When Abraham Mapu published the first Hebrew novel, Ahavat Zion, in 1853, he laid the foundations of modern Hebrew literature. A romance set in biblical days, it was the first time the Hebrew language was used to tell a secular story. The book went on to become the first Hebrew "best-seller," printing 16 editions and translated into five languages. It is also said to have been a major influence on the early Zionist movement. Writing in 19th century Lithuania, Mapu had no reason to believe that a century and a half later, a thriving Hebrew publishing industry would be operating in an independent Jewish state. But in today's hyper-competitive publishing environment, chances are good that Mapu would never get read. Hebrew books have had a strong influence on Jews ever since the Book, but it was only after the Haskala period, in the latter half of the 18th century, that Hebrew literature as we know it came into being. Today, more than 5,000 new titles are published every year, most of them in Israel. Ironically, this abundance may actually be harming the Israeli book business. Israel is home to a rich and diverse book publishing industry. Despite a limited number of readers, it boasts hundreds of publishing houses of all sizes, dedicated to putting out all manner of books, from religious works to experimental erotica. It's estimated that roughly 10 million books are sold annually. This week, annual Hebrew Book Week is marked, and all across the country publishers, distributors and bookstores are setting up stalls in city streets and public squares in a mass celebration of the written Hebrew word. But while on the surface things couldn't be rosier, behind the scenes people are grumbling. Concerned over vertical expansion by dominant publishing houses, smaller publishers worry that they may soon be forced to close. EVER SINCE the first Hebrew book was published in the Holy Land, in Safed in 1577, the publishing industry has seen its shares of ups and downs. Then, Eliezer Ben-Isaac Ashkenazi of Prague went out of business after publishing a mere six titles. Nearly 250 years later, Yisrael Bak, an experienced printer from the Ukraine, established a press in Safed too. After suffering arson and plunder at the hands of local Arabs and a severe earthquake that destroyed the city and his press, Bak moved his business to Jerusalem in 1841. It wasn't long before the competition gathered. What followed has been 170 years of expansion and mergers. Jewish publishing houses from Europe set up shop in Palestine alongside local start-ups. Partnerships were made and dissolved. Publishing houses were established by political parties, unions, kibbutz movements, universities, newspapers, authors, businessmen - nearly anyone with money and connections could set up shop. Today, the publishing scene is made up of three tiers of houses. The top 20 publishers produce roughly 50 percent of all titles. They include Kinneret Zmora-Bitan Dvir, Keter books, the two kibbutz movement owned publishers that merged in 2000, Hakibbutz Hame'uhad and Sifriat Hapoalim; Am Oved, the newspaper chain owned Yediot Books and Sifriat Ma'ariv, Modan, Schocken and several others. The second tier is made up of about 100 smaller publishing houses that publish between 20 and 80 books a year, and the third tier is made up mostly of specialty or boutique publishing houses with limited and sporadic activity. Most of the publishers belong to the Book Publishers Association of Israel, an organization that celebrates its 70th anniversary this year. For most of its history the book market has been dominated by a single retail chain - Steimatzky. Established in Jerusalem in 1925 by Yehezkel Steimatzky, the chain quickly sprouted outlets around the country and even in other Middle Eastern cities like Beirut, Baghdad, Cairo and Damascus. After the 1948 War of Independence, the foreign stores were nationalized by their respective governments and the chain was reduced to its local stores. Over the years Steimatzky grew to include 170 stores and gained a near monopoly on the sales of books here. English readers are particularly familiar with the company's green logo, as for many years Steimatzky stores were the only places where English books were sold. In 2006, Ari Steimatzky sold the chain to Markstone Capital Group. Everything changed in 2000 when a new chain of bookstores took to the stage. Tzomet Sfarim was the product of the merger of three smaller bookstore chains with publishing giant Kinneret Zmora-Bitan Dvir. The introduction of the new and energetic chain with its strategy of aggressive price reductions started a price-cutting war between the two companies. Today Tzomet Sfarim runs 77 stores nationwide and aims to reach 100 by the end of 2010. Soon after it came on the scene, Steimatzky partnered with publishing house Keter. The companies found that by owning both the publishing house and the retail outlets, costs could be cut. The publishers don't need to pay distribution fees to middlemen, the stores serve as storage for the publisher's surplus books and the chain's employees aggressively promote their parent company's titles. Recent sales have featured bargains such as four books for NIS 100 or buy one book, get a second for NIS 1. YARON SADAN, chairman of the Book Publishers Association of Israel and CEO of Am Oved publishing house, says that the battle between the chains might appear to benefit the public with cheap prices, but that in fact it hurts everyone. "Each of them wields monopolistic power, because they are so dominant, therefore they dictate the terms of the market. The mad price war between them leads to lower prices and those come at the expense of publisher's profits and author royalties." He sees the effects of this in today's literary output. "Take a look at the best-seller lists and at the books that are being turned out by publishers. It has already influenced the quality. You see more commercial best-sellers at the expense of literary best-sellers," says Sadan. Sadan argues that most publishers can't afford the discounts they are encouraged to offer and that the situation is unfairly slanted in favor of those publishers who own the bookstore chains. He reckons that the system can't sustain itself in the long term. He believes that even the owners of the chains realize that the price cuts can't go on forever. "While sales were high they could manage," he says, "but now with the recession settling in and book sales dropping, they too will see that they can't survive using this model." Recently, seeking to challenge the status quo, members of the publisher's association decided to begin lobbying MKs to pass a law that would freeze the price of books for one year after publication. The suggestion is styled after similar regulations in France and other European countries. The publishers believe that this will lengthen the book's shelf-life and allow free competition between publishers based on merit instead of price. They also claim that their actions protect the authors and the lovers of high quality writing. "The aim is to enable the writers, first and foremost, but also the publishers to return their investment; lots of time and talent on the part of the authors, and time and resources for the publisher," says Sadan. "Legislation is the last branch we've got to hang on to." Sadan paints a bleak picture of a literary culture in dire straights. "In less than 10 years, you'll see that publishers will either have to merge or perish, the same thing that happened to the private book stores." He predicts that as time goes on, there will be a decrease in the variety and quality of books and that fewer people will even attempt to write. "NONSENSE!" SAYS Yigal Schwartz, a literature professor and chief editor of Kinneret Zmora-Bitan Dvir. "The real question is how much the writer gets at the end of the day." Schwartz says that cheaper book prices means that more books are being sold and that the writers end up earning more because, even if their percentage of the total is lower, they make up for it in volume. "The publishers' problem is that they need to market their books through Steimatzky and Tzomet Sfarim, and on the way lose part of the proceedings, so they can't offer the same deals to their writers as those who own book stores. I can understand their complaints; for them the situation is worse, but they shouldn't pretend to speak on behalf of the authors." Shwartz says that as a lover of fine literature, it bothers him a bit to see books being sold for NIS 1 and that he knows it bothers some writers too, but that he realizes he's being sentimental. Overall, he says, more people are reading books and more writers are employed in the publishing business than ever. More volume, he reminds, also means there is more demand for editors, translators, printers and everyone involved. He says that so far the global recession has had negligible effects. "It's negligible because for some people - the core readers - books are like cigarettes. They'll buy books at any price." He also commented that books make excellent gifts, with favorable value for money. "Prestige and reputation are the publisher's long term strategy," says Schwartz. "The moment a publisher looks only at the dollars and cents, he doesn't stand a chance." He says publishers sometimes take on highly reputable projects even if they know they won't be profitable. Sometimes they do it to gain the rights to other, more lucrative titles, and sometimes to keep their staff happy. Both sides agree that without the authors, nothing would be possible. Unfortunately for them, they get left with the smallest piece of the pie. Most writers make NIS 2-NIS 3 for every copy sold. "You can't make a living by writing full time," says Asaf Schurr, 34, who has authored two novels: Amram (Babel, 2007) and Motti (Babel, 2008). His books have been described in the press as "a flash of literary brilliance" and "a work of genius." Amram won several literary awards and Motti has been very positively reviewed. Schurr says he pays the bills by editing, reviewing and translating. Schurr says that sometimes it's difficult to find things on bookstore shelves because books replace each other so quickly and there's no room for everything that comes out. He says his great find of the month was a friend's science fiction and thriller library at home. "These are the kind of things that if you didn't raid someone's library, you'd never know they existed." He says books have a very small window of opportunity to gain exposure and that it is obvious that in today's market, many good books go unnoticed. AUTHOR YORAM Kaniuk remembers when times were different. The 79-year old novelist, whose work spans 50 years, remembers the days before the book chains, publicists and best-seller lists. "Once, writing a book could buy me three or four months, during which I could write another book. Today, the most it can buy me is two weeks or at maximum, a month," he says. An author of 17 novels, a memoir, seven collections of short stories, two books of essays and five books for children and youth, Kaniuk feels too much emphasis is put on the marketability of books. "Today the value of a book isn't determined by its reviews or by what people have said about it, only by its sale figures; if it sold well, they'll buy it too." He says that the book sales figures, which are reported by the chains, are what make or break an author. "It's all right for me in my old age, I can make do, but an unknown writer who publishes a new book, what can he do?" Kaniuk says that there are many good new authors today, but that their life is very hard. He, like Sadan, is concerned about the future of the culture. "The Hebrew language is upheld and enriched because of the authors and poets. If Hebrew literature is left to die, the Hebrew language will die as well. And if Hebrew dies, we become south Lebanon. In Israel, the written word has always led the way in terms of ideology and the like - today, it's in a hopeless situation." According to him, the downfall is not far off. "I think it will happen in very few years. I think it's already happening." Kanuik suggests that the government would do well to invest more in its proud and accomplished literature, instead of what he describes as its less-than-fruitful soccer efforts. The government regulators have so far been content to let things stand. Last fall, an exchange of letters between Labor MK Shelly Yacimovich and antitrust commissioner Ronit Ken was made public on Yacimovich's Web site. In her letter, Yacimovich brought to Ken's attention the perceived injustice that developed as a result of Kinneret Zmora-Bitan Dvir's ownership of Tzomet Sfarim. "The chain's excessive power is made apparent by its dominance on the best-seller lists," said Yacimovitch. She wrote that over the previous few months, the owner's books consistently made up half of the titles on the fine literature best-seller lists (five out of 10) which, according to her, "demonstrates the chain's abilities to manipulate book sales." She lamented the fact that publishers, after giving up 65 percent of their income to the chains in exchange for distribution, were left with NIS 25 to cover operation costs, royalties and profits. "Books are not simple commercial products. They are creative works that exist in a cultural setting and crucially influence the cultural and linguistic level of the citizenry, " concluded Yacimovich. TWO WEEKS later, the regulator responded. She wrote that she was aware of the grievances, but had determined that the situation did not warrant intervention. Ken said that having two chains on the market was better, competitively speaking, than having one - as the case was before. She quoted numbers collected from 2004-2006, which showed a 44% increase in sales of adult literature, with a 36% rise in earnings, which she said indicated a healthy competition that works in favor of the consumers. In an interview he gave last year, Tzomet Sfarim CEO Avi Shomer compared the book sales his chain offers to giving out a second ticket to the movies or the theater. "We don't cheapen the culture, we bring it into people's homes." A phenomenon that is rapidly growing and that might make the whole industry as we know it redundant is the advent of electronic books. While they haven't broken into the market yet, electronic books could potentially cut some of the manufacturing expenses and remove some of the middlemen. While some in the industry think it will never catch on, that people like the feel of books in their hands and their look on the shelf too much to ever replace them with electronic devices, Kaniuk thinks they can't arrive soon enough. "What do I care how I read a book? As long as the author and the publishing house can make a living off it, I don't care about the paper. On the contrary I think that the forests will benefit from it." As Israelis prepare to celebrate their unique literary festival, they are offered an abundance of choice. Book lovers can only hope that the current plethora doesn't indicate that the book business is going supernova, with the hectic activity signifying its radiant death throes.