Monday, July 16, 2007

Book Prices, II

You know, I didn't think I'd be returning to the topic, but this article has convinced me otherwise.

Very few US booksellers will be making big money from "Harry Potter and the Deathly Hallows".
...
Indeed, as the competition heats up this week to lure customers, a price war has slashed the retail cost of J.K. Rowling's final installment by 40% to 50% at chains, big-box stores, and online retailers such as Amazon.com. They're selling the books for little more than they paid the publisher.
...
"I don't think [the Harry Potter series] has been the profit center it could have been if the publishing world had tried to keep this a book for booksellers," said Katie O'Laughlin, the shop's owner. "That's a sad thing. This was the one time you had a book that people really wanted."
...
"To me, this whole discounting frenzy is a race to the bottom, a contest to see who can whack prices the most, and it doesn't really bode well for most booksellers." (Ron Hogan)

So, the market works, competition passes the benefits along to the consumers, as the textbooks preach in Econ 101, and people complain? Sigh.

It also provides reinforcement to the theory that the publishers are the ones to blame, not theretailers, if competition is demonstrated to exist to such a degree among retailers. Not really a surprise, since the article reiterates that all US stores are mandated to buy from Scholastic.

I am, however, unsure to the extent one can ever get away from some sort of market power in this realm, since JK Rowling is acting as a monopolist with extremely good barriers to entry in the form of copyright protection.

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