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A short history of the NBA and what a new agreement might look like.

Bookshop in Denmark (Naestved), 1899. Photographed as a postcard for an English tourist market. Denmark had a book pricing agreement by 1837, and that agreement is still in place.

 

Like many of the best stories, this one starts in the winding, gas-lit streets of Victorian London. Let’s take a little trip back to 1852. This was the year that the new Chamber of the House of Commons, designed by Charles Barry and enthusiastically decorated by Augustus Pugin, was first opened for use. It was also the year that the first free public lending library opened, enabled by the Public Libraries Act of two years previously. The book market at that time was growing – it had new and exciting developments; printing presses were faster, distribution was easier as the rail and canal networks could transport books all over the country cheaply and easily. The Great North Railway opened at Kings Cross, also in 1852.

Elizabeth Gaskell’s Cranford, 1852. If you look carefully you can see that the author is not named, and referred to only by her previous work.

Furthermore, we had a growing Empire, and the idea that the market for books by English writers could feasibly become world-wide, was tantalising for those whose minds were on the business prospects. The communications industry, of which printing and publishing was the most important part, accelerated economic and social change dramatically by increasing the volume and speed with which books and printed material of all kinds could move through the country and abroad. Elizabeth Gaskell’s Cranford, John Ruskin’s King of The Golden River, along with new work by the great ghost-story writer Sheridan Le Fanu, several novels by Nathaniel Hawthorn, and William Makepeace Thackeray were all published in that year. The bookselling market was exciting at home, and abroad new work by Victor Hugo, Leo Tolstoy, Karl Marx, Longfellow and Herman Melville was generating comment and discussion. Surprisingly, just as they are today, newly-printed books were routinely ‘being undersold in a way that is intolerable’. The archive figures from The Bookseller show that in 1811 books priced at over 10 shillings dominated the market, but that by 1852 the majority of books were being sold for pennies rather than shillings. It was judged that if wider groups of the public were going to buy books in any volume, not only did they have to be cheap, but they had also to appear to be at a throw-away bargain price. The most popular printed price in 1852 was 3s 6d – but these same books were routinely offered to the public at less than 1s (source: British Library). The ‘evils of underselling’ was the main topic of conversation among writers of all kinds and many of the publishers too. The matter was allowed to ferment in the great seething vat that was the world of Victorian bookselling, for far too long. With disputes erupting in gentlemen’s clubs and board rooms all over London, and some very underhand campaigning by both parties, the Net Book Agreement was finally put in place in 1899.

The very latest in printing technology. Image: The British Library.

This was such a dominant issue in the Victorian book market that later in his life Frederick Macmillan found it necessary to write a book with the catchy title: ‘The net book agreement 1899 and the book war 1906-1908; two chapters in the history of the book trade, including a narrative of the dispute between the Times Book Club and the Publishers’ Association’. I have a copy of this book, which is, with a delightful irony, one of the most boring and badly written accounts of Victorian and Edwardian life I have ever come across. It reads like an angry and spiteful divorce filing; it is, nevertheless, informative if you are prepared to wade through the piles steaming of bias. As far as I can work out from the documents available to me, the Net Book Agreement was little more than a glorified Victorian gentlemen’s agreement. It was written down, certainly, but never underpinned by any legislation. The agreement was between the publishers and booksellers. It set the prices at which books were to be sold to the public – their printed price and nothing less. If a bookseller tried to sell books at a discounted rate, the publisher had every right to no longer trade with that bookseller. The principle at its heart, therefore, was to promote non-price competition between publishers; the challenge it set was to offer the most interesting books possible. A good motive. Publishers at the time clearly felt a strong degree of responsibility to society as the agreement, at least in part, was later identified as a factor that enabled publishers to offer a range of books that were of cultural or educational importance to society rather than pure entertainment. The role of Victorian publishers was not just make fast bucks from a continuous stream of heavily discounted blockbusters, they were far more important to British society than that.

We now must leap ahead to the 1990s when Thatcher’s Free Market philosophy was munching its way through the fabric of society, devouring the welfare state, nationalised industry, and anything Keynesian, with more gusto than The Very Hungry Caterpillar. The Net Book Agreement in this landscape looked like little more than a cartel to fix prices against the interests of the consumer. The Office of Fair Trading ruled it illegal in March 1997 – only a few months before Blair’s ‘New Labour’ movement won a landslide victory at a General Election by attempting to find a synthesis between capitalism and socialism.

With the history bit done I think (can you tell that I’m an historian?), we need now to look at today’s market. I did have a purpose in giving so much background; I think that there are significant parallels between 1899 and today, with the opening of new ways of selling (in our case on-line retail and e-books – although current figures would suggest that even these have already had their heyday) and new means of communication (in today’s world, the massive network that is social media).

Thatcher shrinks the State. A cartoon by George Gale, 1990.

It is very tempting to suggest that we simply put back into place the agreement dissolved 20 years ago, but I think it is worth examining more closely before we try to grasp back something written for our Victorian selves. Would an NBA for today’s market have to look the same as one written for an 1899 market? Things are different today: for a start, even in the 1990s e-books were not a factor that was of sufficient enough dominance in the market to be considered. I don’t know enough about e-books to be able to suggest whether or not their existence would alter a new agreement in any significant way – I suspect that, different as they feel to us from ink and paper, they would not alter the principles. The Office of Fair Trading and critics on both sides of the 1990s NBA debate failed to predict then that people would soon have the very easy option of not actually going in to a bookshop at all. The OFT also failed to predict that retailers would demand such high discounts from publishers (many up to 70% +), and that the publishers in turn would cushion themselves from the impact by taking away from authors’ earnings: the NBA played a key role in protecting the income of authors, even if that is not what it was originally created for. Before 1899 the booksellers also had the unrestricted strength to compel publishers to take part in their own crushing of printed prices, to the detriment of a healthy market. There is one other enormous difference between 1990s bookselling and today’s bookselling and that is the sheer volume of books produced and the speed with which the industry operates. Fiction in particular has a very short shelf life these days; it is now entirely normal for a book to be published, win a plethora of awards and great reviews and then be out of print within four years. Each month we receive ‘buyer’s notes’ brochures from two major suppliers and a host of small publishers that, if piled up are about five inches thick and contain between them several thousand new titles from which we have to choose.

St Benedict Reads, a school reading programme in Derby, is an example of an innovative project that is active in seeking out new books, rather than relying on out of date reading lists. http://saintben.derby.sch.uk/content/saint-benedicts-reads/

People often say to booksellers ‘oh what a lovely job – I bet you spend all your time reading!’ Yes, we do! We spend every spare moment available reading Buyer’s Notes. Actual books rarely get a look-in during work-hours. The market now moves so fast and with a torrent of ink that even school reading-lists are washed away. We are always being handed lists issued by school English departments that contain (we suspect) the favourite books of that school’s English teachers, most of which have been out of print for the last decade. Many schools are now realising this and the most energetic are creating programmes of author visits and setting up reading groups, rather than relying on decade-old reading lists.

While there is much we can take from the principles of the original agreement that is relevant, I think we need to accept that due to our own faults we are all living in a cut-price culture. Nevertheless, in a very different and more complex market, how might a new agreement work? A starting point might be to bring book-sales in to line with some other areas of retail and agree, for example, that books must be sold at their printed price for a minimum of 30 days before any discounting could take place. This would resolve the problem that indie bookshops have when new work from popular writers is published and offered at the same ‘intolerable discounts’ lamented by Victorian writers. Alternatively, or in addition, there could be an agreement for all suppliers to be offered the same discount on new books for a set period after publication. Online retail giants are asking for at least 60% discount from publishers, and 72% plus for ‘special promotional opportunities’  on many titles. The big high street retailers require marketing contributions for prominence, along with high discounts. As well as trampling the royalties paid to the authors, this also prices out the smaller publishers from being able feasibly to sell their books through these routes. I’d like very much to see that principle at the heart of the old NBA adhered to: that competition should not be about pricing others out of the market, but about the creativity and imagination to introduce new writers to the public.

This discussion started with a blog we wrote a few weeks ago. It was prompted by our realisation that, as things stand currently, in order to sell the forthcoming, eagerly anticipated book by Philip Pullman: The Book of Dust, La Belle Sauvage, we would have to offer it at a loss to our business as we cannot even buy the book in to our stock for the price that it is already being offered to the public elsewhere. We Need to talk about Hardback fiction.When a new hardback book by a popular author, like the forthcoming The Book of Dust by Philip Pullman, is first published, it is often launched with very heavy discounts – often 50% or more. Why?! A heavy discount implies that something is of less value than its cover price. There is no other area of retail that does this. You wouldn’t go to a high street clothes shop and expect all the new season colours and fashions to be half price. Read our full blog about the heavy discounting of hardback fiction here: http://kenilworthbooks.co.uk/we-need-to-talk-about-hardback-fiction/

We need to talk a little more about what we mean by discounts. The intolerable discounts under discussion here are primarily the 50% plus offers on new major titles – at least that is where this discussion started, with the heavy discounted pre-ordering of Philip Pullman’s forthcoming book, La Belle Sauvage. There are other problems too. For many authors 50% discount is the least of their problems. Some retailer/publisher agreements are offering 80% discounts to the public and crushing author’s takings from book sales down to pennies.

Many indie bookshops offer small discounts as part of local reading programmes,

But before we decide that the thing that is bad is just ‘discounts’ I really have to say that most indie bookshops would consider it a huge handicap to be told that all books must be sold at full price no matter what. We offer discounts to book groups, of which we have at least fifteen in our town (both adult groups and children’s) and they are an important part of our business. We also offer discounts to schools and libraries when we supply books to them, which is a significant part of our work and one which is of particular importance to us. The difference is that when we supply a school library, we split the basic discount offered to us by the supplier with the school. We carry the loss from not selling at full price because it makes good sense for our business to do so. We also do this with book groups. Teachers who buy from us are also offered a discount; we have ten primary schools in our town, and three large secondary schools nearby. Teachers often come to us to talk about how they can support pupils’ reading, to learn about new titles or discuss how to introduce students to nineteenth century literature, for example. If we are told that we cannot divide our own discount with these groups of people, then both we, and our local schools will be worse off for it. And this would be at a time when our school libraries are massively underfunded and really need support from all of us. The problem is not offering a discount per se, it is the abuse of the right to offer a discount, carried out to exclude others in the market, and to the serious detriment of the authors.

When the NBA was dissolved, the arguments were really only about what was perceived by the 1990s mind as ‘consumer interest’ – how cheap can we possibly push it? I think we now recognise that what is in the public’s interest is far more than being merely about the price of a book. We have lurched from having what could be perceived as a Victorian cartel, to having price-bullying through the virtual monopoly of a few giant publishing houses and a few giant retailers – to the detriment of the authors, the illustrators and the smaller retailers. We need also to talk openly about how heavy discount offers and indeed the promotion of big-name books is being presented to the public. To gain space for a newly published book in a large retailer, the arrangement is generally that good and prominent display space is bought as part of the book’s marketing campaign. The book will be acquired at a significant discount by the retailer and they might not make profit on the sale of each actual book still. However, the money that is lost in what would have been full-price book sales, is regained in what you might call marketing purchase. So, in effect, the ‘best-seller’ lists presented to the public have little to do with the public’s choice of their favourite books, and far more to do with what has been bought as part of a marketing programme. Unlike, for example, the current fashion for marketing window-glazing or sofas, where most people know full-well that the ‘now all at half price!’ is merely a ploy to make the offer seem attractive, I don’t believe that the general book-buying public has any idea that half-price offers and ‘best-seller’ lists are little to do with a genuinely good offer. The majority of these books are never sold at full price, and they are never intended to sell at full price. I’m uncomfortable with calling this arrangement ‘in the consumer’s interest’ and most certainly, it is not in the interest of authors.

Related to this is the Society of Author’s recent urgent call to publishers to ensure that ‘ultra-high’ discounted sales to not damage author’s overall earnings; while this is about production of very cheap books, on low quality paper and with poor production (which is particularly insulting to illustrators) for sale at very low prices – the principle is the same. The person who takes the hit ultimately, however the publishers choose to justify it, is the person who created that book. http://www.societyofauthors.org/News/News/2017/July/Dear-publishers

At a time when the CEO of Amazon is the world’s richest person, while the people who had a significant role in putting him in that position – our best-known and best-selling authors – are making less than £11k pa from their books, I think it is absolutely in the public’s interest to see a new and open agreement established. Having said that, I hope we can all move beyond the sentiment that ‘big business is bad’ – heaven knows that in the current political climate we need the stability that our oldest, and most established industries can offer, in lieu of stability offered by a government. This isn’t about big business versus small, this is about ensuring that all businesses have the opportunity to thrive – and that includes those who are self-employed as writers and illustrators. As such, any new agreement needs to be between more than two parties. It needs to take into account the interests of authors and illustrators too, and include protection of authors’ incomes from book sales at a rate that is reasonable and over which those who create the books have some control. And it needs to include agreements about how marketing programmes are presented to the public. While we are about it, the inclusion of an agreement that illustrators and book-cover designers must be credited in the title-page, would be a civilised and very necessary addition. I don’t see any intrinsic reason why a new, and carefully considered-for-our-times, agreement could not be drawn up. Without wanting to sound like I’m proposing ‘going back to Victorian values’ the idea that retailer/publisher arrangements should work on the basis that books, particularly new books, are for sale at their full printed price, and with the income that this allows, the support of new writing is funded, appeals a lot; this is the equivalent of that social responsibility felt so keenly by their Victorian predecessors. You and I will pass, as will all the writers whose work is on our ‘New in!’ shelves today. It must be in the business interests of these enormous companies to support the people who will be writing and editing books, illustrating those books, or running bookshops in the generations after ours. We are made by our history. It is us. The fact that in 1852 the industry was having this same debate – but the books then were by Charles Dickens, John Stuart Mill and Thomas Carlyle, rather than Philip Pullman, JK Rowling and Robert Harris – should be a startling reminder of the need to address this with great intelligence. We have fallen again, and we need to rise.

I spent 12 years working in Parliament and on Whitehall from 1993-2005 and I remember well after the landslide Labour victory in 1997 many businesses were hugely doubtful that the new Government could or would be able to establish a Parliament in Scotland and an Assembly in Wales, or that it was in any way legal to have that ‘windfall tax’ on the huge private utility companies – but they did all of it, pretty much without a hitch. So I learned at a young(ish) age that it is never impossible to make significant changes to the landscape. I don’t think that a new book pricing agreement is different at all; of course this can be changed. It is absolutely in our control if we choose it to be.

Forbidden Books, by Alexander Mark Rossi 1897. Novel-reading was considered to contribute to female depravity. Dr Edward H Clarke wrote that reading was ‘“one of the most pernicious habits to which a young lady can be devoted.”. We have a very different view of reading today; maybe we need a very different book-selling agreement too.