Gov’t reads riot act to book mar­ket over price med­dling

JoongAng Daily - - Front Page - BY LEE SUN-MIN, LEE SANG-UN sum­mer­lee@joongang.co.kr

Lit­er­a­ture lovers couldn’t be hap­pier than they are right now, as book­stores na­tion­wide have been slash­ing their prices.

“I or­dered about 70 books through book­stores and on­line shop­ping malls, and it didn’t even cost me 300,000 won ($277),” said Jo, a 39-year-old company worker. “But at the same time, I was won­der­ing whether it was O.K. for the books to be so cheap.”

Book prices are lower than ever th­ese days. On­line shop­ping malls grab at­ten­tion by ad­ver­tis­ing lit­er­a­ture at up to 90 per­cent off, while larger off­line stores are filled with read­ing ma­te­ri­als re­tail­ing at prices 30 per­cent lower than usual. And many book cafes op­er­ated by lo­cal pub­lish­ing com­pa­nies have jumped on the dis­count band­wagon.

The mark­downs are be­ing driven by a re­vised price-fix­ing law for books that will be en­forced on Nov. 21. The gov­ern­ment wants to cre­ate a health­ier ecosys­tem for the pub­lish­ing in­dus­try be­cause it be­lieves that if the cur­rent con­di­tions don’t change then in­de­pen­dent book­stores could go out of business, pub­lish­ing com­pa­nies will con­tinue to strug­gle fi­nan­cially and writ­ers will re­ceive smaller wages while con­sumers pay too much for books.

“The core of this re­vised law is to take bub­ble pric­ing off books so that we can set a firm ground to grow a health­ier pub­lish­ing in­dus­try here in Korea,” said Vice Min­is­ter of Cul­ture, Sports and Tourism Kim Hee-bum at a press con­fer­ence last week.

“We aim to lead pub­lish­ing com­pa­nies and book­stores into fo­cus­ing on pro­vid­ing bet­ter qual­ity con­tent and more di­verse lit­er­ary prod­ucts in­stead of lur­ing con­sumers with cheap prices.”

The gov­ern­ment says there is room for pub­lish­ing com­pa­nies to of­fer books at lower costs as it be­lieves the in­dus­try cur­rently sets prices too high on new re­leases in or­der to give lee­way for sale-boost­ing dis­counts at a later date.

The ex­ist­ing law al­lows pub­lish­ing com­pa­nies and re­tail­ers to set a dis­count of up to 10 per­cent per book while shops can give cus­tomers ad­di­tional cash off if they have a store card. The max­i­mum price cut a cus­tomer can re­ceive is 19 per­cent.

How­ever, un­der the cur­rent law, any dis­counts can be given on books that are more than 18 months old, ed­u­ca­tional lit­er­a­ture or prod­ucts that of­fer prac­ti­cal ad­vice, such as self-help books. As a re­sult, the law only ap­plies to ap­prox­i­mately 13 per­cent of the books that are cir­cu­lated in Korea.

To en­sure the law cov­ers a wider range of books, the gov­ern­ment has an­nounced that the re­vi­sion, which comes into play in two weeks, will stip­u­late that no more than 15 per­cent can be de­ducted from the set re­tail price of a book, whether it is sold through on­line or off­line out­lets.

“The pub­lish­ing in­dus­try in­cludes con­tent cre­ators, pub­lish­ing com­pa­nies, re­tail­ers and con­sumers,” said the vice min­is­ter. “We think the new sys­tem ad­heres to the re­quests made by th­ese and caters to them all.”

The four par­ties, how­ever, seem dis­sat­is­fied with the gov­ern­ment’s at­tempt to clean up the lit­er­ary scene. When a meet­ing was held last month to hear opin­ions on the re­vised law, ar­gu­ments en­sued.

“This sys­tem is only half good as it still grants all the same pre­rog­a­tives to on­line stores,” said Pres­i­dent Jung Deok-jin of Haet­bit Mungo, a small book­store chain, by point­ing out that the state will not reg­u­late free shipping in on­line stores that of­fer books.

In­ter­net re­tail­ers, on the other hand, com­plained that the gov­ern­ment has not come up with de­tailed reg­u­la­tions on trad­ing used books, while rep­re­sen­ta­tives from pub­lish­ing com­pa­nies claimed it didn’t re­ally take time to lis­ten to voices in the in­dus­try.

“Be­cause the min­istry has made a com­pro­mise that in­cludes some sug­ges­tions from off­line stores and some from on­line stores, the law is just a hodge­podge,” said Korea Pub­lish­ing Re­search In­sti­tute re­searcher Baek Won-geun.

When the min­istry was in the process of com­ing up with the de­tails for the law, off­line book­stores ar­gued that the cur­rent 19 per­cent dis­count should be kept, while on­line stores re­quested 10 per­cent. The min­istry set­tled in the mid­dle and chose to im­ple­ment a max­i­mum dis­count of 15 per­cent on any books.

From Nov. 21, if a pub­lish­ing company wants to sell books at lower prices, it needs to of­fi­cially change the re­tail prices of the books 18 months after they are pub­lished, which will al­low the prod­ucts to re­tail at a set price wher­ever they are sold, thus en­sur­ing fair­ness.

“There are some hopes that the over­all pub­lish­ing in­dus­try will im­prove, but this new law won’t im­pose enough in­flu­ence to make the mar­ket turn around and move to­wards [a rosy fu­ture],” said Han Ki-ho, di­rec­tor of the Korean Pub­lish­ing Mar­ket­ing Re­search In­sti­tute.

Kim Seong-bong of the pub­lish­ing company Ye­baek Me­dia agrees. He be­lieves the law won’t change mar­ket con­di­tions much.

“No pol­icy is per­fect. It is in­evitable to see some trou­ble in the process of im­ple­ment­ing a law since the mar­ket changes so fast that the reg­u­la­tion sys­tem can never keep up with it,” said Vice Min­is­ter Kim

“There are dif­fer­ent groups that are vo­cal about the mat­ter, but the ul­ti­mate goal here is to give a mes­sage that the gov­ern­ment is set on es­tab­lish­ing the idea that the pub­lish­ing in­dus­try needs to fo­cus more on cater­ing to the fast-chang­ing tastes of con­sumers in­stead of com­pet­ing with prices.”

Be­cause it will be­come more dif­fi­cult for pub­lish­ing com­pa­nies to clear older books out their ware­houses un­der the new law, book­stores and book­mak­ers have been of­fer­ing ma­jor dis­counts.

This is ironic be­cause the gov­ern­ment’s at­tempt to set prices for pub­li­ca­tions has in­sti­gated the re­cent spate of sharper dis­counts, which could cause a boomerang ef­fect, hurt­ing the pub­lish­ing in­dus­try after the new law kicks in. Read­ers are be­com­ing used to the large dis­counts and may re­sist pay­ing full price for books in the fu­ture.

“I re­frained from giv­ing out dis­counts as I thought it would come back to me after and hurt [sales], but after I wit­nessed over­all book sales shrink­ing fur­ther due to dis­counted books [at other stores], I had no other choice but to join the trend,” said the pres­i­dent of a lo­cal pub­lish­ing company.

Gen­er­ally speak­ing, books with huge dis­counts, or books that have been out for a while, don’t rank high best seller lists. Some ex­cep­tions oc­cur when movie or TV adap­ta­tions of books are re­leased.

But as of Oct. 31, 20 books ranked in the top 30 of the best-sell­ing list on Korea’s largest on­line book seller, Yes24, of­fered dis­counts of more than 10 per­cent, which is the gen­eral dis­count ap­plied to new books on on­line stores.

But ahead of the up­com­ing re­vised law, out of the top 20, 14 had price tags mark­ing a dis­count of 40 per­cent. “Un­chang­ing Rules on Child Ed­u­ca­tion,” which was the fifth most popular book on that day, was 90 per­cent off at 980 won.

“I’ve worked in the pub­lish­ing in­dus­try for more than 30 years, and I’ve never seen so-called ‘dumped books’ take up the best seller list,” said an op­er­a­tor of a lo­cal pub­lish­ing company. “It might be hard to find any re­lated prece­dents in the world.”

The Cul­ture Min­istry will work closely with dis­trict of­fices and re­gional gov­ern­ments to mon­i­tor whether lit­er­ary re­tail­ers or pub­lish­ing com­pa­nies col­lude to align book prices so that the in­dus­try can suc­cess­fully set­tle a “no dis­count” trend in the book mar­ket.

While many are vo­cal about the trou­bles they have ex­pe­ri­enced with the pub­lish­ing in­dus­try, some sim­ply ig­nore the larger prob­lems and fo­cus on run­ning in­de­pen­dent book stores with a dif­fer­ence.

A store called Manil in Mang­won­dong, Mapo Dis­trict, is small. Un­like many big-name book­store chains, this shop tends to sell lit­er­ary works in­clud­ing po­etry an­tholo­gies or con­tent re­lated to changes in cul­ture and art. The shelves are not so densely packed as other book re­tail­ers.

Peo­ple gather for a book club each Sun­day. Lo­cal res­i­dent are the main par­tic­i­pants, and guest speak­ers are of­ten in­vited — some­times ed­i­tors-in-chief at lo­cal pub­lish­ing com­pa­nies.

“Based on my ex­pe­ri­ences in the past three month, I learned that there are many peo­ple who are pas­sion­ate about books,” said Lee.

Nam Yu-jae, who runs a bak­ery nearby, says he is also a fre­quent vis­i­tor.

“I come here be­cause I’m fas­ci­nated by how this store or­ga­nizes its books and shelves dif­fer­ently from big-name book­stores,” Nam said. “It gets more fun when you find a lot of unique books.”

Some peo­ple even vol­un­teer at the store to en­sure it be­comes firmly rooted in the neigh­bor­hood. One artist in her 20s comes to the store of­ten. “I was happy to see a well-dec­o­rated book­store in the neigh­bor­hood,” she said. “I come here to help out and there are two more who come here to work with­out any pay­ment.”

The book­store opened about three months ago thanks to 32-year-old Lee Se­ung-ju who works as an or­ga­nizer for book-re­lated events.

“I ren­o­vated my per­sonal work stu­dio into a book­store so that I can meet with more peo­ple who love books,” said Lee who be­fore shared many of his books with his ac­quain­tances.

How­ever, Lee said he has not found a way to make enough rev­enue to keep him fi­nan­cially afloat, although he has some ideas in mind.

Bye­olchaek Burok in nearby Dong­gyo-dong, north­west­ern Seoul, is also a popular small book­store. Since it is lo­cated near Hongik Univer­sity, its cus­tomers are a young crowd. It in­cludes a vast col­lec­tion of con­tent re­lated to art and de­sign along with sta­tionery and in­te­rior items such as post­cards and cups.

“I have been fo­cus­ing on ex­pand­ing my col­lec­tion of cute ac­ces­sories be­cause they not only help me make more sales but also de­fine the character of the store,” said 34-year-old Cha Se­ung-hyeon, who opened the store about six months ago.

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