Dancing on the deck of the Titanic

(Mexican author, Alberto Ruy Sanchez,  told me about an essay he wrote in defence of books titled, The Book is not a Shoe, over lunch some weeks ago, so it is with sincere appreciation to him that I write this.)

So Woolworth has gone bankrupt and Betrams Books, which it owns but is not under administration, is up for sale. I am sure that is not news anymore. The latest news to emerge from the publishing industry is that the Association of American Publishers (AAP) has reported that the book sales for the month of October decreased by 20.1 percent at US$644.5 million and were down by 3.4 percent for the year. 20.1%!? That is almost a disaster considering the incredibly low margins the industry works on. One dares not even think of the December season.

Like Sara Nelson of the Publishers Weekly, many have stopped reading their investment statements and even the business pages of their newspapers or listen to the news on television. It is far too relentlessly gloomy. Sara Nelson writes,"We all knew that publishing would not be spared; that feeling was palpable as early as last summer and certainly by Frankfurt -- when, if one more person compared going to the lavish Bertelsmann party to "dancing on the deck of the Titanic," I would have thrown him in the punch bowl. Still, while the news this week of massive layoffs and downsizing at Random House, Simon & Schuster, Thomas Nelson and Houghton Mifflin Harcourt was not surprising, it was, like any expected death, still a shock." Yes, there is no reason the publishing industry should be spared. It has been behaving as badly as the rest. Hence, the rub.

The book is a book, not a shoe. Real book people have been saying this for years. But with dollar signs dancing before their eyes everyone -- from contruction magnates to timber tycoons -- jumped into it. Hundreds of corporations with no idea what a book is, employed thousands who had never read one in their entire lives to run mega stores with hundreds of thousands of titles. From reports, Britain publishes close to 200,000 new titles a year, out of which 3000 make it to the main stores, with a handful remaining there for more than three months. What kind of industry is that? If any of the other industries worked on those numbers they would be closed by now.

A book is not a shoe, too, in many European countires which are strong about their heritage and culture thing. The last country to decide that a book was indeed a shoe was Switzerland, that despite valiant efforts by many to protect books as "cultural goods". In France, not too long ago, where retail book discounting is illegal, Amazon.com, which introduced free shipping, was convicted and made to pay a penalty when the booksellers association succesfully argued that 'free shipping' was indeed a discount.

In a recent International Market Comparisons: A Benchmark Study of Profitability by the Booksellers Association of the United Kingdom and Ireland (BA), comparing the market in the Netherlands, Ireland, Sweden, Finland, and the USA with the UK, the key findings were that the total UK market growth was one of the lowest, and the use of promotions and discounts created a 'vicious circle'. This despite the UK having a higher per capita book purchase than all markets except the US. In the Netherlands books cannot be sold at a discount until a year after release.

It could be (and has been) argued that the current problems in Britain arose with the demise of the national Net Book Agreement (NBA). The NBA was a British price-fixing agreement between publishers and booksellers which set the prices at which books were to be sold to the public that came into effect on January 1, 1900. Any bookseller who sold a book for less than the agreed price would no longer be supplied by the publisher. (Remember the time when we used to pay much lower fixed prices for our books in Malaysia?) The NBA enabled publishers to subsidise the works of important but less widely-read authors using money from bestsellers.

In August 1994 the Director General of the Office of Fair Trading decided that the Restrictive Practices Court should review the agreement. In March 1997 it was ruled that the Net Book Agreement was against public interest and was ruled illegal. So, what had been in place for a hundred years was dismantled only ten years ago, with nothing to replace it. The result has been chaos, ever since.

And the result? Bookstore chains benefitted. They were large enough to demand massive (and unreasonable) discounts, which the publishers provided by increasing the recommended retail price (RRP) of their books. The public bought bestsellers at reduced prices, but had to pay much more for other excellent books that were less popular. Buyers in smaller countries, without the benefit of volume, ended up paying more for their books. (This is made worse by the 'exclusive rights' agreeements signed between publishers and local distributors, but that is another story.) Large supermarket chains got into the business, mainly offering a limited number of best-selling titles at hugely discounted prices. After one hundred years of holding out as a 'cultural good' the book was finally reduced to a shoe, a throw-away consumer product alongside Kleenex and wipes for babies' bottoms. Many small independent bookshops were severely affected. Borders burst forth into high streets all over the world. (Their demise last year was probably the first sign that all was not well in the book-world.)

In Malaysia we continue to dance on the deck of the Titanic. How else does one explain the number of mega-bookstores in the Klang Valley, more than twice the number -- and retail area -- than in the whole of Singapore?