Friday, June 12, 2009

Price Wars

Booksellers and publishers around the globe are struggling to find a business model that works, some with more success than others. Here in the U.S., all brick-and-mortar booksellers are fighting for survival, even the large companies. Physical bookstores must find a way to compete with the lower cost and increased convenience of online retailers, and many are losing the battle. The same scene is unfolding in other countries.

Ed Nawotka at Publishing Perspectives highlights the ongoing price war between Israel’s two largest booksellers. As Steimatzky (170 stores) and Tzomet Sfarim (80 stores) introduce sale after sale in an attempt to undercut each other’s prices, publishers are grumbling. As Ed notes, Legislator Nitzan Horowitz of the New-Movement-Meretz party thinks price fixing might be the answer, and he’s planning to “submit a bill to the Knesset that will fix prices for the first two years after a book’s publication.”

Is price fixing the answer? As discussed in a New York Times article published some time ago:

Germany’s book culture is sustained by an age-old practice requiring all bookstores, including German online booksellers, to sell books at fixed prices. Save for old, used or damaged books, discounting in Germany is illegal. All books must cost the same whether they’re sold over the Internet or at Steinmetz, a shop in Offenbach that opened its doors in Goethe’s day, or at a Hugendubel or a Thalia, the two big chains.

This scheme has superficial appeal, but the ease of procuring books across country lines in this Internet age may undercut the intent of such legislation. And if a government tries to prop up its legislation by imposing import restrictions, such restrictions are likely to be judged illegal. As reported at the Bookseller.com:
A price fixing system for German-language books imported into Austria has been declared illegal by the European Court of Justice (ECJ). The ruling means Austrian booksellers will be able to match the price the books are sold at in neighbouring Germany, or even sell them cheaper, raising fears that Austria could become a back-door for cheap books into Germany.
Without a doubt, we are living in interesting times for the book world.

1 comment:

rhapsodyinbooks said...

I think you are right; it would be difficult to control.

Very interesting issue!