Antonio A. Hidalgo
President and CEO
Milflores Publishing, Inc.
(Presented at the round table discussion on Literary Publishing in the Philippines, 12th Biennial Symposium on the Literatures and Cultures of the Asia Pacific Region, November 24, 2007, UP Diliman, Q.C.)
I shall be sharing with you this morning my reflections on literary publishing in the Philippines based on my experience in managing my company, Milflores Publishing, Inc., since it was established in December, 1999.
Milflores is a small corporation that publishes trade books for profit. In eight years of operation, we have published and marketed 75 titles.
We have a rather broad definition of literary titles that includes both fiction and creative nonfiction. Our fiction includes collections and anthologies of short stories, sudden fiction, and plays. We don’t publish poetry except as part of a larger anthology of fiction or nonfiction. Our creative nonfiction includes collections of essays, including travel essays and opinion columns, anthologies of essays on a single topic, and Internet blogs.
By this broad definition, 52 of the 75 books of Milflores, or 70 percent, are literary titles. However, 75 percent of our sales are information books, even if they only constitute 30 percent of our titles.
Nine of our books are in Filipino and six are bilingual (English and Filipino). Sixty of our books, or 80 percent, are in English. This breakdown is the opposite of the profile of the general reading public, where Filipino is clearly the lingua franca and a large majority of readers prefer to read in Filipino.
The reasons for the asymmetry between our titles and market preferences will become apparent in later sections of this paper.
The Philippines has a fairly large population of more than 85 million people. Unfortunately, the effective demand for all books comes from only a very small fraction of this population. In turn, the demand for literary titles is only a small fraction of the demand for all books. To understand why this is so, let me share with you some characteristics of the Philippine book market.
Some Market Characteristics
In 2003, our National Book Development Board (NBDB) commissioned one of our leading survey organizations, the Social Weather Stations (SWS), to undertake a nationwide survey of the reading attitudes and preferences of Filipinos. This was ground-breaking because it provided the first hard survey data on Filipino readers. A second survey has just been completed, and its findings will be released at a press conference this coming November 28. Unfortunately, I have no advance access to the new survey findings, hence I am forced to describe our book market based on the previous SWS survey.
The 2003 SWS survey found that 90 percent of Filipino adults have read books and 68 percent had read non-school books during the year of the survey. Young adults from ages 18-24 read more non-school books, five per year on the average, than older adults. A large majority of those who bought non-school books for personal reading, 58 percent, spent P200 or less (about US$4.65 or less) on these books for the entire year.
One of the most important findings of the survey is that 57 percent of readers prefer to read non-school books in Filipino, 30 percent prefer English, and 13 percent prefer Cebuano and other regional languages. There are nearly twice as many readers who prefer to read in Filipino than those who prefer to read in English. Hence, books in English cater to less than a third (30%) of the potential market for books in the country. These findings are reinforced by other language surveys that show that Filipino is clearly the lingua franca of our country.
The survey found that 91 percent of non-school book readers read for information or additional knowledge. Only 9 percent read for enjoyment or amusement. Presumably, severely limited budgets force most readers to be very practical; to almost always buy books that have a clear utilitarian content. This works against the sales of literary titles, which do not provide immediately useful information.
The survey found that readership of non-school books tended to be higher among:
- Those with higher levels of education,
- Those who attended private, rather than public, schools,
- Those from higher socio-economic levels who had higher personal monthly incomes,
- Those from urban, rather than rural, areas,
- Those who were younger in age,
- Those who were not married,
- Those who had libraries in their homes and offices,
- Those whose social networks also liked to read, and
- Those living nearer to bookstores and public libraries.
Widespread poverty, which also causes low levels of education, is a major constraint to selling literary titles in the Philippines. This is the reason why a majority of readers can only afford to spend P200 or less a year on books, which is the price of only one book, and why most readers buy information, rather than literary, titles. In turn, the miniscule market for literary titles breeds a vicious cycle whereby publishers are forced into smaller print runs that cause higher unit prices that unavoidably result in less sales. Print runs of 500 to 1,000 copies are fairly common for Philippine literary titles. In contrast, the U.S. print run for the penultimate Harry Potter book was reportedly 5 million.
An important problem is our postcolonial situation, which has resulted in a highly fractionalized society. Scholars in the indigenization movement in the University of the Philippines often refer to The Great Cultural Divide (Ang Dambuhalang Pagkakahating Kultural) between the elites and the masses. This divide explains why there is a mismatch between what many of our best writers write and the needs and preferences of most readers. Too many Filipino writers write in English, while most readers read in Filipino; the best writers concentrate on writing fiction, while most readers want information books; because of class differences in lifestyles and experiences, the content of the best Filipino literature in English is often at odds with what most readers want from fiction, so they turn, instead to telenovelas, formulaic romance novels in Filipino, and lately, badly-written ghost and horror stories in Filipino.
The tiny, but affluent, A and B market (variously estimated at 7-12 percent of the population) should be the audience for Filipino literature in English by the best writers. Unfortunately, again because of our postcolonial situation, this segment is extremely Westernized and prefers books by foreign authors. This is why our largest book stores all carry many more foreign literary titles than local ones, often 20 or more foreign titles for every local one.
The limited reach of book stores in our country is another limiting factor. Selling through book stores is more efficient than direct sales to the general public. In our case, 80 percent of our sales are through book stores and only 20 percent are sales through agents or direct sales to readers through launchings and other means. Therefore, our market for literary titles is basically that portion of the market that has access to book stores.
In an article in the December 2004 issue of Book Watch, Karina Bolasco of Anvil Publishing, Inc. (one of our larger publishers) said that Anvil’s research in 1995 showed that there are, at most, 2,500 book stores in the entire country, or one book store, on the average, per 34,000 people. The Anvil mapping of these stores showed that most of them are concentrated in Metro Manila and the National Capital Region (NCR). In Mindanao, there are far fewer bookstores and the average in our poorer regions is about one bookstore per 200,000 people.
In our experience, the figure of 2,500 bookstores is misleading, for most of these are marginal outlets that don’t have the capital to carry many books and that often close down within a year or two of opening.
On the plus side, however, is the fact that the largest chain in the country, the National/PowerBooks chain of book stores, is rapidly expanding. When Milflores started selling books, the National chain had only about 40 branches. Today, we are selling our books through 109 National/PowerBooks branches for this chain has nearly tripled in size in only eight years.
At the operational level, local printing, though relatively cheap because of lower labor costs, is generally of poor quality due to outdated technology and poorly trained workers. We sometimes get as much as 5-10% rejects in our print runs. This forces us to bear the costs of inspecting each and every book to protect our readers and our reputation.
An operational problem stemming from poverty is that some readers use book stores as public libraries—they read books while standing without buying them. This destroys many books—our rate for our most popular books is about 5% of the books we place on the shelves. All book stores simply return damaged books and publishers have to take the loss. This has forced us to wrap all our books in plastic to discourage reading without buying, and this has increased our production costs.
These are some, not all, of the constraints on literary publishing in the Philippines. I mention them not to paint a hopeless picture, but to lay the foundation for creating realistic strategies for successful publishing and selling of literary titles that are based on a sound knowledge of the market and of the constraints that publishers face.
Some Strategies for Successful Literary Publishing
In our few years in literary publishing, we have continuously experimented in order to be profitable in this difficult field. These experiments were guided by my training and experience as a planner, thus the strategies we have devised were based on market characteristics and the constraints we faced.
1. Narrowing the Great Divide. Knowing that several factors separate good writers from the mass of readers, we have focused on ways to narrow this gap in order to successfully sell literary titles.
In terms of content, we encourage good writers to write on what we call their “intersections” of life with the masses. Since the class divisions that fragment us are not total, it is virtually impossible for our social classes to lead completely mutually exclusive lives. Hence, all writers have some kind of intersection of life with the masses.
We have published an eight-title series of books on cockfighting that includes short stories set in the cockfighting world. Some of these stories have won national literary awards. The series has been selling well for well over a decade now, longer than Milflores has existed, since the first few titles were published by Anvil Publishing, Inc.
Milflores also engaged many dozens of the best, award-winning writers to contribute to humorous anthologies on popular topics like shopping malls, insomnia, beauty pageants, common maladies, being a Nora Aunor fan, and heartbreaks. We also published collections of humorous essays by good writers on migration to America, pregnancy, youthful angst, young married life, etc. We are in the process of producing a collection and an anthology of horror stories.
While publishing books on popular subjects that appeal to a wide audience is not new in the Philippines, the Milflores titles are different in that they are written by some of the best writers in the country who had previously not tried to reach out to a wider audience. The quality of the writing is high and a number of these literary titles have sold well and also earned national awards from the critics.
This is in keeping with my view that our postcolonial society has far too many centripetal social forces that channel values and actions toward ever-shrinking circles of class, high-walled subdivisions, clans, and, ultimately, self above all. Such centripetal forces can only create intersections of life that are characterized by exploitation and violence, like when rich movie producers and publishers churn out mindless escapist films and romance novels to exploit poor moviegoers and readers, or when renegade poor policemen kidnap rich Tsinoys for ransom. We need more centrifugal social forces that reach across class barriers to create a common culture and more unified country. Good writers can help by writing books on popular topics that seek to inform and educate, eschewing formulaic writing that panders and stunts the intellectual growth of readers.
Thus we publish literary books on popular topics but we never tell writers to simplify anything for the mass market. In fact, we always select manuscripts where the writer poured everything he/she had into it, for we believe that books with great passion are the best ones, or to paraphrase Simone de Beauvoir, “In a sense, every good book is a cry for help.”
We have often found this passion in young writers writing their first book. We have also often contracted young cover designers and illustrators who are still making their mark. In this way, we obtain the best efforts of writers and graphic artists and we also further narrow the gap between literary titles and mass readership. As I mentioned previously, the SWS survey found that young adults read more books than older ones. But the young dominate the local market for books not only because they read more. We have one of the highest population growth rates in the world at 2.3 percent per year. This means that each generation of Filipinos has been much bigger than the previous one to the point where we now also have one of the youngest populations in the world. Young readers, therefore, dominate the market for books through their sheer numbers.
We continue to actively seek more literary titles in Filipino, the lingua franca of the country. I find our progress in this area too slow, for language is often an emotional issue and it is not easy to convince good writers in English to learn how to write in Filipino and far too many good writers have been educated in English. Nevertheless, we are making some progress and have a number of literary titles in Filipino now.
Humor is appreciated by all Filipinos. This is why most of our literary titles are written in a humorous vein. Though they are funny, however, these titles do not lack in depth. In fact, some of our best-selling literary titles discourse on particular distortions of our postcolonial existence. In Suddenly Stateside, Marivi Soliven Blanco probes sensitive issues like racism against Fil-Ams and the alienation of Filipinos in the U.S. In his award-winning play, “Welcome to Intelstar,” Chris Martinez dissects the cultural distortion wrought by call centers in the country, which are manifestations of continued economic domination by rich Western countries. In some of my cockfighting short stories, I dwelt on the continuing class struggle in the country, the dehumanization brought about by excessive commercialization, and the mindless blanket acceptance of globalization, as defined by the U.S., by our unfeeling political elite that has led to the sacrifice of disadvantaged Filipinos who are far from globally competitive. Despite the generally pro-U.S. attitudes of most Filipinos, these literary titles have sold well because they are funny. As a consequence, their critical discourses have gotten a hearing in an audience that is larger than would be expected.
Knowing that most readers prefer information books, we have actively solicited these manuscripts from our best writers and intellectuals. We have also combined straight information with literature in a number of our titles. Our series on cockfighting mixes theoretical and practical information on cockfighting with short stories that revolve around cockfighting. Sleepless in Manila and My Fair Maladies, literary anthologies edited by my wife, Cristina Pantoja Hidalgo, contain sections with straight information on insomnia and common illnesses. Our latest hybrid literary title is Much I Do About Nothing, by Atty. Onnie Martin. It conveys the basic legal information couples will need if their marriages break up through fictional, and zany, interviews with a host of comic book heroes. All these books have sold well, at least partly due to their information components.
Finally, we try to narrow the gap with readers by devising means to lower the prices of our books without resorting to subsidies or sacrificing our profitability. The most effective way in which we have done this is to break up what might have been a large book into a series of smaller ones that don’t overlap, so that each title can then sell at affordable prices. Though readers might ultimately need the entire series to derive the full benefits, they will have the option to buy the titles one at a time. In effect, they can buy the series in installments, rather than have to forego one large, all-encompassing volume because its price is unaffordable. We did this for our cockfighting series and the prices of the nine titles, at this time, range from P150 to P190 per copy. We also did it for our language series of twelve titles and their prices range from P95 to P195 per copy. Recently, we broke up a thick anthology of flash fiction by young writers into two volumes to lower the price of each book.
2. Selling through alternative outlets. Though book stores are, by far, the best sales outlets for books, nevertheless, their limited number in our country means that a substantial number of potential readers cannot be reached through them. A number of alternative outlets already exist, among them: websites; specialized distributors to libraries, the Fil-Am market in the U.S., and other groups; provincial book fairs; the periodic book caravans to schools by the U.P. Press; the large annual book fair of the Book Development Association of the Philippines (BDAP), etc. We have tried all of these with varying degrees of success in augmenting our sales through book stores. The least successful have been the websites.
One of our interesting experiments was to sell our cockfighting series of books in poultry supply stores where breeders of fighting cocks get their feed and other supplies. This worked very well for a number of years for we found large chains of poultry supply stores in Bicol, the Visayas, and Mindanao. The largest, Pacifica-Agrivet, is owned by the Mercury Drugstore chain, the biggest in the country. We sold many thousands of our books through these chains until their market was saturated and our books stopped moving. Apparently, their customer base is narrower than that of the National Book Stores and the flow of new customers into their shops is much less. However, our success in selling our cockfighting books in these poultry supply stores enabled me to boast to my fellow writers that I was the only one in the country who could sell his fiction in such stores. On the other hand, I also confessed to them that some of the unsold copies were eaten by the rats that proliferated in these stores because of the chicken feed.
We also tried to sell our gay books in gay bars and shops in Malate and our book on malls in the hotel and airport shops. This was hardly worth the effort for it resulted in meager sales. We were marginally more successful in selling our book of children’s stories in some children’s clothing stores in the malls in Metro Manila.
3. Niche marketing. Philippine society has become quite large and complex due to our big population, exaggerated class divisions, age stratification, urban-rural differences, regional cultures and languages, etc. In view of these, all books can now only hope to reach a segment of the market and not the entire market, though, of course, the market segments for each individual book can vary a great deal in size.
We are sensitive to this fact in our publishing. When evaluating manuscripts, we always ask ourselves what market segment the book was written for and how large that segment is. The clearer the market segment of the book and the larger it is, the better the chance that we will publish it, provided, of course, that the writing meets our quality standards. We also base the size of the initial print run of a new book on the size of the market segment it was written for.
We have successfully published literary titles that were written for identifiable market segments like gays, single women, young wives, cockfighting aficionados, insomniacs, Tsinays, mallers, and young adults.
We also try to suit the production of the book—its size, type of cover design, layout, and illustrations—to the tastes of the market segment it intends to reach. Thus, a collection of funny essays on the angst of youth would be designed by young artists. A book on the heartaches and foibles of life as an independent single woman would be designed by young female artists. A book of humorous essays on the gay life in Metro Manila would be designed by a gay artist. And so on.
Finally, we have used the concept of niche marketing in a somewhat different sense—to identify market segments whose needs and wants are not, or are being inadequately, met by local publishing—in other words, gaps in local titles. Then we try to get good writers to fill this gap.
For example, The Milflores Guide to Philippine Shopping Malls, edited by myself, was conceived because despite the immense popularity of malling in the Philippines, no local book on this phenomenon had yet been published. This book contains informative and entertaining essays by 27 of the best writers in the country, many of them major award winners, on 35 malls nationwide.
Nightmare Journeys, a book by an award-winning journalist that tells the stories of Filipinas who survived being trafficked as prostitutes abroad, was similarly conceived by identifying an important aspect of Philippine life for which no local book had yet been written.
4. Efficient distribution. Our distribution system is an important factor in our continuing ability to profitably publish literary titles. Though books are not really a consumer good, nevertheless, they have to be distributed efficiently, much like consumer goods, in order to maximize sales. This is not easy to do, for books are relatively low value items that are retailed in several shelves in many outlets. In our case, as a small publisher with only eight years of operation, this still means the tracking of production, inspection, wrapping, storage, delivery, sales, and collections of well over 300,000 individual books, with different sales prices and bookstore commissions, in several hundred shelves in 158 retail outlets nationwide. Anyone who has tried to do this knows that this massive amount of data can only be processed with the help of computers.
The computer program we have devised, using standard spreadsheet technology, tells us what has happened to every single book we ever produced in the past five years—whether it was sold, damaged, is still on the bookshelf, or is in storage. Our tracking system also enables us to make sure that, almost all of the time, none of our books run out in the book stores, that there are always sufficient copies in every book store to forestall lost sales. This is important, especially in the large National/PowerBooks branches in major cities, where the sales are very brisk during peak seasons like Christmas and school opening in June. For this reason, since our computer monitoring system is dependent on the book store sales reports that are issued only once a month, we often resort to physical counts of our books on the shelves of the largest National/PowerBooks branches in Metro Manila during the peak seasons.
From observing buyers in bookstores, I noticed that there is significant impulse buying of books. This makes attractive covers, good blurbs, and shelf positioning important sales factors. The advantage of a series of books rather than a stand-alone volume is that if the series is displayed altogether on the same shelf, it has a better chance of attracting the attention of an impulse buyer rather than a single volume. This is one of the reasons why Milflores tends to publish entire lines of books, like our cockfighting series, our English grammar line, our series of humorous essays, with identical or similar types of covers, so that they will be more noticeable on the bookstore shelves when they are displayed altogether.
An interesting aside to publishing a series of related books is that, often, the later books in the series tend to sell less than the first ones because of market saturation. The question then arises—for how long should the publisher keep on producing additional titles in the series? The answer, of course, is provided by Business Economics—for as long as marginal revenue exceeds marginal cost. The marginal revenue of each later volume in a series of related books will tend to fall because of declining sales, while the marginal cost of these volumes will be stable or will gradually rise due to inflation. Business Economics tells us that publishers should continue producing new titles in the series for as long as the latest title continues to be profitable, even though it may be much less profitable than the earlier ones, since this latest title still adds to the profits of the publisher in absolute terms. This analysis can also be applied to successive printings of one title, where the sales decline with each new printing and the costs remain the same or increase over time.
5. Minimal overhead. Knowing that book publishing in the Philippines, especially the publishing of literary titles, is quite a risky venture because of the constraints I mentioned earlier, we consciously planned our company to be a no-frills operation with minimal overhead as a major strategy for survival and success. The idea was to concentrate our limited capital on the production and marketing of books rather than on a large staff and office.
We have very few employees and no printing press. We outsource to contractors the design of covers, illustrations, and layouts, and all printing. I edit all the manuscripts myself and we do all the quality control and distribution and collection in-house. The actual retailing is done, usually on a consignment basis, by a large number of book stores nationwide.
Through this strategy, we have been able to achieve rapid growth with a tiny organization, for, though our own staff is very limited, the actual operations of Milflores are augmented by many dozens of authors and contracted graphic artists, the hundreds of workers in the printing presses that successfully bid to produce our books, and the thousands of employees of the book stores that retail them.
Implementation of this minimalist organizational strategy has been greatly facilitated by the advances in Information Technology (IT), like personal computers (which now have remarkable capacities for producing books and documenting business operations and transactions), the Internet (for globally accessing manuscripts and selling books), the fax machines, and cell phones (for doing business night or day outside the office). This is a prime example of the synergy between IT and book publishing, contrary to doomsayers who had predicted the demise of books with the advent of Information Technology.
These are some of the strategies that we have devised to successfully publish and sell literary books in the Philippines.