Karl Pohrt in China

That would make a good title for a movie . . . Actually, the title of this post is in reference to the group of independent booksellers attending the Beijing Book Fair right now. As previously mentioned Reed Exhibitions/BookExpo America arranged this cultural exchange and organized a special panel on bookselling to take place at the fair.

Karl Pohrt (owner of Shaman Drum Bookshop one of the best bookstores in the country) promised to write a blog about his experiences in Beijing, and as soon as it’s available, I’ll post about it here. In the meantime, he sent me the text of the speech he plans to give, which is a great overview of the current situation in America, and worth reading in its entirety. He presents an interesting perspective on this profession which features a 2% margin and an incredible set of challenges, and yet seems so vital to culture. In particular, the info on sales at indie stores for the top 300-500 books is very intriguing . . .

THE CHALLENGES AND OPPORTUNITIES FACING BOOKSELLERS IN A POST LITERATE WORLD

Xinping posed two questions to us prior to this forum:

1. How do booksellers in the United States balance business demands with cultural advocacy?

2. How do booksellers respond to the challenges of the digital world?

Because I want to respond to both of these interesting topics, I asked Xinping if I might speak about the challenges and opportunities facing booksellers in a post literate world. I chose the term post literate in part because I wished to be provocative, but also because I wanted describe our present cultural moment. Perhaps the term post literate is too loaded. It has a kind of science fiction quality to it, and for some people I think it implies a decline in literacy. In the interest of fairness, it might be better to describe the world we are living in as transliterate, a term coined by Alan Liu from the University of California at Santa Barbara. This means the ability to read, write and interact across a range of platforms, tools and media from signing and orality through handwriting, print, TV, radio and film, to digital social networks.

The first time I heard someone describe a book as an information platform was maybe eight years ago. I was startled by the phrase information platform, not because it isn’t absolutely accurate (it is), but because it implies that the book is just one among many platforms for disseminating information. In this formulation, the cinema, television, ipod, compact disc, and the computer are all platforms for disseminating information. The subtext here is clear: The book is no longer in the privileged position it has held since Guttenberg invented movable type five hundred years ago.

The implications of this shift for everyone is enormous, but it is especially so for those of us who make our living as booksellers. How will we remain vital participants in the cultural life of our society? More importantly, how can we even stay in business?

The world of bookselling exists within the for-profit economy in America, which is (and always has been) a volatile arena. Those of us here today from the United States are representatives of the independent bookstore world, and all of us will tell you that our retail environment is much more competitive than it was two decades ago. In the last twenty years we have been challenged by the rise of superstore chains, the advent of internet sales, and the growth of discount warehouse clubs.

At our peak in the 1990s, the American Booksellers Association had 4,800 member companies and 6,000 stores. Today we have 1,800 member companies and 2,500 stores. For a decade, 200 to 250 stores a year closed. This was consistent with our attrition numbers in the past, but nobody was opening any new stores.

The retail bookstore in the United States today has been called a 2% business. After we subtract our costs, many of us net a 2% profit. This model insures that booksellers can expect a razor slim profit margin at best. Mark ups in the book business range from 25% for professional titles and textbooks to 45% (if you’re buying skillfully) for trade books. In the world of retail business, the mark up from wholesale to retail is usually 100%. There is a telling joke circulating among bookstore owners these days: How do you make a small fortune in the book business? Answer: You start with a large fortune.

As you might imagine, it is very difficult to attract talented young people to our business under these circumstances.

During the 1980s independent bookstores accounted for 33% of the market share of books sold in the United States. In 1998 we had 17% of the market, and today our market share has stabilized at between 9% and 10%. Chain stores account for 22% or 23% of sales, and 60% of book sales happen outside bookstores.

Twelve percent (12%) of book sales occur over the internet. There has been consistent growth in a relatively short amount of time in this retail channel. A few years ago experts predicted that a third of all book sales were going to occur on the internet by 2005, but this did not happen. However, 12% is still a huge percentage of sales that have migrated from traditional book stores.

This isn’t the whole story. We need to also carefully consider how the independent sector functions within the various retail channels that sell the top 500 titles each week. Of the retail channels that sell the first 150 titles on the list, it turns out that we underperforms in terms of its market share. Independent bookstores account for less than 9% or 10% of the sales of the most popular titles on the list.

However, for the next 150 titles, we dramatically exceed our market share. We also exceed our market share for titles sold in the 300 to 500 range. Ultimately, of course, many of these titles will move up the list.

When we do our job properly, independent booksellers act as an early warning system for publishers. We help publishers launch books. It should also be noted that the 150 to 500 range of titles is where publishers are making money, because they haven’t made huge investments that they have to recuperate in contracts with best-selling authors and large ad campaigns. So we also augment sales from the top 150 to 300 titles.

To answer one of Xinping’s questions, independent booksellers in the United States have responded to the digital revolution by embracing internet technology. It is an essential business tool now if we are to stay competitive in the global marketplace. A website allows us to be open for business 24 hours a day, 7 days a week, which is what our customers all expect. It also gives us access to any customer anywhere on the earth.

I recently read a report in the on-line newsletter Advertising Age (Dec 6, 2007) that China, which currently has 500 million mobile phone subscribers and more than 122 million broadband users, will very quickly become the number one internet market in the world.

There are some other examples of the impact of the digital revolution on bookselling in America. One is the promise of electronic books. E books have received a great deal of press attention two months ago when Amazon unveiled Kindle, an electronic device for reading digitized books. And recently Sony brought the Sony Reader to the market. Over the years I’ve watched developments in this area fairly closely, and my sense is that the e-book moment has not yet arrived. The examples I just mentioned are too expensive and, of course, it would be a mistake to read using them in a bathtub or on the beach. At this point they appeal to gadget lovers rather than readers, and they are not a serious challenge to the traditional model of the book.

This is not to say they won’t be a challenge in the future, and I think textbooks will be the first market to be seriously impacted by e-book devices. Imagine a chemistry textbook with animated three dimensional illustrations of complex molecules and with footnotes that you can click to view film clips of interviews with Nobel Prize winning scientists. These are ways of providing content that a traditional book can’t replicate.

However, I do believe the traditional book is still a very efficient technology. A few years ago archaeologists excavating an Irish bog dug up a prayer book that had been tossed away in the 12th century. The book was carefully cleaned and the text was still legible.

The digital revolution has also brought us Print-On-Demand books, which perhaps is less glamorous than e-books, but just as revolutionary. Any book that is digitized will theoretically always be available to readers, either in an electronic format or as a traditional book. Printers have told me that they now define an ultra short print run as one copy. This technology makes the utopian dream that no book will ever go out of print a reality.

Furthermore, the traditional publication process as we defined it in the 20th century could be radically decentralized if the technology to print digitized books becomes available to booksellers. Local bookstores could become publishing sites, much like they were in the early days of the American Republic when Ben Franklin printed books in Philadelphia.

There are also a number of sophisticated electronic inventory control systems on the market in the United States. Each of us can speak to the various strengths and weaknesses of the specific systems we use. One of the most exciting recent innovations in this area is a program from Above The Treeline, a company which describes itself as “a provider of collaboration based business intelligence.” Their program gives booksellers, publishers and distributors the ability to analyze and share information to make faster inventory decisions. You might want to look carefully at Above The Treeline. All of these systems help us work smarter and more efficiently.

By the way, a small group of bookstores in the U.S. have arranged bookseller to bookseller staff exchanges so that they might share each others’ best practices. Perhaps we could discuss developing a pilot project between booksellers in the Peoples Republic and the United States. I have no doubt that much of value could be gained by such an exchange.

And what about our customers? American booksellers love to tell each other that people will always need books, but this avoids a key question: How many people are really out there who feel the need to own and read books? The evidence coming in isn’t particularly reassuring. Recent reports from the National Endowment for the Arts indicate that there is a precipitious decline in readers. In 2004 the NEA published Reading At Risk and in late 2007 they published a new study, To Read or Not to Read. According to the first study, the rate of decline in literary reading has accelerated from -5% to -14% over two ten year periods.

Our traditional customer base has changed due to the explosion of entertainment choices available to people, the shrinking of leisure time, and the erosion in cultural and civic participation. Some experts tell us that children are processing information “differently” these days (which means their attention spans are shorter) and that publishers and booksellers should embrace multi-media products. I would rather declare children’s shortened attention spans a national illness, like childhood obesity. Instead of accommodating this situation, I’d rather call the Center for Disease Control.

A psychotherapist who oversees the training of clinicians at the University of Michigan Hospital, told me recently that he has noticed a decline in his students’ abilities to contextualize the information they learned, although these students were every bit as intelligent as students a decade ago. He blamed this decline on shortened attention spans and the computer. His observation echoes Marshall McLuhan’s assertion almost fifty years ago that the technology we use to record and access information shapes our view of the world.

If these problems are the consequences of transliteracy, maybe we should all just take a deep breath and say no thank you! I understand, of course, that these are weightier problems than we have time to do justice to here, but we should be there when these issues are discussed.

I’m fairly certain the business model we’ve developed in America doesn’t work very well for any sector of the book business there, and many of us are looking for new ways to publish, market and sell books. The question is: Will the new business models be expansive and robust enough to sustain our community of stores in the new information economy? Obviously the world of books is changing very quickly, but this has always been the case with everything as both the Pre-Socratic philosopher Heraclitus in ancient Greece and King Wen of Zhou noted a few millennia ago.

In spite of the business challenges we face, independent booksellers in America still manage to act as cultural advocates. We respond creatively to social issues beyond the narrow range of our immediate concerns regarding our own survival. I’d like to describe two examples.

Five years ago, following the U.S. military intervention in Iraq, a small group of American booksellers met over dinner and discussed the best action we might take at that difficult moment in history. We decided that the most progressive response would be to make a concerted effort to market more international fiction to the American public. Our assumption was that we might possibly prevent lethal conflicts with other people if we were able to see them as human beings with internal lives, capable of loving and making mistakes just like us.

For example, I think of Orhan Pamuk’s novel Snow, which is about the rise of religious fundamentalism in an economically depressed rustbelt town near the Russian border in Turkey. I grew up in what is now a rustbelt industrial city near the Canadian border in the United States, and as I read Pamuk’s novel I felt a shock of recognition. Because of my own experience, I understood the vulnerability and misery of people who realize they have no economic future due to historical shifts beyond their control. Snow gave me more insight into the social conditions that give rise to religious fundamentalism than any news or journal article I’ve read.

We developed a program called Reading The World which is about learning to listen more carefully to people speaking from outside the rooms we occupy. The American booksellers here today all participate in Reading The World, which is a collaborative project between booksellers and publishers that introduces to American readers literature in translation from around the world. Last years’ writers included Chinese authors Eileen Chang and Cao Xue.

The second example of independent bookseller social activism involves our response to the problem of illiteracy. Given what I’ve said about literacy, post literacy and transliteracy, you might assume that illiteracy isn’t still an enormous problem in the United States. Unfortunately, this is not the case. Illiteracy, of course, is the inability to read and write at levels of proficiency necessary to function on the job, in the family, and in society.

In one of the states in our American south, over 33% of the population is functionally illiterate. In another southern state, officials project out the number of future prison cells they need to construct on the basis of the percentage of eight year old children who fail their reading tests in the eighth grade. The social costs of illiteracy are staggeringly high.

Many independent booksellers respond to this crisis by partnering with various literacy organizations in our communities. There is a bookseller in Connecticut, Roxanne Cody, who established a program called Read To Grow that gives a book to every newborn child in her town. Her initiative was expanded to include the entire state of Connecticut. Reading experts tell us that the single most effective action parents can take with children to assure they successfully master literacy skills is to read to them when they are very young, because from then on they associate reading with being loved. The social impact of a program like this is incalculable.

In Washtenaw County, which is where I live, around 12% of the adult population is functionally illiterate. The city in which I live, Ann Arbor, is the home of the University of Michigan, one of the great public universities in the United States. Recently the University announced they are partnering with Google to digitize the contents of the University library system, the eventual goal being a digitized universal library of all the world’s books.

I mention this to make the point that I live—as we all do—simultaneously in multiple worlds. In this complex world and at this pivotal moment in our history we all need to be as clear as possible about what we stand for and what we value.

Late last year Doris Lessing was awarded the Nobel Prize for Literature, and in her acceptance speech she asked us to imagine a recently literate young mother in southern Africa proudly reading Anna Karenina. Lessing said she thinks this girl who was talking about books and an education when she had not eaten for three days “may yet define us.” I believe she is correct.

The social, political and ecological issues we all face are absolutely daunting, and we need a literate citizenry with attention spans long enough to honor the complexity and subtlety of these problems. I first heard the phrase deep literacy from my friend Paul Yamazaki, and I believe this is where we begin to solve our problems—with a commitment to deep literacy.

I want to end by telling you how delighted I am to be in this room with you today. As booksellers, we stand at a key cultural intersection. We help bring ideas to the marketplace, and we encourage conversations about these ideas. Ours is a noble and important profession.

Thank you.

Karl Pohrt
Shaman Drum Bookshop
Ann Arbor, Michigan
USA