Book price-fixing: good, bad, or just weird?
O'Reilly Radar's Peter Brantley has a great rumination up today about the economics of print publishing in Germany (where all new books , used, new, damaged or whole, have to be sold for the same price) and Switzerland (where this stricture has been dropped).
Here then is a meaty nugget, because it discloses that economic policy impacts not just the range of commerce in books that prevails within an economic zone (such as a country); economic and social policy also impact what gets read, and by whom. If one can take the question crassly, then it devolves to the consideration of whether should our economic and social policies encourage a diversity of reading, or encourage the greatest magnitude of reading.LinkIt is easy to oversimplify this argument: a nation that through its economic doctrines encourages the development of an oligopoly of bookstores begets a readership of mass-market book consumers, vs. a nation in which multitudes of small bookshops thrive encourages the development of a richer cross-section of arts and science. Historically this has been tied up in questions of selection and curation: indies stock a smaller range of titles, but with either 1) greater in-store variation across the types of authors and publishers represented, or alternatively 2) deeper exposure of a specific type of literature (e.g. show me a B&N that can match the collection of City Lights in San Francisco, or St. Mark's in New York).
the latest
latest episodes
I lived in Germany back in the 90's and can say that used books are available for less than new ones. The link from your post confirms this:
"Save for old, used or damaged books, discounting in Germany is illegal"
Used books can be sold however and at whatever price the owner feels appropriate in Germany - books are still property and have no licensing EULAs! Germany is not only still a country of readers (despite a societal dumbing-down generally blamed on the standard scapegoats: television, video games and so on), it also has hugely thriving second-hand book stores and monthly flea markets in many places exclusively for books. The price system, as already pointed out, only applies to new books.
Shmuel ninjaed me.
D'oh! Thanks for the correx!
Neither St. Marks nor City Lights can hold a candle to Powells in Portland Oregon. That being said, there are no other bookstores in the country than those three that I would rather spend the night in...
it sounds like a good system, but i bet you'd be hard pressed to find a bookstore with table after table of books about angels.
The UK also prohibited discounting of new books until the mid 1990s.
Since then, the large supermarket chains have started selling the best-selling books at a massive discount. For example, the latest Harry Potter was sold at around £8 in Tesco and Asda; RRP was ~£18. As wholesale price was allegedly ~£10, it seems it was regarded as a loss leader.
I suspect this has put a dent in the revenue of large and small bookshops alike...
Some years ago, when, thanks to the Interwebs, I discovered that the German publishers took one English original book from my favorite series, split it into four parts and sold each part for a good deal more than the original, I stopped buying German books altogether, and the book industry got a place of honor on my personal sh*t list ahead of the the music industry. Thankfully, English books are not price-fixed and readily available for ordering online. After a bit of a learning phase, non-translated books are much better anyway.
Given how the world usually works, most of the money gained by fixed prices will simply get pocketed by the industry, and much of the rest ends up in artsy shmartsy books that wannabe intellectuals line their shelves with, but never read.
On the other side, fixed book pricing allows you an enormously clear calculation: printing, marketing, the author, the translator and so on.
I'm quite sure panic would ensue in Germany if this system was changed.
I'm sorry to curb your enthusiasm, but price-fixing in no magic bullet against the decline of small bookshops. Here in germany too, the big chains (Thalia, Hubendubel + a few others) are taking over the market right now, smaller bookshops fell on hard times and seem to be bound to disappear - price-fixing or not.
On a personal note: when say I want to have a certain book, in fact I don't. What I want is its content, not a kilogramm of paper to go with it. Distribution costs in the web should be a matter of less than 10 cents per book ( paying for staff, equipment and bandwidth) - it's the author who should get the lion's share of the price (something in the order of 1-2 Euro), not people who do me a "service" (printing books) that I don't need, that I don't want, that pollutes the enviroment. However: When it comes to making a present, that one kilogram of paper to go with the books content sure comes in handy. ;)
I'm afraid the small bookshop will go the same way as the blacksmith or the taylor, they will disappear for the most part.
France applies a similar policy for new books.
Such restrictions are in fact in place to supposedly protect small book shops from large ones or supermarkets.
The reasoning is that large book store chains and supermarkets have enough financial resources and incentive to either muscle the publishers or dump their margins to offer books at a reduced price; an option not existing for small book stores who barely make a living if they try to have a logistic tied neither to publishers or professional associations.
The real effect is to force book store owner to lose their independence if they plan on making any profit at all and doesn't prevent some chains to drop prices on the guise of "compensating" for VAT on new cultural products as it seems tolerated and they have the financial capacity to pay the eventual fines without having to think twice about this policy.
City Lights is great... if you happen to live nearby. Same for about a dozen other bookstores in North America. For the rest of us who grew up far away from these few bookstores, the rise of B&N and Borders was a *huge* change for the better. Remember, back then your choices in most places were B. Daltons (at the mall) or a small, undiscounted downtown bookstore, usually with nowhere to sit.
The big box bookstores cleaned up because of how expensive, inhospitable, and limited the stores they replaced were. You can still go to City Lights or Powells, but now everyone else has access to bookstores with huge selection, reasonable prices, and comfy seating.
What I find infuriating about the NYT article is this,
What results has helped small, quality publishers like Berenberg. But it has also — American consumers should take note — caused book prices to drop. Last year, on average, book prices fell 0.5 percent.
This factoid by itself is meaningless without knowing just how expensive or cheap books in German are compared to the United States. Obviously to take an extreme example, if prices fell 0.5 percent last year but the average price for a book in Germany was twice that in the United States then we wouldn't be so impressed. Or, if the average book price in Germany is half that of American books, then we'd be very impressed.
But just throwing out a small year-to-year decline in average prices without providing any context is plain stupid and more than a little deceitful.
It's right that Thalia and Hugendubel are taking over the market but there are still quite a lot specialist bookstores.
Not sure if there's one just for angels, but I know a store for crime thrillers and whodunnits, some bookstores for SF and Fantasy only, several esoteric bookshops, probably even more for gay and lesbian literature and even a bookshop specialising in modern American literature. All in walking distance.
So it's not that bad, yet.
I'm not sure that either price-fixing or the rise of the chains explains that much of the variation between countries.
I grew up in Australia (which used to have book price-fixing but I think now doesn't) and now live in Seattle.
There is really only one bookstore in Australia ('Gleebooks' in Glebe, Sydney) that would beat 'Borders' in Seattle even in a moderately specialised subject area. Even so, I don't use Borders much because I work a few blocks from one of Seattle's two good bookstores.
On the other hand, Borders now has stores in Australia, and the one I have visited in Melbourne isn't anywhere near as good (which is why nice smaller stores like 'Readings' still survive). AFAICT the bookstore situation in Auckland, NZ, is even worse (both pre- and post-Borders), though I may just have not found the right place.
It's surprising that Auckland and Melbourne, both with larger populations than the Seattle area, can't support a better bookstore. Whatever is wrong with the Aus/NZ book market seems to be pretty resistant to changes in market structure. Presumably it's something to do with distance, but I don't really see why.
I find it amusing that "free market" advocates take their opinions as truth (gov't intervention drives prices up), even when reality proves them wrong (it actually keeps them down overall). It's true in this case, it's also true in the case of utilities privatization, which is driving prices up and quality down in Europe.
I just wanted to add that the motivation behind this regulation in France is that books are considered cultural object and not mere commodities; and that bookshops provide a (cultural) service to the community beyond just generating revenue.
Egads. Another beatnik reference: City Lights founded by Lawrence Felinghetti. How about a reference to Dorothy Parker and the Algonquin Round Table or some other literary clique on occasion?
I'm still trying to figure out what the New York Times means when it says that all new books have to have the same price:
Do they mean all copies of a given title have to be sold at the same price? Because what they are saying doesn't make sense. Also, by "price" do they mean retail, wholesale, or both?How can I trust an article that leaves out such basic information?
The next paragraph is worse:
Excuse me? What I'm seeing in that article is that Germany has a law about all books costing the same, and last year German book prices fell one-half of a percent. I'm not seeing any reason why the first should cause the second. The NYT certainly doesn't give us one; it just lets the reader assume that a causal relationship exists.I won't try to list all the factors that influence book prices. It's very complicated. Therefore, if there's a mechanism at work that so clearly connects the single-price law to that slight drop in book prices that it warrants dismissing all the other possible influences on book prices, the NYT should tell us what that mechanism is.
They don't; so damned if I'm going to believe a word of it.
If prices were forced to remain the same throughout the market, wouldn't that help big box bookstores since they could still carry a greater number of titles? Variety becomes the focus of their sales strategy rather than pricing.
On the other hand, without price fixing, I think there would still be a market for small publishers and there would be a higher demand for specialized bookstores as demonstrated by the Long Tail effect, no?
I do not believe we should attach moral value to books, or even certain types of books (thrillers, sci-fi, classics etc.)over other commodities. Market controls will ultimately lead to distortions and to declining consumption as other products or methods of delivery of literature, education, information or entertainment takes over.
I never understood why books were so expensive in Sweden (population 9 million) and cheap in Latvia (population of Latvian speakers around 1 million).Might be some kind of government control in the name of "culture".
The more books are read, the more people read, the higher average literacy, the better for society.
@ #19: The law is about discounts. Publishers can set prices any way they want, but bookstores can't. They have to sell to the price determined by the publisher.
I have great sympathy for book price fixing for a number of reasons.
First of all, in my previous life I managed an independent bookstore in a city full of bookstores (in Canada) which, after the arrivals of general discounting online and in newly arrived superstores and other outlets, saw the demise of most of the independents and the diminishment of those who survived. The discount skimming of the bestsellers, and the forced give away of Harry Potters, virtually eliminated the quick money that supported the selling of lower profile products. I saw professional salaried positions of respect turn into jobs that barely paid the rent. Discounting was simply a means to move money from the pockets of the worker into the pockets of the consumer.
It is symptomatic of the consumer culture as a whole which undermines any sort of value for community. One last issue I have with it is that it is environmentally unfriendly. The more we transport ourselves to take advantage of discounts, or have things shipped instead of our local store, or outsource the production so that we can discount even more, the more fossil fuels are being used, and the more traffic infrastructure required.
Bit of a rant I know but I really miss my little old bookstores all over town.
"I find it amusing that "free market" advocates take their opinions as truth (gov't intervention drives prices up), even when reality proves them wrong (it actually keeps them down overall). It's true in this case, it's also true in the case of utilities privatization, which is driving prices up and quality down in Europe."
I find it amusing that you reach a conclusion completely unsupported by the article. Nowhere do we actually learn the cost of books in this price support scheme as compared to a non-regulated scheme. Instead we learned that prices declined by 0.5 percent last year which doesn't really tell us anything by itself.
Also, I'm curious if publishers have to sell books at the same wholesale price to everyone, or if chains can get discounts because they purchase at a higher volume than the independent stores.
Essentially what you're doing here is giving a huge windfall to publishers for bestselling books. Whereas in the United States these would be sold through at deep discount -- thereby saving the consumer money on the latest Harry Potter book -- in Germany they're transferring the difference to the publisher.
I mean, I guess there's room for the socialists to join the fundies in hating Harry Potter for destroying their values, but I liked buying it at a steep discount. I'd rather spend the money I saved on food or condoms or something.
Interesting post at bottom of O'Reilly story on prices of NYT bestseller list on Amazon.com vs. Amazon.de,
"Inspired by J's question I compared the average price for the top ten bestsellers on amazon.com and amazon.de (I would directly have compared the NYT list to the Der Spiegel list, as the would be even more relevant, but the Spiegel list is available only for 50ct). The result was:
amazon.com: 12.87USD
amazon.de: 23.68USD
Well, this is'nt exactly proving anything, but it gives an idea."
Also, its unclear where the stats the NYT uses for total # of titles comes from, but it appears to be inaccurate. NYT claims 172,000 titles published in U.S. in 2005.
But Bowker estimates there were 285,000 new titles published in U.S. in 2005.
So our population is 4 times as large as Germany and we publish 3 times as many new books. I guess we might be concerned that we're not publishing 4 times as many books, but I think it undercuts the implication in the article that the price fixing regulations are inherently better at promoting a large number of book titles vs. an unregulated pricing structure.
@sexyrobot: While diversity is generally a good thing, I'm not sure a paucity of angel books is necessarily bad.
Well, according to Paul Collins, the US Supreme Court repealed the ban on minimum book pricing this summer. Whether this will ever result in a Germany-like new book landscape remains murky.
Hmm, HTML skillz rusty. Here's the link to Paul Collins' post:
http://weekendstubble.blogspot.com/2007/07/revenge-of-doc-miles.html