The German book price fixing scheme has been in place for more than 120 years. But the publishing world faces new challenges now that e-books and electronic reading devices have been thrown into the mix.
The German book price fixing scheme has been in place for more than 120 years. But the publishing world faces new challenges now that e-books and electronic reading devices have been thrown into the mix. Germany likes to think of itself as ‘the land of poets and thinkers.’ Considering the nation has around 20,000 publishers, about 5,000 book-sellers and more than 90,000 new books hitting the market each year it may seem hard to disagree with that assessment. However, the country’s publishing industry has had a little extra help: Germany operates a fixed book price system that allows publishers to set the cost of new releases. The time-honored pricing scheme has been is even protected under European Union regulations. Traditional German booksellers are set to face unprecedented competition as the digitization of books becomes more commonplace. E-book devices like the Sony Reader and Amazon Kindle worry German publishers and booksellers, because they have the potential to eliminate, or at least weaken, the bookstore, just as Mp3 players hurt the record business. The same fixed-price laws that protect booksellers have a glitch when it comes to the virtual world. Legally, e-books are seen as a replacement for printed books, and as a result, must have set prices. But when it comes to taxation, e-books are considered software or electronics – not books. The higher tax and fixed prices mean that e-books are much more expensive in Germany than in markets like the US, where the dominance of Amazon and Apple has led to price wars.