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One Way to Save Bookstores from Extinction

June 2nd, 2015 · No Comments

Buenos Aires, Argentina has more bookstores per capita than any other city in the world. According to a 2015 study by the World Cities Cultural Forum, Buenos Aires has 734 bookstores, or about 25 per 100,000 people.


Interior of El Ateneo Grand Splendid, a bookstore in Buenos Aires

By comparison, Madrid has 16 bookstores per 100,000 people, Tokyo has 13, London has 10, Paris and New York have 9, Amsterdam and Berlin have 7, Los Angeles and Rio de Janeiro have 5, Mumbai has 4, and Singapore has 3 per 100,000 people.

Buenos Aires also has some of the best bookstores in the world, including El Ateneo Grand Splendid. A former theatre palace built in 1919, the ornate building was repurposed as a bookstore in 2007. The main floor and balconies are filled with bookshelves, the former theatre boxes are now reading nooks, and the stage, framed by a crimson curtain, is a café. The grand space is regularly cited as one of the most beautiful and most interesting bookstores in the world.

Juan Pablo Marciani, manager of El Ateneo, says books are a significant part of Argentinian culture. “Books represent us like the tango. We have a culture very rooted in print.”

How did Buenos Aires come to have such a bookish culture?

Partly it’s due to chance. For example, the country’s literary community grew and flourished with the influx of Spanish writers and publishers who fled to Argentina during the Spanish Civil War in the 1930s. It is also because of choice. Argentina doesn’t charge sales tax on books. Heavy taxes on e-readers and tablets have kept e-book use low, too.

The local bookstore industry is also helped by the fact that doesn’t have a retail website in Argentina. Even if Argentina did have Amazon, it’s likely that the company wouldn’t gain the dominant foothold it now has in the U.S. and the U.K. in digital and print book sales.

The main reason behind the country’s thriving bookstore culture, though, is that Argentina has fixed book pricing (FBP). Thirteen other countries have FBP as well, including Austria, France, Germany, Greece, Italy, Japan, Lebanon, Netherlands, Norway, Portugal, Slovenia, South Korea, and Spain. The FBP rules in each country vary, but generally they require bookstores to sell limit price discounts during the first 6 months to 2 years after the release of the book. The rules usually apply to digital books as well. The effect is that all bookstores in their countries sell the latest titles for roughly the same price, even digital books.

Countries without FBP tend to have large book chains and Internet retailers, which can offer deep discounts on new releases and easily dominate the market.

In the U.S., we’ve witnessed both forms of this. First, in the 1990s, big box chains Barnes & Noble and Borders (now defunct) held huge inventories and could slash prices on bestsellers, driving thousands of independent bookstores out of business. Then, Amazon used the Internet to change the distribution rules and undercut the brick and mortar bookstores. Advocates of free market conditions would argue that Amazon had the best business plan and “won” its market share (although it is worth noting that the federal government has not required Amazon and other online businesses to collect sales tax from their customers, and even now Amazon collects sales in only about half of the states, those in which it has a physical presence).

The effect of FBP can be seen in comparisons of countries and their number of independent bookstores. Since 1991, the U.S. has lost more than half of its independent bookstores, and they represent less than 4 percent of the market. The U.K., which gave up FBP in the late 1990s, has lost one-third of its bookstores since 2005, and independents also represent only about 4 percent of the bookseller market. In France, however (which has FBP), independent booksellers represent 22 percent of the market. France also has about 2,500 booksellers, more than the 1,900 booksellers in the U.S., even though France is five times smaller in population.

Catherine Blache, of the French Publishers Association explains that in France, “booksellers compete not on price, therefore, but in terms of the variety of books they offer, their location and the quality of their customer service.

This is what the Buenos Aires bookselling market looks like, too. Travel + Leisure magazine recommends this special feature of life in Argentina’s capital. “Buenos Aires is bursting with bookstores… enjoy the land that Amazon forgot.”

The point of all of this is that government policies make a difference. There is no truly free market. All markets have built in advantages for some, and “free market” is usually the term big players like to use when they get conditions that are most favorable to them. The federal government gave a huge break to web retailers by not requiring them to collect sales tax. This has hurt local retailers in communities who must charge sales tax, and has also pulled sales tax revenue out of local communities.

Fixed book pricing is a government policy that shifts the market to favor more bookstores. This encourages a market that enables and encourages more competition at the bookseller level. As Blache notes, “Fixed book price ensures that all retailers have the same access to the offer of e-books and makes it easy for new players to enter the market.”

So, it’s a matter of what people want their cities to look like. Do you want a city with lots of bookstores, physical locations that enhance a certain kind of literary culture? (This doesn’t preclude online sellers, it only precludes one company – physical or online – from getting too massive.)  Or, do you want cities with few or no bookstores, because one major online retailer has the market power to run most independent booksellers out of business?


Photo: HalloweenHJB at English Wikipedia [CC BY-SA 3.0 (], via Wikimedia Commons




Tags: Journalism Ethics

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