As a lot of people are aware, the new Harry Potter book, Harry Potter and the Order of the Phoenix goes on sale at midnight tonight. In the UK, the recommended retail price of the book is £16.99, which is fairly typical for a new hardback novel (although expensive for a children’s book). However, Britain’s booksellers are using it as a loss leader, and it is thus going to be available for much less than this. Amazon is selling it for £8.49, and the cheapest I have seen it advertised in a shop with physical premises is £9.99.
Judging by the prices of the other books in the Harry Potter series, the paperback edition of the new book is likely to sell for £7.99 (when it comes), so the effect of all this discounting is that the hardcover of the new book is selling for close to the price of a paperback. Obviously this is good. Consumers will be saving money. Poor people (or cheap people) who normally wait for the paperback in order to save money will be able to buy the hardcover, thus saving their children from social death. There will be happiness and light in the world. Capitalism is a fine thing.
Remarkably, as recently as 1995 this discounting would have been illegal. Believe it or not, book prices in the UK were fixed. Under something called the Net Book Agreement, it was actually illegal for a bookseller to sell a recently published book at any price other than the one set by the publisher. Supposedly, this was so that publishers could make money from popular books and thus subsidise more “worthy” books, or something. (In reality, it protected specialist bookstores from supermarkets and other stores that merely stocked a few bestsellers). When the price fixing was abolished, various literary establishment figures came out of the woodword and said how terrible this was. I remember some famous author (Harold Pinter?) saying something like that removing price fixing on books would “Lead to a decline in the number and quality of books published in the UK. In fact, we will end up will a lowest common denominator publishing industry like the one we have in America”.
And my goodness, we couldn’t have that, could we. What fate could possibly be worse than being like America?
In any event, British bookbuyers (many of them children) over the next couple of days will save a total of something like £25 million due to the demise of the net book agreement. Politicians often favour indirect subsidies over direct ones because indirect ones (although always actually more expensive) are often hard to quantify. It’s always interesting when an event like this gives you some actual numbers for an indirect subsidy. £25 million is a lot of money. You could buy David Beckham for that.
I work in a shop called The Works, which is one of many owned by Remainders Ltd, who also run Book Sale and Bannana Bookshops. We are selling the book at £8.99. We aren’t making any profit from the book, but simply hoping that it will increase sales for other goods in the shop.
Wonder if anyone has calculated the loss of V.A.T., due to the lowered price? Where is HMG in all of this; loss of intake to the government coffers must not be permitted. 🙂
In the meantime, over at The Volokh Conspiracy, Jacob Levy is lamenting the fact that the University Presses are cranking out ony 31 million books a year.
“Lowest common denominator” indeed.
You’ll probably think I’ve got moonbat tendencies, but I’m getting the book at full price, plus postage, from a small independent book-shop.
Why? Well, I’ve known them for years, and they’ve supplied me with stuff that the likes of Smiths, Waterstones, or Borders would never have even considered. They’ll look for stuff that’s out of print (yes, I know about Alibris and it’s always been more expensive than them). They’ll recommend one printing over another for binding or print quality. In your speak, they provide enough “Value-added services” to make their prices worth it.
Hey- it’s my money. Want to make something of it?
Chuckle.
The Barnes and Noble chain of megabookstores in the US (don’t know if they’re in the UK) are offering are publishing classics like Moby Dick, The Art of War, The Odyssey and The Red Badge of Courage at discounted prices. Frankly, that’s a brilliant idea. I bought cheap (as in price) classics during college as my entertainment (seeing I couldn’t afford anything else), and I can’t help but think that such low prices will encourage otherwise price-conscious readers to gravitate to those books. All in all, a pretty good thing. I guess I shouldn’t be surprised that among an author’s strengths will not be a well-grounded understanding in how markets work.
Those perturbed like MommaBear that Mr Brown will find himself out of pocket because of the discounting will just have to wait for the audiobook–assuming Stephen Fry’s voicebox survives the ultimate-distance read–to make their contribution to skoolznospitles and police retirement on health grounds. Books carry VAT at zero-rate*, so the fisc is unaffected whatever they sell for.
Of course it’s always possible that the kiddies will spend any money they have left over on other Potter merchandise bearing the full 17.5%. In which case the treasury actually does better out of discounting than otherwise. Just like magic.
Huzzah!
(*For US readers–yes, that’s right, they are taxed, but at zero rate. I really need to start my own blog, I’m plainly infected with the need to explain the whole world.)
Barnes & Noble do not have any stores outside North America, although Borders have stores in the UK, Australia, Singapore, New Zealand etc. (Oddly, although Starbucks have a deal to provide cafes in Borders’ chief competitor Barnes & Noble in the US, they have a deal to provide cafes in Borders outside the US). The business of extremely cheap editions of “classic” books is very common in the UK. For out of copyright books, Penguin normally provide two editions: a fancy one with nice annotation and an introduction by someone distinguished costing five or six pounds, and a cheap one just containing the text, often costing one pound. Several other publishers publish similar very cheap editions.
Guy: You should indeed start your own blog. It is great fun, although sometimes time consuming. The realisation that you can denounce anyone you like is particularly enjoyable.
Harry Payne: I fully support your decision to pay full price if you think the value of services rendered is better than “the lowest price.” I don’t shop at Walmart for partly that reason (there are many), and I encourage people to shop at stores such as Nordstrom’s if they appreciate customer service. I mean, if you want the cheapest price there are plenty of places to get it, but customer service is a wonderful thing that is worth paying for.
Yes, bought an 8.99 Potter from The Works (for my daughter, honest!), and yes, also bought loads of other stuff, proving Richard’s point. Smiths, not fifty yards away, were selling for 11.99