Book firms need digital to stop $800m loss

Summary:Facing a future of an ailing Australian book industry leaking profits to successful overseas sellers, yesterday the government's Book Industry Strategy Group handed down a report with 21 recommendations, many of them involving technology, which it hopes will enable the industry to survive and thrive.

Facing a future of an ailing Australian book industry leaking profits to successful overseas sellers, yesterday the government's Book Industry Strategy Group handed down a report with 21 recommendations, many of them involving technology, which it hopes will enable the industry to survive and thrive.

The sale of ebooks contributed $35 million to the $2.3 billion Australian book sales market in 2010 (1.5 per cent), and was forecast to reach between $150 million to $490 million by 2014 (up to 24.6 per cent) of an estimated $2.8 billion total market in 2014.

In 2011, according to PricewaterhouseCoopers, Australia lost $280 million worth of sales to overseas retailers. The report commented that the strength of the Australian dollar and the growth of ebooks were certain to see this trend continue. Australian retailers such as Bookworld, Booktopia and Dymocks were underfunded in comparison to their overseas competitors such as Amazon, Apple and Kobo — which the authors of the report believe has to change if the Australian industry is to avoid the loss of $500 million to $800 million in print and ebook sales.

"It is imperative that booksellers compete with offshore retailers by providing an online service and shopping experience to Australian and possibly overseas consumers in the supply of print and ebooks," the report said.

"The Book Industry Strategy Group predicts that, without an enhanced digital supply chain solution, by 2014 at least $500 million and potentially upwards of $800 million in print and ebook sales could be lost from the local industry to offshore retailers."

The group recommended a number of steps to stop this happening; for example, by spending $5 million to develop digital infrastructure so that consumers could access the books of independent publishers, and the publishers and booksellers could improve their supply chain.

The idea is to expand on a service called TitlePage, a single-search repository of titles available in Australia, to include a centralised e-commerce system to manage trade across the supply chain for publishers and suppliers, and an electronic data interchange order tracking system for publishers, booksellers and warehouses. It would be integrated with print on demand services to help supply books and would also be able to process orders for consumers, giving them the same amount of choice and functionality that they would get from overseas retailers.

Skills were also an issue, with the Copyright Agency Limited finding in a 2011 survey that 80 per cent of publishers' primary concerns about moving to digital delivery were a lack of technical expertise and digital marketing skills. Only 15 per cent of publishers and 4 per cent of authors had a clearly defined digital strategy that differentiated them from their competitors. The group recommended that a comprehensive skills strategy be developed to address training needs for the book supply chain. It also wanted the government to support digital enterprises for authors, publishers and booksellers with grants.

Education received special attention. The education market was at a tipping point where electronic books were necessary instead of nice to have, the group said. Introducing the national curriculum was the perfect time to introduce electronic texts, it continued, but recommended that $30 million in funding be allocated to schools to help fund the introduction.

The group made various recommendations relating to copyright, which was considered to be a particularly sticky issue for digital books. It said that digital book copyright issues should be included in the Australian Law Reform Commission's upcoming review of digital copyright, and that the commission should make sure it consults with authors and publishers.

The Book Industry Strategy Group also recommended that the government take steps against piracy by working with the Attorney-General's Department and internet service providers (ISPs) to come up with a "binding" industry code on copyright infringement. The Internet Industry Association has been working on such a code. The report even recommended that discussion be held between copyright holders and ISPs on remuneration for copyright accessed over networks.

Libraries gained some attention as well, with digital formats creating problems for lending. The report recommended that publishers clarify a business model for using ebooks in libraries. The report said that 29 countries had been working on a lending rights scheme, but none of them had extended the scheme to ebooks.

The government will issue its responses to the report at a later date.

Topics: Government, Enterprise 2.0, Government : AU

About

Suzanne Tindal cut her teeth at ZDNet.com.au as the site's telecommunications reporter, a role that saw her break some of the biggest stories associated with the National Broadband Network process. She then turned her attention to all matters in government and corporate ICT circles. Now she's taking on the whole gamut as news editor for t... Full Bio

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