Jan 10
28
The Book Publishing Business Model Is Broken
I was in Sydney yesterday for a meeting.
In the car on the way up I had been listening to a BBC podcast and an author was interviewed about her new book (How to Live: A Life of Montaigne in One Question and Twenty Attempts at an Answer).
Pardon my ignorance but I had never heard of Montaigne before yesterday. But he seemed like an absolutely fascinating guy. He was a magistrate, the mayor of Burgundy, a winemaker and a philosopher who apparently didn't like to do too much that was demanding and encroached on his thinking time. And he was also a brilliant essayist who wrote down a lot of the things that he thought about. For a while his writing was smiled upon by the Catholic Church, but then he got into trouble for posing the question that maybe our pets control us rather than us controlling them… All this I learnt from the podcast.
Since my meeting was at a coffee shop in Woollahra, right across the road from Lesley McCabe's book shop, I thought I would check if they had it. The answer was no, and that it is available on indent. That is the book shop orders the book from the local publisher's representative who then imports it in from wherever it has actually been physically published. The price for the book was quoted at $53. I declined and left.
Later on when I got home I went on line to see what the price of the book might be from an online shop. After all if you are going to go to a book shop and order a book on indent, why include the local retailer in the equation?
The results were not really that surprising. (I used booko.com.au to give me a listing of comparative prices in Australian dollars).
The result was that I could get the book from The Book Depository in the US for $25.55 – free shipping too. So I've ordered it.
Now when you get a disparity of this proportion at retail you have to wonder what is happening – not only to retail which has to be getting more and more disrupted by stores like Amazon and Book Depository (the two most aggressive price competitors for this book).
This can not just be about bricks and mortar operations. This has got to be about the whole supply chain. I mean, if a shop in the US can offer a book published physically in the UK for a price that is half what a book shop in Sydney feels it has to charge in order to make a profit, you have to figure that the system is well and truly broken. Publishing houses not understanding pricing systems, retailers not understanding the way that consumers think… and not one of them really paying attention to the marketplace. And really not getting the fact that the consumer is in charge.
Amazon gets this, and that is clearly why they invested in the Kindle.
And its why Apple just released the iPad. They too get it big time.
But there are problems with this too. The problems are with Free Trade. Free Trade is actually coming down to bite everyone. First it will drive prices down. Then when things are marginal for retailers they will get out of business. Then only the cheapest online suppliers will be around and then they will be mopped up by the bigger ones…
And at this point in time there are no Australian online book retailers who come even close on price to the big international ones. They are selling at the same prices that people like Lesley McCabe sell at. It is not a sustainable model.
I can only deduce that the local book publishers are just like the local record companies and music publishing companies – expecting that their profit base will continue at its same rate and that they can use the lawyers to fix things.
This doesn't work. They have to realize that in a global market, the lowest price in the world is the lowest price locally. We all live next door to the biggest book shop in the world, the biggest record shop, the biggest DVD store….