Change the writing on the wall in digital publishing
Tim Hely Hutchinson is group chief executive of Hachette UK, the largest publishing house in Britain. Following the opening of Hachette's sales office in Hong Kong last year to cover Southeast Asia, Hutchinson talks to Kate Whitehead about the publisher's presence in Asia and how it is responding to the challenges posed by digital distribution.
How important is Asia to your business?
The Asian market has grown significantly faster than the British or European markets and I think it will continue to do so. We've a greater awareness that Britain is a relatively small and static market, and that we should be publishing more for the world. I wanted to have a specific base here to co-ordinate and maximise the sales and publicity in Asian markets and also to tell us what's going on - to draw writers and trends to our attention. The opening of a Hong Kong office is a functional thing, but it's also a symbol and a catalyst that we're publishing for the world, and not just for Britain with a few add-ons.
How does the Asian book market differ from the UK or the US?
In Asia it's more dominated by non-fiction. It's more interested in business and self-improvement - it's less literary and more to do with getting on in life. All the markets in Asia are quite strong for children's books because Asian parents, particularly the middle class, tend to see English as essential for their children to get a head start. Our representative here is Paul Kenny - part of his role is to look out for authors in Asia. The biggest single market is eight to 11 years - it's your first reading book on your own, without your parents.
How big is the e-book market for Hachette?
It's grown so quickly. Our turnover at Hachette UK and the Commonwealth in 2009 was £1 million (HK$11.9 million) - and last year it was £50 million. It has taken off like a rocket. In fiction, about 40 per cent of our sales are electronic and that's happened quickly. It was really Amazon's Kindle that led it - the ease of the download.
Will the e-book market continue to grow?
It will, but the rate of growth will slow down and settle because we all know people who say, "Oh, but I really love the physical book". There will be a solid print market as well, particularly as booksellers adapt and they have to adapt to make sure they are relevant in the physical world. Booksellers have to get the balance between fiction and non-fiction right, they have to make their shops lovely places to browse in, they have to have the right mixture of books and sometimes non-book products to draw people into the store.
How is Hachette adapting to digital?
When we realised the market was quite likely to take off for digital - after the launch of the iPhone in 2007 - we set up a digital department. We have a massive conference called Digital Ideas Day for the entire staff to show them what is happening in the world. Our job is to be the leader in digital - in our markets we are the leading e-book publisher and a leader in audio downloads. And we're experimenting with new concepts for children's books, what you can do on a phone or an iPad and practical books, recipe books. Our business in 10 years' time and beyond is going to be … way over 50 per cent digital. We've got to be there and be good at it.
How do you protect the intellectual property of authors in the digital market?
One of the most important new roles for publishers is the protection of copyright - how do we protect authors against piracy and casual file sharing? We have a subcontractor who sweeps the internet every day to find infringing editions and we send every infringer a takedown notice. If they persist we take legal action. And that is successful - the books do get taken down. And on casual file sharing, we strongly support the maintenance of DRM - digital rights management - so all the files, e-books and audio are encrypted and all our contracts with people like Amazon make it impossible for people to share or to lend. Lots of people say take DRM off, it's old-fashioned, but that's wrong. Our primary job is to represent authors and authors deserve to be paid. One way is by making sure we keep the DRM on.
What does the future look like for Hachette?
I see the future as being multimedia. This change towards digital hasn't run its course yet. It was only late last year that the iPad and tablets started tumbling in price so that they were more accessible to everybody, so that rollout worldwide of tablets and smartphones and things in between hasn't finished. Neither the public nor the publishers have yet explored all that you could do. Once there is a screen in everybody's bag and home, what can you do that people actually want? We need to be there leading that as best we can and being positive about change.