"Given the shifting sands underpinning the book publishing business, do shareholders need to be sceptical about the solidity of the entire industry?", asks Orbach in typically unflinching style.
"This is a reasonable question. Even those uninvolved in book publishing, might find it difficult to ignore the apocalyptic tone of many reports about the industry, and the evidence that it is facing profound challenges that must be addressed."
But Orbach isn't impressed by the talk of a wipe-out. First he does not think e-books will become big business for the bits of the sector Quarto inhabits, and neither does he think Quarto is best placed to become the pioneer.
"While Quarto is feeling the ripple effects of this evolutionary change, the impact to date has been slight. To satisfy the curiosity of analysts and commentators, we have noted above that our digital revenues climbed five-fold in a year. But they still only represent a little over one percent of group revenues. Quarto's book output is substantially non-fiction titles that are useful and, often, necessary for readers pursuing a craft, a hobby, home improvement, self-improvement, and so on. This is not a large part of the current e-book market, and efforts to build both apps and e-books around the kind of content we create have not been well rewarded. This is not surprising, as they have not taken advantage of the benefits that the new tablet computers and e-readers now offer. At the moment, and seeking to take advantage of better and less cumbersome software authoring tools, more efforts are being made to create enhanced e-books. No doubt, some will turn out to be very fine, but it remains unclear whether there is a profitable commercial model lurking in all of the experimentation.
"In software terms, Quarto has been staying very close to technological progress, however we believe it is not yet good enough and are waiting patiently for an improvement which will compel us to participate more actively. At the moment we cannot even glimpse the outline of a business model for enhancing the kinds of books at which Quarto excels. If others blaze a successful trail, we shall travel it, dragging our mountainous piles of proprietary content."
Orbach says he speaks from experience, drawing a comparison with the CD-Rom bubble of the '90s. "Quarto did not invent 'enhanced' books, but in the late 1980's, pioneered in creating 'interactive books plus' for consumer audiences, including children's titles, and continues to produce them today at Q+ and Walter Foster. We invested in the first iteration of digital enthusiasm in the 1990's, for CD-ROM's. The public expressed its enthusiasm for these products by ignoring them."
Full piece at FutureBook