Christmas ghosts haunt the humble page turner

Stephanie Bunbury , Sydney Morning Herald, December 19, 2010

BOOKS have always been a stocking-filler staple, the perfect last-minute gift.

But the rush to buy books in the lead-up to December 25, usually seen as a Christmas bonus for bookstore owners, has come at the end of a year retailers say is the worst in living memory. The extra sales will provide some relief, but there's little to celebrate in the local book trade right now.

Sales are down as much as 10 per cent, competitive discounting has squeezed profit margins and the humble paperback faces an uncertain future as ebooks grow in popularity.

 Everyone, apparently, is feeling the pinch. ''Our woes are those pertaining to most retail,'' says Mark Rubbo, who owns Readings bookshops. ''None of them can you shoot home to the ebook. People aren't spending. And the strong Australian dollar makes overseas internet suppliers very cheap.''

Online sellers such as Amazon and Book Depository can consistently undercut local retail prices by half or more, even when the cost of overseas postage is factored in. A quick look at a few websites tells its own story.

Dymocks offers Jonathan Franzen's acclaimed Freedom for A$32.99 as a trade paperback. Amazon has it for $US13.97 ($A14.14) plus shipping; it costs slightly more as an ebook for those with an Amazon Kindle.

''It's difficult to compete in terms of price, even if on other levels like service we can,'' says Australian Booksellers Association chief Joel Becker. ''Unfortunately there is no GST on books coming into the country, so there is a 10 per cent price advantage right there.''

How much trade has gone to the online giants is impossible to calculate, however. All sales statistics come from the scans in bricks-and-mortar bookshops.

''We can't measure the impact, as the overseas booksellers are not taxed here and don't report figures here,'' says Simon Milne, general manager of the Leading Edge group of 200 independent booksellers. ''All we can say, is that the overseas trade is definitely hurting us.''

Fighting back hurts, too; discounting has sliced nearly $5 off the average price of the most popular books. Bigger chains, which are arguably competing more directly with the online retailers - along with discounters such as Kmart - than smaller bookshops, have changed focus by selling other products. ''You go into Borders in Carlton and it's 50 per cent non-books,'' says Chris Redfern, of Avenue Bookstore in Albert Park. ''That really changes the concept. A lot of other franchises are only just hanging in there. We are going to see a lot of closures; there is only so far you can struggle on with spiralling debt.''

But if the Ghost of Christmas Present is the overseas online retailer, the Ghost of Christmas Future is the ebook. Although ebooks account for less than 1 per cent of book sales in Australia, publishers and retailers predict that Australia will follow the lead of the US, where the ebook versions of best-sellers now account for as much as a third of their sales.

''The tsunami is coming,'' says Michael Heyward, managing director and publisher at Text Publishing. ''This year, 2010, is the year ebook sales became significant in the US for authors like Stieg Larsson and John Grisham; it's only a matter of time before it's here.
Full story at Sydney Morning Herald.