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Can newly-introduced fixed price system support publishing sector?

Can newly-introduced fixed price system support publishing sector?

Posted October. 22, 2014 06:48,   

한국어

The revised fixed book price system goes into effect on November 21, spurring worries that it will become the next Terminal Distribution Structure Improvement Law. The revision has strengthened the previous fixed book price system. Currently, only newly published books are banned from being sold at over 19 percent discount. From now on, all books will be banned from being sold at over 15 percent. With large brick and mortar bookstores and online stores engaged in price wars, the revision aims to protect smaller bookstores and bring back the publishing sector to growth.

The publishing and distribution sectors complain that the penalty of 1 million won (948.32 U.S. dollars) is too low and that there is no regulation on giveaways that are believed as discounts. On the consumer front, however, it is a loss since they can`t buy books at a cheaper price. Since the Terminal Distribution Structure Improvement Law went into effect, consumers have to buy mobile phones at higher prices and the market has turned downwards making vendors fret. The publishing industry has requested the government for stronger regulation to stop bleeding competition, but is now in massive discount competition ahead of the effectuation of the revised system. The Terminal Distribution Structure Improvement Law had also resulted similar price wars before going into effect.

Half of OECD member countries have a fixed price system for books. Both the U.S. and the U.K. have a free price system while Germany and Sweden have a fixed one. The U.S. and the U.K. own globally renowned publishers, but the top 20 publishing companies take up 97 percent of total book sales. Europe opted for a fixed price system to enable smaller publishers and bookstores flourish but failed to foster global publishers. The same debate goes to whether regulating large retailers can lead to growth of traditional markets.

It is important to protect the publishing industry to nurture various cultures and content. Nevertheless, it remains in question whether the fixed price system can restore growth to the book market when the mobile video and e-book markets are continuing steady growth. Various methods should be sought for to help people read more books and for the publishing market to grow again. Korea`s some 800 public libraries purchase 65 billion won (61.64 million dollars) worth of books a year. If they increase the figure to around 300 billion won (285 million dollars), this will help the publishing sector as well as enhance the level of culture of people.