Story written by Jane Nicholls and originally published in The Deal magazine, February 2019.
In June 2011, senator Nick Sherry infamously predicted the death of the book industry.
“I think in five years, other than a few specialty bookshops in capital cities, you will not see a bookstore,” the then minister for small business told a conference audience. “They will cease to exist because of what’s happening with internetbased, web-based distribution.”
Booksellers love to cite Sherry’s prediction and point out that they’re still trading, that sales of physical books are up and that the ebook market has dimmed. “Bookshops have a really important role in society,” says Steve Cox, managing director of Dymocks, which began with William Dymock’s first store in Market Street, Sydney, in 1879. “They’re where people can discover things for themselves beyond what’s being fed to them through online algorithms. People love to go into a bookstore, browse the shelves and discover something that surprises and inspires them.”
Sherry had reason to be pessimistic: 2011 was the year that US chain Borders went out of business and Australian private equity firm REDGroup Retail went into administration, taking with it local Borders stores and the iconic bookseller Angus & Robertson. Joel Becker, who recently retired after more than eight years as CEO of the Australian Booksellers Association, recalls: “There was panic going on, partly driven by a couple of the large tech companies, which were selling ebook readers, [saying] that books and bookshops were going to become artisan objects… but there was no evidence to justify that.”
Today, the Australian book market is worth about $1.9 billion annually, including print, audio and ebooks. Data from the PricewaterhouseCoopers Australian Entertainment & Media Outlook 2018-2022 shows that while revenue in Australia for consumer ebooks was up 22.3 per cent in 2014, it sank by 20 per cent the following year. There have been single-digit declines every year since and these are forecast to continue to 2022, and presumably beyond.
“E-readers now sit in the cupboard next to the breadmaking machine and the fondue set,” quips Tony Nash, CEO of Australian online bookseller Booktopia (which also sells ebooks).
“They’ve tested people reading crime fiction as physical books and as ebooks, and those who read the physical book could remember the sequence of the storyline much better.”
While the PwC report shows print and audio consumer book revenue was down 0.22 per cent in 2016, it has steadily, if modestly, ticked up every year since, and is forecast to continue that trend. The 2018-2022 global PwC Entertainment & Media Outlook report pronounced that books were “the only form of physical media on which spending is expected to grow”.
Digital educational publishing is strong, but screen fatigue is seeing recreational readers returning to old-fashioned books. “Bookstores have proved themselves to be remarkably durable,” says Michael Heyward, publisher at Text, the reigning Australian Book Industry Awards’ Small Publisher of the Year.
“They are essential to healthy bricks-and-mortar retail environments. They’re treasured by communities and bring with them a whole lot of other values that aren’t to do with buying and selling.”
PEOPLE LOVE THE EXPERIENCE
The wonder of the printed word can be accessed via a book that’s been clicked and shipped, but the pull of a gorgeous bookshop is undeniable. It’s the reason journalist Corrie Perkin decided to open her own store, My Bookshop, in Melbourne’s Hawksburn in late 2009.
“Everyone thought I was crazy,” says Perkin. “The Kindle had arrived, Book Depository and Amazon were all the rage, and we had one of the biggest Borders in Australia one kilometre from our shop. But I felt in my bones that people love shopping in their local village in this increasingly disconnected world.”
Perkin doesn’t pretend it’s been easy – a second shop in Toorak Village closed after two years – but as she approaches a decade in Hawksburn, she feels vindicated. “People love the experience of a clean, beautiful bookshop with an extensive range of stock, including a good backlist,” says Perkin, who says Instagram and her Book Pod podcast have also been critical in building business. And in the wake of what publishers have hailed as a standout year for sales of Australian authors, she points to the role of independent bookstores.
“We are the greatest advocates of Australian authors. If you go onto Amazon or Book Depository, no one there is going to tell you ‘This is the first novel of a great young Australian author – you must read this book’.”
Like most independent booksellers, Perkin has invested in a website for My Bookshop, “not so much for sales, but for marketing and as a resource tool for our customers, who see a book on our site, ring up and ask us to put it aside for them”.
ABIA 2018 Young Bookseller of the Year Tim Jarvis says: “It’s impossible to compete on price with online retailers. But to some extent the difference in price can be offset by the convenience of being able to go in and grab the book.” For Jarvis, being a fulltime bookseller at Fullers Bookshop in the heart of Hobart trumps being an academic. “I really like talking to people about books,” he says. “It combines a lot of the things I like about academia – my PhD was in philosophy and I enjoyed teaching it, but I love talking about it.”
Fullers takes its “role as a cultural institution very seriously”, says Jarvis. The store hosted about 150 launch events last year. “We run several lively and longstanding reading groups, which bring a real sense of life to the shop,” Jarvis says. The Shared Reading group is in its 18th year of reading and discussing classics aloud, and another group “is reading their way through all of Shakespeare’s plays… that’s a multi-year project and we’re nearly halfway through”.
AUSTRALIAN COMPANIES ARE COMPETING
Even though it’s a pure-play e-commerce bookseller, Booktopia has created an online book club of sorts, via an active blog, a podcast, and an author video and book-signing studio, housed in a corner of a 13,000sq m warehouse in the western Sydney suburb of Lidcombe. “I have huge admiration for what Booktopia’s achieved,” says Heyward. “And they have the same commitment to curating their online bookstore that a lot of bricks-and-mortar booksellers have.”
Booktopia, which in 2015 bought the Angus & Robertson and Bookworld online businesses, built its reputation on super-speedy dispatch, facilitated by an early decision to keep substantial stock on hand across a wide variety of titles. “Today we have about 148,000 titles across 600,000 units, ready to ship,” says Nash.
Booktopia’s growth continued after Amazon’s arrival in Australia, boosted by customers loyal to the local hero, born in 2004 as internet-marketing consultant Nash’s side project and hitting turnover of $113 million in 2018.
“I think people are proud to know that there are Australian companies that are competing and doing well,” says CEO Nash, who owns the company with his brother, sister and brother-inlaw. In November 2018, they announced a crowdfunded equity capital raising, targeting a minimum of $3 million and a maximum of $10 million to improve distribution-centre automation, and increase stock levels and working capital. Nash was sanguine when ASIC ordered revisions in the offer documents to make risk assessments more prominent. (The capital raising was scheduled to close as The Deal went to press, though Nash suggested it might be extended.)
Counterintuitively perhaps, the company supports bookshops. “If you find a book you like on our website and you are close to a local bookseller, then please, go in and support them,” the Booktopia site urges. “They know their product, they love books and are a part of your community.” That generosity of spirit has contributed to Booktopia’s popularity in the industry.
Dymocks and Booktopia are significant supporters of literacy and reading-focused charities and events, but Booktopia is committed to its online, book-focused model while bricks and mortar is the main game for Dymocks, which is actively diversifying its business.
Dymocks has company-owned stores, partnerships and franchisees in every state and territory, and recently expanded with three Milligram designer stationery retail stores in Victoria (a fourth will open in Carlton this month) and two Potentia Tutoring hubs in Sydney’s western suburbs. Cox says the company’s franchise network, which began in 1986, continues to grow, and the total of Dymocks’ online bookselling revenue is roughly equivalent to that of one of its larger bookstores.
“Our franchise owners are a part of their community and know the people who come into the store, what they want to read, and stock the right range of books at a localised level,” says Cox.
Text’s Heyward says “a genuine independent publishing sector” has emerged in Australia in the past 15 to 20 years. Previously, he jokes, “if you wanted to be a quixotic and doomed hero, you would start an independent publishing company”.
Heyward cites Australia’s “world-class network of independent booksellers” as key to the success of local publishing. “They are genuine partners in that whole process of exploration and discovery of new voices with all publishing companies, not just independents.”
Disruptors will no doubt continue to challenge book publishing and selling, but there’s every reason to believe this passionate ecosystem of book lovers will keep the sequels coming.
Readers have turned away from ebooks, but they’ve turned up the volume on audiobooks. Amazon’s digital audiobook behemoth Audible launched in Australia in 2014.
“We’re in the book space, but also the broader entertainment space,” says Leanne Cartwright-Bradford, country manager and head of Audible Australia and New Zealand.
“We’re all competing for share of mind and share of wallet. People really want to read more books, but it’s hard when they’re so busy.”
Books are playing in cars and headphones on commutes, and in the home via digital assistants. And for those who are still reading ebooks, Audible and Amazon sync so that bedtime reading on a Kindle continues where the audiobook left off – and Audible says it’s seeing double-digit growth year on year.
Benjamin Stevenson’s first novel, Greenlight, Audible Australia’s first “thriller of the year”, launched with an extensive marketing campaign at the same time as the physical book and, says Cartwright-Bradford, audiobook sales have surpassed print.
“The growth for us is working with local publishers and on our own original content,” she says. “The bar is high – we put a lot of time into working out how books can work as audio, the right treatment and the casting.”