Home » Non-US, Pricing » Can a Fixed Book Price Law Stem Poland’s Sales Slump?

Can a Fixed Book Price Law Stem Poland’s Sales Slump?

28 December 2013

From Publishing Perspectives:

The Polish Chamber of Books has drafted a bill which is set to introduce fixed prices for new book releases for 18 months after publication, with an exemption for ebooks (which have the higher VAT rate of 23%, as opposed to the 5% levied on print books). The chamber sees the proposed regulations as a remedy to the continuing decline of book sales in Poland. But some local observers accuse the chamber of hampering competition and fostering protectionism in the publishing market.

. . . .

The data released by the PIK draws a gloomy picture of the state of the country’s publishing industry. Between 2010 and 2012, books sales decreased from 139.2 million copies to 107.9 million. Last year, only 11.1% of Poles read more than 7 books, compared with 11.6% two years later. An average Pole spent only about 60 zloty (US$19.2) on books in 2012.

. . . .

The bill is designed to bring significant change to the market. According to the PIK, it will introduce “fixed prices for new releases” and enable publishers to “create mechanisms of internal subsidies” which will allow [them] to finance non-commercial releases with profits generated by bestsellers.

The chamber believes that the bill, based on France’s Lang law from 1981 which was last revised in 2008, will “increase the level of readership through ensuring popular access to books throughout the country and making the publishing offer more diversified.”

“Owing to this, readers will have easy access to non-commercial literature, bookstores will be able to offer a wider range of books,” the PIK said in a statement. “The number of published titles will increase, and the interest in local literature will also become stronger.”

. . . .

[T]he industry association says that various European countries have introduced similar regulations to those which are now proposed by the PIK. These, in addition to France, include Germany, Austria, Greece, Spain, Portugal, Italy and Croatia, the PIK said.

. . . .

“We should think about [using] models which proved their efficiency in other countries, so that a book which is about to enter the market … had a fixed price adequate to its publishing cost for a limited period of time,” Zdrojewski said at the 17th Krakow Book Fair in late October.

Link to the rest at Publishing Perspectives and thanks to Eric for the tip.

Without wanting to brag, Passive Guy has been capitalist for longer than modern Poland has.

If he wanted to sell more books, PG would get rid of the VAT taxes and make sure there were no barriers to Amazon, Kobo, Smashwords, etc., selling books in Poland at whatever price they wanted to charge.

Non-commercial books are called that because not very many people buy them. A physical bookstore with an increased number of books most people won’t buy is not a very good way to sell more books.

Ebook bestsellers for 3 zloty would work much better.

Non-US, Pricing

40 Comments to “Can a Fixed Book Price Law Stem Poland’s Sales Slump?”

  1. No. Next question.

  2. I’m old enough to remember the NET Book Agreement where books could not be sold for any price other than the one decided by the publisher. This was supposed to protect small bookshops and small publishers from price competition and allow “worthy” and “Cultural” books to be published. In this day and age where it costs nothing to publish anything and people can download form anywhere via the internet I can seen no argument for any type of protectionism.

    • mark williams international

      “…people can download form anywhere via the internet ”

      Well I certainly cannot download from anywhere. Here in West Africa Amazon does not even let me see my own ebooks, let alone pay for the licence to download them, unless I sign into my account set up in the UK.

      • Bet you could download from Smashwords, should you choose to use ‘em. (Dunno about Kobo.)

        Amazon is not the only place to download books from.

  3. So, raising the price is going to result in more purchases by readers? :: scratches head :: R-i-g-h-t! ;)

  4. PG, you’re my hero. Why are so many people so stupid when it comes to basic economics?

  5. Okay, so they allow price fixing at whatever the traditional publishers choose to set their price.
    How does that protect them from indie publishers setting their POD and ebook prices lower?

    These folks seem to think low(er) book prices are only a competitive tool of (online) retailers.

  6. Not trying to be snarky or anything, but “non-commercial” books could also refer to literary books in this day and age. I like commercial books just like anyone else, but do we really want to live in a world where pretty much only commercial books about vampires, sleuths and hunky heroes sell consistently? It’s likely that writers would just start writing those kinds of books and literary writers would have to move on to other jobs.

    I don’t agree with the way Poland went about this, but I think it’s a little concerning that people don’t consider the fact that literary books (by more modern authors anyway) have such a hard time competing in the marketplace.

    • Check out how many poetry books are for sale on Amazon. There will always be people willing to write poetry and literary fiction, regardless of the marketplace. I have no doubt that lots of it will be good and will occasionally break out into best seller status.

    • Movies are harder to make and distribute than books but indie “literary”/artistic movies get made and distributed just fine in a market-driven environment.

      Considering how much cheaper ebooks and POD make book distribution there is no real barrier to litfic getting to market. If anything, it is easier than ever before.

      Litfic authors just need to get over their validation fetish.

    • I guess it depends on what you mean, Liz. Do I want to live in a world where the system is structured in such a way that it shapes what people read? That’s a pretty scary thought to me.

      Literary books do really well when they hit their target. The Road was a compelling story… except for the more overtly literary parts. I got angry more than once at interruptions to the story that seemed designed only to make me think of Mr. McCarthy as a literary genius worthy of teary-eyed adulation. I don’t want to judge the man, but I also can’t help but think that was his exact motivation. My brother had to stop reading the book for this same reason.

      • I think Liz has a point. And while Felix’s analogy of films is a good one, independent films, certainly in the UK, are reliant on government/art council funding. Few if any would get made without it. Lit fic writers too are subsidised, usually by prizes such as the Booker and the literati-loving media such as the Guardian, without which, many lit-fic writers wouldn’t make a living. Even Cormac McCarthy might not be around today if it wasn’t for the MacArthur grant. While some would argue that if people aren’t buying certain books, those books are not worth saving, I have to disagree. Governments support other forms of art, such as opera, film, theatre and ballet, in order to keep them alive, why not literature? Price fixing may not be the answer, but an answer is needed.

        • Write stories people want to read. There’s no trouble selling Jane Austen or any of her contemporaries. But I actively avoid modern litracha because their writers actively avoid telling stories. Blaming their decline on vampire and werewolf fiction is a cop out; they need to take a good, long look at themselves first. That’s where the fault lies.

        • There are a number of practical problems, leaving aside the politics of government subsidies. How do you even identify literary fiction? How do you decide which particular works deserve subsidies, once you have come up with some system for identifying lit-fic? What is an adequate subsidy? Should this apply to prose, poetry, plays, tv and movie scripts? Just prose, or all of the preceding?

          And the biggest problem of all – who decides? A body of eminent writers? A body of political appointees? A random jury of average citizens? A popular vote? All of these are fraught with obvious difficulties.

          I am not against government support of arts and culture in principal. I don’t know if it is needed in the literary world anymore, though, as the barriers to production and distribution of books have come down so drastically.

          • Oh, boy…
            The temptation, the temptation…
            It’s too easy and the horse is already dead…
            Heck, why not?

            Litfic is where style trumps story.
            Litfic is writing for critics instead of readers.
            Litfic is yet another “coming of age in a big city” or “coping with a dysfunctional family”, or “finding yourself through sex with weirdos” story.
            Litfic is the genre were “fun” and “engaging” are optional but “slogfest” is allowed.
            ;)

            (It’s monday, okay? And the weather outside is frightful… And I have to go out. Might as get the snark out early.)

  7. I had to stop reading The Road because I got disgusted (and bored) with the unrelenting horror of that nightmarish world. It just went on and on.

  8. A country cannot just abolish VAT – that’s against EU regulations, though they could lower the rate down to 15%, which is the minimum the EU allows. But print books are already sold for the lower VAT rate for essential goods pretty much everywhere and the VAT on print books is only 5% in Poland. As for treating e-books like print books, that’s a battle currently being fought between Luxembourg and France on one side and the EU parliament on the other side. Poland is very welcome to join in, because treating print and e-books differently is a silly regulation.

    Besides, it’s not as if the US or Canada are going to abolish sales taxes anytime soon. Cause that’s what VAT is, sales tax. And unlike Canada and the US, where sales tax is added only at the cash register, so that what you’re buying is always more expensive than the price sticker said, European countries at least manage to calculate the VAT into the listed price.

    Finally, I know that a lot of commenters here at PV are opposed to fixed book price laws, but the truth is that they work quite well at what they are supposed to be doing, namely protecting booksellers from supermarkets, etc… using bestsellers as loss leaders. I’m always shocked to hear about whole towns, cities and regions in the US without a single bookstore, because here in Germany we have plenty of bookstores, both chain and indie, in every town. Could fixed book price laws be improved? Sure they could and in fact, there are some things that annoy me about the German system, e.g. that I cannot use discount coupons to buy books. But in general I’m not opposed to it. And in fact, the US and UK are outliers for not having a fixed book price law, since most other western countries do.

    • Point of fact, ma’am: the decimation of the US pbook distribution system was not due to retail-level discounting or competition but because of giant multinationals consolidating the bulk of the NY publishing houses under their control and implementing short-sighted policies.
      (Check the most recent Business Rusch column, linked a couple of posts below, for details.)

      The way it played out would not have been altered by price fixing.

      The bulk of the damage was done before the rise of the chains and even then it was the publisher’s volume discount choices that enabled the rise of the warehouse stores and Amazon.

      Price fixing tends to favor entrenched suppliers over newcomers, big ones over small, all at consumer expense. Which is why it is generally illegal on both sides of the pond, for good economic reasons. Societies are entitled to whatever social contract they choose to impose upon themselves but the laws of economics don’t cease to work just because a few politically-connected suppliers get themselves declared a special snowflake. The underlying forces will always find a means of expression and, sooner or later, in one way or another, the protectionist bill comes due.

      State-sanctioned price-fixing is simply bad economic policy that at best delays the inevitable and always makes the inevitable worse. But since people rarely learn from others’ mistakes…

      (Shrug)

    • I don’t think treating e-books and print differently is a silly regulation. When you buy a print book, you are assigned first sale rights: you can sell it, lend it or give it away to somebody else. Assigning these rights to e-books is not a good idea. Readers could download an e-book, read it, then upload it to Amazon to resell it or send it to all their friends. It would be like an infinite return policy. While Amazon would make money on each resale, authors wouldn’t.

      • If I got a half-way reasonable cut of the re-sale of an ebook via Amazon (or B&N, or whatever), I’d go for it. And, yeah, people could crack the encryption (especially since I don’t put DRM on mine), make a copy, and re-sell — but they could only re-sell once, because it would automagically be removed from their libraries and put into someone else’s. People who are going to be pirates or mini-pirates can already sell or give away stuff without the author seeing a sniff of it.

        If there was a minimum author cut for a re-sale (35 cents, say!), that’d be awesome. I’d support it on principle as well as the more practical basis of: “people can take a chance on my books without me having to futz around with the prices.”

      • We’re talking about treating print and e-books differently for tax purposes. Print books are taxed at a reduced VAT rate in most EU countries, e.g. 7% in Germany, 5% in Poland and 3% in Luxembourg, while e-books are classified as software and taxed at the full rate of somewhere between 15% (Luxembourg) and way over 20%.

        Resale has nothing to do with this issue.

        • Unfortunately, Cora, the two are inextricably linked. The EU has a rigid classification system. If e-books were to become ‘books’ they’d be both VAT exempt (as in the UK) or VAT reduced (as elsewhere), as well as having the same sale rights. You cannot separate the two. Don’t forget, this is an institution that categorises carrots as fruit, simply because it cannot bend on classification and Portuguese carrot preserve wouldn’t enjoy the same export privileges as jam if carrots were still vegetables.

          Incidentally, the VAT rate in Luxembourg is 5%, which is one of the reasons why Amazon is based there and eebooks only have a 5% surcharge in UK and EU sales.

    • Most Socialists Western countries have anti-competitive and anti-consumer laws. Hopefully US will maintain some aspect of the free commerce, unencumbered by government laws.

      • There are no Socialist western countries, merely some social-democratic ones (and that is largely eroding). Just because Americans think something is Socialist doesn’t make it so.

        • http://www.merriam-webster.com/dictionary/socialism

          ” a way of organizing a society in which major industries are owned and controlled by the government rather than by individual people and companies”

          Socialism, as defined by classic economics, doesn’t require the government own everything, merely that it own major industries and control/regulate the rest.

          The shoe fits pretty much everywhere.

    • New Hampshire has no sales tax. I think there may be a few other states which have resisted the pernicious “let’s add state and city sales tax so no one knows what they’re actually going to pay” meme.

      • I have never come across a US state without sales tax (though I don’t think I ever bought anything in New Hampshire), which doesn’t mean that there aren’t any. Canada is even worse, since they have federal and provincial taxes.

  9. mark williams international

    “Ebook bestsellers for 3 zloty would work much better.”

    Absolutely, PG, so why does Amazon insist on slapping a 6 zloty surcharge on 3 zloty ebooks for Polish buyers?

    ‘Txtr, GooglePlay and other international sellers do not do this.

    The fact is ebooks are taking off in a big way in Poland, with over twenty domestic ebook retailers happily selling ebooks, and many in mobi format because so many Poles have Kindles purchased in the UK or Germany.

    Those that managed to set up Amazon accounts while in those countries can log in and buy at UK / German prices. Someone in the same room with an Amazon account opened in Poland gets slapped with the surcharge,

    Savvy small publishers and indie authors in Poland are making a killing with multi-format ebook sales at cheap prices sold through myriad domestic ebook stores, taking advantage both of the fixed price for print books and Amazon’s myopic surcharges.

  10. I wonder if that weird surcharge on buying e-books in Poland is one of the reasons why a solid 30% of my pirated copies are uploaded to Polish file-sharing sites. It does seem to confirm the idea that if books aren’t readily available/stupidly priced, that only feeds piracy.

  11. Increase readership by fixing the book market with higher prices. Where was that ever successful? Not even under Communism.

  12. People are reading fewer books, so prices should be raised? Why do they believe that will solve the underlying problem? The people who made the law seem to believe the decline is because there are fewer bookstores, but it might be the reverse.

  13. Having visited many bookstores in Poland, I can tell you that this ruling is meant to protect *local Polish publishers*, not the Big 6.

    The problem is that there is a shitload of Polish publishers producing Polish books but seeing their revenue eroded due to a variety of reasons, not least of which (the elephant in the room) is the complete unliveability of the basic wage. I’ve read that the average USAian reads a book a year (okay that’s an old stat), maybe now five?, six? with a Kindle, but this does not compare with Continental Europe, where the average reader ploughs through upwards of a dozen *print* books a year. (I think a European paper did a survey on this last year and the Czechs topped it with about twenty-five print books per year per person.)

    Right now, that kind of reading prowess is being eroded. It may even descend to USA standards, which strikes terror into the heart of every European. As Cora points out, with the Polish completely unable to do anything about the VAT rate, they are trying (what they think is) the next best thing to protect their national publishers. Yes, it’s called protectionism and is what the USA has also used–and continues to use–to protect certain of its industries, so let’s not criticise the Poles for trying this tactic.

    Any talk about how policies in the USA should be used in Europe will not work. The situations and cultures, the very psychology of the readers, are different, not to mention a publishing model that did not come from New York or even London. The second problem is that the dominant chain, Empik, is doing a dirty on publishers. A book may be published in January with a cover price of 30zl and then **within 2 MONTHS** be thrown into the bargain bin for 10zl. (Empik believe they have to do this because 30,000 Polish-language print books are released a year.) People with low incomes would rather wait for a heavily-discounted book rather than pay the full 30zl and, as a result, both the publisher and the author loses. THIS is the situation that the Poles are attempting to address.

    Although I think this plan has some flaws, and unless a Pole weighs in with details on how the book industry actually works in Poland, I wish the Poles all the best with it and hope it helps to keep some of their own publishers (and, therefore, authors) afloat.

    PS Ebooks, btw, are exempt from this, so no bar to Kobo or Smashwords or Amazon, in case anyone was wondering.

  14. Great thinking !!! How do we get people to buy and read more books ? Hmmmmmm …. I know ! We RAISE the price of books !!! Yeeeeaaaahhh !!

    (duh …)

    • Who said anything about raising prices? The law is there to stop DUMPING of books until 18 months after release. It’s actually meant to give both publishers and authors a crack at decent returns before Empik (the dominant book chain) remainders new books (which it currently does only a couple of months after a book’s release).

      And, as I mentioned before, ebooks are exempt and there’s nothing stopping Kobo or Smashwords or iTunes or Amazon selling low-priced ebooks in Poland as they’re already doing.

      Has anybody actually read the article or are the facts getting in the way of a good capitalist screed?

  15. (Sorry, PV, but I couldn’t let this one slide)

    Howard, do you know what price fixing is? Price Fixing is when two or more entities collude to set the price of a consumer good or service. What the Polish government is doing is called PROTECTIONISM, which is exactly what I called it in my earlier remark (29-Dec, 5:43pm). For some education in the difference, I suggest you mull over the DoJ price-fixing suit against Amazon vs. protectionist policies instituted by the US government in the area of, say, steel. Nevertheless, you’re veering off on a tangent.

    The point is, this issue is not about RAISING the price of books, as you initially remarked. It’s about the government intervening (just the government (= protectionism), not two or more entities (= price fixing)) to MAINTAIN the price of print books for 18 months after release in order to protect Polish publishers, who are in financial straits. As I said myself (see the 5:43pm comment), there are flaws to the plan, and a disregard of certain unassailable economic factors, but nobody is RAISING book prices. Good grief.

    Happy New Year all. I’m done.

    • “What the Polish government is doing is called PROTECTIONISM” No – actually it is called Price Fixing when a Government introduces a bill that ‘fixes’ prices. It’s called the english language. There is no plan that I can see in any coverage of this plan, to stop the salles of anyone’s books, and hence there is no protectionism. It is price fixing.
      Your semantic gymnastics are meaningless and unconvincing. Fixing the price is the same as raising the price, unless they are choosing price that is below market competition price. They are not choosing prices that are below market price. They are choosing prices that are higher than market competition and are therefore raising prices.
      This is all about raising prices, and they openly discuss the boosting of bookstores income and that of publishers. There is no confusion.

  16. Sorry, not DoJ against Amazon. Was trying to use shorthand and bungling it completely. I meant DoJ’s suit against Apple + Trad that also involved Amazon. Apologies for the error.

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