After the Net Book Agreement…

Children’s Books in a Free Pricing Market

Those of us who supported the Net Book Agreement before it bit the dust three months ago are in an uncomfortable position. We supported it because we believed that books were more widely available at generally lower prices while the agreement was in operation, and that, because booksellers did not compete on price, they competed instead on the things that really mattered to the book buying public: a wide range of stock, and the provision of service – principally bibliographic information to access the vast number of in-print titles available in this market, and a willingness to order books for customers that were not in stock. If price competition were allowed, we argued, booksellers would become less able and willing to provide these essential services.

And we reasoned that these services were far more necessary to the book trade than they were to any other retail sector, because of the vast size of the inventory, more than 600,000 titles in print, each a different product line, available to the UK reading public. Or, to put it another way, a large supermarket would rarely have more than 15,000 product lines on its shelves; a decently stocked bookshop would offer more than 60,000.

Price competition, we insisted, would take place on only a very small proportion of that inventory – the top 10 or 20 or 30 bestsellers perhaps – and to compensate for the loss of margin suffered by publishers and retailers in the price competition on those bestsellers, the prices of other books would have to go up, because any increase in sales could never be sufficient to compensate for that loss of margin. Moreover, free pricing would bring the supermarkets into the picture: they would heavily discount the bestseller list – cream, in other words – and push many smaller stockholding bookshops into bankruptcy.

As to the institutional world, we feared that libraries and schools would feel compelled to squeeze their suppliers, and that these would inevitably suffer along with service and range.

Those hostile to the NBA found us quaint, elitist and needlessly pessimistic. Price competition, they argued, would bring more people into bookshops, more people would get the reading habit, and smaller stockholding bookshops would learn to box smart to stay in the game. Now that the NBA has gone, we who supported it have to hope that the abolitionists will be proved right. The sceptics among us probably expect that the future will bring a mixture of the abolitionists’ hopes and the pro-NBA lobbyists’ fears.

The NBA had been in place in various forms since the start of the century – with the exception of proprietary medicines, it was the last vestige of resale price maintenance, swept away by Ted Heath’s economic reforms of the 1960s. It was always unpopular among politicians with free-market proclivities, and also, more recently, with the Office of Fair Trading. The OFT referred the NBA to the Restrictive Practices Court last year, but long before it got a first hearing there the NBA collapsed, destroyed from within.

Why? The first reason was a stagnant market, stagnant in particular in the stockholding retail book sector. Over the years publishers – and in particular children’s book publishers – were increasingly looking for a larger and larger proportion of their sales through outlets outside the stockholding sector – through supermarkets, book clubs, book fairs, door-to-door operations and the like. And these were precisely the kinds of outlets that demanded from publishers deals not permitted under the NBA. First Reed and then Hodder Headline withdrew from the NBA, and then, in October, W H Smith, until last year the strongest supporter of the NBA, but now facing a critical City after poor results, approached Random House and HarperCollins with a deal they could only accept if they too withdrew from the Agreement. They found it an offer they could not refuse. Within hours the 95-year-old NBA had collapsed.

It’s still early days, and too soon to predict what the results of this development will be. But as far as children’s books are concerned, even the staunchest supporters of the NBA could not argue that the old regime was a wholly good one. It is significant, I think, that children’s book publishers were at the vanguard of those consumer book publishers seeking sales outlets beyond the stockholding bookshops – which, with a few honourable exceptions, proved to be no more than mediocre children’s booksellers.

A number of reasons for this disappointing performance suggest themselves. One is that children’s books are on average cheaper than adult ones, so every copy sold contributed less to the bookseller’s financial performance. Second, they require specialist knowledge, and that again costs time and money. Third: the general view that children and those who deal with them are intrinsically less important than adults and those who deal with them. Sad, but it remains undeniably a part of our national life.

Whether this remains the case or whether some healthier attitude can be nurtured probably has little to do with whether books are sold under resale price maintenance or not. But we have to hope that, following the end of the NBA, books generally and children’s books in particular, will find a higher profile in the marketplace. We have to hope, too, that this will not occur at the expense of stockholding bookshops, and we have to hope that they – the big chains like Waterstones and Dillons, as well as the independents – will find ways to sell children’s books more effectively than they have up to now. Keen prices may be one way to draw the punters in, but I hardly need to persuade readers of Books for Keeps that books have a value beyond their price.

As well as being Editor of the Bookseller, Louis Baum is also author of several books for children.