Amazon.com is the world’s largest book retailer and Australians spend around $150 million with Amazon each year.
So how do Australian book stores take on a $16 billion company?
Australian online book-reseller Booktopia.com.au has adopted a model that could leave it at a loss (and deliberately so).
On the 15th September, 2009, at exactly 9am (Australian Eastern Standard Time), the new blockbuster Dan Brown book, The Lost Symbol, will hit Australian book stores. Fans of the Da Vinci code (and its many sequels) will be counting down the days until it arrives.
The storyline has been kept so secretive and the security around printing and distribution is so tight that no one is really sure what the book is about, other than it once again features Robert Langdon as the key character and it takes place over 12 hours.
Amazon.com, no doubt, expects to sell millions of copies worldwide, and many people in Australia may consider buying their copy from the online giant. That is, of course, unless Booktopia has its way.
According to a media release announcing the book launch, Booktopia is planning to match the overseas price and offer Australians the same book at the same discounted price.
“I want to make sure readers in Australia can buy online at the same price as readers anywhere in the world,” said the Booktopia.com.au CEO, Tony Nash.
This comes at a time when Australian book publishers are smarting from recommendations by the Australian Productivity Commission to free-up Australian reseller laws, which currently prohibit mass importation of foreign books without a proper reseller’s licensing agreement from the copyright owner.
Australian book publishers have presented numerous submissions to the Commission that claim it is the revenue generated from the reseller agreements that allow Australian publishers to invest in original Australian content.
The Australian publisher (i.e. authorised reseller) of the new Dan Brown book, Random House Australia, is printing 600,000 copies in its first print run and each and every copy is being printed in Australia. It has set the recommended retail price at $49.95 (although astute buyers can second guess that it is likely to be discounted heavily at retail).
At the same time, Amazon has set its discounted price in the UK at approximately AUD$20 and AUD$21 in the US. Booktopia.com.au is currently taking pre-orders on its website at $19.95.
By doing this, the Australian online reseller is likely to take a short-term financial hit, pushing the popular title as a ‘loss-leader’ (i.e. a featured article of merchandise sold at a loss in order to draw customers), for longer-term financial gain.
Maree McCaskill, CEO of the Australian Publishers Association, in a statement on the Association’s website, makes the point, “You don’t invest in a property you are renting, completely renovate it and landscape it in the knowledge that you will never own it. The Commission is proposing that publishers and authors rent copyright thereby removing completely the ability to invest in the Australian industry”.
What this means for original Australian content is anyone’s guess, with interests as deep as, well, a Dan Brown thriller. Let’s just say, the ’symbolism’ of Booktopia’s move will not be lost on Australian booksellers.
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View Comments
Australian Online Bookshop
August 10th, 2009 at 12:20 pm
It’s a shame Australian booksellers have to prostitute themselves to compete with Amazon. Good on Booktopia for taking a lead in what will be a long and sustained battle for the hearts and minds of Australian book consumers.
[Reply]
Leela Cosgrove
August 10th, 2009 at 5:29 pm
It’s about time the book publishing industry took a blow like this – perhaps it will get them to smarten up about the way they do things.
If you look at the model book publishers use to secure, publish and market books – it’s so backwards it makes me want to shake someone! If most of us ran our businesses like that, we’d be out of business so fast our heads wouldn’t have time to spin.
If publishers just smartened up about the way they ran their businesses (i.e. caught up with the fact it’s 2009 now … they’re still living in the 18th Century!) – they would have plenty of money to invest in new Australian authors and to take risks on books …
It’s time the industry got a shake up – competition isn’t going to kill them – in fact, it might just make them stronger …
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Australian Online Bookshop Reply:
August 10th, 2009 at 7:44 pm
With all due respect to Leela, this post is a nothing comment! If you’re going to take a free swipe at Australian publishers then you could at least mention what it is that they are doing so poorly.
[Reply]
KIM JACOBS
August 10th, 2009 at 10:28 pm
I don’t think the Productivity Commission see it as their goal to ensure the Australian consumer is poorly served by the restructure of an industry. In fact I am sure it is the exact opposite. They are probably a more disinterested party on this matter than the Australian publishing industry.
The Productivity Commission has a good record in ending industry arrangements that maximise industry profits in return for illusory or unquantifiable small benefits for consumers. The benefits might exist but their cost to consumers is way above what they are worth. Typically the case of the target industry collapses when a realistic value is placed on the alledged benefits and it is seen that the target industry is appropriating a massive amount of revenue for itself over and above the cost of the benefits been supplied to consumers. Recent changes to copyright and importing arrangements on music, credit card servicing and interchange fees and so on are good examples. With this in mind comments like those of Maree McCaskill, CEO of the Australian Publishers Association, leave me cold: “You don’t invest in a property you are renting, completely renovate it and landscape it in the knowledge that you will never own it. The Commission is proposing that publishers and authors rent copyright thereby removing completely the ability to invest in the Australian industry”. What I want to see is how much extra the industry is charging the Australian consumer each year for books and how much of this is being reinvested back into the Australian industry over and above what there would be invested any way. I bet there is nice little profitable differential that the industry is keen to hold onto. Nothing wrong with that but don’t dress up profit maximisation as something other than what it is.
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Melbourne Lawyers
March 3rd, 2010 at 2:25 pm
In order to get a business started you often have to take hits. Hope this works out for bootopia!
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