FIXED BOOK PRICE SYSTEM
IN GERMANY
International Forum on Fixed Price Law in Rio
Joachim Kaufmann
Representing:
Bonnier Books and Carlsen Publishing in Germany
German Publisher´s Association (Börsenverein)
International Publisher´s Association (IPA)
WHAT TO EXPECT?
• The German Book Market
• History of Fixed Prices in Germany
• Current System for Fixed Prices
• International Overview
• Market Effects of Fixed Prices
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THIS IS BRASIL &
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THIS IS BRASIL & THIS IS GERMANY
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THIS IS GERMANY
80 million Germans do not only love football,
they also love books
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SOME FIGURES ABOUT THE GERMAN BOOK MARKET
• Size 10 bn. Euro (30 bn. Reais)
• Third biggest book market of the world
• 1,3m titles
• 100k new titles per year
(without self published books)
• About 5.000 booksellers
• About 20.000 publishers (8.000 with more than 10 titles)
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MARKETSHARES (TRADE CHANNELS)
IN PRODUCT GROUPS
Sciences, Medicine,
Technology
4%
NonFiction
9%
Travel
6%
Education
9%
Social Science,
Law, Economy
3%
Arts, Music
5%
Guidebooks
14%
Adult Fiction
34%
Childrenbooks, Young
Adult Fiction
16%
•
German Publishers and Booksellers Association, founded in Leipzig in 1825
(similar to Brazilian Book Chamber)
•
Our members represent all sectors of the book industry:
•
Publishers
•
Retail Booksellers, Antiquarians
•
Wholesalers
•
5.600 members (companies)
•
Organizes:
•
•
Frankfurt Book Fair
•
Peace Prize of the German Book Trade
•
German Book Prize …
Custodian of the Fixed Price System
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HISTORY OF FIXED BOOK PRICES
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HISTORY OF FIXED BOOK PRICES
IN GERMANY
•
1888: fixed retail prices were incorporated into the statutes of the „Börsenverein“
•
After World War II Germany divided in four occupied zones, no possibilities to maintain
this system
•
1958: anti trust law includes a paragraph permitting publishing houses to fix book prices
•
1965: Börsenverein introduced a contractual book price system which had to be
„watertight“, meaning publishers must bind EACH vendor to sell at the price the publisher
has set
•
Börsenverein introduced „Sammelrevers“ (umbrella agreement covering a number of
individual price-determining contracts)
•
1993: creation of the European Union – lead in the following years to discussions mainly
about the treatment of cross-border sales within the homogeneous linguistic area of
Germany, Austria and Switzerland
•
2002: Price Fixing Law come into force
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WHAT IS REGULATED BY THE LAW?
• Publisher must set retail price for each book
(including ebook, music scores, maps, globes - not audio books, calendars)
• Prices may be changed by publisher
• Prices may be cancelled after 18 months
• Different editions of same work may vary in price
• Limited types of discounts (high quantity, series, subscription, libraries)
• Mandatory fixed discounts for schools
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POLITICAL ASSUMPTIONS/BELIEFS BEHIND THE
SYSTEM OF FIXED BOOK PRICES
1.
Books are inevitable for our society´s and individuals´cultural development
2.
A strong network of book stores with a great variety of books would be
most effective for enhancing the distribution of books as an object of our
society´s culture
3.
The system of fixed book prices is the best instrument to achieve such a
network
All major German political parties (conservatives, social democrats,
green party, liberals, socialists) strongly support that law
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EFFECTS ON THE INDUSTRY
• Booksellers of all sizes profit from calculable margin on bestsellers
• Retail competition for selection, variety of books, customer service, reading
acitivities – not mainly for price
• No destructive competition for brick&mortar booksellers regarding the prices
of only a few bestsellers, offered by supermarkets, internet retailers, other
vendors outside book industry
• Bestselling books allow publishers to „cross-subsidise“ other works
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BENEFITS FROM A CULTURAL PERSPECTIVE
Dissemination of Culture
• Wide variety of books: 1.3 million titles in print
• Large range of small and large publishing houses
• 20,000 publishers in Germany
(of which 60% have less than 10 titles available)
• Efficient logistics system
• Wholesalers have around 500,000 titles on site
 97% of all orders can be fulfilled by the following morning
• Strong network of about 5.000 book shops promoting diverse and colourful
range of books
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FIXED BOOK PRICES IN OTHER COUNTRIES
Very long tradition
Recent
•
Denmark 1830
•
Spain 1975
•
Germany 1880
•
Portugal 1996
•
UK 1900 (until 1995)
•
Italy 2005
Move from contract to law to avoid anti-trust issues
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OVERVIEW OF CURRENT FIXED PRICE SYSTEMS
COUNTRY
PAPER PAPER BOOKS FIXED PRICE SYSTEM DETAILS
DURATION OF APPLICABILITY
LEGAL BASIS
FIXED
PRICE?
ARGENTINA
Yes
Law
18 months after publication
10% during book fairs, book
festivals; 10% for schools and
libraries, 50% for public entities.
AUSTRIA
FRANCE
Yes
Yes
Law
Law
5%; 10% for libraries
5% (consumers), 9% (libraries)
GERMANY
GREECE
ITALY
Yes
Yes
Yes
Law
Law
Law
2 years after publication
2 years after publication, 6 months after
last supply to booksellers.
Minimum 18 months
2 years from publication
20 months after publication and 6 months
from last bookstore purchase
JAPAN
Yes
Resale Price Maintenance
Agreements
It depends on the agreement
LEBANON
Yes
Decree of Ministry of
Economy
NETHERLANDS
NORWAY
Yes
Law
Yes
PORTUGAL
Yes
Agreement between
Until 30th April the year after publication.
publishers and booksellers’
ass.
Law
18 months
SLOVENIA
Yes
Law
6 months
SOUTH KOREA
Yes
Yes
Law
Law
18 months
2 years after publication, 6 months after
distribution in bookstores.
SPAIN
Publishers can reduce prices
every 6 months
MAXIMUM DISCOUNT
EBOOK IF YES FOR TEXTBOOKS
FIXED BOTH, SAME INCLUDED?
PRICE? SYSTEM?
Yes
Yes
Yes
No
No discounts
10%
15%; 20% for books sold during
Book fairs or trades fairs.
Yes
Yes
No
Yes
Yes
It depends on the agreement
No
20% to schools, distributors and
booksellers.
No
Yes
5-10% discount for students.
No
No
12.5 % for book shops, 20% for
libraries.
Yes
Yes
No
10%; 20% for libraries and during
book fairs.
0%; 20% only for book fairs, book
series and subscriptions.
19 %
5%; 10% for World Book Day and
Book fairs, 15% for public entities
No
No
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
No
No
No
Yes
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SWITZERLAND
• Fixed Book Prices until 2007, referendum in 2012 decided against a law for
fixed book prices
• High discount for bestsellers, in general higher prices for all other books
(no good figures due to currency matters)
• Amazon delivers from Germany and sells with (at least) 20% discount for
ALL books
• More and more independent book stores had to go out of business, the two
biggest book chains („Orell Füssli“ and „Thalia.ch“) merged in 2013
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COMPARISON GERMANY VS. UK
Germany (Fixed Prices)
UK (Net Book Agreement until 1995)
•
Number of independent bookstores: 4.038
•
Number independent bookstores: 987
•
Marketshare independent bookstores: 31 %
•
Marketshare independent bookstores: 3%
•
Average retail price: 10,56 €
•
Average retail price: 7,70 GBP (10 €)
•
Marketshare Amazon print books: 14,9%
•
Marketshare Amazon print books: 27%
•
Marketshare Amazon e-books: 46 %
•
Marketshare Amazon e-books: 84%
According to „Buch und Buchhandel in Zahlen 2013“ & GfK
mediacontrol
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According to several sources like Nielsen, Bowker …
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SALES CHANNELS UK VS GERMANY
Channel share of volume within format
100%
90%
26
31
4
12
4
8
80%
70%
60%
50%
40%
6
14
31
30%
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
20%
10%
21
7
3
33
0%
Germany 2013
UK Jan-Jun 2014
Internet-only
retailer
Book
club/direct
Other shop
Supermarket
Bargain
bookshop
Independent
Chain
bookshop
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AVERAGE SALES PRICE VS. AVERAGE
RECOMMENDED RETAIL PRICE IN UK
£11,000
£10,5000
£10,000
9,86
10,01
10,04
10,14
10,12
10,27
10,47
10,52
10,47 £10,56000
£9,5000
£9,000
£8,5000
Germany 8,28
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
£8,000
£7,5000 7,78
7,61
7,57
7,48
7,43
7,51
7,59
£7,000
2004
7,53
7,49
2005
2006
2007
2008
2009
2010
2011
2012
ASP
7,7
2013
Average RRP
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SUMMARY
• A Fixed Price System does not lead to higher prices in average, only
bestsellers are not that much discounted
• This saves a countrywide distribution, supports cross-subsidization and
mainly helps booksellers to be able to compete with pure E-Commerce
companies and supermarkets
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QUESTIONS?
MUITO OBRIGADO!
[email protected]