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Price fixing for e-books

October 28, 2010

You’ve got to admire the French. They say “free trade” but act “protectionist”. It’s their way of protecting their culture, their industry, their retirement age and La Gloire. While other countries – most notably the UK – talk of buying goods from anywhere as a way of absolving themselves of responsibility for national assets, France carries on doing what it’s always done. Being French above all else. 

Cue the latest move by the French Senate in fixing prices for e-books to protect small publishers. This is an interesting development in that it recognises the power of big intermediary brands such as Amazon and Apple (not to mention Google, of course).

I’m sure some publishers here in the UK would wish for an interventionist policy of their own, enabling them to generate more money from an industry renowned for its curious blend of limited profits and intellectual arrogance. But you can’t have it both ways.

If publishing (well in print form at least) is protected from VAT on the basis of providing products for human learning, surely it is wrong to further protect the industry by price fixing? Price fixing, of course, protects no-one. All it does is preserve a business model which is inefficient.

The Net Book Agreement, which ended years ago in the UK, compelled publishers to be commercial or die. At the time, I felt the demise of the NBA was a bad thing for publishers profits but also a bad thing for literature. Indeed, this was a common view. But what has happened is that publishing has not collapsed; indeed, it has been compelled to do what other companies have being doing for years – finding out what people want and giving it to them.

Of course, e-books present a huge problem, as we have discussed before – the diminution of publisher brands. This is serious, but not beyond the wit of the publisher to address – provided that they understand brand issues and create a brand strategy. Price fixing is not the answer to the problem – value creation is what publishers need to do if they are to continue to remain relevant, attract new customers.

As we have argued before on A Brand Day Out, value should define what a book is and what price it should be. To carry on talking about fixed prices and price bands further positions publishing in a dead end street where it loses its ability to be in charge of its own destiny.

Seth Godin argues for tribes as his answer to the book industry’s woes. I argue for customer focus. Both are the same thing. And unlike in the old days when it was argued that you could create the world’s best mousetrap but people wouldn’t beat a way to your door, now – with the social web – people can and do search out what they want.

Now, I admire the French for putting themselves first but in all seriousness this is the economics of the fenlands: protect the land by draining it and the land shrinks. Eventually, the land you are protecting becomes indefensible and the seas and waters will rise to cover the earth.

This is the fate of all who rely on artificial means to protect their own inefficiency. Price fixing is not the answer; value, brand and customer satisfaction is the way forward.

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3 Comments leave one →
  1. Amanda permalink
    November 4, 2010 9:07 am

    Interesting post.
    Publishing aside, I’d welcome a bit of gallic-style interventionism from the UK government (any UK governmment ) when it comes to developing essential national assets and resources.

    • November 4, 2010 7:17 pm

      I know what you mean and broadly I agree, for over-reliance on laissez faire as the determinant of success must necessarily have an impact on culture because the loss of industries creates a loss of purpose, community and togetherness. Publishing has a curious role to play in cultural sustainability. As does strategic vision, will and direction.

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