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Vol.10 : Paul Riley (Oxford University Press Japan)
May 2, 2007
E-money soars as retailers, railways climb on board
Abe, Bush reaffirm Japan-U.S. Ties
Citigroup bags Nikko Cordial
Nissan's profit sags amid stale offerings
Expanded coverage: Pet's stress level shows in color of new patch
wholly-owned：完全所有の
monograph：特定研究分野の論文
K through 12：幼稚園から高校３年生まで
support ancillaries：補助的付属品
（ P: Paul, R: Russell ）
| R : |
Well, you are the head of Oxford University Press in Japan and obviously that's a company with a great - well, a company - that's one of the questions we'll come to. That's an organization with a great brand name, but what does Oxford University Press actually do and specifically what does it do in Japan? |
| P : |
Okay, Oxford University Press is a department of the University of Oxford, and our mission is to further the University's goals of education and research and culture world wide through our publishing.
We also have a very strong commercial side in that we provide the university with a lot of the money that funds their various investments and a lot of their - the good works the university does. Unlike many American universities, in particular Oxford actually has a rather poor endowment, but they do have the press which gives them, you know; a handsome contribution every year.
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| R : |
So the press is a profit center for the university. |
| P : |
We do - we are self-funding. In other words, we publish about 5,000 titles yearly and the money that we generate from our publishing funds our continued research and new publishing as well as any surplus we give to the university to fund their various projects, but we are a wholly owned department of the University of Oxford.
In Japan, we are mainly a sales and marketing branch. We import books that are produced either, primarily in Oxford or in New York which is our American Publishing Center.
We - and then we - we pick the books that we want to sell and we think are appropriate for the market. And then we produce promotional pieces and different material to make them more appropriate for Japan, and then we sell them mainly through wholesalers and directly to the large book retailers, the Maruzen's and Kinokuniya's, etcetera.
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| R : |
I see. And in Japan the books that you sell are mostly English language teaching related and academic books, is that correct? How does that break down? |
| P : |
Oxford University Press has five divisions. We have a journals division. We have a, what we call academic books, which are the monographs, mainly academic higher education material, science, chemistry, medicine. We have Oxford Education, which is UK Schools' publishing and they are making, you know, K through 12 and children's trade books for the - primarily for the UK public schools.
We have the international division, which are the publishing centers that are in the larger branches. So we have - we, for example, publish in Chinese out of our Hong Kong office. In Hindu, out of our Indian office, and we publish schools books for Australia and South Africa and Canada.
And then in Japan, our primary business would be ELT, which is English Language Teaching. So they are the five divisions and this office represents all of those divisions, although for Japan probably about 80% of our business would be English Language Teaching as opposed to the academic monographs or the books that are primarily for native speakers.
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| R : |
And the market here is an imported book market. The books that you are selling are primarily books that were published in New York or in Oxford and then resold here in Japan. |
| R : |
Is that correct? You don't create Japanese language publications? |
| P : |
We do very little of that. We do create what we call support ancillaries. These might be materials that allow our books to be more accessible to the Japanese market, maybe a teacher's guide in Japanese or, you know, a test package or something that is specific to the Japanese market, but for the most part, yeah, the core materials are published overseas and sold and we import and sell them here and typically they will be sold in other markets as well. |
markup：利幅
transparency：透明性
high-priced market：価格設定が高いマーケット
（ P: Paul, R: Russell ）
| R : |
How would you describe the market - publishing market in Japan... |
| R : |
...and Oxford's place in it? |
| P : |
So, the publishing market in Japan, again it tends to be a very good market, again it's high prices, and Japan has a book culture. The interesting thing is that maybe people who aren't involved with the book market don't realize is that western books and Japanese books actually work on a different system.
Every book - on the back of every book you have an ISBN, which is a unique number for that book, and that's how you trace books and that there is a bar code that matches that ISBN, and anywhere you go in the world that would be...
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| P : |
...the same except for Japan. Japanese books have their own ISBN or JSBN. ISBN is International Standard Book Number. Japan has their own version of that. That's why when you typically go into a large bookstore in Japan, the foreign books are on the sixth floor, back in the corner, because the bar coding system is actually different for all - from all of the other books in the bookshop.
So, our place in the Japanese book world is first of all defined by the fact that we have an ISBN rather than a Japanese SBN And, therefore, we are segregated into that segment and so are all of the other foreign books. Within that world, you break that roughly, I would say, into trade books- and these are the Harry Potters and the, you know, the novels.
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| R : |
How would you like to see the market for publishers develop - foreign publishers develop in Japan, not just educational publishers like Oxford, but for any kind or any foreign publisher who is interested in Japan as a market? How do you see it developing, how would you like to see it develop? |
| P : |
Well, I think the ISBN issue and the whole fact that segregated the market and segregated the distribution channels, has made it somewhat more difficult to compete. I wouldn't say its necessarily discriminatory, but it just - it's made - because it's a separate system that's worth a proportionally much smaller share of what's available, a lot of the big companies, you know, find dealing with foreign books is a bit of a nuisance.
I mean, why - you know, ‘we better put a sticker over the bar code so that it reads on our system or we have to think of a markup, okay, it sells for $10 in the US, therefore, we need to price it at 1,500 (sen-gohyaku) yen here in Japan...', and it just, you know, that would be very nice if we could do away with some of those issues.
I think a second thing that would certainly help our business is if people would have more babies, you know, to make it blunt. In education publishing what you've got is, you know, population or birth rates that peaked in about 1973-74 and have been declining 2%-3% year on year to about, I think they bottomed out a couple of years ago.
But, you know, in university it's pretty well known now that anyone who wants to go to university can. It's just if you have enough money to pay, you can go. What that's done is made schools much more competitive and it's lowered academic standards.
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| R : |
So, more babies is the answer. |
| P : |
To me, yeah, more babies would be fantastic. |
| R : |
Well, I'll see what I can do... |
| R : |
What about the Internet? Is that something that's affected publishing in Japan or do you see affecting publishing in Japan? |
| P : |
It has very much so, but in maybe an indirect way or in ways that are different from what might be imagined. I think probably one of the biggest effects it's had is on the distribution and transparency.
When I say transparency, Japan was a very high-priced market and for many years much, you know, double, triple the price maybe of Korea or Thailand or other markets in Asia and that transparency could be - you couldn't see that those prices were different unless you were really looking. Now, it's very easy to see that a book that costs, you know, ¥2000 here actually only costs about a ¥1000 elsewhere.
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| R : |
One last question though is, are you a reader of "The Nikkei Weekly?" |
| P : |
I do read The Nikkei Weekly. I guess I was first introduced to it - it was at the Japan Economic Journal... |
| R : |
Japan Economic Journal? |
| P : |
...when I was at Isuzu Motors years ago, and what I like about The Nikkei is it gives me a good roundup of news. Unfortunately, although I speak Japanese pretty well, my reading and writing is not great. I know what it is, it's about the fourth grade level, because I have a son, who just entered junior high school, and I found it very difficult... |
| P : |
...to keep up with him and I could help him with his homework till about the fourth grade and so that's where I fossilized, to use an industry term - my language is at the fourth grade level. |
| R : |
So, The Nikkei Weekly helps out there. |
| P : |
It does, it does. It will give it to - give you all the summary of what you need to know in English and I think it's a must-read for any executive, who wants to do business in Japan. |
 Ken Siegel / Managing Partner
Morrison & Foerster LLP 
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