Book publishers know the high cost of living

By R. Masri Sareb Putra

JAKARTA (JP): Add the book publishing industry to the long list of businesses battered in this crisis. The price of paper, most of which is imported, increased in July last year when the exchange rate of the rupiah against the U.S. dollar started on its upward trend.

This also triggered a steep increase in book prices. Last December, the paper used as the raw material for books cost Rp 2,000 a kilogram. Early this year, it was Rp 6,700 per kilogram; now the price is almost Rp 9,000.

Inevitably, the price of paper has caused a similarly high cost in book production. Usually, a publisher would sell his products to customers at a price five times the production cost. If the production cost of a book of 250 pages with a print run of 2,000 copies is Rp 6,000, the retail price would exceed Rp 30,000.

Shelling out this amount for a 250-page book is not cheap in a crisis. Books are not basic needs. Even book lovers will think twice before buying a book with more important purchases, such as food, to think about.

Consequently, the turnover of bookshops and book publishers has decreased drastically. Their capital will be depleted in the long run, and, in the worst scenario, publishers will no longer be able to produce books.

"That is what we are experiencing," said Djoko of the production section of PT Pustaka Utama Grafiti publishing house.

He said that from January to March this year Grafiti published just two new books, Subversi sebagai Politik Luar Negeri (Subversion as Foreign Policy) and Politik Orde Baru (New Order Politics).

"The main causes for the decrease in book production is the price of the raw material and the community's weakened purchasing power. We were even forced to close down the Grafiti book shop at Slipi Jaya because the overhead costs, including rental space, far exceeded revenues," Djoko said.

Store manager of Obor bookshop on Jl. Gunung Sahari, North Jakarta, G.L. Mariatmo, also expressed despondency.

"Since early March, the management has laid off some employees. It has only maintained the productive units of sales and marketing."

He added that remaining employees must be managed effectively and efficiently. "Formerly our shop had two shifts, now it has only one."

Business is also slack for imported books, which have to be paid for in foreign currency.

"Before 1998 there were many people buying imported books. Now they have become increasingly scarce. On average, imported books cost more than Rp 80,000," said Hendrikus, sales manager of Gramedia Direct Selling, which specializes in imported books.

Hendrikus said books were currently low on the priority scale of Indonesians coping with the problem of meeting needs for basic foodstuffs.

"You could say that people buy books only when they really need them. Otherwise, they will not make the expense."

Nevertheless, the decline in purchasing power for books does not translate into a decrease in reading interest.

"There are as many visitors to bookshops as before. There are always people at the comics counter for children and adolescents," said Vivi, sales section head of the Gramedia bookstore on Jl. Matraman Raya, East Jakarta.

Few eventually open their wallets to buy.

"Many visitors browse but do not make a purchase," she confirmed.

Some general books are wrapped in plastic to prevent too much fingering and browsing through their pages.

Customers are more likely to purchase textbooks.

Vivi said textbook sales at her store increased last month. She assumed this was because students or their parents feared publishers would raise prices in the next few months.

There are three types of books traded in the country; imported books, translated books for which the publishing house has to pay royalties or the publishing rights to the original publisher or license holder, and local books whose authors and contents are Indonesian.

Data from the Indonesian Publishers Association (IKAPI) shows 225 publishing houses produced 3,000 new books annually from 1990 to 1997. Major publishing houses, with an annual turnover of more than Rp 5 billion, issued 100 to 200 books a year.

A major publishing house with its core business in translated books attained an annual turnover of Rp 20 billion in the past three years.

This all changed after the exchange rate of the rupiah against the dollar increased from Rp 2,400 in July 1997 to about Rp 9,000 last month. Most publishers can no longer afford to buy the rights to foreign books.

Most publishing houses now only produce translated books for which the rights were paid before July 1997 because there has been a threefold increase in the cost of paying for rights. In the book publishing trade, the component of rights already takes a 10 percent share of the direct total production cost.

Not everybody is glum. The director of Kepustakaan Pupuler Gramedia publishing house, Parakitri T. Simbolon, said the crisis also opened up opportunities for innovative publishing houses as people sought books which could explain the current conditions, those which could entertain and provide an escape and others having a calming effect on readers.

He believed that publishers who could adapt to the trends would be able to survive the downturn.