Book Retailing and Publishing in Australia: survival in a digital age

The digital age has reshaped many industries, but book publishing has change more than most. Books aren’t going away but the way we read them is definitely changing. Fergus Neilson asks how can the industry survive and what will the future look like?

There was a time when printing the Bible in the ‘vulgate’ rather than in Latin was a capital offence. The initial introduction of paperback books by Penguin in the early 30s failed. Their eventual and enthusiastic adoption by Woolworths drove a level of success and growth that was seen by traditionalists as the beginning of the end for book retailing.

The second half of the 20th century saw massive increases in sales volume and the gradual shift of emphasis from specialist stores to the book ‘hypermarket’. The first decade of the 21st has seen erosion of the latter’s margins (in Australia now circa 0.5% for large outlets versus 2.5 per cent for small bookshops) and the looming threat of on-line sales. Change is not new. It is ever with us. What is of interest therefore is not the ‘whether?’ but the ‘wither?’ What will be the direction of change impacting on book publishing and retailing over the next five to ten years?

This look at the possible future of the Australian book publishing and retailing industry has adopted as the basis for discussion, the generic issue of ‘survival in a digital age’, with four scenarios as the stimulants for response.

>Open Forum members are asked to consider which scenario they consider the most probable outcome for the industry in the near future (three to 10 year time frame)? And, to recommend actions that could be taken right now that will enhance the probability of survival of their preferred future – even if it not considered the most likely outcome.

1. Anna’s community bookstore – Based on the relationships and personal service offered by specialist booksellers that cater to readers who value ownership and collection of the physical object. They may cater to specific tastes, but the demand exists. Will falling volumes elicit support from publishers? And will they deliver sufficient income to the owner and staff?

2. Stack ‘em high & sell ‘em cheap – The shopping mall experience welcomes the global brand. But recent experience in Australia suggests that the low margin/high volume book emporium is on the cusp of failure. Staff are not generally well versed in literature. The shopping experience is second rate at best. Will the ‘hypermarket’ survive when margins are unsustainable and the market isn’t ‘mass’ any more?

3. Domination by on-line warehousing – Amazon, and a range of other on-line book ‘warehouses’, have emerged as the most obvious rival to the traditional book retailing industry. Their catalogue is infinite and their convenience is attractive. Do they pose a threat to traditional publishers and the author/editor relationship? Will Amazon’s expansion (recent acquisitions of ABEbooks and the Book Depository) and influence continue?

4. An eReader in every knapsack – There are pundits who see an industry delivering almost three books per capita per annum (in Australia) as being guilty of purveying little more than landfill. Does the future see an end to books as physical objects and their replacement by MB downloads to eReaders? Should we care about book retailers when authors and publishers will continue to flourish?

Online Forum member feedback

Your comments on these four near future scenarios and suggestions for action now will be used to refine The Future Project’s proposed ‘issue & scenarios posting’ on the near-term future of the Australian book publishing and retailing industry. With that posting to access a wider spectrum of social networks and reach a ‘global’ audience for the aggregation of ‘crowd wisdom’ into public debate of this crucial issue.

The Futures Project

The Futures Project is focused on a single ambition: directing the wisdom of crowds at encouraging government and business clients to shift their emphasis from hindsight and daily ‘fire fighting’ to the application of insight and foresight in preparing society now for better outcomes in the near future.

Fergus Neilson is Co-Founder of The Futures Project. Fergus brings a wide range of business and life skills gathered from a career in the armed forces, investment banking, the United Nations, McKinsey & Company and private equity investment. Always sceptical of solutions imposed ‘top-down’ and increasingly frustrated by the default position that invariably sees cleaning equipment bought in only after the proverbial has hit the fan. Fergus can be contacted at Fergus.Neilson@dif.com.au.

0 Comments

1. 

   Martin Aungle

   October 25, 2011 at 12:30 am

   I think there’s a fifth, unexplored business model

   I think there’s a fifth, unexplored business model for book publishing and retailing – rental. I don’t know if it’s legally possible to do this in Australia, but I think there is a business model for a viable book rental service, which might even replace our local video rental stores – stores that are likely to go out of business within five years, if they don’t adapt and change pretty quickly.
2. 

   Fergus Neilson

   October 25, 2011 at 3:13 am

   Thanks for the suggestion, Martin

   Thanks for the suggestion, Martin. Interesting. I wonder though whether renters are already in that space on a de facto basis. Using libraries (books on paper and books on tape)? Subscribing to Kindle? I suspect that the world will divide. Fewer and fewer ‘collectors’ like myself who feel it necessary to own the physical object. More and more ‘readers’ who read (in any form) and then discard to landfill, to the ‘aether’, or back to the dwindling number of libraries.
   
3. 

   Martin Aungle

   October 25, 2011 at 3:15 am

   I think rental is happening on a very limited basis already

   I think rental is happening on a very limited basis already. Obviously, libraries will continue to provide a vital service in the community, but the issue is that libraries can’t currently cater for the demand for newly-published titles (for instance, huge waiting lists at public libraries when each new Harry Potter book was published). I also think that we have a tendency to disregard the ‘old’ when there is a new and revolutionary way to do something – in this case, digital publishing and e-readers in preference to traditional publishing. We are an ageing population, and the majority of the baby boomer generation – who are still going to be around for at least the next 20 years – will probably never gravitate to buying their books online and reading them on a device.