achieve for our society?

From the discussions I had with participants in the previous book strategy group and collaborative council, it was relatively clear what people in the industry generally wanted - an efficient, self-reliant (rather than government-reliant) sector, not disadvantaged by regulations that effectively provided assistance to overseas competitors.

In other words, they wanted a fair go and an industry policy framework reflecting that. (In this context, it is worth remembering that Amazon’s sources of profit include the Internet, developed primarily by the US government, tax avoidance, low wages and determined opposition to the unionisation of its workforce.)

But for Australians in general, is our bookselling and publishing industry any more worth preserving than, say, the car industry?

If what “we” want, most fundamentally, from publishers and booksellers, is the opportunity for Australians to write important books for a local readership that can help us build, ultimately, a better overall quality of life and a more robust democracy, perhaps the most important policy decisions pertaining to the industry are not those most immediately affecting it.

Reduced book prices from the arrival of Amazon, for instance, are unlikely to lead to a boom in reading, because there are other more important factors influencing whether people read or not and what and how they read, if they do.

It’s not a coincidence that some of the most enlightened nations in the world, with the highest literacy rates; the best outcomes on a range of social measures - from equality to social cohesion to education and health - and populations who work relatively shorter hours for relatively more money, also have the strongest book publishing and selling businesses.

It’s not a coincidence either, I would suggest, that these northern European nations have produced some of the most successful writers on the world stage in recent decades (Stieg Larrson, Henning Mankell, Karl Knausgaard, Jo Nesbø …)

The best societies create the preconditions for the best minds to shine; instead of the preconditions for the best minds to give up or take up banking.

Thanks to John Byron, Malcolm Neil and Sean Scalmer for reading and commenting on drafts of this article.