Last week another well-known bookstore – this one in Hyderabad – the 65-year A. A. Hussain and Co, shut shop. Though there are commercial reasons for this closure (a new mall coming up at the location), the owner is on record as saying that he is no longer interested in running a bookshop in the space he will get.
This follows a pattern developing over the last two years in India, with every major city having lost many famous bookshops – close to 100 by a rough estimate.
Most Indian bookshops may be doomed to be die sooner or later. The few that are soldering on are mostly living in denial. Sales have dropped, though no one will openly agree.
People now use bookshops to check out a book, feel its physical presence in their hands, read the blurb on the back cover, return the book to its shelf, go home and order it from one of the virtual bookshops for at least a 25 per cent discount. In most cases delivery too is free.
The fixed price solution
In Europe, where I was recently, the problem of bookshops closing down has been solved by passing a fixed price law. Fixed pricing has been in existence for long but now it serves as a bulwark against Amazon.com.
Books can only be sold at the price printed on the cover. The Germans, for instance, take much pride in strengthening this law and standing by it. The Presse Grosso (press wholesale) system helps small publishers survive, according to a German government. Some 12 European countries have a similar fixed price policy for books.
The question is: should the government in India intervene on the side of the book publisher and the book retailer, and thus serve as a bulwark against the predatory pricing of e-commerce sites? Such a policy will, of course, put many books out of reach of readers who can now benefit from the economic strategies of huge private behemoths, besides raising the question: why should the government get into it at all?
In Germany, for instance no new hardcover book is available for less than €25 (about Rs 1,750). Germany takes its book industry seriously, and holds two of the biggest book fairs in the world: Frankfurt in October and Leipzig in March, which I visited on the invitation of the Goethe Institute.
The question of whether the government should be on the side of the publisher and the brick and mortar bookseller, as opposed to the consumer, is a contentious question. Government policy so far in India has been to subsidise textbook printing, helping millions of students. But with bookshops closing down one after the other, the government may show some interest in entering muddied waters.
The benefits
The lessons from the fixed price policy in Europe are worth looking at. It has helped book retailers. Defenders of the fixed price system argue that older books are on average cheaper since publishers and booksellers aren’t forced to make up for money-losing discounts on more popular books.
Both bookshops and book titles have increased in number in Germany. In 2008, Germany published 96,000 new books. In the US, 275,000 books were published in the same period, though the country is four times as large. But Germany has 4,000 more bookshops than the US, where bookshops are closing down by the dozen under the assault of e-commerce and deep discounting.
How does this impact growth?
A couple of years back three French economists studied the impact of such fixed pricing in 12 European countries: “Over the past decade, the growth rate of book prices is weaker in countries with fixed prices than in countries with free prices,” they concluded, adding, “the increase of new title is stronger in the countries which have a fixed price.”
But Australia, which also has a fixed-pricing policy, has recorded an increase in printed book sales over the past two years. Although the figures have dipped from the level five years ago, but at $937 million, sales in 2014 were higher than the $918 million level in 2013.
So most studies suggest that fixed pricing helps publishers and book sellers. The doomsday scenario is that after physical bookshops die, online booksellers will raise their prices.
The pricing game in India
The big online retailers usually get books from publishers at a 40% discount. So, they pass on a benefit of at least 25% to the customer. Sometimes they price their books even lower, willingly taking losses in exchange for marketshare, in the process taking away buyers from bookshops, which cannot afford to offer matching discounts.
The new selling model in e-commerce is the marketplace, where an Amazon or a Flipkart not only sells books themselves but also allows other virtual stores to sell them. Now, since they always display the lowest price first, this leads to all the virtual bookstores competing with one another to lower the price. The winner is the customer.
So, there is no denying that Amazon and other online sellers have made bookreading universally affordable with the most astounding of rebates. Both publishers and authors, too, continue to get exactly what they would have got from sales at brick-and-mortar stores.
The only loser? The bookshop. Will fixed pricing protect them? The real question: will a free-market-oriented government even consider legislating for such protection? Possible, but not probable.
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This follows a pattern developing over the last two years in India, with every major city having lost many famous bookshops – close to 100 by a rough estimate.
Most Indian bookshops may be doomed to be die sooner or later. The few that are soldering on are mostly living in denial. Sales have dropped, though no one will openly agree.
People now use bookshops to check out a book, feel its physical presence in their hands, read the blurb on the back cover, return the book to its shelf, go home and order it from one of the virtual bookshops for at least a 25 per cent discount. In most cases delivery too is free.
The fixed price solution
In Europe, where I was recently, the problem of bookshops closing down has been solved by passing a fixed price law. Fixed pricing has been in existence for long but now it serves as a bulwark against Amazon.com.
Books can only be sold at the price printed on the cover. The Germans, for instance, take much pride in strengthening this law and standing by it. The Presse Grosso (press wholesale) system helps small publishers survive, according to a German government. Some 12 European countries have a similar fixed price policy for books.
The question is: should the government in India intervene on the side of the book publisher and the book retailer, and thus serve as a bulwark against the predatory pricing of e-commerce sites? Such a policy will, of course, put many books out of reach of readers who can now benefit from the economic strategies of huge private behemoths, besides raising the question: why should the government get into it at all?
In Germany, for instance no new hardcover book is available for less than €25 (about Rs 1,750). Germany takes its book industry seriously, and holds two of the biggest book fairs in the world: Frankfurt in October and Leipzig in March, which I visited on the invitation of the Goethe Institute.
The question of whether the government should be on the side of the publisher and the brick and mortar bookseller, as opposed to the consumer, is a contentious question. Government policy so far in India has been to subsidise textbook printing, helping millions of students. But with bookshops closing down one after the other, the government may show some interest in entering muddied waters.
The benefits
The lessons from the fixed price policy in Europe are worth looking at. It has helped book retailers. Defenders of the fixed price system argue that older books are on average cheaper since publishers and booksellers aren’t forced to make up for money-losing discounts on more popular books.
Both bookshops and book titles have increased in number in Germany. In 2008, Germany published 96,000 new books. In the US, 275,000 books were published in the same period, though the country is four times as large. But Germany has 4,000 more bookshops than the US, where bookshops are closing down by the dozen under the assault of e-commerce and deep discounting.
How does this impact growth?
A couple of years back three French economists studied the impact of such fixed pricing in 12 European countries: “Over the past decade, the growth rate of book prices is weaker in countries with fixed prices than in countries with free prices,” they concluded, adding, “the increase of new title is stronger in the countries which have a fixed price.”
But Australia, which also has a fixed-pricing policy, has recorded an increase in printed book sales over the past two years. Although the figures have dipped from the level five years ago, but at $937 million, sales in 2014 were higher than the $918 million level in 2013.
So most studies suggest that fixed pricing helps publishers and book sellers. The doomsday scenario is that after physical bookshops die, online booksellers will raise their prices.
The pricing game in India
The big online retailers usually get books from publishers at a 40% discount. So, they pass on a benefit of at least 25% to the customer. Sometimes they price their books even lower, willingly taking losses in exchange for marketshare, in the process taking away buyers from bookshops, which cannot afford to offer matching discounts.
The new selling model in e-commerce is the marketplace, where an Amazon or a Flipkart not only sells books themselves but also allows other virtual stores to sell them. Now, since they always display the lowest price first, this leads to all the virtual bookstores competing with one another to lower the price. The winner is the customer.
So, there is no denying that Amazon and other online sellers have made bookreading universally affordable with the most astounding of rebates. Both publishers and authors, too, continue to get exactly what they would have got from sales at brick-and-mortar stores.
The only loser? The bookshop. Will fixed pricing protect them? The real question: will a free-market-oriented government even consider legislating for such protection? Possible, but not probable.