Indonesian conglomerate Kompas Gramedia’s book publishing unit is optimistic that blockchain technology can help it fight persistent online content piracy, as it also works to overcome challenges including lifting reading levels and reducing regional pricing discrepancies in the sprawling island nation.
The company’s storied history began in 1963, and six decades later it has eight business pillars: retail and publishing, media, education, event and venue, printing and packaging, property, hospitality, and digital. It has a network of over 100 Gramedia stores selling books and other goods including stationary across Southeast Asia’s largest economy.
Adi Ekatama, publishing director of the company’s Group of Retail & Publishing (GoRP) division, is responsible for six book publishers including Gramedia Pustaka Utama (GPU)—the largest and oldest and which will celebrate its 50th anniversary in March. It has produced over 25,000 books since its founding in 1974.
GoRP published 1,865 books last year, compared to 1,912 titles throughout 2022.
Kompas Gramedia’s books have gained international prominence and some have been translated into English, such as Eka Kurniawan’s magic realism novel “Lelaki Harimau,” or “Man Tiger,” published in Indonesian in 2004 and English in 2015. Indonesia in 2015, meanwhile, was a coveted guest of honor at the Frankfurt Book Fair, the world’s largest. And it was the “Market Focus” country at the London Book Fair 2019.
Adi told Nikkei Asia that while the company can meet demand for books, various threats loom over the industry, including book piracy. Adi said finding pirated books in Indonesia’s online marketplaces is “really easy” due to “lack of regulation.”
According to a 2021 survey by the Indonesian Publishers Association (IKAPI), around 75% of more than 130 publishers surveyed found their books were pirated and sold, Kompas newspaper reported in May last year, citing the survey.
“We cannot depend on marketplaces or the government to create regulations,” Adi said in an interview. “After we reported it [to marketplaces], [the books] were taken down, but nothing was done. The sellers were not punished, they just created new stores.”
Indonesia’s copyright law, most recently updated in 2014, stipulates an array of penalties for violations, including fines and imprisonment. The European Commission, in a report in May, said the country has taken steps to beef up the protection of intellectual property rights (IPR) and enforcement, “including curbing piracy and counterfeiting.” But it added, “IPR enforcement remains a source of serious concern.”
The Office of the United States Trade Representative, meanwhile, places Indonesia on its Priority Watch List for intellectual property rights. Indonesia’s Directorate General of Intellectual Property (DGIP) said in a news release in October of 2022 it is cooperating with local e-commerce site Tokopedia to “eliminate counterfeit goods on the marketplace platform.” DGIP said that the initiative is in accordance with “the government’s efforts to remove Indonesia from the Priority Watch List.”
Market analytics provider Euromonitor International said in a November report that market demand for Indonesian book publishing was USD 712 million in 2022.
Adi said blockchain could be utilized to reduce book piracy’s impact on GoRP.
“NFT can be quite useful for writers because it shows proof of the authenticity of [intellectual] property [rights],” he said, referring to non-fungible tokens (NFTs). He added the group was in talks with several industry players to develop the technology.
“Just put a QR code on a book, then the buyer of the book [could] scan the QR code,” he said. “The reader’s data [then] has been entered into the blockchain. [The book] already has its own unique code. If it turns out [the pirated version] is being sold on a marketplace, we will already know who the source is.”
Other challenges include the country’s geography—being the world’s largest archipelagic state ranging across 38 provinces—also makes it harder for GoRP. “Indonesia is very huge, there are many areas we have not yet explored,” Adi said.
With some Indonesian provinces being less developed economically, including due to Java-centric development under former president Suharto’s New Order dictatorship throughout much of the second half of the last century, logistical costs went up when transporting goods to places outside the most populous island.
“The prices of books sold at Gramedia stores in Jakarta and Papua are different,” Adi said, referring to Indonesia’s capital and easternmost region, respectively. “There are [distribution] zones, and logistics cause price differences.”
The Asia Foundation, a San Francisco-headquartered nonprofit international development organization, wrote in August that “a lack of access to interesting reading materials” contributed to low literacy rates among Indonesian children.
The Organisation for Economic Co-operation and Development in early December released its most recent Programme for International Student Assessment results—which measured 15-year-old students’ reading proficiency and ability in other subjects in 2022. “Some 25% of students in Indonesia attained Level 2 or higher in reading,” the OECD said in a fact sheet. That was far below the OECD average of 74%. The PISA test measures six levels, with the second described as the basic level of ability.
As a means of closing inequality gaps, Adi says one solution is holding clearance sales at its various shops in which some older titles are priced from IDR 10,000 (USD 0.65) a copy. The company has also invested in more digitalization efforts, including through the Gramedia online store and presence on local e-commerce platforms, boosting physical book sales in unserved areas.
Meanwhile, the proliferation of social media influencers has also affected Kompas Gramedia’s business.
“It is really easy for people to write and publish their books independently, especially influencers, celebrities or famous figures who already have lots of followers,” he said, referring to the rise of self-publishing platforms. “That is a big threat we also need to pay attention to.”
With advancements like artificial intelligence, Adi said he and his colleagues will “explore” such technology for potential tasks ranging from helping editors with their daily manuscript work to ensuring optimal book distribution and determining what books to publish that align with market interests.
Eventually, Adi said the conglomerate, with over 19,000 staff in Indonesia, “had the greatest responsibility for the progress of the Indonesian book industry” and to contribute “toward the growth of Indonesian society’s reading interests.”
“It is very important for us at Gramedia that we can make books even more popular and accessible,” he said.
This article first appeared on Nikkei Asia. It has been republished here as part of 36Kr’s ongoing partnership with Nikkei.