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Key points from Frankfurt

I flitted in and out of a busy Frankfurt last week.  For anyone who hasn’t been to the Messegelände, the scale is spectacular – vast hall after vast hall, interconnected with numerous escalators, corridors and security checks.  A dead whale full of Audis and antiquarians was parked in the centre of the complex, and wifi support (notwithstanding the BlackBerry Crumble) was lousy.  Earls Court is being demolished next year, but if it ever saw Frankfurt, it would die of shame.

From the perspective of this blog, the big buzz was eBooks, and the point at which their penetration of English-speaking markets will extend to the rest of the world.  Kobo’s new partnership with Fnac (as well as their new relationship with WHS as a UK-exclusive partner) suggests both that Europe will start to feel the eBook hurricane through 2012, and that there may be some alternatives to the Amazon hegemony starting to emerge.

My presentation at Tools of Change has been extensively (and sometimes sensationally) reported, though my determination to rouse my audience with touches of revivalist preaching meant that I got what I deserved – anyway, I thought it would be useful to reprise my key points, then we can move on to the next chapter of this brave new world.

1. Bookshops cannot survive as economic entities

UK bookshop chains, a few years back:

UK bookshop chains, 2010s:

Progressively, most of the businesses on the first slide disappeared over the past ten years – they were acquired and subsumed, or they failed and closed down.  In a more benign economic environment (less price competition, less online competition, less severe banking crisis) more of them might have survived; of course, some were more robustly structured or better managed than others.

These bookshops (and the hundreds of indies that have also folded) didn’t disappear because no one wanted to buy from them any more; however, in a world of upward-only rent reviews, rising utilities costs, and very tight net margins, bookshops can only survive losing, say, 20% of sales before they become uneconomic, and plugs get pulled.

This leaves the remaining 80% of their customers unhappy and disenfranchised; it speeds the drift to Amazon and supermarkets (and in due course Kindle), or it causes those customers to stop buying books altogether.

The “eBook Revolution” (one for the cliché file) will accelerate this process.  I’ve never prophesied the death of the physical book (or pBook, as the eBook-people prefer), but publishers need strategies for a bookshop-free world, and I’m not yet convinced they’ve found them.  One strategy might be to support bookshops with more equable terms, of course, but retailers and publishers would have to be very honest with each other about outcomes, so that publishers’ profits weren’t ploughed into supporting failing enterprises, or bookshops given a false sense of their own robustness.  Interesting to read Hachette Livre Chief Executive Arnaud Nourry’s views on these matters.

2.  Retailer diversity matters

Regular blog readers will have seen my “Amazon takes over everything” sketches before.  Click here for the Fantastic Dystopia.  I used these old sketches to illustrate the peculiarly British phenomenon, whereby Amazon has emerged as the sole credible online bookshop, and the sole credible eBook seller, in the UK.  I’m concerned that the publishing community hasn’t done enough – collectively? – to ensure that there are alternatives to this level of domination.

There is a limit to the amount of business you can do with a “frenemy”.  John Ingram, whose family owns the dominant American book wholesaler (and much more) defined his company’s relationship with Amazon – on a Tools of Change panel discussion – something like this:

Amazon will make use of our services and expertise for as long as it makes sense for them.  But as soon as they can do it themselves, they’ll shoot us in the head.

I had something of a Damascene conversion over the summer, shopping for books in the regulated French market, where book discounting is limited by law to 5%.  I saw a greater choice of books in mass market stores, and a greater choice of interesting bookshops.  It started to look as though price protection might be assisting plurality, and helping to keep good bookshops in business.  Consumers may pay more for their books – but (beyond academia) no one has to buy books.  More realistic pricing would be a benefit to everybody.

Here’s a table of pricing that Rüdiger Wischenbart presented at the TOC wrap-up.  Rüdiger calculated the average RRP and discounted price of six major nations’ top ten fiction books, and benchmarked them against their eBook equivalents.  The results confirm that we get cheap books in the UK – though we have got ourselves into a “high RRP, big discount” mentality that favours the most powerful merchants, and disadvantages the small specialist.

3.  Keep books special:

I’m worried about books being subsumed into “the seduction of colour, movement and noise” represented by tablet devices.  My slide showing all the things you can stuff into an iPad looked like this:

Of course, the tablet environment is ideal for many non-narrative formats, but I fear for the distinctiveness of long-form narrative if it is left to fight all of this miscellaneous (and often more seductive) content.  I believe that standalone eReaders are important – indeed, I’d like to see the focus move away from what is a fairly basic and straightforward piece of technology, to a point at which the eReaders are free of charge, and the content – the stuff that really matters – is ascribed the value it merits.

4.  A couple of contentious observations:

a)  Publishers need to promote more, younger firebrands to positions of real responsibility.  My generation grew up with paper (and telephones, vinyl, 35mm film and all the rest), and we are inevitably “translating back” – subconsciously – much of the time.  The bigger the publishing house, the more disruptive new media will be to their established business model, and thus the more disruptive the people they should be hiring to ensure they prosper.  We’re saying goodbye to our bookshops; professional publishing is economically and culturally essential.

b)  It’s great coming to Frankfurt, and talking books, books, books, to all and sundry.  But most book buyers (the actual customers that publishers need to get much closer to) don’t eat, sleep and breath books.  They have other things to worry about.  Publishers will have to fight for their attention, so they need to ensure the public still value what books give us, and their fundamental role in a strong society – the ideas, the knowledge and the power that they ultimately confer on us all.

If you want to talk to me directly about any of these matters, you can contact me at philip@frontofstore.co.uk.

Afterword: Apologies to the long-established and very fine booksellers John Smith & Sons, whose name should have appeared on both of the “bookstore” slides above.

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