Magazine article Marketing

The Book Price War Breaks Out

Magazine article Marketing

The Book Price War Breaks Out

Article excerpt

The book price war breaks out Reed's decision to abandon the Net Book Agreement has given Dillons the all clear to slash prices. But all eyes are on WH Smith. If it joins the fray, the face of book marketing could be altered irrevocably. Suzanne Bidlake reports A book publishing price war is now certain to break out, following the decision by Reed subsidiary Octopus to allow the entire range of its Octopus Publishing books to be discounted at retail level from this autumn.

The price war will be initiated by the Dillons Bookstore Group, with a price-led television advertising campaign this autumn. Pentos-owned Dillons has long been campaigning against the price fixing Net Book Agreement (NBA), and for it, the Octopus decision represents a hard-fought-for breakthrough with dramatic domino effects.

WH Smith, Dillons' main rival, while still maintaining its role as a strong supporter of the NBA, could soon enter the price cutting fray. If Dillons goes ahead with a price cutting initiative, "We may not wait at all to respond," says Laurence James, general manager, books and news at WH Smith.

And, says Pentos group chairman Terry Maher, a large number of publishers could soon be joining Octopus. "The management of most publishing houses is fairly wet. They're at sixes and sevens and don't know what to do," he says.

"An air of panic develops very rapidly in the book trade, which is not noted for the courage of its management," he adds. "Things could change very quickly indeed."

Already several smaller publishers, including reference book company Cassell, have pledged to follow Octopus, says Maher.

Maher claims his long-awaited victory over book retail price maintenance will introduce consumer goods marketing techniques into book selling for the first time. The move is likely to open the floodgates to aggressive price discounting in bookshops on fast-selling blockbuster titles and the first onslaught of conventional consumer products marketing on the book trade.

But there may still be stiff resistance. Until five weeks ago, two others of the four major publishing houses were committed to bringing out "non-net" books - a classification normally reserved for academic books, which gives companies a way out of the price maintenance set by the NBA.

But pressure from NBA-supporting retailers ("not least of all WH Smith," claims Maher) has forced publishers to cave in and change their minds.

But, says Maher, "I wouldn't be surprised if there is another about-face". Moves could come in "weeks' time" or at least by next spring, he predicts.

Meanwhile, Dillons, which is already the most aggressive book marketer, with its 30m [pounds]-over-five-years investment in store design and annual marketing budget of 1.5-2% of 120m [pounds] turnover, is gearing up for a new era of competition.

If other publishers do not fall into line with Octopus, they will lose market share and come under pressure both from their shareholders and top selling authors who feel their titles are not being promoted sufficiently, claims Maher.

The argument for price promotion, which Pentos has backed vociferously for years, is borne of frustration at not being able to market books like any other consumer products.

It believes that the NBA restricts even the slightest marketing tool common to other consumer goods. …

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