After almost two decades of hype and speculation predicting a digital book revolution, the past 12-18 months have seen some major developments that could herald a turning point in the broad adoption of digital publishing in Australia.
Few could have missed the high profile launches of products such as the Apple iPad or Google eBooks; and similar developments in more established products, such as the Kindle, where Amazon announced only last month that ebook sales on that device have now surpassed all its hardcopy book sales combined.
In February last year, the Commonwealth Government announced the establishment of the Book Industry Strategy Group (BISG) – a Committee of 14 publishing industry experts whose aim is to develop a comprehensive strategy for securing Australia’s place in the emerging digital book market – the BISG will report in September this year.
Against this background, the Copyright Agency conducted a survey of members to learn more about their views of, and experiences with digital publishing in Australia. Over 2,000 members responded, making this survey the largest of its kind in the Australian publishing environment. The survey was sent to all members, ranging from international publishers to self-published authors, asking about their digital experiences and thoughts on the future.
- Both authors and publishers think the benefits of digital publishing far outweigh any of the downsides
- Around half of all authors and publishers create digital products
- The majority of publishers are still developing their digital strategies
- Only 15% of publishers have a competitively differentiating digital strategy
- To date, 26% of publishers have no digital strategy at all
- Digital publishing currently contributes less than 5% to the income of most authors and publishers – however, around 10% of authors and 14% of publishers currently make more than half their income from digital publishing
- Lower costs and improved access to markets are the greatest benefits for authors and publishers alike
- Technical expertise, market dominance of multinationals and piracy are the three concerns shared by authors and publishers
- Low-level technical skills are the most significant barrier to market entry
- Authors and publishers share some common views in relation to e-book royalties
- 2/3 of members believe that digital sales will eventually overtake print for the Australian publishing industry as a whole
- Of all the 2,090 members surveyed, almost 19% own an iPad and over 12% own a Kindle
THE FULL STORY
The full set of survey results is available here and the following commentary highlights some key findings.
On the whole, authors and publishers are largely ‘on the same page’ when it comes to digital publishing. Both groups see digital publishing as a significant opportunity, sharing the view that the potential benefits outweigh the risks.
One of the survey’s most surprising outcomes was in relation to participants’ digital strategies. Only 15.3% of publishers have a clear digital strategy to differentiate them from competitors. Another group (13.6%) said they have a digital strategy, but admitted it probably shared similarities with their competitors’. The majority (32.6%) said they are currently in the process of developing their digital strategy. Another group of publishers declared they needed some help; 8.5% said their digital strategy was reactive, and 26.3% admitted to having no digital strategy at all.
In relation to current digital publishing activities in Australia, results were mixed. Whilst a large proportion of both authors (43.5%) and publishers (54.0%) conduct some sort of digital publishing activity, for most it still only contributes to a small percentage of income. For around 2/3 of all authors and publishers digital still contributes less than 5% of to their total revenue. However, that leaves around 1/3 who are making more substantial amounts; 14.9% of publishers and 13.9% of authors are making between 5%-15% of their income from digital, and 13.9% of publishers and 10.4% of authors are making more than 51% from digital.
When asked how they viewed the current shift to digital publishing, both groups were overwhelming in their support of the change; 74.8% of publishers and 75.3% of authors described it as either a ‘huge’ or ‘significant’ opportunity. In assessing the benefits, publishers viewed a lower cost base (printing costs, warehousing, return, etc) as the primary benefit of digital (71.1%), closely followed by access to more customers and international markets (63.5%) and the ability to develop new and innovative products (61.5%). Authors saw access to more readers and international markets as the primary benefit (78.4%), along with the ability to self-publish and sell content directly (54.8%) and the speed at which writing projects could be developed (52.5%).
Authors and publishers also shared a common view of concerns about digital publishing. For publishers, the number one issue was a lack of technical expertise (42.5%), closely followed by apprehensions about the market domination of large multinational distributors (36.8%) and their lack of digital marketing skills (36.5%). Surprisingly, they were less concerned about piracy, at 36.0%. Authors were slightly more worried about the market domination of the large multinationals (42.0%), but were more concerned than publishers about piracy (41.2%). Lack of technical expertise (36.1%) and lack of digital marketing skills (31.3%) also featured in authors’ concerns.
The survey results suggest a relationship between low-level technical skills posing a barrier to entry into the digital market, possibly highlighting a need for industry-wide training. For those who currently do not sell digital products, but would like to do so, their lack of technical skills was their number one concern; 29.6% of publishers and 30.1% of authors cited a lack of technical knowledge as a reason why they don’t publish ebooks or other digital products.
Even in the contentious area of e-book royalties, authors and publishers shared some common views. No doubt there was some divergence of opinion, but the differences were by no means extreme. Similar numbers of authors and publishers (16.9 and 17.8%, respectively) thought e-book royalties should be set in the range of 11-20% of net receipts. Another 16% of authors and 13% of publishers thought that range should be 21-30%. Unsurprisingly a large cluster of authors (16.3%) felt the range should be 41-50% (whereas only 4% of publishers agreed). Interestingly, only 14.3% of authors felt the royalty should be 51% or greater. It should also be noted that when asked about the topic of ebook royalties, there was a significant proportion of both authors (24.3%) and publishers (38.8%) who chose not to express an opinion.
At the end of the survey, we asked members one open ended question – ‘Do you have any other comments on the survey, your experiences, or the future of digital publishing?’ The response (650 members expressed views) was overwhelming, with opinions as diverse as they were passionate. A sample of succinct responses is offered below.
- As a lover of actual books I find the virtual book revolution sad and threatening.
- Ebooks will never outsell paper.
- I’ll be sad to see bricks-and-mortar bookshops go but I think it’s definitely heading that way.
- Time for me to become more proactive. But how?
- It’s here to stay and we need to embrace it and make it work for authors, sellers and consumers. No point fighting it and hoping it will go away.
- I now no longer read paper books and am a 100% digital reader. It has changed my reading habits in that I now read genres I never would have spent money on buying a traditional book.
- It’s still a pretty defensive attitude to digital publishing here. It’s happening. It’s huge. It’s a game changer. So perhaps more thought needs to go into how to positively adapt.
- The shift is totally inevitable even if the timeline is unpredictable. We are moving inexorably towards a globalised world. The question is how we respond to this, not how we resist it.
Another interesting category of respondents were those who described themselves as ‘digital converts’, usually due to the recent purchase of a dedicated ebook reader such as the Kindle. Below is a typical example:
- My 83-year old mother just bought a Kindle – before me! – along with a large cohort of her retired and aging friends. They are all talking Kindle and e-books, and the fact they are sick of packing up dozens of boxes of books when they down-size and move houses/apartments. The retired baby boomers and 70yos are increasingly mobile and travel often – my mother is now a whiz at Amazon and uploading books ahead of a two month trip to Europe. She says she is never lugging around a conventional book again on planes, just her Kindle…
The Copyright Agency would like to thank all members who contributed to the digital publishing trends survey. Your participation has created a valuable data set and baseline study which is now available as an industry asset for anyone who has an interest in digital publishing. We are planning to survey members annually to monitor changes.
We consulted widely in developing the survey, obtaining feedback from the Australian Society of Authors (ASA) the Australian Publishers Association (APA) and various industry experts. The finalised survey consisted of 34 questions, which was sent electronically to all CAL members on 9 May 2011.
It should be noted that the Copyright Agency has a very broad membership base of almost 20,000 authors and publishers. This membership base has a significant crossover with the ASA and APA, but the views of members should not necessarily be seen as reflective of the membership base of other associations.