New Law in Israel Curtails Bookstore Discounts

In News by Dennis Abrams

Steimatzky bookstore and café (Photo: Wikipedia)

An outlet of the Steimatzky bookstore chain (Photo: Wikipedia)

By Dennis Abrams

The Jerusalem Post reports that the Israel passed a books and authors law, (officially known as the Law for the Protection of Literature and Authors in Israel (Temporary Provision), 5773-2013), designed to increase competition between publishers and booksellers, “and to ensure outside the top few are better compensated.”

The bill is meant to help break up what’s seen as the “duopoly” dominating Israel’s book market, Steimatzky and Tzomet Sfarim, “by not allowing a store or publisher to encourage salespeople to promote specific books, and by requiring stores to give equal prominence to books from different publishers.”

The Post also reports that the legislation will require stores and publishers “to reach agreements on what kind of discounts can be put on books,” and that those discounts can only be placed on books that are more than 18 months old.

“During those 18 months, Israeli authors will receive at least 8 percent of the price (minus VAT) of the first 6,000 books sold and 10% of the price of books 6001 and up. The bill also regulates authors’ royalties after 18 months.”

Analysts expect that because of the law, the prices of books will rise considerably in order to “maintain profits for publishers, booksellers and authors,” although the Culture and Sport Ministry predicts that the price of books would actually drop due to increased fair competition.

The Post quotes MK Nitzan Horowitz (Meretz), who proposed the bill three years ago, as saying that it “is meant to ensure that consumers, readers receive good, high-quality books and that their authors will receive appropriate compensation.”

“We passed this law because of a market failure,” he told Army Radio. “The new law protects the prices of new Israeli books. Books don’t get old that quickly and there will still be sales and discounts in stores.”

But Rotem Sela, a publisher who led a protest against the law, told Army Radio that in any country with laws that limit book prices, the amount of books that are published dropped by a third.

“Fewer books will be published. Fewer books will be bought and fewer books will be read,” he said. “Discounts and sales allow publishers to take risks and publish different, bold literature and unknown authors.”

And as the headline of Adi Dovrat-Meseritz’s article for points out, “Israel’s new Book Law bans discounts (except it doesn’t)”

Dovrat-Meseritz writes:

“The law says that discounts for newly published books are banned, but the market is saying something else.

“…The law bans retailers from selling new titles at a discount or through any kind of special offer, for 18 months after they are first published. But that hasn’t stopped both of Israel’s two largest bookstore chains from running ‘buy one, get one free’ sales this month.

Dovrat-Meseritz notes that while the law means that bookstores are prohibited from selling new books for less than the publisher’s suggested retail price (except under certain conditions), publishers argue that since the law still doesn’t prohibit “booksellers Steimatsky’s and Tzomet Sfarim from demanding discounts for the books they purchase,” that they have been forced to find “creative ways” to get around the law.

One way was to simply publish as many titles in January as possible, exempting them from the new restrictions.

“In January I released all the books I intend to publish until Hebrew Book Week in June,” said Ziv Cohen, owner of Sela Books publishing. “Another trick is to release books with minimal distribution. The publication of a few copies is enough to have the book listed as having been released before the law came into force. Or the book can be printed now and released later. All publishers have by now grasped that the law can’t work the way it was written, so they’re looking for ways around it.”

In recent years, Dovrat-Meseritz says, more than 75% of retail book sales are made at a discount or through professional channels. But now bookstore chains will have to find a way to convince customers to either purchase new books at full price or to “settle” for buying older titles. “Until May, we’ll run promotions as usual, and in March we’ll invest in direct marketing to our 440,000 club members, said Steimatzky CEO Iris Barel.

And with the mandated 8% royalty based on the book’s list price, publishers and book store chains claim that the law will hurt unknown authors.

“Up until now, said Ziv Cohen, “I made it a principle to publish several books by unknown writers each year on the house, but this year I won’t, because it isn’t economically feasible. I do care about culture, but this is ultimately a commercial business.”

Eitan Zinger, an owner of Probook and chairman of Dionon Publishing House acknowledged that, “New writers will find a way to sidestep the traditional publishers by publishing privately through digital marketing.”

Dovrat-Meseritz quoted a “major publisher” who said that, “This law came about because the market was in the process of collapse; its goal was to improve the situation. But what is happening is the opposite. The money intended for writers and for literature was stolen by the chains. The consumer will pay more, the writer will sell fewer copies, publishers will receive less in commissions, and fewer books will be sold. There is just one beneficiary: the Steimatzky – Tzomet Sfarim oligopoly.”

About the Author

Dennis Abrams

Dennis Abrams is a contributing editor for Publishing Perspectives, responsible for news, children's publishing and media. He's also a restaurant critic, literary blogger, and the author of "The Play's The Thing," a complete YA guide to the plays of William Shakespeare published by Pentian, as well as more than 30 YA biographies and histories for Chelsea House publishers.