One Year On, Israeli Book Law Brings Higher Prices, Lower Sales

Israeli legislation aimed at controlling prices for new titles has had the opposite effect its backer promised it would bring.

Daniel Tchetchik

“A book isn’t just a product on a shelf, it’s a cultural treasure,” then-Culture and Sports Minister Limor Livnat declared when the Knesset approved the Book Law in 2013.

In a way, she was right. In the year since the law went into effect, the era of four books for 100 shekels ($25) has ended and prices have risen so much, booksellers and publishers say that ordinary people have stopped buying them because they are so expensive.

Sales of new titles have plunged by more than a third in the past year and overall sales are down about 15%, say industry executives.

Formally known as the Law for Protecting Literature and Books, it requires that for the first 18 months after a new title is published – the so-called protected period – its price is subject to controls. Bookstores are barred from selling these titles for less than the cover price, except for major events like Hebrew Book Week or as an e-book – but even then, discounts are limited to 10%. Bookstores can now only deeply discount older titles.

“The law has been bad for everyone,” said Roni Modan, one of the principals for Modan Publishing House. “The bookstores tell me about six people coming into the store, everyone asking about new titles during the protected period, and all six leaving without anyone buying a single book.”

She says new titles sales have dropped by tens of percent and now account for just a third of total sales. “The rest are older titles sold in sales,” she said.

Eran Zamora, a coowner of the Kinneret Zmora-Bitan Dvir publishing group, called the legislation “the law for hurting literature and books.”

“Maybe that wasn’t the intent of the wise people who devised it, but that’s been the result,” he said. “It’s a law that has only done damage. And anyone who says, ‘Well, it’s a new law, you need time and patience, and eventually buyers will get used to it,' are simply confusing matters.”

Publishers say the law has upset the entire literary food chain. Sales are down between 40% and 60% for new titles, and 20% for all book sales. Bookstores say sales of new titles are down about 35%.

Tamar Peleg, of the publisher New Library, said she had done relatively well this year, because she published titles by very popular authors like David Grossman and A.B. Yehoshua. “But sales of less popular authors were hurt,” she added.

Before the law was passed, prices for fiction were typically priced by publishers at 84 to 98 shekels. But booksellers usually sold titles in "Buy one, get one free" sales, or four for 100 shekels, or three for 79 shekels. The real price to the customer was more like 35 shekels.

The law’s backers had promised it would lead to lower prices, but that isn't what happened. The first book to be released after the legislation went into effect, Yoram Kaniuk’s “Malachim” (“Angels’), was priced at 50 shekels. But since then, prices for new titles have been climbing.

Itzik Shalev, vice president for trade at the book chain Steimatzky, said publishers did lower their catalog prices to 59 and 62 shekels at the start. But as the year went on, they raised them to about 69 shekels, on average.

He sees the publishers' dilemma. “Less than that, the publishers can’t make it,” he said. The problem, say industry executives, is that the big chains, Steimatzky and Tzomet Sfarim, get discounts of up to 60% off the catalog price, plus more for delivering the books to their own outlets and those of smaller stores. Even if they are squeezing out somewhat higher profits per book, it’s all eaten up by the drop in sales.

Racheli Edelman, publisher of Shocken Publishing House and chairwoman of the Israel Publishers Association, was a staunch supporter of the law. She said its big failing was not imposing a ceiling on the discount that book retailers are allowed to demand from publishers.

“Prices are going to gradually rise even more, because my competitors have no choice but to raise them,” she said. “Today, the average [book] price is 76 shekels, which leaves the publishers with a loss The book chains don’t need to then raise the price 45% to 50% and neutralize the distribution payment, which in any case is an Israeli invention.”