Language
Country/Area
No result found
What are the surprising effects of the fixed book prices in France and Germany?
Fixed Book Price (FBP) has become a hot topic in the publishing industry, especially in countries such as France and Germany. The law gives publishers the power to set retail prices for books and is intended to support independent bookstores and cultural diversity. However, the effectiveness of FBP has sparked heated debate among economists and publishers.
The core idea of the fixed-price book law is to promote non-price competition among bookstores, thereby promoting obscure, hard-to-sell or culturally significant books, rather than just catering to the needs of bestseller readers.
Principles of the Fixed Price Law
The introduction of fixed book prices was based on the belief that a dense and high-quality network of bookstores was a necessary condition for the publication of a wide variety of books. These bookstores face stiff competition from discount retailers, which often focus only on selling bestsellers. This has hurt the profits of premium bookstores as discounters do not bear the higher operating costs. Therefore, the main purpose of FBP is to reduce this competition and ensure that high-quality bookstores have enough profit margins to maintain operations.
Scope and History of FBP
Many countries with significant book industries have had fixed book prices since the 19th century. As competition policy has evolved since the 1970s, many countries have withdrawn these agreements (e.g. Australia in 1972, Sweden in 1974, and the United Kingdom in 1995). Meanwhile, other countries such as Spain, Greece and Italy have enacted laws making FBP mandatory.
FBP's assessment is controversial. On the one hand, most economists are skeptical about the cultural value of FBP, emphasizing its distorting effects. On the other hand, other economists and the book industry argue that FBP is the only tool that can enable difficult, elegant, and culturally significant books to be published.
Theoretical Framework of FBP
A solid theoretical foundation supports the operation of FBP. When two retailers offer tangible advance sales, they both work to increase our demand, and there is an opportunity for “free riding.” This situation results in an overall level of effort that is lower than publishers would like, so the presence of FBP effectively eliminates price competition, allowing bookstores to compete on service.
Empirical Evaluation
Empirical studies from different countries show that the abolition of FBP often leads to the replacement of small independent bookstores by large chains, and that while prices of bestsellers may fall, prices of other books tend to rise. After the end of FBP in the UK, although the number of independent bookstores has decreased, some bookstores still remain due to quality-sensitive demand.
"In France, fixed-price book laws have helped maintain a dense network of independent bookstores and curbed the expansion of chain bookstores."
FBP's Cultural Impact
The ultimate impact of FBP is not only reflected in the price of books, but also in the protection of cultural diversity. Although some have questioned the cultural value of FBP, it has promoted the publication of specific types of books and thus enriched cultural life. This is particularly evident in some countries where, despite the existence of FBP, consumers of certain low-selling books are not exclusively representative of lower socioeconomic classes.
In this case, has the fixed book price system truly achieved its intended cultural promotion effect?
