Time for books to turn new page … Andy McCourt’s commentary

Can there be a happy ending for book stores in the wake of last week’s bad news? Industry commentator, Andy McCourt shares his views.

Last week the famed Australian bookseller Angus & Robertson became victim of the insolvency of its owner, the Red Retail Group. Along with it, the Borders book megastore chain has crashed (as did the unconnected Borders in the USA), and New Zealand’s largest book & stationery chain Whitcoulls.

To top it off, Red Group Retail also ran the Supanews chain of 50-odd mostly franchised newsagencies, and the Calendar Club, whose outlets tend to pop up in shopping malls around Christmas time. These too are now being run by the appointed administrators, Ferrier Hodgson,

Without A&R, Australia’s literary legacy would be much poorer. David Angus and George Roberston became partners in 1886 and Roberston in particular cultivated the talents of authors and artists such as Banjo Paterson, Henry Lawson, Miles Franklin, Norman Lindsay, May Gibbs, CJ Dennis … need I go on? A publisher as well as bookseller, Roberston was depicted as a Rapunzel-like character letting down his tresses so that struggling writes could clamber up into the ivory tower of patronage, fame and reward. A genuine Patron of the Arts.

With the 2005 demise of Collins booksellers Australia is at risk of losing yet another link to its cultural past, but maybe not if Ferrier’s succeed in selling the A&R brand off.

The printing industry is far wider than books alone, but most people will think of books, newspapers and magazines as ‘the printing industry’ before considering the vastness of the rest.  So what’s going on, and who’s to blame?

First, the A&R/Red Group situation needs to be put into perspective. The Group is essentially a private-equity backed amalgam of businesses put together by finance, not publishing industry, types with a view to making a killing and walking away with a big profit. Pacific Equity Partners stumped up the readies in 2005 when UK outfit WH Smith decided to get out of Australia and New Zealand. It was Pacific Equity that pulled the plug last week, to protect what they have left after a $43 million trading loss.

Next, like so many PE-backed enterprises, what seems to happen is that you replace the inherited knowledge-base and expertise of the acquired concern with people who don’t understand the business, have appalling people skills, and then blame everyone but themselves when things go pear-shaped.

Here’s a list of excuses offered up by Red Group Retail for its failure:
•    Too many people buying books online (why didn’t YOU establish your own online presence 5 years ago?)
•    Poor retail conditions (tell that to JB Hi-Fi!)
•    Rents too high in shopping centers (well who signed the leases mate?)
•    Parallel imports and the 30-day rule (jury’s out)
•    Wages too high in Australia (right-size your wage bill to profits and turnover and it won’t appear so)
•    The GFC (we’re all in that boat folks)

Notice the missing ‘excuse.’ Could it be ‘We were very poor at managing these businesses and planning for the future?’

Where books are at in 2011
With the kind of rents charged by shopping mall owners, I’ve often wondered how feasible it is to even situate specialist bookstores inside them. Often, rents are increased with ‘turnover surcharge’ so the more successful you are, the more they take from your till.

A walk along Glebe Point Road, Sydney, Chapel Street Prahran or King Street Newtown reveals dozens of smaller, charming and, judging by the patronage, seemingly successful bookstores. National chain Dymocks are still family-owned and seem to be doing okay. Maybe bookstores are naturally high-street and specialist; with booksales in shopping malls best left to the department stores and mass merchandisers?

Online booksales – both physical and downloads to e-readers and iPads, grew 176% in the US alone last year, against a 1.8 per cent decline in ‘traditional’ sales. Although only accounting for 3 per cent of total booksales, the growth is huge and I would have thought that anyone in the book trade would have their online/download strategy well in place by now. It’s hardly the latest news.

But the book trade’s malaise goes far deeper than retailers. It goes all the way up the food chain to Publishers. Books are personal – they have to appeal to someone or a genre – and yet many booksellers seem to think they are like cans of baked beans. Apart from guaranteed top-notch author best sellers, I believe ALL book production should shift to a combination digital on-demand print and online downloads. That way, you wipe out all of the warehousing, the money tied up in inventories, costs of remaindering, and expand your sales with downloads. Just like iTunes?

If I were the Great Book Industry Pooh-Bah, here’s what I’d do:
•    Set up micro, good quality on-demand book printing sites in all capital cities and pitch to publishers that you can fulfill their orders on a daily basis. No waste, reduced time-to-market and better service to retailers and customers. Note this is not for the consumer, like the Espresso concept. It is a quality book production factory servicing publishers and retailers.
•    Offer EVERY word-based book as an e-download as well as printed product. Situate online book-buying terminals in retail stores for people to download direct to iPads etc.
•    Start binding USB sticks into the spines of books with loads of additional content, freebies, literacy courses, ads, catalogues, weblinks – you name it.
•    Obliterate dedicated in-big mall bookstores, apart from short-term clearance leases, and either move to good high streets and online, or take space inside department stores.
•    Partner with Apple stores for in-store book downloads.
•    Keep book stores specialised, cosy, friendly, community-connected and perhaps partnered with other services such as a coffee shop, art gallery or even wine bar.

The ‘big four’ book printers in Australia all have book-on-demand strategies and that is excellent. The next stage is to create more of a spread for production, so that a true distribute-then-print model can be effective, and we burn less fuel getting books to market.

The research shows that only about 27 per cent of our population bothers to read books. This 27 per cent is a prime market than needs mollycoddling, servicing, spoiling and listening to. It’s not rocket-science, just fundamental marketing.

The big iron presses can always be there ready for the next Potter, Twilight, DaVinci or retired politician’s autobiography. Or my book.