The Dutch Book Market: The art of the possible

by Mihaela JovićZagreb, July 20th 2004

One of the reasons that the Dutch book market functions well is the art of the possible in many things, the capacity to cooperate and reach compromise, and the uniform book price that exists in most of the (old) countries of the European Union. In The Netherlands, the uniform book price has been a gentlemen’s agreement between publishers and booksellers since 1904, and the government had nothing to do with it. But since the European Union does not accept price agreements, The Netherlands has to transform the century-old voluntary gentlemen’s rule into a law.

From 15th until 20th of June 2004, a small group of CEEBP’s associates went on a tour through some of the important parts of Dutch book  market infrastructure. Among the visitors were the Book Market Research (BMR) experts from Poland, Jacek and Jolanta Wlodarczyk, the director of National Library of Serbia, Sreten Ugricic, the coordinator of the Serbian Book Market Project, Dragan Puresic (deputy director of the National Library of Serbia), Jaka Primorac from the Institute for International Relations (IMO) in Croatia, the developer of the Serbian-Montenegrin Books in Print, Saša Drakulić, and myself.

During our visit to The Netherlands, we became acquainted with the Central Book House, the main Dutch distribution centre, the Athenaeum bookshop, one of the best bookstores in the country, and the training centre (VOB) and market research (Stichting Speurwerk) of the Royal Book Trade Association ( KVB ). We also met with Mr Aad Nuis, the Chairman of the Royal Book Trade Association and of CEEBP, writer and literary critic, and former state secretary of culture. We had the opportunity to pay a visit to many bookshops in Amsterdam. I should say that the functioning of the Dutch book market is very impressive.

Central Book House

The Central Book House in Culemborg was our first destination. Patrick Steenvoorden, who presented the Central Book House, explained that the CB was established more than 100 years ago due to cooperation between the associations of publishers and booksellers. Publishers and booksellers are also shareholders and they sit on CB’s board  - three publishers and three booksellers.

About 600 publishers and 1.000 booksellers (out of 1.500) use the services of CB. Thanks to CB, Dutch publishers have no need for their own warehouse and logistics, or their own bookstore. CB stocks in its warehouse more than 95 % of all books available in The Netherlands and the Flemish Belgium. CB guarantees to distribute the books to  bookstores within 48 hours. As Patrick Steenvoorden said, CB has about 70.000 titles in its warehouse, out of which 63 % are general books (fiction and non-fiction for general readers), 27 % schoolbooks and textbooks, and 10 % academic books. CB has about 40 million books in stock, and delivers about 60 million copies per year to 3.000 customers. In addition, it delivers 25.000 tons of office supplies annually.

The numbers are impressive, but the quantity also creates problems, because it takes a lot of space, and in the end it is not very profitable. CB therefore contemplates a change of strategy: more titles and fewer books in stock; if a publisher wishes to have more books in stock in CB, he will pay additional charge. With this strategy CB can maintain its main advantage (large number of titles) above other distributors, and its dominant position on the market remains.

All bookshops buy books but they have the right of return if they don’t sell them. From the 50 million books delivered every year, about 5 million are returned. It depends on the publisher after what time the bookseller can return the books. Sometimes booksellers return books after 3 months. Not the CB, but the publishers sell books to booksellers, and CB just distributes them. It does give invoices to bookshops. It can issue one invoice for several publishers if the books are delivered to the same bookshop. Consignment sale is also possible. It depends on publisher’s wish.

The Central Book House has a highly efficient electronic information system of books-in-print, the CB NET (www.cbonline.nl), where booksellers can place and check their orders. Users can check the ISBN database, as well as British, American and other books-in-print databases. The CB NET has two ways of communication with booksellers. Both are on-line, via FTP or Internet. There is no unique software for bookshops because every bookshop has different needs, but there are 5 to 10 software systems they can buy and use.

CB works with large Dutch and Flemish publishers who issue more than 10.000 titles, but also with small publishers who published only one book. Apart from a few exceptions such as Penguin, CB does not deal with foreign publishers because it is too expensive.

The discount of CB amounts to 42%. A bookshop can order just one book and it gets a perfect service within 48 hours, but it must pay a percentage to the distributor with every delivery.

CB has its own travelling salesmen who offer books to bookstores. Although it is the biggest and most important distribution centre, there are wholesalers in The Netherlands who are a real competition to CB. Regarding libraries, CB leaves them to bookshops. The Central Book House sells books to bookstores, and bookstores then sell them to libraries.

The Dutch ISBN agency, which has the register of all the books published in the last 15 years, is integrated in the Central Book House. CB was one of the first houses that started to use ISBN system of registration, already in 1968. The ISBN agency has always been located in CB, not in the national Royal Library. There are about 42.000 registrations per year, including books from Dutch and Belgian Flemish publishers. Publishers pay for the registration (the bigger the publisher the higher the price), and a charge for each ISBN number. As Patrick Steenvoorden pointed out, ISBN is very important for reliable distribution because it is the best identification of a book.

Unfortunately it was not possible to make a tour around the Central Book House to take a look at what Patrick Steenvoorden described to us. I imagine it would have looked as a space ship to us. Nonetheless it was very interesting to get a presentation of a model of well-functioning self-supporting completely automated book distribution with integrated information system.

Athenaeum bookshop

The Athenaeum bookshop (www.athenaeum.nl) has been established in 1966 by Johan Polak, the hair to a perfume company, who invested in a publishing house and a bookshop. He gave the bookshop to the people who worked there and had set up a very intelligent management structure ensuring that the bookstore cannot be taken over by one person. 48% of company shares are in the hands of a foundation representing the employees, while the director owns 52%. The main point is that every director, when leaving his position in Athenaeum, has to hand over his share of the company to his successor.

During our visit, we spoke with Maarten Asscher, the director of Athenaeum who was originally a publisher, and later a senior policy advisor at the Dutch Ministry of Culture.

Asscher advocates small-scale, medium-size and individualism, and would like Athanaeum to be such a company. He stressed that the bookshop is a cultural institution on economic basis. He considers it a moral duty to ensure the continuation of a flourishing business.

One of the problems of the Dutch book market Asscher mentioned is that there are no middle-sized publishers. The most interesting editions come from publishers who are small and want to stay small. The small quality publishers publish about 20 to 30 titles annually.

In The Netherlands there are 1.500 bookstores, 80 % of which are owned by three conglomerates. One of them is the publisher of four out of five national newspapers and is now sold to a British investment company. The second conglomerate is also British owned. The remaining 20 % consists of independent bookstores.

Maarten Asscher pointed out that Athenaeum would not have survived without the net book price agreement, nor have the same attentive approach to its customers. Athenaeum is one of the bookshops that take great care of its image. It invests very much in book promotion. It would never sell 3 books for the price of 2, it gives no discount, and has only two clearance sales per year lasting only one day.  The average book price in Holland is 20 euro, while the average price of sold books is 13,5 Euro. The bookshops get 42% discount for books. The rebates are lower only for textbooks and academic books, mostly 25%.

Asscher appreciates the value of the Central Book House, and especially the Dutch ability to compromise, which enabled Dutch publishers and booksellers to organise it. As he nicely said: “A compromise is for the Dutch what sex is to other people.” It is perhaps the main reason why the Dutch have such a well-organised book market.

The Royal Book Trade Association

The visit to the Royal Book Trade Association (KVB – www.kvb.nl), where we met Jeroen Kans, the head of the Association’s Book Trade Training (VOB – www.vob.nl), was also very interesting. He spoke about the functioning of the Association, about book policy, book trade education, and book market research.

As he explained, KVB was established in 1815, at a time when there was no differentiation yet between printers, publishers, and booksellers, as the “Association for the Advancement of the Interests of the Book Trade”. It successfully fought book piracy, published a trade periodical, founded the Central Book House at the turn of the 19th & 20th century, introduced the net book price agreement in 1904, and organised joint book promotion since 1930’s (Foundation for the Collective Promotion of the Dutch Book - www.cpnb.nl ).

The membership of the association consists of professional companies involved in book trade (publishers, booksellers, distributors and wholesalers, and book clubs). The main concern of KVB are not publishers or booksellers, but books and the common interest of the book trade.

Members of the Association, certified book trade companies - publishers, booksellers, wholesalers, distributors, and book clubs - pay membership fees. They also pay for the monthly book trade magazine, “Boekenblad”, book market research, and training. This season, 255 booksellers and 755 publishers took part in the training courses of the training centre (VOB). Publishers participate more often because they have more money and time than booksellers.

The market research, both on macro and micro levels, is carried out by KVB’s research foundation “Stichting Speurwerk” (www.Speurwerk.nl), in cooperation with market research institutions. One of the programs, called Book Monitor, which tracks the weekly turnover of bookshops and the best-selling titles, results in a list of 100 top titles. The Book Monitor receives data from 25 bookstores that are able to send their information about turnover and sold titles electronically. The list of top 100 titles is a very useful marketing tool for booksellers. The annual turnover of Dutch bookstores amounts to one billion euro with 2 - 5 % profit for the booksellers; the turnover of the publishing houses is twice as high, two billion euro with 10 % profit.

According to Jeroen Kans, more books will be sold in hypermarkets and supermarkets in the future. Until now, one needs a certificate for selling books issued by the Association. Kans expects next year to be confusing for the Dutch book market because of the new channels of book sale.

For 100 years, since 1904, The Netherlands has a gentlemen’s agreement on the net book price. Jeroen Kans informed us that from January 2005, a law about the uniform book price should be introduced, but we found out more about that from our next host.

Meeting with Aad Nuis - Chairman of the Royal Book Trade Association and CEEBP, writer, literary critic, and former state secretary of culture

Mr. Aad Nuis met us in the House of Parliament in The Hague. He told us that just that morning he had a meeting with members of the Parliament to give the “final touch” to the bill about the uniform/net book price. He was 99% sure that the bill will be adopted.

As he said, the uniform book price exists in eleven of the old countries of European Union, either as a gentlemen’s agreement or as a law. In The Netherlands, it has been a gentlemen’s agreement of  publishers and booksellers. It holds that books have to be sold to the consumer at the price set by the publisher. The price of a book edition is fixed for two years; after that period the publisher is free to decide what to do with the price of the title.

The idea behind the agreement was to find the best way to ensure the availability of as wide assortment of books as possible in a great variety of bookstores by financing less profitable titles from the proceeds of more popular books and bestsellers. Thus, if the price of a book is the same in all bookstores, bookshops that offer also less profitable titles do not suffer from unfair competition of booksellers selling bestsellers at lower prices, and publishers are enabled to take a risk with a less popular publication.

The gentlemen’s agreement about uniform book price has been functioning very well, but since the free market and free trade became a hit in the European Union, which does not accept cartels, The Netherlands has practically been forced to introduce a law about uniform book price.

As Aad Nuis told us, within 2 years after the abolishment of the uniform book price agreement in France and Britain many bookshops went bankrupt and the book prices went up. That was the reason why the French minister of culture introduced the uniform book price law, and other countries followed suit.

The law to be introduced in the Netherlands maintains the principle of a fixed book price. The bookseller (including book clubs) has to sell books at a price set by the publisher (or importer). The publisher may raise or reduce the price once every half a year in case the market changes due to inflation. After one year, the price may be annulled.

The effect of the new law should be the preservation of a fine network of good bookshops, which Nuis sees as “the wisdom” needed for a well functioning book market. He considers the law as an advantage for the market, an advantage for quality publishing and for quality bookshops, and for the reading public. The risk that is always present in the bookselling business will remain. But publishers and booksellers will not be able to compete with book price. Instead, they will compete with the quality of books and bookselling.

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