How Germany Keeps Amazon at Bay and Literary Culture Alive [View all]

[HiPointDem]

Discounting has upended traditional publishing in the United States. Independent bookstores usually operate on a shoestring and have never been able to afford negative profit margins on bestsellers. During the 1990s, as the major chains expanded and bookstores—and booksellers—emerged on the Web, many independents were ruined by the downward pressure on the price of bestsellers. By discounting these books, the big chains and Amazon did to the independents what Walmart has done to mom-and-pop Main Street retailers: crush them by running a race to the bottom...

What I learned at Holt... is that publishing and selling books in the United States was, and remains, a very different and far rougher business than in my home country of Germany, where since the late nineteenth century a fixed-price agreement between publishers and bookstores has defined a less competitive and highly regulated publishing market. The participants in this voluntary price cartel signed a mutual agreement: publishers set the prices on books, and bookstores abided by them...

The agreement was deeply engrained in Germany, and in 2002 it became the law. Publishers list new books, prices included, in a database that currently contains around 1.2 million titles....In Germany, approximately 90,000 new books are published each year, which per capita is about four times as many as in the United States. Among the new books of 2010 were 11,349 translations, including 6,993 English-language titles. Additionally, average book prices in Germany are the lowest in Europe, with the possible exception of Iceland and Finland. This ignominious “cartel” seems to be working to the advantage of readers, publishers, bookstores and authors...

The cultural advantage of this arrangement is obvious. Bestsellers—whether by Stephen King or Günter Grass—sell at the same price anywhere, guaranteeing the survival of independent booksellers. The small profit margin on bestsellers allows bookstores to keep in stock high-quality, low-selling titles. They can also write off on their income tax up to 90 percent of unsold books kept in stock for no more than three years. Without this tax advantage, which costs the German version of the IRS billions of euros, at least a third of Germany’s independent bookstores would disappear within twelve months.

By turning the fixed-price agreement into law, Germany meant to send a signal to the Eurocrats in Brussels: the entire Bundestag stands behind this national practice, so attack it at your peril. Even so, since 2002, the EU has continued its assault on fixed-price, lobbied no doubt by Amazon and the German book chains...

http://www.thenation.com/article/168124/how-germany-keeps-amazon-bay-and-literary-culture-alive#