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Amazon Closes Westland Books - Are Publishing Houses Becoming Endangered?

Editor, TRANSFIN
Feb 5, 2022 11:28 AM 5 min read
Editorial

In publishing you need two things: a tough hide and a dry martini.

These aren't our words. They come from a very successful HBO series. Telling you which one would be too easy and no fun. Let's just say that HBO writers know what they're talking about. ;) 

Speaking of publishing, the industry in India has had some tough news lately. Amazon, while it may have shone on Wall Street with its earnings this week, decided to take a dump in the Indian publishing lane by announcing the closure of Westland Books. 

Westland is a small but beloved English language publishing house which, despite its dwindling financials, has been a favorite with bibliophiles all over the country. Its closure has led to many being upset and waking up to the realisation that the Indian publishing industry might be heading towards a painful demise. 

Let's see about the factors which led to its demise and where the industry stands.

Westland Features

Originally known as East West books, the publishing house was founded in 1962 and taken over by Trent Ltd, a subsidiary of the Tata Group, in 2008. Then, Amazon India acquired the publisher in 2016. 

The acquisition seemed like a useful synergy at the time since Amazon intended to add an Indian arm to its own operations as a publisher of books (Yes, there was a TIME when Amazon's business dealt exclusively in publication and sale of books!).

And it wasn't just about synergy but opportunity as well. The deal was expected to provide necessary capital, scale and recognition for Westland to compete with multinational publishers like Penguin, HarperCollins etc. Even though Westland has a modest turnover in the vicinity of ₹30cr ($4m) annually, it did boast of a stellar roster of high profile authors like Chetan Bhagat, Amish Tripathi, Ashwin Sanghi, Devdutt Pattanaik, Ashok Banker, Rujuta Diwekar, Rashmi Bansal, Preeti Shenoy, Anita and Hasha Bhogle etc. 

But most of all, Westland had the distinct "homegrown" advantage and hence could reach a wider audience. It was relatable to the new-age Indian authors (read: author-preneurs) who yearned for a chance to feature their work on the shelves, especially the little-known non-celeb authors. 

As it turns out, the shelves began to empty on their own accord due to the advent of…

 

The Digital Apocalypse

The classical vertical engineering ushered in by Kindle eBooks - you buy the product and also the book - is what reinvigorated the book business in the 21st Century. It is what led to Amazon Publishing turning into a publishing juggernaut by blending technology with a constant reinvention of marketing and promotion efforts.

But the problem with technology is that sooner or later it acquires a juggernaut character of its own. If Kindle is what ushered in Amazon's digital brilliance, Prime Video is what solidified it. The wheels of entertainment evolved swiftly past the ebook age to enter the OTT age where the interface is shinier and the only letters one needs to read are subtitles. 

Be it books or OTT entertainment, content is the hook and commerce is the goal. But if you are a trillion-dollar company deriving most of your profits from the e-commerce, advertising and cloud businesses, publishing doesn't often take precedence in the scheme of revenues. When long and stagnating sales, plunging readers' interest and wallowing popularity hit you in the face, it becomes hardly surprising for a multinational's unwillingness to stop running a loss making entity.

 

"Books Are the New Art"

"We don't need books anymore but they look nice" - another piece of HBO writing (The Newsroom, 2014). 

The point is that unlike others, sustaining a publishing business is something that requires a blend of financial expectations and a promise of literary ethos. Agreed, it is driven by numbers but due to readers romanticising books, publishing houses have always been more eager to incorporate user preferences and personalised business models (like building interactive reading-cum-purchasing experiences at cafes, libraries, stationery stores etc.). 



Which begs the question - why didn't Amazon follow the same model with Westland? One would assume that with its ebooks advantage, Amazon could easily catapult the publisher towards more platform sales. It could have also benefited from the differential price model (MRP of physical books different from ebooks) followed in India.

Moreover, the titles on Westland were quite diverse and unique. It was home to many debut authors from various regional languages and its editors did a stellar job over the years nurturing writers and manuscripts into their best possible versions. 

Why, oh why, shut down then?

 

The Author and the Publisher's Lament

Amazon India hasn't officially given any reason for the closure except stating that it was a "difficult decision" to stop operating in Westland. However, as per some filings, Westland is reported to have lost over ₹40cr ($5.3m) in FY20. 

And mind you, those were the pre-pandemic numbers. With post-pandemic household discretionary spending taking a massive hit, it would be hard to imagine publishing businesses still riding on marginal losses, let alone healthy profits. 

Furthermore, why is a closure more preferred over, let's say, a business restructure, personnel changes, change in governance, or even a buyout? What's the strategic incentive of a complete liquidation as opposed to corporate resolution?

And finally, remember that Amazon bought Westland for merely ₹40cr ($5.3m). For a business as old as these publishing houses are, for an industry that brings together the intellectual powerhouse of the nation,  defines and documents culture and helps shape civil society debates, this was a bargain. So, like many in the twitterverse seem to have suggested, "Yo, Amazonian behemoth! Why not just run with it, losses be damned?!"

For those among us who grow to live, love and learn life's greatest passions through the written word, it keeps pressing on how valuable publishing houses like Wesland are. Books aren't consumer-durable items and so, perhaps, corporations should be more patient with these businesses even if it means sustaining the lack of economic rewards for a while. 

Having said that, there is a certain double standard at play with expecting Amazon to sustain a loss making publishing house and then go on to question Jeff Bezos' expenses towards space travels and billionaire super yachts. There seems to be a visible disconnect in the understanding of business here, especially with attempts to paint the aspiration behind "profit" as evil. 

So, maybe, go out there and buy more books because publishing houses don't run on love and sunlight. The shelf life of books remains directly proportional to how much you shell out towards their purchase.

It is an art that only few have been able to master, even in the West where per capita consumption of books is higher. The key lies in corporatisation along with acquisition of independent publishers. The Big Five of the publishing world - Penguin Random House, Harper Collins, Hachette, Simon and Schuster and Macmillan - have been comparatively successful (albeit recent financials are poor) in adopting this model through tie-ups with local publishers and bookstores and active engagements with a diverse section of authors.

FIN.
 

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