July 30, 2010
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Let’s just dump our books into the Danube
The economic crisis and publishers' woes
 
 
These last few weeks had seen an upheaval on the Hungarian book market as one publisher put forth an open letter calling on his fellow publishers to resist big distributors who try to weather the economic crisis at the expense of small independent publishers.
"Let’s just dump our books into the Danube, we won’t be any worse off for it," the managing director of one publishing house wrote in a private letter. The upheaval started with the open letter penned by the director of Pécs-based publishing house Jelenkor, who called on his colleagues to resist Libri, one of the major distributing companies. So far reckoned something of a good egg on the book market, Libri has offered new contract terms to its associate publishers with a sixty percent margin. Only a month before, another major distributor, Bookline had offered a fifty percent margin. (The general figure for last year was forty-five percent, with fifty as a maximum.)

Publishers are vulnerable and uncertain as to what the consequences of rejecting a sixty percent margin are. Thirty-four publishers have thus participated in grounding an interest group. Only those without proprietary or employment ties to the larger wholesale book distributors or to retailing franchises are eligible. This immediately excludes a number of significant operators on the Hungarian book market.

Publishers associated with big distributors are in fact also putting up resistance even despite their getting occasionally better deals than independents. The publishers' associaton favours joint agency and hopes to achieve a status quo. This is only partly possible, if indeed at all. Publishers may achieve more favorable margins individually, but big distributors have a hostile view of joint agency. On the other hand, publishers can’t sidestep the big distributors, because unless their books are stacked on those shelves, they cannot be sold any other way and despite publishers having ideas for alternatives they’d be practically done for.

Along with the margin issue, publishers are also discussing a possible abolishing of the commission system. An example from a publisher: in one of their releases they had five hundred copies extra printed at the expense of the author besotted by promises from one of the big distributors. They were returned 475 copies out of the 500 because the book didn’t sell, and so they suffered a considerable loss.

Cases like this have typically led to the circular debts plaguing the book market, and their cancellation isn’t likely to provide a solution either since the big distributors would only further tighten their circle of publishers and reduce their book orders.

The economic crisis affects different book market operators in diverse ways, but it is certain that everyone is dependant to some degree on the four main big distributors: Alexandra, Libri, Líra és Lant and Bookline. The big four are out to play hardball, and according to them it’s their only choice. The companies operate enormous franchise chains (apart from Bookline with its four outlets) and are forced to counter Euro-based rental prices boosted by increased infrastructure expenses and an ailing Forint.

Bookline and Libri have both offered new contract terms in the past month and a half because they couldn’t rise to those earlier terms they attest had primarily served the interests of the publishers. Both companies are headed by new managers who have come from outside of the book market sector. In the face of an economic crisis, both see their main task in rationalization entailing the following: increasing margins, cutting preferential rates, downsizing. The dictates of the strong are met by protest from the weak, who are in no position to do anything but haggle and accept the deal really, because they simply can’t afford to be pulled from the big franchise stores’ shelves. On the Hungarian book market, independence does not pay.

László Valuska
 
Translated by Dániel Dányi







SZTAKI dictionary
1. Gábor Lanczkor: A mindennapit ma (This Day, Our Daily. Kalligram, novel)
2. János Háy: Egy szerelmes vers története (The Story of a Love Poem. Palatinus, poetry)
3. Andrea Tompa: A hóhér háza (The Executioner’s house. Kalligram, novel)
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