Bankruptcy threatens publishing industry : Song-In Books’ collapse leaves small publishers scrambling to survive

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Bankruptcy threatens publishing industry : Song-In Books’ collapse leaves small publishers scrambling to survive

Published: 08 Jan. 2017, 20:21

Song-In Books, the country’s No.2 wholesale company in the publishing business, went bankrupt, leaving hundreds of small- and mid-sized publishers and bookstores in debt. [YONHAP]

Korea’s publishing industry has been in shock since the new year.

Song-In Books, the country’s No. 2 wholesale company, went bankrupt, leaving publishers with damages worth 40 billion won ($33.6 million), and bookstores with damages of about 20 billion won.

Song-In, which was established in 1959, announced on its website on Jan. 3, that “due to worsening business management, we concluded that we cannot revive the company and decided to begin the liquidation process.”

A “wholesale company” in the Korean publishing industry helps small- and mid-sized publishers - who often lack the resources for sales and marketing - get their books on the shelves of bookstores, often small ones, across the country.

The website of Song-In Books [SCREEN CAPTURE]

Major publishers and big name bookstores, like Kyobo, don’t really rely on the middleman like Song-In, but that is not the case for small- and mid-sized businesses. In fact, Song-In’s clients include 2,000 publishers and about 500 are small and mid-sized companies, some of which are one-man operations.

Readers may not grasp the gravity of the issue or feel the effects immediately.

But what this means is that small- and mid-sized publishers as well as small bookstores may have to close their businesses. If only big name book stores and online book stores survive, the choice of books could shrink as only books that meet the tastes of those companies will be available to readers.

“There are hundreds of one-man publishers that have been relying on Song-In solely for distribution,” Seong Ui-hyeon, the vice president of Korea Publishers Society, said. “As for small book stores, those in Gangwon, Jeolla and Chungcheong have a particularly high reliance on the company.”

Even more worrisome is that printing houses could also suffer financial damage.

This is because of an old custom of doing business. Song-In Books would issue promissory notes when they purchased more than 100 books from small- or mid-sized publishers. The publishers would strike a deal with printing house using these notes. Now that the notes have become useless, printing houses will suffer as well.

Critics say, however, that the bankruptcy of wholesale merchants in Korea’s publishing industry was a preventable disaster.

For starters, Koreans are reading less. In the fourth quarter of 2015, two-person households spent just 16,623 won on books every month. To grab a larger slice of the pie, big-name bookstores and online bookstores have been aggressively increasing their business.

“When one big name bookstore opens, it’s said that ten small bookstores nearby close,” one insider commented. “As large bookstores grow, sales of wholesale companies decrease. This trend has been going on for the past ten years.”

Asked about countermeasures from the government-level, the Ministry of Culture, Sports and Tourism said that as Song-In is a private company, there is nothing it can do.

But as critics called on the government to intervene, the culture ministry announced Friday evening that they will help affected companies take out loans at interest rates between one and two percent starting this week.

BY KIM HYUNG-EUN
[hkim@joongang.co.kr]