[Open Forum] Korea’s Fixed Book Price System Must Be Reformed

A review of the validity of the fixed book price system is scheduled for this year. In 2020, more than 200,000 people signed a national petition calling for its abolition, but the decision was made to maintain the current system, provoking widespread outrage. So what exactly is the problem with the fixed book price system, which continues to divide opinion?

The fixed book price system has excluded consumers from the publishing market. It was introduced to protect cultural diversity within South Korea’s publishing market, as well as small publishers and bookstores. By limiting discounts on book prices once they are set, it prevented large distributors and publishers from launching aggressive discount campaigns. However, this effectively forces consumers to buy books at high prices one way or another. Rather than prices being adjusted through supply and demand, they are determined solely by suppliers.

For consumers, books are products. Supporters of the fixed book price system argue that books are public goods and possess high value that deserves protection. But consumers do take price into account when purchasing books. Transactions occur when perceived value exceeds price, yet the fixed book price system keeps book prices high, making consumers hesitate to buy.

Moreover, the fundamental purpose of the fixed book price system has been diluted. The reason for protecting small and medium-sized publishers is to preserve cultural diversity by discovering new authors. But high prices make consumers reluctant to buy books. As a result, publishers focus on selling bestsellers rather than taking risks on books by new writers. Paradoxically, the fixed book price system is harming cultural diversity.

Semi-permanent rentals and e-book subscription services created to circumvent the fixed book price system also call its validity into question. Because e-books do not require printing, distribution, or storage, they were expected to offer consumers lower prices. However, e-books are also subject to the fixed book price system, and because the price gap with print books is not large, e-books—which had once been feared would erode the print book market—have remained stuck at around a 20% market share since 2018. Even worse, with long-term rental services, if the company disappears, consumers may lose access to the service despite having paid for it, meaning they bear the risk themselves.

The discount restrictions on older books under the fixed book price system should be abolished. Under free competition among publishers, bookstores, and distributors, consumers should be given more reasonable choices. If South Korea’s stagnant publishing market is to be revitalized, now is the time to revise the fixed book price system.

Heehyun Yang

Intern Researcher, Center for Free Enterprise (CFE)

---

Original title: [자유발언대] 도서정가제 바뀌어야만 한다

Author: Hee-hyun Yang

Date: 2023-03-03

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=free_opinion&pn=6&idx=25431