eBooks in Australia – What went wrong?


This article is by Darryl Adams, a government worker and internet tragic. A former IT worker, he still pines for the days of IBM keyboards that go CRUNCH and the glow of green screens. He can be found on on Twitter or on Facebook. Check out his site oz-e-books.com for more articles about e-book readers, retailers, formats and news (or will have when Darryl can be drawn away from reading Delimiter). The views expressed here do not reflect the views of his employer, the ATO.

opinion Last year there was a feeling that Australia was entering a new age of digital books. Borders introduced its Kobo reader, software and retail platform, Apple introduced its iBooks software and store and Amazon finally allowed Aussies to access the Kindle Bookstore and introduced a worldwide Kindle device. Yet almost a year later, we have REDGroup (owner of Borders) in administration, almost no commercially available books in the iBookstore and a limited range of titles available in the Amazon Kindle marketplace.

So what happened?

1. Publishers.
Publishers in Australia refuse to be dragged kicking and screaming into the 19th century, let alone the 21st century. They successfully lobbied the government to prevent parallel importing of books into Australia, despite a comprehensive report from the Productivity Commission.

The territorial rights also means that books available in the US and UK eBook stores have to be negotiated for another country. This adds a layer of legal paperwork that most companies seem to enjoy avoiding. The Borders/Kobo alliance was negotiating the agreements required, however the collapse of the REDGroup retail business and the uncertainty caused has put a damper on to this. Apple and Amazon have made little effort in working to gain the territorial rights, and the only large player who could negotiate these agreements, Google and its eBook platform, has yet to enter the marketplace.

Retailers who used to be able to sell to Aussies, are no longer allowed to do so (Diesel, Fictionwise) as the territorial rights start to be heavily enforced. As a result, the local publishers have continued to party like its 1799, when the fastest way to move stuff was by sail.

2. The global economy
The Australian Dollar is at its strongest value since before the floating of the dollar under the Hawke Government. As a result of the falling US greenback, the cost of the Kindle and the books in the Amazon store are far cheaper than can be purchased in Australia.

Compare the Kobo with the Wi-fi Kindle. Both are functionally the same, however the Kobo is A$179 and the Kindle is US$139. With the dollar above parity with the greenback, it makes the Kobo a lot more expensive for people willing to make the effort to shop online. The only advantage the Kobo has is the instant gratification, rather than waiting for the Kindle in the post. And if Borders goes under, that advantage is lost.

3. Publishers.
The Publishers in Australia are heavily addicted to the large margins that Australian books traditionally generate. The prices for books are so high (as I have written earlier) that retailers can order books from Amazon and/or Book Depository and still undercut the local distributors’ price. As a result, eBook prices are far higher here than in the US and UK. And due to the territorial rights, overseas companies can not compete with Australian retailers when the book is locally available.

4. Marketplaces
The Kobo/Borders online store (and the Kobo software) was not as strong as it should have been. My first experience was one of broken cover art and poor range of books. The range slowly improved, however the interface was poor and book discovery was lacking. Even things like email alerts (or bacon email) would have allowed me to keep track of new releases. If you are going to compete with Amazon (or Apple’s iTunes), you need to direct customers to books they are willing to buy, which means strong search and data mining. Clytie Siddell has an eloquent post of this on my blog.

5. Publishers
Publishers are trying to protect their rivers of gold (book sales) by pricing eBooks in such way that makes them less attractive. Considering you lose rights by buying books compared to a paper book, charging a price similar to a paperback (or in some cases hardcover) is outrageous. Overseas, all of the publishers have adopted the agency model (selling through another entity to evade price fixing laws). This is now the case in the USA and UK.

Only one publisher on the Kobo/Borders store (Hatchette) uses the Agency Model, however the Australian Competition and Consumer Commission believes the model is legal and it will not take long for the other major publishers to jump on the price-fixing bandwagon. Expect price rises for all major release eBooks in the future.

6. There is no point 6!

7. Publishers
Publishers are afraid of falling into the music trap, where Apple walked in as the savour of the music industry, and walked out dictating terms to them. Hence the publishers are fixated on Digital Rights Management, ensuring that they and not the retailers dictate price, and falling over themselves with more draconian rules to impose (like the 26 uses of an eBook before replacing rules). This also means that moves by retailers to improve the e-book experience will be actively fought by the Publishers.

As a result, the promise of a better experience for long-suffering Aussie eBook readers has turned into a nightmare where Aussies are worse off than a year ago, and the chance of the market falling into a Monty Python farce rises everyday. With the high risk that Borders disappears, the only large Aussie eBook play is under threat, and with no competition, the publishers can keep on gouging the readers to their heart’s content.

Image credit: Andrea Kratzenberg, royalty free


  1. There’s are factual errors in this article

    The Kobo is sold in Australia for $179 incl free shipping

    The actual total price shipped for Wifi Kindle 3 is ~$160 (i just bought one).

    Unless you plan on swimming to the USA, picking up the Kindle and swimming back the cost of a Kindle is $139 + shipping cost + $US credit card processing fee is = appx $160

    To be exact my Kindle 3 Wifi receipt says $AUS 159.07

    • Cheers! I’ve fixed the $179 price. As mentioned on Twitter it’s not standard practice to quote shipping price in articles of this nature. You’re right, it is relevant, but not a big enough issue to warrant changing the article.

  2. The book pricing issue needs to be resolved before people get used to circumventing the current Australian market.

    I read a lot of books. I get them from everywhere.

    The high volume of turnover means that ebooks are attractive. When I finish one book, I can simply browse through my collection for another. I read anytime I have to wait in a queue.

    I’m actually reading a ‘regular’ paperback at the moment, and have been reminded that my ebook reader (my smartphone) is actually a lot more convenient. It’s not as heavy and is quite capable of allowing me to read single handedly. It also allows me to have my book with me at all times.

    The issue I experience is similar to what you’ve mentioned. E-books are offered at incredible prices, and when I compare them to prices elsewhere I quickly feel that I will be ripped off purchasing them.

    An easy solution is to find a method of downloading them for free. The first time wasn’t too difficult, the second time even less so. It’s getting to the point where I’m almost going for the free download first.

    If the pricing was halfway appropriate, I would never have considered going down this route in the first place. It’s going to be harder to get me to go back now, though I wish it wasn’t so.

    • Personally I hate reading an actual physical book at this point. Why cart around 1kg worth of dead tree when you can just carry your iPhone? And for those haters who hate reading on their iPhone … have you actually tried it? I just read the complete series of Culture novels by Iain M. Banks on the iPhone. It’s great.

  3. Yes the cost of ebooks in Australia is dubious for all the reasons and more outlined in your article. Now that Borders and Angus & Robertson have gone into receivership I have no outlet to purchase ebooks compatible with my Sony Reader. Even at that their market range is/was substantially limited. I can’t understand the rationale that supports suppressing business opportunity. The powers that be should have resolved the issues by now. Surely unless Austalia is refractory to ebooks and/or commerce then I suggest our government do something for consumers shut out like myself. I’m ticked that because I live in Australia I can’t buy ebooks overseas. There are only so many free ebooks one wants to read!

  4. Hi, just wanted to say this page is really screwed up in Firefox. The ads from the right-hand side are covering the words on 1/3 of the left side. I had to switch to IE to read and leave this comment.

    (Please feel free to delete this after you read it.)

  5. The only alternative is free of dubious origin. This demonstrates the flaws in the system as they shouldn’t come into the equation, let alone be a viable (or even only) alternative.

    • So true. The publishers’ greed and abuse has driven their own customers to the darknet.

      You can’t read your DRM Mobipocket ebooks anymore because Amazon bought Mobipocket and won’t license it to anyone for iOS? You have the choice to rebuy those books (on which you have already spent many hundreds of dollars), probably in a format you will also have to replace before long, or you Google for help on how to access the books you legally bought.

      You have nearly all the ebooks in a series, but you’re barred from buying the remaining ones (although you can see them sold on ebook sites) because you live in Australia? You have the choice of abandoning that series (in which you have invested significant money), or of looking for illegal copies of those ebooks, despite the fact that you’re perfectly willing to pay for the ebooks. And I’m not just talking about later titles in a series, but of randomly interspersed titles. You could have volumes 1, 2, 5, 6, 8, 10 and 11, but not be allowed to buy volumes 3, 4, 7 and 9.

      Rather than driving frustrated and confused paying customers to this point, publishers could just sell them books.

  6. I have over 300 books for my Kindle now and the majority of them have come from indie authors/publishers – most have cost $2.99 or less, don’t have geographical sales restrictions, have all the features such as text to talk and quite a few don’t have DRM. Many of them are just as good, or better, than ‘name’ authors from the Big 6 Publishers’ Cartel.

    I think after nearly a year of Kindle ownership the greatest benefit, apart from the usual things like portability and convenience, is access to this whole range of authors that I would never have seen via paper publishing especially in Australia.

    I’m going to have to want a book really badly to pay more than $5 or so in the future.

      • Not at all, Renai. As a matter of fact quite a few of my books have only cost 99c. By visiting various ebook forums – Shelfari, Goodreads, Kindleboards and reading Amazon book reviews, it’s quite easy to filter the books yourself. If I get a stinker, and that’s only happened, it’s only cents that I’ve lost.

        I think I’ve put aside, without finishing, more conventionally published books than I have indie ebooks.

        I have 5000 paperbooks on my shelves but I can’t see that number growing now. In a way, I see them more as dust collectors now. I’ve become os used to my Kindles that I’m actually not comfortable reading paperbooks any more.

        I think ebooks are great thing for readers – I don’t think anyone has mentioned that with ebooks there’ll no such think as out-of-print and/or unobtainable book – but I also believe that once authors get their heads around the benefits (ie ditch publishers as we know them today), they will reap enormous benefits too by way of increased sales and higher royalty payments.

        Browse through this blog if you have time:


        • I agree with Ron. And Joe Konrath is a trailblazer. He’s proven that a good author doesn’t need a publisher, and that lower prices make the author more money. All power to Joe.

          I’ve also been buying more indie ebooks since geolims were imposed. First, that’s all Fictionwise has, now B&N refused to get Agency titles for it. Secondly, there’s some good stuff in the indies.

          In my travels online, trying to work out why just buying ebooks is so damned difficult, I’ve also found author sites to be a valuable resource. You often get free stories, you can tell them how their publishers are screwing with their audience, and there are innovative ideas like Michael Stackpole’s Chain Story (a free online story from each of several authors, following a theme) and his willingness to let readers choose and pre-order what he writes next.

          An Agency publisher does not an author make. Keep your eye out for good authors who self-publish. There are some blogs and collation sites now which recommend good indie and self-published ebooks. It’s worth looking for them.

  7. Great article, Darryl! You’ve really hit the nail on the head, The only e-books to buy right now (for an Australian) are PDFs. Anything else is not safe / not competitively priced. And I refuse to buy anything, EVER, with the sort of DRM that the publishers are trying to foist on us.

    • I dunno, Mike. PDF is not a text format: it’s actually an image format, a snapshot of what that page looked like at the time. It’s not really good for ebooks.

      The free ebook cataloguing, conversion and transfer tool Calibre means you can access any non-DRM ebook format. The best bet currently is non-DRM ePub, because it’s a standard format and much less likely to disappear.

      Both Baen Books and Fictionwise also provide ebooks in (non-DRM) Multiformat: you can have a copy of your ebook in each format, if you like. I think Smashwords does that, too.

      So the problem is DRM, not the variety of formats. You can convert the non-DRM ones by just pressing a key in Calibre. It’ll even send the converted ebook to your device. ;)

    • Sorry, can’t resist answering that one, even if I’m not Mike. ;)

      The biggest problem with DRM, IMNSHO, is that it’s a barrier to reading the book. Even with ePub, there are a proliferation of different DRMs used. I can’t read my Borders ePub books in iBooks, for example, because Borders and Apple use different DRM on their ePubs. With even books in the same series only available at different retailers, I end up switching from one reader to another, just to follow a series. I have to keep lists of which title is in which reader program. It’s confusing, time-consuming and gets between the book and the reader enjoying it.

      DRM also prevents you sharing a book, passing it on or reselling it, all actions which promote reading and the popularity of authors. DRM restricts library lending, and drives the few brave librarians crazy trying to satisfy it, while discouraging the rest from even trying it. DRM says, even though you pay full price for a book, you don’t own it: you’re only renting it.

      If your retailer goes out of business, or that format is no longer available on your device, then you have no access to your DRM ebooks. Your rental just expired.

  8. Daryl, I was surprised to read in this article about the ‘rivers of gold’ and ‘high profit margins’ in Australian publishing. I would question whether you have conducted any research into Australian or international publishing whatsoever.

    You write that Australian publishers ‘successfully lobbied the government to prevent parallel importing of books into Australia, despite a comprehensive report from the Productivity Commission.’

    Firstly, parallel importation is allowed. The restrictions currently in place mean that an overseas publisher cannot import a title for thirty days if a local publisher is releasing the same title. EVERY country in the world operates under these same rules and to remove them in Australia would place Australian publishers at a distinct disadvantage. If Australian publishers cease to exist, many Australian books would cease to be published given international publishers only release a small fraction of Australian titles.

    Secondly, it seems to me that your concern is with territorial copyright, again this is a system under which every country in the world currently operates. Further, part of your complaint should be levied against the retailers themselves. Amazon is yet to open a Kindle store in Australia. There are no impediments against them opening such a store and they would be able to price ebooks as they chose.

    Third, what do you mean by a ‘comprehensive report’ from the Productivity Commission? The report provided a set of recommendations but I saw no reference to any of these in your blog.

    Publishing is one of the lowest paying industries for tertiary educated professionals in Australia precisely because of the extraordinarily slim profit margins. Book prices are higher in Australia than overseas because of economies of scale. A book in the US might be priced at under $20 because when printing in the hundreds of thousands, the unit cost shrinks significantly. While ebooks do not attract a print cost, many of the usual costs of book production still apply. The author must be paid a royalty, the book must be edited, typeset and prepared in multiple digital formats.

    You later write that ‘Overseas, all of the publishers have adopted the agency model (selling through another entity to evade price fixing laws). This is now the case in the USA and UK.’ This is a broad statement without referential ballast. For one, publishers may operate under the agency model with Apple and not with Amazon and secondly the agency model is not some sort of price fixing scandal. It’s a means of trading. For the record, the Australian publisher to which you refer is spelt ‘Hachette’ and it is the Australian arm of an international company.

    Further, you conflate the role of the publisher and the bookseller in your discussion of pricing. Generally publishers grant booksellers a 40-50% discount off recommended retail price and ultimately the pricing decision is made by the retailer.

    I do hope that in future you will conduct deeper research before writing on such complex issues.

    • “many Australian books would cease to be published given international publishers only release a small fraction of Australian titles.”

      Perhaps the reverse will be true with ebooks when authors can simply load their books at Amazon and enjoy 70% royalties.

      “it seems to me that your concern is with territorial copyright, again this is a system under which every country in the world currently operates.”

      Why can I buy paperbooks from Amazon, The Book Depository etc but not the ebook version?

      “Amazon is yet to open a Kindle store in Australia. There are no impediments against them opening such a store and they would be able to price ebooks as they chose. ” (My emphasis.)

      Not while the Big 6 Agency agreement cartel is in place. And what is really the point of them opening an Australia store? I’m quite happy with the 30 ebooks I’ve bought from them. I would be happier though if they could sell a lot more of the ebooks that are currently restricted by the geograpical barriers (and this includes most Aussie authors – they are missing out on sales because of their publishers!).

      “Book prices are higher in Australia than overseas because of economies of scale.”

      I bought an Australian-printed book from The Book Depository for $22AU. The price of the same book in Australia $45. Australians know they are being ripped off with paperbook retail prices. If TBD can express airmail me a book at less than 50% of the rrp, you can’t tell that the publishers and booksellers can’t do better bulk-buying.

      No what the arguments are for Australian publishers, it’s the perception that counts and it’s why ebooks bought from Amazon etc. will be the winners.

      I’ve spent nearly 45 years in the writing business and it’s time the publishers and authors put down their glasses of white wine and cheese pieces, stopped navel-gazing in the ‘writers centres’ and joined the world as it today. (The same can be said for the Australian movie ‘industry’.)

      • “I’m quite happy with the 30 ebooks I’ve bought from them.”

        And that line should read, “I’m quite happy with the 300 ebooks I’ve bought from them.”

        • Ron, you are absolutely right. Why should we have to buy ebooks from our own, territorially-isolated Australian bookstore on a world-spanning Internet, when we can just as easily buy them from an international site? Why do publishers do the ebook typesetting, editing etc. (and they’re still doing a terrible job) in the same language in different countries at the same time? Of course that’s an added cost. It only needs to be done once, then the title released to the world in that language. Publishers should not expect customers to pay for their bad practice.

          The Internet maximizes economy of scale. Sell to the world and flourish. Sell to narrow geographical enclaves and fail.

          I also want to ask the original poster why we can buy books only printed in Australia, from other countries for about half the cost. How can these books be printed in Australia (at the increased costs mentioned by the OP), then shipped overseas and sold with international postage included at about half the price of the book sold here?

          OP, you can protest about added costs and low profit margins, but the fact is that the Australian publishing industry doesn’t offer us anything worth the inflated prices. That particularly applies to ebooks, which are only much-delayed but identical copies of titles released overseas.

    • The Productivity Commission report can be found here http://www.pc.gov.au/projects/study/books. I did not blog about this as it is outside of my focus on oz-e-books.

      From the report overview:
      Parallel Import Restrictions (PIRs) provide territorial protection for the publication of
      many books in Australia, preventing booksellers from sourcing cheaper or better
      value-for-money editions of those titles from world markets.
      • From the available quantitative and qualitative evidence, the Commission has
      concluded that the PIRs place upward pressure on book prices and that, at times,
      the price effect is likely to be substantial. The magnitude of the effect will vary over
      time and across book genres.
      • Most of the benefits of PIR protection accrue to publishers and authors, with demand
      for local printing also increased.
      • Most of the costs are met by consumers, who fund these benefits in a nontransparent manner through higher book prices.
      • Some of the effects represent transfers from book purchasers to local copyright
      holders, but the restrictions also cause economic inefficiencies and a significant
      transfer of income from Australian consumers to overseas authors and publishers.

      All of the major publishers are overseas based, and the full report is well worth the read http://www.pc.gov.au/__data/assets/pdf_file/0004/90265/books.pdf

  9. Hi there,

    I often talk about the success of ebooks and the demise of the paperback on my website.

    The incompetence of the local retailers cannot be emphasised too strongly. On almost every occasion that I went into a local retailer, the ebook devices they had on display were either broken or not powered up. If this simply happened once or twice I would be forgiving about it.

    Unfortunately it happened to me at least half a dozen times. If a retailer can’t stock the equipment in good order, then it should not carry it. I eventually bought a Kindle. I’m happy with it.

    Local retailers, grow up!


    • Most retailers just don’t seem to understand what is happening to their industry at the moment … generally, they are fundamentally in an inefficient industry which the internet is about to forcibly drag into the future. Hell, how old is Amazon now? 15 years?

  10. Alice, how can we make more eBooks available in Australia?

    Doesn’t the Australian book industry face demise if it can’t meet the pricing of Amazon and Book Depository?

      • I argue that there is a place for publishers. In the filtering, editing, promotion and design area, a Publisher has skills and knowledge that trumps most (but not all) self publishers.

        It is worth noting that most of the successful authors had content published preciously before becoming self publishers.

        • So publishers now need to sell their services to authors who want them. They should not form an oligopoly which fixes prices and focusses only on best-sellers.

          Although the initially successful self-publishing authors had previous experience with publishers, the newer crop does not. Amazon self-publishing and Smashwords have produced some good stuff.

          Indeed, why should an author take as little as 8% royalties when they can get 70% from Amazon? What services can a publisher offer which are worth 62% of the price of every book sold?

  11. There isn’t a lot I know about the Australian publishing industry so I can really only speak as a consumer. Australian books have been too expensive for years. Most of my reading is done through libraries for that reason. I keep expecting e-books to solve some of that, less “economies of scale” but that hasn’t happened and there’s too many problems getting them. I’ve played with free books directly from Gutenberg, and I have paid double the overseas price for one e-book just because I wanted it so much. On the other hand now that A&R is going broke I dropped into one of their store for their 50% off storewide sale. The place was packed. I suspect a lot more people would be buying their own books if the price was right and then the publishers would be able to maintain their profit margins just because they’d be selling so many. At this point, for people still reading paper, I’d recommend everyone join their local public library. You might have to wait for the very latest but you won’t pay for it either. And everyone should ask their local library if they are doing e-books yet. Some are.

    • +1 to this post.

      I have a large personal library, and have paid a small fortune for it over the years. Looking back, I realise that I paid way too much … because I “had to read” this book or that book, and didn’t shop around.

  12. Random House is showing $49.95 as the price of the ebook version of Peter Fitzsimons’ new book ‘Batavia’.


    And people actually wonder why ebook selling in Australia is a disaster?

    Amazon has it for $31.09. (I notice the only two reviews at this relate only to the price.)

    At that price they’re just asking for it to get to the ‘darknet’ asap (that’s if anyone’s silly enough to buy it in the first place).

  13. Amazon is my new second favourite company. I love Kindle on my iPad, and I would love a physical Kindle.
    We just got a new bookshelf to relieve the pressure on my old one, now it looks like it’s going to sit half empty :(
    Feels a bit like Children of Men, but with paper books!

  14. Alice, you are absolutely correct. And I too am sick to death of people who know nothing about publishing blaming local publishers for territorial restrictions ultimately put on books by the authors and their literary agents. Authors own the copyright and control the rights to their books. If they choose to license rights to publishers on a territorial basis there is nothing the publishers can do about it. Publishers are desperately trying to convince authors and literary agents to license on a worldwide basis so that ebooks can be made available on a worldwide basis from the get go. So do us all a favour Daz, and do some research.

    • I’m sorry … are you saying it’s all the authors’ fault here? Because in my experience they have no problem with licensing things for eBooks — it’s the locally based publishers who are the bottleneck.

      • Yep. I have written to authors whose books I haven’t been allowed to buy, and in each case they say bewilderedly, “But I insisted on world rights for ebooks.”

        Authors want their books read.

  15. My experience too, Renai. I’m in contact with a lot of authors and everyone of them blames their publisher for problems with licensing ebooks and territorial rights for them.

  16. Whichever way one looks at it: “What we’ve got here is a failure to communicate.” – Cool Hand Luke R.I.P.

  17. Recently, I made my first purchase from iBooks. I’d looked often, but they had so few titles, and not anything I wanted to buy.

    But this time I found one title I did particularly want, a later title in a series. I don’t understand why they didn’t have any of other seven titles (all available in ebook). Why only have volume 8 in a popular series? Is anyone actually thinking, behind the scenes?

    I had to pay $14 for this single ebook! I gritted my teeth and did it, because I wanted this title, and couldn’t get it anywhere else (due to me being Australian and thus damned in the ebook industry). But I didn’t buy anything else while I was there.

    I never buy a single ebook, when I visit an ebook retailer. I grab a handful, at least $50 per visit.

    So, Apple? You got my $14, and missed out on the other $36. Hope you’re pleased with your inflated prices.

  18. Rivers of gold?! Are you joking?! The first thing I was told when attending a university seminar on working in the publishing industry was “there is no money in publishing”. The “large margins” that we’re apparently addicted to are quickly eaten up by the costs of printing, shipping, warehousing & distribution, purchasing title rights, not to mention business costs. You are painting us as a bunch of fatcat idiots who are sitting on a huge pile of overpriced books, throwing money into the air and guffawing gleefully. I cannot even begin to tell you how far from the truth that is.
    Yes, I will allow that the publishing industry in Australia isn’t anywhere near up to speed with e-books. Things are happening. REDGROUP’s collapse has hastened the process. Watch this space.

  19. I don’t know the date of this discussion, but has anything changed on ebook sales? Does Amazon sell to Australia? Are Apple iPads popular and do people buy ebooks from Apple’s iBook app? Is Kobo stll popular? I’m in the US. I want to understand your market for ebooks. Thanks in advance.

Comments are closed.