In 1978 I found myself on the same podium talking on the same subject, and the exercise forced me to take a long hard look at what I had said six years earlier. For several reasons my predictions had not been particularly prescient. Certainly, the inroads of technology had not been made as quickly as I had thought they would be. And, of course, I couldn’t have known what impact the Literature Board of the Australia Council was to have on the production of fiction in this country, because it didn’t exist at the time. Nor could I foresee the curious success of serialized novels on television and the consequent stimulative effect on the reading public.

The progress towards mechanical or technological substitutes for books had not been nearly as great in the years between 1972 and 1978 as I had thought they would be. It was there, but not as much had been done in Australia in computerized information retrieval systems, cable television, microfilm and microfiche readers, and one-off publishing through film as in other countries. In 1978 it seemed to me that this was largely due to the dramatic fall off in funds available for education in this country. It is in educational institutions where these methods are most commonly employed and where experimentation in non-print media most often occurs. In 1978, therefore, I could see little likelihood of the book as an object being threatened in Australia by technology. However, I am no longer so sure that technology will play only a minimal role in publishing.

My thinking has been influenced by several factors. In 1979 the Australian Library Association invited me to give a paper in Canberra on technological change in publishing. In researching for the paper I discovered that a great deal had been happening overseas in areas which ultimately will affect publishers.

Essentially my Canberra paper had two basic points to make. First, if one looks to technology, not just in terms of its capacities to transmit information, one finds that enormous strides have been made. Through a combination of cable television, optical fibres, facsimile reproducers, and the gigantic storage capacities of modern computers the possibility exists of reproducing books through the home television set in printed form, i.e. not on the screen but in actual unbound printed sheets. Although such linkage has not yet been done the capability to do it exists.

Second, the reason it has not been done is the cost, but the cost of technology is dropping dramatically whilst the cost of labor-intensive book production is escalating rapidly. There will come a time when the rising curve of book production costs will meet the descending curve of technological cost, and once that point of intersection has passed it is only a matter of time before we are into the brave new world.

Publishing is a very labor intensive business and as the price of labor has risen so have publishing costs. It is often argued, I think correctly, that books have only increased in price relative to other consumer items. Unfortunately, the demand for books is elastic, i.e. as the price rises the desire to buy drops. One may say that is probably a good thing. It will sort out the correct number of titles to publish and will eventually end the remainder plague. This simplistic argument presupposes that the world’s publishers will all get the message and either conform to the market forces or perish. Most of the world’s publishers, however, are not state controlled and subject to socialist or fascist planning. New publishers spring up just as fast as old publishers die, perhaps even faster.

Furthermore, our simplistic argument that market forces will drive out bad publishers and unnecessary books conjures up a society where Harold Robbins and his non-fiction counterparts reign supreme. If we are only prepared to pay mass-market prices for our books we are going to get mass market ideas.

Not only are books very expensive to produce these days but they are extremely expensive to market and distribute as well. There is no doubt that the largest proportion of the book buying dollar goes to pay for the marketing and distribution of that book. If we include the bookseller’s margin as part of the cost of marketing and distribution, well over half the price one pays for a book is involved in that cost. Even excluding the bookseller’s margin, the cost to the publisher of marketing and distribution is his largest single cost. If no costs were involved in marketing and distribution, the book which costs $10.00 now would cost about $4.10 including the royalty the author would normally get for a S10.00 book and the profit the publisher would normally expect to receive. Even if one puts back a marketing and distribution component to cover selling costs to computer memory banks and an advertising allocation to get the message of the book’s existence to the reader, one is still talking about a book costing the consumer little over $5.00 or half the price he now pays.

Publishers are feeling the strain of buyer resistance to high prices. Warehouses everywhere are filled with books which are not selling at all or are moving far more slowly than tight budgets will allow. The result is that they are either being pulped or remaindered. The book which is pulped is a total loss to everyone – to the reader who will never see it, to the publisher who must absorb the loss, to the author who will not be paid for his work. The remaindered book is perhaps an even greater evil. The author still gets nothing for his labor, the publisher still cops a hefty loss, and the reader although at first glance the gainer is actually being reinforced in his view that books are too expensive. Indeed, the remaindered book has an even greater and more insidious impact on publishers. Booksellers make huge mark ups on remainders. A book which they might buy as a remainder for 10 or 20 cents is sold at $3.95 or S4.95. Small wonder they literally canvass the world for remainders. The Australian publisher trying to sell his wares finds himself competing for bookshop shelf space with the mistakes of not only his Australian colleagues but those of publishers 12,000 miles away and facing an airy indifference to his new books by a bookseller bloated with remainders purchased at token prices and selling at several hundred per cent mark ups.

The bookseller has his problems too and, indeed, would undoubtedly argue that it is these problems which force him into the remainder game; I happen also to be the head of a bookshop, and I know that over 80% of our overheads there are composed of salaries and related expenses such as 17% holiday loadings, payroll tax, long service leave, superannuation, workers’ compensation, insurance, etc. Books are priced to give an effective 40% discount, i.e. if the discount received from a publisher is less than 40%, the price is increased to give us that return. We at U.Q.P. have pared staff to the bone and have done everything that is humanly possible to maintain a highly-efficient and stream-lined service. And yet our net profit is less than we would have received if we had put our money into the Commonwealth Savings Bank.

Small wonder then that even if a publisher could get out a paperback for $1.95 (which is doubtful) the bookseller would not want to sell it. Even with a 40% discount giving him a gross profit of 78 cents, he would have to sell too many (probably more than he genuinely thinks he can) to pay his expenses. For example, he would have to sell twelve copies of the $1.95 book to equal the gross profit he would make on the sale of one $22.95 hardback or four copies to equal the profit on the sale of one $7.50 paperback. Finally, I calculate that the publisher would have to sell the $1.95 book in lots of sixty in order to recoup the cost of invoicing, packing, and despatching the book to the bookseller.

All of this means that there is a growing and powerful economic incentive for technological change at a time when technological change is being discussed as a force as potent as the industrial revolution.

The remainder problem highlights one of the wasteful inefficiencies of publishing tied to present printing methods. Even the most modern printing techniques are really only more sophisticated variations on older techniques. We are still plagued by high initial setting up costs, costs which are then spread over the print run. All publishers know what the effect of this is – pressure to increase the number printed so as to lower the unit cost. This leads inevitably to overprinting, and remaindering or pulping in the worst cases, and slow stock turnover in the best.

As long as we continue to publish books on speculation and print them by what are basically conventional methods with print runs which are again based on speculation as to the size of the market, we are going to have this problem which ultimately the consumers must pay for. Until recently, technology had only offered short term solutions in the form of cheaper setting, cheaper paging and proofing, and faster highly-automated printing and binding equipment (themselves powerful incentives to increase print runs as their efficiencies are most noticeable in long runs).

We may have to consider seriously getting back to small is beautiful. One of the areas hardest hit by rising prices and government parsimony (not only in Australia but in the U.K. and the U.S. as well) has been the scholarly book. In the face of falling demand, scholarly publishers have been under pressure to increase print runs in order to achieve unit costs which wouldn’t take the books into the price realms of rare gems. In fact if we continue to produce scholarly books along conventional lines using conventional printing methods we will not survive.

The answer, it seems to me, lies in rethinking the place of the scholarly book and the way we as publishers deal with it. In the 1960s when government money all over the world was being poured into tertiary institutions and academics everywhere were the fat cats of society, it was possible to sell fairly reasonably sized print runs (1500 to even 2000) of scholarly books. The university libraries took almost everything published and academics themselves bought scholarly books, quite rightly looking on them as tools of their trade.

Government money for tertiary institutions has long since dwindled to a trickle. Our own university library now spends considerably more on periodicals than it does on books. The ubiquitous photocopier provides the scholar with his working tools. The book which once could command a market of 1500 copies is now fortunate to sell 500.

We must then come to the no-frills scholarly book. Set on a word processor (preferably in the scholar’s own department) from a manuscript that has not required heavy in-house editing, the new scholarly book will not have traditional superscript numbers for footnotes (instead numbers in brackets will do) nor attractive dust jackets. Cased without jackets in limited editions of 500 to 750 copies, they will carry short discounts (bookshops are not interested in stocking them any more in any case) and will be marketed to library suppliers and by direct mail. Their prices will be high (we estimate about $30.00) but they can be profitable.

Are there any lessons in the above special case for the rest of publishing? In thinking about the plight of scholarly books, it occurs to me that at least they have targetable audiences. If one publishes a book on Melanesian cargo cults, one has a pretty fair idea who is going to be interested in the subject, and with the aid of a computer one can build up a fairly reliable customer list over the years. This is not true of much of the general publishing done today.

We must know less about our customers than any other industry! I have never seen a survey of either reading habits or, more importantly, buying habits which I trusted. I think that probably traditionally there are good reasons for this. Publishing has not always been an entrepreneurial trade dealing in the kind of monopoly created by copyright. As such, each title has been kept under wraps until the right moment for what my friend Brian Clouston calls the full reveal’. It is a highly competitive game and too much testing of the market before publication is apt to bring one’s competitors in hot pursuit.

It has also been a highly individualistic business with the best publishers priding themselves on their ‘sensitivity’ to good writing on the one hand and their ‘feel’ for the market on the other. Furthermore, because of competitive pricing the profit margin on each item sold is small allowing little fat for expensive market surveying. Finally, because in publishing we are dealing with the products of the mind, we are subject to all the vagaries of human thought. What is popular and interesting to many today is more useless than last week’s newspaper tomorrow. Small wonder there is suspicion, at least among general trade publishers, of market surveys or even test marketing. Although some marketing expertise must exist among many experienced publishers, one must question its accuracy in a time of relentless inflation where book prices are turning away many faithful readers.

This leads me to another lesson we might learn from the scholarly-book dilemma. We are all producing too much. This is obvious from the remainder tables. I have never been taken by the argument that too many titles are being published. No doubt there is a lot of junk about, but one man’s junk is another man’s pleasure. Earlier I spoke of an explosion of knowledge. This, together with the fact that reading for pleasure or for instruction is no longer the prerogative of an elite, means that peoples’ interests are broader than ever before. And, I believe, this in turn means more titles are necessary to cater for these interests.

No, the real problem is that in an effort to combat rising unit costs we are printing too many copies. I am not suggesting that we should all emulate the no-frills scholarly book I hypothesized earlier. Instead, we should evaluate the market for each book very carefully. Is it a title booksellers will buy? If so, how many? If not, can it be sold by other means – direct mail, space advertising, television? The numbers have then got to be added up, the retail price for these quantities looked at to see if it will affect the quantities printed and if they don’t square, the title rejected. The impulse to add 500, 1,000, or more to the print run to make the unit cost attractive has got to be vigorously resisted.

Most publishers I have talked to have not been optimistic about their side of the trade. Certainly the lack of funds for education has made educational publishers gloomy. Many are suffering backlist erosion which is going to mean heavier investment in research and development at a time when static or declining sales are supplying little cash for such increased investment and borrowed capital is becoming more expensive. Several educational publishers, who are also marketers, report sales are down on imported textbooks and they seem to be experiencing their best successes in locally-produced material. Level-pegging with inflation seems to be what the more successful are experiencing. In fact the impression I get is a static one with, at least in the short term, a future of no growth. Nevertheless, the fact that the educational market appears to be spotty may be a reason for hope.

Whilst there has no doubt been price resistance to the cost of tertiary-level textbooks, consequent sharing of texts by groups of students, and wholesale photocopying, I do not believe these are the main reasons for the drop in sales. Rather, I believe it has been due to a totally irresponsible carrying of the pedagogical concept of multiple textbooks to illogical extremes. In one course in history at the University of Queensland 80 textbooks were set with a total retail value in excess of $1,500. What would any student do faced with that situation? He doesn’t buy any of the books, and, what is more, when he finds that he gets away with not buying the books for that course he applies the same sense to his other courses. All this occurs against a background of academic voices raised in a pious chorus of denunciation over the price of textbooks as they gaily add the free copies given to them by publishers’ representatives to their bookshelves. Or, what is perhaps more hypocritical, they consistently urge in both lectures to students and lately in print the purchase of English books from Blackwells whilst discreetly trousering their half-yearly CPI increases thereby tacitly condoning the wage structure which makes the marketing of overseas books in Australia an expensive proposition.

One can only hope that as the reality of the government’s vicious chopping of tertiary-level funding begins to bite, a new sense of responsibility toward the truth and the real victim, the student, will emerge. There are signs that this is beginning to happen.

Our industry, like any other, is tied up with the economy of the nation. I think the economic forecast for this country is good, at least through the 1980s. We sit isolated a long way from Afghanistan or even potential Afghanistans. We are energy rich. Every time the OPEC nations turn the fuel price dial up a notch this country gets another boost. We are so wealthy in what the rest of the world is going to want in the 1980s even the economic decline of much of the western world will not destroy us. We can almost afford the salaries we pay ourselves.

Furthermore, I believe in the book field one of our great competitors, the English book, may price itself out of the market providing a hefty devaluation of the pound does not take place. So, with some luck and some right publishing decisions, we could be entering a decade of good times for Australian publishers where people have the leisure to read and the money to buy books at competitive – but realistic – prices.

I want to believe that scenario, but there are flaws in it. Unfortunately, our prosperity will be coupled with rising unemployment and this will create great strain on the social fabric. Do people buy books in times of stress? Certainly, the unemployed will not. I predict it will be a great time for escapist literature, but I wouldn’t put my money on the novel of social consciousness.

Furthermore, I doubt if the present mix in the basket of currencies which pegs the Australian dollar will change much. This may very well mean that, even if the British competitor is defeated, the American competitor will come on stronger than ever to fill the gap. I believe the 1980s will see a number of American presences here in Australia which have never been here before, particularly in the trade book area.

There are no easy answers in what is proving to be a difficult time. I suspect that for the short term we are going to have to play a pretty tight game, get back to basics, carefully examine every hunch, think hard about the marketplace, and be miserly about print runs. I may have been unduly pessimistic but publishing worldwide is not very healthy. However, with sense I believe Australian publishing could do well in the 1980s.

But for the longer term I refer back to technology. Those publishers who want to survive into the 1980s and beyond will need to start looking now at what the technological revolution will mean for them. The real message in Alvin Toffler’s Future Shock was not about this technological miracle or that one, but rather that the pace of change is accelerating. The future is closer than we think.