A Storyteller's Opinion

This was originally written as a comment on Dee White’s blog about the PIR kerfuffle.

It seems to me that this whole argument lacks some basics.

I listened to Don Grosvner on The Book Show (Radio National) along with Mike Woods (the Commissioner) and also to Lousie Adler being steamrolled by Bob Carr on Late Night Live. I’ve read a lot of articles and blog posts along the way.

First up, I don’t support the argument that PIRs should be removed. It’s fundamentally absurd that an accountant (Mike Woods) should address a cultural economic question without balanced arts knowledge input. His ignorance of writers’ needs for publishing and its economic structure was amply demonstrated in his interview, and his absurd notion that writers needed Government Subsidy.

It has been said by many that ‘we want cheaper book prices’.

Not one person I’ve heard interviewed, blog post or newspaper column I’ve read has indicated exactly what is meant by cheaper books. How much cheaper do we want books? 10%? (Easy, one stroke of the GST pen.) 25% (Also easy, halve the retail margin.) The point is, the claim is fatuous because it has no stated object. Don Grosvner couldn’t say how much, Mike Woods couldn’t say how much. So if these people pushing for cheaper books can’t say how much cheaper, then the argument itself is moot. That clearly is not what the inquiry is about.

Some have said they want the same prices as the US and UK.

Have these people looked at disposable incomes and compared those? When it all boils down, they may very well find that many of our book prices are very similar in terms of affordability. I was in Borders San Francisco last year and stocked up on a lot of books. Not because they were cheaper, but because they were not available in Australia. By and large, most books were priced the same: many were more expensive when our dollar plunged to 70cents during my three week stay.

Another issue that has been ignored by all parties in this argument is that of volume production costs.

We either support our local printers or we don’t. Print is one of those things that reduces in costs per item as volumes increase. Large printers, printing large volumes in the US and UK (Lightning Source is a good example) can offer much cheaper print because their volumes are so great. They buy paper stock and consumables cheaper, their financing costs for print machinery is cheaper, their real estate costs per print is cheaper, and their overhead is cheaper than a small Australian printer who faces exceptionally high real estate and financing costs, labour, and higher stock and consumable costs.

Mike Woods suggests that printers (and other suppliers) need to be ‘more competitive’.

To an accountant, competition is based on how cheaply something can be achieved. The fundamental flaw in Australian economics policy is the rampant ‘deep pocket’ syndrome: If you can buy more, we will sell it cheaper.

This skewed — and encouraged — practice allows the market pressure of money to disbar activities of otherwise viable entities. It has sent many businesses broke because they foolishly underestimate the costs of providing high discounts, and of accelerating future purchases. It is one of the reasons why Western Australia lacks credible cultural enterprise.

The booksellers margin is another area not well investigated in the commission’s report.

Anecdotal reports suggest that booksellers receive 45%-50% discount margin, and a Sale-or-return policy to boot. Compared to the Music Industry’s 27.5%, and general retail margin of 33.3%, this is patently absurd. It is this practice that has lead to the ridiculous idea of a ‘coalition for cheaper prices’.

Say a book has an RRP of $24.95 (including GST = $2.27). The retailer (say Myer) is offered 50% discount = $12.45, meaning the retailer’s buying price is $12.50. (GST accounts for $1.13.) Myer offer the book at $16.21, a margin of 29.7% — a realistic retail margin for a store with an overhead structure like Myers. A specialist bookstore marking up 50% would then retail the book for $18.75.

Clearly publishers need to change the pricing of their books, and eliminate volume discounting as a practice — on a SOR basis, it does nothing to increase real sales.

If Authors are paid according to the RRP printed on the cover, with allowances for non-royalty stocks, and remaindered discount, then a smaller RRP and a higher Author Royalty rate will solve all problems, leaving authors with the same income, and level the playing field.

The key is to take some of the predatory marketing practices out of the supermarkets and support the specialty book stores. A simple ‘no’ to heavy volume discount requests will go a long way, and will, in the long term, cost publishers very little in terms of volume sales. It may in fact increase them.

Authors need to have more control over the ultimate value of their property.

Another area of great concern is the Americanisation of our language and culture. I hate it. I hated the idea that the movie, The Castle, had the Commodore removed and replaced with a Chevrolet something. The American publishers’ and producers’ arguments are that the ‘American public wouldn’t relate.’ Sorry, it’s simply not true.

Contrary to Sally Murphy’s point, many Americans do want to read about Australian culture, understand Australian cultural icons and humour. Hell, one of the most popular shows on television (Myth Busters) among young audiences is so because of its Australian ownership and cultural approach to the subject. The irreverence that comes from the Australian production charms the hell out of the young American audience. Many Australian actors are now being cast in movies in roles that celebrate their Australian-ness.

Moreover, young American readers are generally intelligent enough to understand the differences. And, in the words of the great Stan Lee, “if he or she has to reach for a dictionary, how is that a bad thing?”

Australian writers (Andy Griffiths for example) need to simply say ‘no’ to changing Bum, to Ass; to changing footpath to sidewalk, carpark to parking lot, mobile to cell… It’s endless and it’s absurd. Many young American readers want their stories sooner rather than later, the same as our young readers. They get frustrated at having to wait because of the translation. But the power lies with our authors and publishers.

A quick scan of my daughter’s bookshelf reveals many American novels published by Australian publishers (under PIRs) that are not the British editions — they retain the Americanisms. But my daughter writes in Australian. She has no problem understanding that Mom is an American term for Mum, and so on. I’m currently reading Tom Clancy’s The Teeth of the Tiger, published in Australia 2003, printed by Griffin Press in Australia, but it is American in its spelling and cultural iconography.

It seems to me that the greatest power in this Productivity Commission’s report lies in the way it has energised the storytelling industry. It is perhaps a watershed moment, and if anything, demonstrates to publishers and writers that they have a vibrant future. Yes, we must resist the change to PIRs, because that won’t make one iota of difference. But we should also consider that there are real changes ahead.