The Net Book Agreement, dating from 1900, was a price-fixing deal between British publishers and booksellers to protect the wide range of publications stocked in shops. It was a resale price maintenance agreement which allowed the publishers to set the “Net price” of a book. This prevented booksellers offering discounts on “net” price books. The idea behind it was, in crude terms, that left to themselves booksellers would cut their own throats by offering competitive discounts — the benevolent publishers would save them from this suicidal move by setting a price which would be universally honoured. Earlier this year The Bookseller blog opined “Since the end of the Net Book Agreement in the 1990s, supermarkets have done as much as anyone to devalue books and drive independent booksellers to the wall”.
Here’s a 1994 report of the Agreement’s imminent collapse.
This report, from Booksellers.org.uk dates from 2011:
RPM – Book Sales in the UK
Established on 1st January 1900, the Net Book Agreement (NBA) was a voluntary publishers’ agreement which allowed them to set a minimum or net price in bookshops and other retail outlets. Discounting of net titles was only allowed under certain schemes (e.g. book clubs, library and school supply) administered by the Publishers Association (PA). In the event of a breach, in most cases, the PA acted on behalf of the publisher to enforce compliance.
In August 1994, the Director General of the Office of Fair Trading announced that the 1962 decision in favour of the NBA would be reviewed by the Restrictive Practices Court (RPC). In September 1995, several major publishers withdrew from the NBA and the PA Council decided that it could no longer defend the NBA in Court, therefore to all intents and purposes, it no longer operated. In September 1996, the BA Council agreed that the Booksellers Association (BA) should play no part in the RPC case, even to the extent of registering an interest. The BA Council also confirmed that the BA was neutral as to RPM. In March 1997, the RPC stated that the NBA was no longer in the public interest and it was declared to be illegal.
In 1962, the RPC believed that the abrogation of the NBA would produce the following:
• The number of stockholding bookshops would be reduced
• The stocks held by bookshops would be less extensive and less varied
• Although certain titles would be cheaper, the price of most books would be higher
• Fewer titles of literary and scholarly value would be published
The number of stockholding bookshops has decreased, but the number of outlets devoted to books has grown enormously. Supermarkets and other non-traditional outlets have increased their sales and range of books and the ending of RPM has also enabled internet bookselling to become established and take a large market share. Certain sectors have been affected, especially high street bookshops, newsagents and the specialist library supply market.
The new book superstores; internet retailers and next day delivery from wholesalers; widespread use of EPoS/e-commerce and print on demand (POD) have all extended stock range enormously. However, increased competition has probably made bookselling a far riskier sector.
Discounting has been widespread, though chiefly focused on bestsellers from the major publishers. By some measures, book prices have risen at above the level of inflation but the actual average selling price has gone down. Consumer spending on books has increased, though wider economic downturns have had their effect.
The number of new titles published has continued to grow year on year. POD and digitisation (e-books) are enabling almost anyone to become a publisher and are also preventing books from going out of print.
Given the important changes in the bookselling and publishing arena and the global market for English language books, it is extremely difficult to assess what changes in the market can be attributed to the ending of RPM in the UK.
Most of the publications about the Net Book Agreement in the UK are now out of print but may be obtainable from libraries. There may also be past articles in the press.
The Net Book Agreement: Benefits, How it works, the terms The Publishers Association, www.publishers.org.uk
National Heritage Committee: Fourth Report – The Net Book Agreement The Stationery Office 1995 – ISBN 0 10 238395 2, www.tso.co.uk
Business Impacts of the Demise of the Net Book Agreement Rob Newmarch – Vista Computer Services 1995 – ISBN 0 9525566 4 2, www.publishingtechnology.com
The Effects of the Abandonment of the Net Book Agreement Dr Frank Fishwick & Sharon Fitzsimons – The Cranfield School of Management Book Trust 1998 – ISBN 0 85353 474 8, www.booktrust.org.uk
Two sides of the same coin Dr Frank Fishwick – The Bookseller, 23 February 2001, www.thebookseller.com
An evaluation of the impact upon productivity of ending resale price maintenance on books Office of Fair Trading 2008 – OFT981, www.oft.gov.uk
The NBA – a short history Clarissa Sebag-Montefiore – The Bookseller, 20 February 2009, www.thebookseller.com
Discount dash Tom Tivnan – The Bookseller, 20 February 2009, www.thebookseller.com
Was it all worth while? It seems hard to say that we are worse off today, in terms of book-supply, than we were in 1994. Many more books are published, and more books are finding their way into the hands of readers. There was a charm to the old-fashioned world of stockholding bookshops which is rarer today than it was back then. The bookshops of my childhood in Galashiels and Melrose are gone, but shops like Village Books in Dulwich still provide the same sort of service — just not to inhabitants of the Scottish Borders! Antiquarian bookshops are mainly where you hang out now for that serendipity feeling. On the continent things are done quite differently. We stayed in Vienna recently and there were at least eight proper bookshops within 1/4 of a mile of our hotel.