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International Forum on Fixed Price Law in Rio
Joachim Kaufmann
Representing:
Bonnier Books and Carlsen Publishing in Germany
German Publishers Association (Brsenverein)
International Publishers Association (IPA)
FIXED BOOK PRICE SYSTEM
IN GERMANY
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
INTERNATIONAL FORUM ON FIX PRICE LAW, RIO 2
THIS IS BRASIL &
INTERNATIONAL FORUM ON FIX PRICE LAW, RIO 3
THIS IS BRASIL &
INTERNATIONAL FORUM ON FIX PRICE LAW, RIO 4
THIS IS GERMANY
THIS IS GERMANY
80 million Germans do not only love football,
INTERNATIONAL FORUM ON FIX PRICE LAW, RIO 5
they also love books
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)
INTERNATIONAL FORUM ON FIX PRICE LAW, RIO 6
MARKETSHARES (TRADE CHANNELS)
IN PRODUCT GROUPS
Adult Fiction 34%
Childrenbooks, Young Adult Fiction
16%
Guidebooks 14%
Arts, Music 5%
Social Science, Law, Economy
3%
Education 9%
Non-Fiction
9%
Sciences, Medicine, Technology
4% Travel
6%
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
INTERNATIONAL FORUM ON FIX PRICE LAW, RIO 8
HISTORY OF FIXED BOOK PRICES
INTERNATIONAL FORUM ON FIX PRICE LAW, RIO 9
HISTORY OF FIXED BOOK PRICES
IN GERMANY
1888: fixed retail prices were incorporated into the statutes of the Brsenverein
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: Brsenverein 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
Brsenverein 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
INTERNATIONAL FORUM ON FIX PRICE LAW, RIO 10
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
INTERNATIONAL FORUM ON FIX PRICE LAW, RIO 11
POLITICAL ASSUMPTIONS/BELIEFS BEHIND THE
SYSTEM OF FIXED BOOK PRICES
1. Books are inevitable for our societys and individualscultural 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
societys 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
INTERNATIONAL FORUM ON FIX PRICE LAW, RIO 12
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
INTERNATIONAL FORUM ON FIX PRICE LAW, RIO 13
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
INTERNATIONAL FORUM ON FIX PRICE LAW, RIO 14
Very long tradition
Denmark 1830
Germany 1880
UK 1900 (until 1995)
Recent
Spain 1975
Portugal 1996
Italy 2005
FIXED BOOK PRICES IN OTHER COUNTRIES
Move from contract to law to avoid anti-trust issues
INTERNATIONAL FORUM ON FIX PRICE LAW, RIO 15
COUNTRY PAPER FIXED
PRICE?
PAPER BOOKS FIXED PRICE SYSTEM DETAILS EBOOK
FIXED
PRICE?
IF YES FOR
BOTH, SAME
SYSTEM?
TEXTBOOKS
INCLUDED? LEGAL BASIS DURATION OF APPLICABILITY MAXIMUM DISCOUNT
ARGENTINA Yes Law 18 months after publication 10% during book fairs, book festivals; 10% for schools and
libraries, 50% for public entities.
Yes Yes
AUSTRIA Yes Law 2 years after publication 5%; 10% for libraries No
FRANCE Yes Law 2 years after publication, 6 months after last supply to booksellers.
5% (consumers), 9% (libraries) Yes No
GERMANY Yes Law Minimum 18 months No discounts Yes Yes
GREECE Yes Law 2 years from publication 10% Yes Yes No
ITALY Yes Law 20 months after publication and 6 months from last bookstore purchase
15%; 20% for books sold during
Book fairs or trades fairs.
No Yes
JAPAN Yes Resale Price Maintenance Agreements
It depends on the agreement It depends on the agreement No
LEBANON Yes Decree of Ministry of Economy
20% to schools, distributors and
booksellers.
No Yes
NETHER-
LANDS
Yes Law Publishers can reduce prices
every 6 months
5-10% discount for students. No No
NORWAY Yes Agreement between publishers and booksellers
ass.
Until 30th April the year after publication. 12.5 % for book shops, 20% for
libraries.
Yes Yes No
PORTUGAL Yes Law 18 months 10%; 20% for libraries and during book fairs.
No No No
SLOVENIA Yes Law 6 months 0%; 20% only for book fairs, book series and subscriptions.
Yes Yes Yes
SOUTH KOREA Yes Law 18 months 19 % Yes Yes No
SPAIN Yes Law 2 years after publication, 6 months after
distribution in bookstores.
5%; 10% for World Book Day and
Book fairs, 15% for public entities
Yes Yes No
OVERVIEW OF CURRENT FIXED PRICE SYSTEMS
16
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 Fssli and Thalia.ch) merged in 2013
INTERNATIONAL FORUM ON FIX PRICE LAW, RIO 18
Number of independent bookstores: 4.038
Marketshare independent bookstores: 31 %
Average retail price: 10,56
Marketshare Amazon print books: 14,9%
Marketshare Amazon e-books: 46 %
According to Buch und Buchhandel in Zahlen 2013 & GfK
mediacontrol
COMPARISON GERMANY VS. UK
Germany (Fixed Prices) UK (Net Book Agreement until 1995)
INTERNATIONAL FORUM ON FIX PRICE LAW, RIO 19
Number independent bookstores: 987
Marketshare independent bookstores: 3%
Average retail price: 7,70 GBP (10 )
Marketshare Amazon print books: 27%
Marketshare Amazon e-books: 84%
According to several sources like Nielsen, Bowker
Co
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2012
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20
SALES CHANNELS UK VS GERMANY
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Germany 2013 UK Jan-Jun 2014
21 33
31 3 7
6 14
12 8
4 4
26 31
Channel share of volume within format
Internet-onlyretailer
Bookclub/direct
Other shop
Supermarket
Bargainbookshop
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