National book production in continuous decline

National book production in continuous decline

By R. Masri Sareb Putra

JAKARTA (JP): May 1996 has been proclaimed National Book
Month. This is necessary considering that books are not on most
Indonesians' shopping lists.

One indicator is national book production. It declined
continuously between 1991 and 1994. (see table). In the 1980s a
title could sell 5,000 copies in two years. Now publishing houses
don't risk runs above 3,000 copies. A book that sells 2,000
copies in a year is considered a best seller.

The table does not truly reflect the situation today because
in the 1980s there were more publishers producing smaller runs.

There is now an estimated 470 productive publishers producing
between 100 and 200 titles a year. The annual turnover of a small
publisher is about Rp 1 billion (US$425,531), a mid-size
publisher between Rp 5 and Rp 15 billion, and a big publisher
between Rp 15 and Rp 60 billion.

The book publishing industry has a turnover comparable to the
pharmacy industry.

The book market is not as slack as often reported. The
production decrease is not sufficient evidence to conclude that
purchasing power is low, because publishers have increased the
price of their products in line with the fluctuations of the
price of paper.

Paper makes up only 30 percent of production cost, the
remainder being overhead costs.

The publishers' ability to calculate market potential has
decreased production runs. Indonesian publishers can now make
accurate projections to avoid oversupply.

Indonesia is far behind other countries in book production.
According to the National Library, national book output between
1982 and 1991 amounted to only 24,259 titles. That is an average
of 2,400 titles a year. As far back as 1987, Malaysia published
over 4,000 titles a year, Thailand nearly 8,000, Japan 40,000 and
South Korea 43,000.

Indonesia is not among the top 20 developing countries in
science and technology because reading is not popular here. Other
aspects are production, distribution and utilization.

Struggle

Book publishers in Indonesia have always struggled. From its
establishment on May 17, 1950, the Association of Indonesian
Publishers had to compete with the foreign publishing houses
still rooted in the new country.

At the 1956 Printing Industry Congress, association chairman
A. Notositardjo reported on the Indonesian printing industry's
situation. Of the 793 printing houses operating in the country,
339 were owned by indigenous people and had a total capacity of
750,845-square meters; 378 were owned by Indonesian Chinese and
had a capacity of 1,068,984-square meters; and 76 were owned by
the Dutch and had a capacity of 1,106,453-square meters.

The space imbalance prompted the government to nationalize all
publishing house with Law No.86/1958. The Dutch publishing houses
of J.B. Wolters, W. Versluys, Noordhoff and H. Stam were taken
over as state enterprise Pradnya Paramitha. In 1973, it became a
limited company.

Indonesian book publishing developed in Java and Sumatra. The
publishers' political struggle yielded results when their
association took over Dutch publishing houses which, despite
Indonesia's independence, were still allowed to continue their
business in Indonesia. After the Indonesian government took over
all Dutch companies, the publishing industry started a new life.

The government pushed the development of national publishers.
Until 1966 nearly 100 percent of the books in education,
teaching, sciences and general knowledge were produced by
national publishers. Only reference and higher education books
were imported.

A slump hit publishers in 1996 due to the political situation.
The industry was hit hard when the government ceased all forms of
subsidy, including paper subsidies. Forced to buy paper at market
prices, the book publishing industry stagnated after a brief 10
year boom.

Other obstacles

Other crucial limitations, such as Indonesians' lack of
interest in reading, the low level of paper consumption (5.7 kgs
per family a year), purchasing power, tight competition with
other information technology and tax problems, have blocked
publishers.

Upon urging by the association, the government issued
Presidential Decree No.2, 1990, stipulating that the government
cover the value added tax on imports and delivery of books on
general teaching and on religious text books.

The decision aims to give consumers a break, but in reality it
is not much use because the price of paper increases year to
year.

Value added tax is also linked to the convoluted distribution
channels. A publisher cannot sell books directly to consumers but
must go through a distributor and then a book store or school
cooperative.

The publishers' association has also agreed that a maximum
discount of 30 percent can be given by the publisher to the
distributor. However, to support cash flow, the publisher is
allowed to pay bonuses for cash purchases. The delivery cost of 5
percent is paid by the buyer.

The agreement has been violated. Many publishers, especially
of school books, approach consumers directly. Moreover, discounts
in excess of 30 percent are given along with various bonuses and
incentives. The result is a chaotic market.

Another problem is the uneven distribution of publishers and
bookshops in Indonesia.

Publishers and bookshops are concentrated in Java. Jakarta has
145 publishing houses and 190 bookshops. West Java has 28
publishers and 60 shops, East Java 28 and 36, Central Java and
Yogyakarta 29 and 64. Compared to Java, publishers and bookshops
in other regions are few.

The uneven distribution stems from potential market share. The
concentration of publishers and bookshops in Java shows that the
per capita book and paper consumption of Java is far higher than
the other regions.

One role of publishers, to improve the national education as
stipulated in the introduction of the 1945 Constitution and the
Pancasila state ideology, has recently led the government to help
regional publishers to develop.

Regional publishing houses have lost out to strong competition
from big, Jakarta-based publishers. The government has therefore
developed books with local content for each province to stimulate
regional publishers.

The government's efforts to stimulate the publishing industry
is just one factor in a complex problem that includes government
regulations and deregulations, taxes, raw materials, reading
interest, purchasing power and competition with electronic media.

The writer is an observer of the book publishing industry. He
works for a book publishing company in Jakarta.