A free market for books

Our lawmakers should reconsider blatant intervention in a book market that seems to be working relatively well on its own.

bookstore 521 (photo credit: Marc Israel Sellem)
bookstore 521
(photo credit: Marc Israel Sellem)
Immediately after the summer recess, Culture and Sport Minister Limor Livnat plans on presenting legislation designed to protect our literature from the ravages of a cut-throat book market, governed more by profit-making than a desire to advance original Israeli culture.
On Tuesday she presented to a group of MKs that included Nitzan Horowitz (Meretz) and Zevulun Orlev (Habayit Hayehudi) the possible versions of a private bill that have been discussed for at least two years. Minister-without-Portfolio Yossi Peled (Likud) has a bill of his own.
The lawmakers hope to reverse a trend that has been unfolding for the past 10 years in which authors and publishing houses are getting paid less and less for the books they sell. However, while their intention is honorable, our lawmakers should reconsider blatant intervention in a book market that seems to be working relatively well on its own.
Until a little over a decade ago, Steimatzky enjoyed a near monopoly over the market for new books. Publishing houses were pleased with the situation. Steimatzky’s interest in keeping book prices high dovetailed with publishing houses’ interests in getting a cut of those higher prices.
But the market began to change.
Towards the end of 2002, Tzomet, which had been a retailer of bargain-priced books, embarked on a series of mergers with other book purveyors and publishing houses, ostensibly entering into direct competition with Steimatzky. Today the two chains are roughly equal in size, and between them control roughly 80 percent of the market, according to Globes.
They also engage in cutthroat competition.
At the beginning of the month, for instance, Tzomet – in an unprecedented move – announced that special sales offered during June’s Book Week would continue through the entire month of July.
In response, Steimatzky ordered publishing houses not to cooperate with Tzomet. Tzomet countered, warning that publishing houses that acquiesced to Steimatzky’s demand would have their books removed from all Tzomet stores.
The big winner from this state of affairs in which Tzomet and Steimatzky compete to push down book prices is the consumer. The big losers have been the publishing houses, who must continue to pay the same overhead costs in the form of paper and ink – as well as salaries to editors, translators and administrators – while they see their income from book sales fall.
Authors have been hit hard too. Yoram Kaniuk, who won this year’s Sapir Prize for Literature for his book 1948, told The Jerusalem Post that he received two shekels on average for each of the 60,000 copies of 1948 sold so far.
“I devoted two years to writing that book,” said Kaniuk. “It’s outrageous.”
And Kaniuk, a well-known author whose book is being made into a play at the Haifa Theater, is in a relatively good situation compared to dozens of authors who will never sell more than a few thousands books.
STILL, WHILE we sympathize with the plight of Kaniuk and other novelists who devote years to producing works of art, but do not receive the appreciation they deserve – at least not in economic terms – we are also wary of tampering with the book market.
Israel Antitrust Authority, which investigated charges that Steimatzky and Tzomet operate like a duopoly, found that there has been a significant rise in the diversity of titles offered the public – and that expenditures on books have actually gone up despite the steady fall in prices.The authority saw no justification for intervention.
Nevertheless, lawmakers are contemplating adopting what is known as the “French Law,” named after similar legislation adopted in Europe. If the law is passed, Tzomet, Steimatzky and other retailers would be prevented from selling new books at a significant discount for the first year after publication, except during Book Week.
Well-known authors, such as Kaniuk, might be right to assume that they would earn more if the French Law gets adopted in Israel. But they tend to ignore a number of negative side-effects. New, unknown authors, would find it harder to break into the market. Fewer people would be able to afford to buy a newly-published book. The total demand for books would fall – as would the diversity of titles.
Instead of attempting to tamper with the market, our lawmakers might consider other methods of encouraging literary activities. As in the movie industry, special state-backed funds could be set up to support authors. State-funded literary events could also help promote literature and educate the public about its importance.
Promoting original Israeli culture is an eminently fitting goal that should be pursued by the Jewish state. But tampering with market forces might not be the best way to achieve that goal.