Some interesting new research coming out about the changes in the High Street vis-a-vis their online competitors. It’s summarised with links to other pages here and here. It’s well worth reading. What the research is showing is that the online reading sites like Goodreads and others aren’t very effective at generating book sales. They are nowhere near as effective as a visit to a bookshop. So what that means is that at the moment, people prefer to browse in a bookshop, then more than likely go home and buy the book on Amazon. If they haven’t got a bookshop to browse in first, they may not go to Amazon and buy a book, even if they spend time browsing Amazon (which isn’t very good at encouraging browsing) or talking about books on Goodreads and others. What all this research indicates is that in the new environment, all of us involved in the game need to have a greater understanding of the triggers which encourage people to buy. When I was running my last publishing company in London, the prime mover in all this was “approved recommendations”, which basically meant a Richard & Judy nomination, an Orange or Booker Prize shortlisting, that kind of thing: many readers would wait to be prompted by advisers they felt they trusted before they would go to purchase. All slightly depressing of course, but that’s how the world works. The next mover in the process was book design: research commissioned by Faber demonstrated that there was a physical dance which would lead to purchase: look at the cover; if that intrigued, turn it over and glance at the blurb on the back; if that intrigued, open the book and read the first para; if that intrigued, go back to the blurb and read it properly and look around the jacket for endorsement prompts (Richard & Judy etc); decide to purchase (which might mean put it down and go home and buy on Amazon). If that whole process gets taken out of the equation as high street shops disappear, then we face an entirely different purchase procedure. All very interesting and stimulating.
The news has once more been filled with stories about tax-evading corporations. This time we’re focussing in particular on Amazon and Starbucks. I never go into Starbucks, as they stuff they serve resembles coffee like Premier League footballers resemble sportsmen. But Amazon I do have an interest in, because I am a reader and a publisher. So I care about what I think about Amazon.
It would appear that Amazon last year paid £1.9m tax on income of £3.9bn – a tax rate of approximately 2.5% of estimated profits. This doesn’t seem to be entirely right. I would prefer it if Amazon paid more of their profit in tax, and really I would prefer it if all companies paid an equal percentage of their profit in tax.
But I’m not planning to boycott Amazon, as some in the media have been proposing. The main reason that Amazon make such a large amount of money is that they are very good at what they do. They run an incredibly efficient business, and I like the fact that I can get any book I like from them without any fuss. I don’t always buy from them; sometimes I buy hardbacks from nice independent bookshops too (like Plymouth’s very nice University Books), but if it’s the middle of the night and I want to download something onto my Kindle…
I haven’t asked them, but I have a suspicion that many of the people who have been outraged about the situation have, at some point in their lives, used ethically dubious means to reduce the cost of something. They may have an accountant who helps them reduce their tax bill by entirely legal but possibly spurious grounds. They may have overstated their income in order to get a better mortgage. They may have kept quiet when a barman made a mistake and gave them change for a twenty when they gave him a ten. I think it is an aspect of human nature which applies to a very wide cross-section of the population – if it were not, there would not be admonitory phrases like “there’s no such thing as a free lunch”.
My point is that Amazon as a corporation is acting in the way in which most of us would probably act were we in its position. (It would be interesting to find out how lottery winners manage their money – I would guess that many find that, with a lot of money in the bank, you suddenly discover that you can afford to employ accountants who are clever enough to outwit the taxman.) Amazon is trying to reduce the amount of its money which it has to give away. I think the responsibility for stopping this, for making Amazon behave in a more acceptable and socially responsible way, lies with our government. If they were really serious about acting on behalf of the people who voted for them, rather than acting on behalf of the lobbyists of companies like Amazon who sidle up to them on the terrace of the Houses of Parliament, they would do something about the tax rules for which they are responsible which allow companies like Amazon to get away with it.
But governments these days don’t really do anything. They just go on TV. Which is why Amazon doesn’t pay enough tax. Feel cross about it? Then write to your MP and demand to know what he or she plans to do about it. You employ them – tell them to put their PR planner down and do some work.
But don’t blame Amazon. One day, you might find yourself with more money than you were expecting to have in your bank account, and are you absolutely sure you would give 40% of it to George Osborne?
The Frankfurt Book Fair is kicking off again today, with pre-fair talks before the show itself opens tomorrow morning. This year, as well as talking about the strength of Brazil as a book market amongst other things, they seem to be talking about the price of books. This is an area which has become terribly confused over the last few years. First, the Net Book Agreement was toppled, which meant that publishers were no longer able to set the retail price at which books were sold, and so the more aggressive retailers such as the supermarkets began to use books as consumer price-plays: bestselling books like Harry Potter were savagely discounted as a way of encouraging consumers into the store in the hope that they would then linger and buy some loo rolls. Then e-books arrived, and Amazon’s Kindle spawned a wild rush of new digital marketing activity, which mostly seemed to revolve around either free e-books or very low-price e-books. I lost count of the number of publishers who used to say, with a sly and knowing wink, that such-and-such a book had got to the top of the e-book charts by the incredibly clever marketing tactic of offering it for free. “Then you lure in the reader, you see, and they will then pay for the next one.” Hmm. I’m not aware of that particular marketing ploy ever working, but I could be wrong. The overall result of this and most other areas of book marketing over the last 15 years seems to have been to reinforce in the consumer’s mind that books should be cheap, or possibly free. Which brings us to this year’s Frankfurt Book Fair, where they appear to be talking once more about the price of books, and whether the 99p e-book can possibly be sustained, and whether the market will tolerate increasing the price. Good grief. But at least they are talking about it, I suppose. The answer remains, to write words which are brilliant and important, and to make those words available to people who might wish to read them in such a way that the writer may sustain a living. Everything else is like Aristotle Onassis used to say: the rules are, there are no rules. The publishing industry hasn’t been very good at creating and/or sustaining rules about the marketing and distribution of words, so I think it may well be time that everyone else had a bash at it instead.