The hot topic among booksellers (and readers) at the moment is book pricing. The price of books has always been higher in Australia due to the tyranny of distance, our small population and the ‘real’ value of our dollar. In relative terms books have always been more affordable here (see a previous post), however since our dollar reached parity with the US dollar and has increased in value against the Pound (coupled with the more aggressive nature of online retailing) the actual price of books is now measured globally not locally.
This situation is not new though. In the past Australian publishers attempted to address the price differential between Australia and the rest of the world by bringing out a special format exclusively for our market; the Trade Paperback. This was designed to substitute for an expensive hardcover edition thus giving Australian readers a more affordable format allowing publishers and booksellers to sell more copies. However over the last 10 years the price of this format has risen from $24.95 to $32.95. This has meant that the substitute edition, that was supposed to be cheaper, is now the equivalent price of the format it is supposed to substituting. Not only that, but the other smaller paperback formats have also risen in price ($19.95 to $24.95) increasing the gap between the price of a book here versus the price of the same book overseas.
This year the gap has widened even further due to the exchange rate but nothing is being done to address it. Booksellers’ hands are tied as Parallel Import Restrictions (PIRs) mean they can only source cheaper overseas editions on a special order, single copy basis. While discounting to price match is not a sustainable way to do business. Some publishers like John Wiley and Hardie Grant have brought down their prices to reflect the current exchange rate but the majority have not changed any of their prices.
Whenever the issue is raised (by myself or other booksellers) we are often told that local publishers’ hands are also tied because of the price they pay for the books from their UK parent company. This is a very frustrating response and is akin to the blame game state and federal politicians used to play with health funding. Equally frustrating is that the price is set 6 months ago and apparently there is no room to change the price to reflect current changes in the exchange rate. Authors are also losing out in this scenario as their royalties are not calculated on the higher Australian price but on the local UK price.
I strongly believe that for physical books territorial copyright is important but I think the practice of selling commonwealth rights should be abandoned. When a local publisher buys the Australian rights for an overseas book they have a much more tangible investment in that book and therefore manage the sale, distribution and price of that book much more effectively than when they are lumped with a title through contractual arrangements with a parent company. However the growth of eBooks internationally is making the practice of territorial copyright look archaic and may even render it redundant. In terms of eBooks I think every author from top to bottom should make sure their digital rights are made global and not sold piecemeal. It is in their best interest but probably not publishers.
The issue about book prices boils down to the fact that we no longer exist at the ‘arse end of the world’ and cannot continue to do business like we exist in a bubble. Despite the bitter fight to maintain a closed market in this country the truth is the only people who exist in a closed market in the Australian book industry are the booksellers. Publishers and consumers all operate globally and the price of books on Australian shelves needs to start reflecting this. We were told by the Australian Publishers Association and many Australian authors that an open market would destroy the Australian Book Industry by flooding the market with cheap overseas editions and that local publishers would reduce their investment in local authors, author tours and other marketing and promotion. To some extent that has happened this year anyway.
The issue over price is not going to go away if the Australian dollar drops. The price of eBooks is also going to exert massive pressure on our industry. Through Amazon’s aggressive attempt and grabbing early market share the standard price for an eBook in the US is $US9.95. This caused publishers considerable consternation over what to do with their hardcover editions that were priced at $US25-$US27. Some publishers began ‘windowing’ or delaying the release of the eBook to give the more expensive hardcover a free run but consumers rejected this model. The solution became the Agency model floated by Apple where the eBook price is set by the publisher and locked in (no discounting). Publishers retain 70% of the price they set, a considerable increase from print books. This meant that for publishers there was a ‘point of indifference’ between what they make on a hardcover and on an eBook. But for booksellers there is still quite a significant ‘point of difference’ between a hardcover and an eBook; price. The price of physical books is going to have to be addressed here in relation to eBooks. The current model here of pricing eBook editions as 20% off the current physical book price is ridiculous and I can’t see it lasting. Nor can I see the physical book model of publishing in multiple formats lasting either.
Regardless of what the actual worth of the Australia dollar should be; regardless of what the ‘traditional’ price of a book has been and all the other old rules of book pricing the world has changed. The power and influence UK publishing has over our local industry is ridiculous especially when you consider the current state of the UK book market. While prices in this country are influenced by people thousands of miles away who view our market as nothing more than a small outpost, have no real investment in our market or knowledge of what is happening here; then our market is truly doomed. If we are to have a serious discussion between booksellers and publishers about book pricing in Australia what we need is a book pricing summit with CEOs from UK publishers to make it meaningful and constructive.
For the record I think the following should be the current price of books:
Hardcover: $35-$39.95 for fiction; $39.95-$49.95 for non fiction
Trade Paperback: $24.95-$27.95 for fiction; $29.95-$32.95 for non fiction
Small Paperback: $14.95-$19.95 for fiction; $19.95-$24.95 for non fiction
I haven’t priced kids books or illustrated books because they vary greatly depending on productions costs.
Also these are prices for new releases or new into a format. I think backlist titles should be at least 25% cheaper than new releases, period.
What do think a book should be worth?
The Australian Dollar (AUD) has remained steady at parity with the US dollar yet there have been no price reductions from any major publisher in Australia. Publishers I have spoken to on this issue do not believe price reductions will lead to increase sales in this market and are not willing to take any risks to prove otherwise.
There has been some movement on paperback picture books as well as a classic promotion at $12.95 but these are not the books that are under the most price scrutiny. Current releases are what consumers are focused on and their prices have not moved.
A leading children’s book publisher actually increased their prices as of January this year including one of their lead titles for 2011. It has risen from $24.95AUD to $27.95AUD despite an overseas online book retailer selling the same title for only $12AUD. This is significantly cheaper than the price booksellers are expected to pay the publisher for the book.
My idea of a book price summit cannot work as this would probably constitute collusion and/or cartel behavior. But the issue still needs to be addressed. Booksellers and publishers cannot afford to have another year like the one we just had.