Old technology a threat to publishers’ bottom lines

December 20th, 2012 by Philip Brasor & Masako Tsubuku

By the gross: cheap reads at Book Off

There was only one book published in Japan this past year that sold at least a million copies: TV personality Sawako Agawa‘s volume of essays, “Kiku Chikara: Kokoro Hiraku 35 no Hinto” (The Power of Listening: 35 Hints to Get People to Talk About Themselves), a relatively inexpensive paperback published by Bungeishunju. Though the media has been claiming for years that reading is on the decline, a single million-seller is still pretty low by Japanese publishing standards. Last year, for instance, there were ten, and two years ago five. According to the industry organ Shuppan News, the main reason is that there were no topical books for publicity departments to push effectively.

Publishers and wholesalers usually focus promotion on titles they think will sell easily, but this year couldn’t find anything they really thought would catch the public’s imagination. The conventional wisdom about million sellers is that a good portion of them are bought by people who aren’t devoted readers. Remember the phenomenal sales for Haruki Murakami’s “1Q84″? Many of the buyers were people who were caught up in the “event.” They wanted to own a copy — or several, as the case may be. Some probably didn’t even read it. Experts say this phenomenon no longer applies. Interests have become more compartmentalized, more diverse. People no longer automatically buy a book or record just because everyone else does.

According to a recent article in Tokyo Shimbun, book sales in general have dropped. The peak year was 1996, when 915 million books were sold for a total of ¥1 trillion in revenue. In 2011, the total number of books sold was 700 million and revenues were ¥819 billion. This year, the drop is expected to be even greater.

Now, before you ask about the sales breakdown between printed books and e-books, keep in mind that sales of e-books remain relatively low in Japan, owing to industry resistance that is just now breaking down. The drop in sales has less to do with technology and more to do with demographics. In fact, the number of people who read regularly hasn’t really changed despite the decline in population. That’s because the loss in general readership is being compensated for by older retired people who now have time to read. However, these people don’t really care about owning books. The real reason for the drop in sales is that they have rediscovered the library.

According to the Japan Library Association, there were 2,522 libraries throughout Japan in 1998. By April 2011, that number had increased to 3,210. Last year, library users borrowed 716 million books, CDs and DVDs, a new record, which is surprising given that local governments are hurting financially and library budgets are usually one of the first things they cut.

Obviously, some rationalization is going on, but at least one local government, Takeyo in Saga Prefecture, has come up with — no pun intended — a novel solution. The city hired the entertainment media rental and sales company Tsutaya to run its public library and has saved 10 percent of its normal operating expenses in the bargain. In return, Tsutaya opened a store next door as a kind of annex to the library, complete with a cafe.

A researcher interviewed by Tokyo Shimbun said that the recession definitely has something to do with the boost in library usage. It has also boosted the success of used book chain stores like Book Off. Sales of used books have been increasing every year. Naturally, this is bad news for publishers and, especially, new book stores despite the fact that prices for new books are fixed by the publishers and can’t be changed by resellers. These prices tend to be set artificially high by making the print larger than necessary and dividing texts into multiple volumes. But as much as the publishing industry has tried, it can’t do anything about the used book market.

According to the Yano Financial Research Center, the market for used books in 2010 was ¥130 billion. Sales at Book Off alone amounted to ¥70 billion in 2010. Even if one keeps in mind that Book Off sells merchandise other than books, the retail giant obviously has a substantial share of the market. Their system is attractive to people who just like to read. You buy a used book for a few hundred yen, read it and then sell it back to Book Off for about ¥50. It’s especially attractive when it comes to best-sellers, for which there is usually a long waiting list at the local library. By their very nature of being best-sellers, there are usually a lot of them at Book Off, sometimes for as little as ¥100 plus tax.

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4 Responses

  1. I love your articles here, on the Cat Forehead site, and in the Japan Times.

    The digital revolution may mean that the market for used books has been declining since that 2010 survey. I notice that the shops that used to sell old books and magazines in Shimo-Kitazawa have disappeared. Good Day Books has moved from its convenient location in Ebisu.

    Two years ago I worked hard to keep my book collection after I moved in with my new wife. Nowadays I never look at them, as I have so much to read on my tablet and smart phone. Then I would visit book shops every week, now there seems little point.

  2. Until you mentioned the library, I would have never guess it to be a main cause for the decline in book sales. I’m one of those people who still prefers to hold a real book when reading and I think there are enough people who agree with me that traditional books will never go obsolete. But now that I think about it, libraries are in fact the one thing that could really hurt bookstores–after all, they offer the same product, only for free. That said, when I lived in Japan, I bought most of my books at Book Off.

  3. Living in Iowa, I found this blog by following a link from Google. Very Happy I did. Amazing topic, and great blog. Keep up the Wonderful Work.

  4. I suspect that younger folks spend much of their free time surfing the Internet – time that earlier generations spent reading. The Internet habit is difficult to break and many people now in their 30s and early 40s continue to rely on their computers for information and entertainment. There’s a slow but steady snowball effect that does not bode well for the publishing industry.

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