The original meaning of the word "to pub-lish" was "to make a work public," and the more people read a work, the more influential it is. The key is not necessarily the work's quality but the way it is marketed and sold.
According to a 2007 survey of the publishing industry by the Government Information Office, in the time since the lifting of martial law opened the field to widespread competition, three companies have emerged as the main outlets for books: Eslite, which takes in around NT$3 billion a year, and Kingstone and Books.com.tw, which take in around NT$2 billion a year each. Those are followed by the ordinary independent bookstores and local chains. Calculating from the estimated NT$20 billion industry total, the top three accounted for as much as one third in 2007.
In contrast with the big changes in the downstream sector of the publishing industry, midstream operators-the wholesalers-are small-to-medium-sized businesses. Most work on a local level and only a minority have a nationwide presence. The largest is Nung Hsueh, which holds a 12% share of the publishing market (excluding magazines). The situation is even more complicated upstream. Only a small minority of firms such as China Times Publishing, Yuan-Liou Publishing, and Hong Kong's Cite Publishing operate on a large, conglomerate level. The remaining 80% of the business belongs to small-to-medium-sized publishers that take in less than NT$60 million a year. The difference between the economies upstream and downstream is apparent.
Problems upstream
Such a disparity doesn't have much of an effect when the publishing industry as a whole is thriving. But during times of economic stagnation, when supply exceeds demand, it's easier for the discrepancies in the supply chain to become problematic. In a market like this where there isn't enough to go around and companies that originally shared a common fate have to squeeze out a profit, it is easy for conflicts to arise.
Kingstone, which has more than 100 stores, is an example. Since 2002 it has had many disputes with distributors and publishers. First, it unilaterally changed its payment system from a monthly one in which suppliers were paid as orders came in, to one in which suppliers were only paid after books were sold. The company's accounts were unclear and payments went into default. It ended up in court with Nung Hsueh, Taiwan's largest book distributor. Nung Hsueh won the case, and the two parties formally ceased business with one another. In 2004, Kingstone again tried to push for post-sale payments and, once again, disputes broke out. In 2007 it had yet another financial dispute, this time with Taiwan's third-largest book distributor, Interzone International. Interzone went out of business, and soon after many publishers, including Cite, ceased dealing with Kingstone.
The trouble with Kingstone had yet to blow over when in 2008 Taiwan's largest bookseller, Eslite, announced its consignment system. Books in Eslite stores would remain the property of the publishers, and payments would only be made after they were sold. Eslite also wanted publishers to buy back all the inventory in its stores (around NT$1 billion worth) and to pay fees for the use of its new electronic inventory system. Publishers would also be responsible for a portion of the cost of lost and damaged books. This created disputes. Eslite believed that this new system would stop publishers' habits of forcing new books on stores. The publishers, however, felt that the fees placed on them were unreasonable. Of special concern were small and academic presses with limited resources-they would have to wait too long for payment and might not be able to bear the costs.
These controversies make one worry that with such strong pressure from retailers the average small-scale publisher could only give in to demands or go out of business. But experienced publisher Chen Ying-chin thinks otherwise. He boldly asserts, "Eslite is sounding the call for reform among Taiwan's publishers." How could that be?
Finding new paths
Yuan-Liou Publishing editor in chief for culture and arts John Lin says that, in reaction to the unfair demands of powerful retailers, "Publishers who aren't willing to be backed into a corner by Kingstone and Eslite should be able to develop more marketing channels on their own." By methods like selling directly to specific organizations, direct marketing, and opening their own shops, publishers could bring back the vibrant, multifaceted market of 20 years ago.
Additionally, many publishers are now doing more and more business outside of retail bookstores. For example, in late 2007 Business Weekly Publications brought Japanese artist Takashi Murakami to Taiwan for a lecture. At the same time, the company put out related books. The most expensive tickets for the lecture went for more than NT$10,000, and the event was cross-promoted through cell phone and auto dealerships. The lecture became the main source of revenue, and the books were only advertisements for it.
"In the past, Taiwan's publishers didn't consider category or scale. They always used the same business methods. In the future, they should find out what the most profitable business model for themselves is."
The diversification of marketing methods is also reflected in the rise and fall of independent bookstores. After the rise of the chain bookstores, many long-established independent stores went under. But chains tend to stock bestsellers without paying attention to the special characteristics of the neighborhoods where individual stores are located, and they demand big discounts from publishers, so they have created room for independent, specialist bookstores to enter the market.
Taipei's venerable Tonsan Bookstore, which specializes in academic books in the humanities and social sciences, and Taichung's Tunghai Book Studio and Hard Wood Bookstore, for example, use local events relating to literature, culture or history to develop sales opportunities. Chiayi's Hoanya Bookstore provides a place for people to meet. Tanshui's Yuho Books has the air of a literary salon, and More Bookstore, which was once an old-fashioned neighborhood stationery store, retains its local feel. Not only are these bookstores models of possible new outlets for books, they also represent potential partners for publishers.
Setting aside matters of profit and loss, John Lin reminds us, "The value of culture is not dictated by the marketplace. Some academic or classic books might not sell many copies but they are more worthy of being published than most bestsellers. For this reason, when average bookstores facing the pressures of the market can't find a place for these types of books, there ought to be non-profit organizations like foundations or academic presses that can come along and make a place for them. That will keep the nation's spectrum of books fuller and more complete."
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