By Roger Tagholm | @RogerTagholm
‘Print Continues To Decline, Digital Grows’Hiroshi Sogo is the director of import and distribution for the Japanese bookselling chain Kinokuniya, and ahead of the Frankfurt Book Fair this year, Sogo spoke with Publishing Perspectives about regional trends that the global bookseller is seeing.
As Publishing Perspectives has reported, Kinokuniya has been in a rapid expansion in several parts of the world, and we opened our exchange with Sogo by asking just how broadly the placement of international facilities has gone so far.
Hiroshi Sogo: We have 107 locations altogether:
- Japan: 69
- The United States: 21
- Singapore: 3
- Indonesia: 2
- Malaysia: 1
- Thailand: 3
- Cambodia: 1
- Myanmar: 1
- Australia: 1
- Taiwan: 4
- UAE: 1
Publishing Perspectives: What are your opening plans, both in Japan and internationally?HS: One in Nagoya, Japan later this year and two in the USA—one just opened in Portland in Oregon, and the other is to open soon in Katy, Texas [just west of Houston]. We plan to open one in Abu Dhabi in March 2020. We’re always looking at opportunities both in Japan and overseas.
PP: How are your international stores doing?
HS: In the United States, operations have been exceptionally strong for the past 18 months or so. Southeast Asia, especially Singapore and Malaysia, are under strong competition against Amazon/The Book Depository. We’re holding up well, but definitely cannot be at ease.
Bangkok is fine. Dubai and Sydney are stable. Taiwan’s economy as a whole seems not to be helping the retail industry at present.
PP: How is the market in Japan at the moment?
HS: Tough as ever. A long decline since 1997 hasn’t hit the bottom as yet. Total sales have declined to half of what they were in 1996.
Digital vs. Print: Especially Good for Manga
PP: What’s the balance between digital and print in Japan?
HS: Digital is around 14 percent and print 86 percent. Basically, print continues to decline while digital grows.
Around 90 percent of digital is represented by comic and manga content. There was rampant piracy of manga content until March 2018 when the government finally passed seminal legislation and the police started to crack down.
That helped the industry to regain what had been lost for many years, and helped digital manga sales for some of the major publishers, such as Shuei-sha and Kadokawa. It’s estimated that the total loss collectively inflicted by piracy is 300 billion yen (US$2.78 billion).
PP: How is your ebooks service Kinoppy doing?
HS: Kinoppy is doing fine with positive growth, albeit being pretty small compared to other ebook services such as Kindle and specialist manga sites run by publishers.
For academic markets, we launched our own Japanese content ebook platform called KinoDen last year. For public libraries, we have a digital library service called LibrariE. These two services are fast developing and penetrating each market segment in Japan.
PP: Are fixed prices under pressure in Japan?
HS: It would not be right if I said no. Pressure on pricing in general is being felt more strongly than before, while a large section of the working population is feeling worse off as their wages haven’t been increasing enough to negate inflation.
Furthermore, the consumption tax is due to increase from 8 to 10 percent on October 1, which will be a huge blow to the entire retail and service sector.
Retail price maintenance (RPM) will stay for the foreseeable future in Japan, but retailers are competing by offering extra benefits such as points or mileage and/or vouchers.
PP: Why do you think Japan takes a different view from the US with regard to fixed prices?
HS: Historically, the mechanism has been regarded as one of the more civilized, inclusive government policies. It goes back to the era when Japan was rebuilding the country after the war. Recovery of social coherence and infrastructure was the priority.
While ordinary commodities were exchanged in free markets, the government (and I could be wrong but the Allied Occupation Forces as well) thought that information carried by publications such as newspapers, books, and magazines should be available to all citizens at the same price wherever they were.
When Japan went into a fast economic development drive in the 1960s and 1970s, fixed pricing made a lot of sense. Publishers and booksellers didn’t have to compete on price. There was a strong appetite for news, knowledge, learning, and entertainment. I suspect that there was hardly a soul who had any negative perception against fixed prices up until recently when a new type of Western capitalism started seeping into the social fabric of the country.
Winning competitions became the highest virtue above all else. Then people started to think that fixed rates are a cartel that’s ugly and unsavory. Yes, it’s under pressure and will remain so. I’m not certain if it will survive for long. But the current administration hasn’t shown any specific interest in ending it any time soon.
‘Physical Bookshops Will Never Die’
PP: What are your thoughts about the future of physical bookshops?
HS: I personally believe that physical bookshops will never die, partly because physical, printed books will never completely disappear.
Digital may continue to grow, but tactile reading will not leave human behavior entirely. The total volume may reduce and as a result, only selected, curated works may be made into aesthetically crafted volumes that attract avid readers and connoisseurs alike.
Those who don’t pay attention to books and reading now will be unlikely to complain when there are fewer bookshops in high streets. Books will have stronger constituencies, where people are willing to support physical bookshops because they value the physicality of books, the curation, the serendipitous experience, the conversations, and recommendations over your favorites.
I admire [US author and bookstore owner] Ann Pratchett a lot whenever I read her essay “The Bookstore Strikes Back.”
PP: And what do you like about Frankfurt?
HS: The buzz and adrenaline goes up as Day One opens. After three days or so, you start feeling as if you’re wiser than you were last week, even though that may be an illusion.