Issue 1, 2014. February-March

   

FOR PUBLISHING BUSINESS, LIFE AFTER THE TEXTBOOK TRADE A STRUGGLE

While Georgia's publishing industry has seen an impressive surge over the past several years, publishers complain that the dynamics will slow down as a result of the Ministry of Education's decision last spring to provide textbooks free for all public schools.

Maia Edilashvili

For years, a constant supply of book orders from the Ministry of Education helped support Georgia's publishing business.

But in April 2013,the Ministry of Education announced it would start distributing textbooks at the country's 2,084 public schools free of charge starting from the 2013-14 school year.

To the disappointment of the publishing industry, however, the decision did not mean the Ministry would purchase the product from publishers and then distribute them for free. Rather, the Ministry asked four printing houses to print them and provided the copyright-holding publishing companies and individuals with compensation. The compensation rate was 10 percent of the printing cost, which publishers called "symbolic."

Instead of purchasing from publishers, the government planed to spend 12 million lari (approximately $7 million) to print the textbooks. By comparison, the previous government spent 10 million lari ($5.6 million) to hand out free books selectively - to only those children who came from socially vulnerable families.

The money from the government helped book publishers grow over the years. Publishing and Bookselling in Georgia, 2012-2013, a study done as part of Book Platform, an EU funded-project trying to assist the book sectors in Armenia, Georgia and Azerbaijan, shows that the turnover of Georgia's publishing business jumped from $6 million in 2007 to $24 million in 2011, while the number of annual book sales hit 7.7 million, up from 2.3 million in the same period.

But publishing companies fear the lack of government orders could harm the industry.

"One audit company calculated the loss for two of our school textbooks - which had authorization until 2015-2016 year - and it is as high as 700,000 lari (approximately $395,000)," said Lasha Beraia, the director of Logos Press.

Small Market, Big Challenges

The government's business also helped make up for the small market local market.

Ludovic Girod, who founded Zebra Group Ltd in 2007, noted that the size of the market remains a substantial challenge for publishers. He said that while the profit margin in the publishing industry is 20% on average around the world, in Georgia it's even less. "The most realistic circulation for Georgia is 1,500-2,000 copies per edition. This is why we have opted for covering three countries," he said in the interview.

Girod's company decided to stay out of publishing school textbooks, and instead branched out into all three south Caucasus countries. At Logos Press, school textbooks comprised about two-thirds of total production.

"The large benefits on textbooks would allow us to reinvest quickly, expand business and improve quality," Beraia said.

Now, however, book publishers are looking new ways to make up for the loss.

Tinatin Kukhianidze, the project manager at Bakur Sulakauri Publishing, agreed that the school textbook market was good for publishers. Now, however, she said publishers have the chance to readjust their strategy.

"We used to dedicate about seven-eight months a year to the development of school textbooks because getting the Ministry's authorization led to high circulations and thus was worth making such efforts. Now we will have the necessity and time to develop other directions as well," she noted.

Digital books: Still Carving Out a Niche

Beraia also confirmed the need of a new strategy: printing fewer books but with higher circulation, which would bring profit later that the previous strategy. Logos Press is also pushing ahead with digital book publishing.

The dynamics of the developing e-book culture in Georgia are noticeable, although still quite slow. According to the Publishing and Bookselling in Georgia study, in 2011 a mere three companies published 31 electronic books, while in 2012, the numbers increased and eight companies published 218 electronic books.

E-books are mostly available at local distributors such as bookland.ge, lit.ge, market.ge and others as well as at the publishing companies' web sites and global distributors' pages.

Logos Press is one of the pioneers in digital book publishing in Georgia. Their experience gives a clear picture of the segment's low-key performance so far. "The share of electronic books is just one percent in our sales. I think this is because reading from hard copy remains a stronger culture here," Beraia said.

According to another study, Reading Habits in Georgia, which was carried out in 2012 under Book Platform as well, 31% of the one thousand people interviewed across Georgia have not bought any books since last year. For those who love reading, the most popular books appear to be fiction with 68.2 % of sales.

The study illustrates that digital books, well as online purchasing of traditional books, still has a long way to go before appearing as a strong rival to traditional books and bookstores: 74.9 % of those surveyed said they buy books at bookstores and only 8.9 % read books on the internet or read electronic books. The young generation is the primary consumer of alternative forms of reading.

Girod of Zebra Group has no intention to produce electronic books in Georgian, because when it comes to children's books, he says that hard copies are preferred everywhere in the world. "And, additionally, this segment is not interesting because of high piracy rates in Georgia in the high tech field," he revealed.

In order to push the industry forward, Girod thinks that promotion of reading is very important. "This includes investing in school libraries; teachers giving information to children on new and good books; educating and training illustrators, translators and graphic designers to improve publishing quality," he advised, adding that the best thing in terms of developing the publishing business is to "give Georgians a taste of reading."