The Harry Potter Price War Part 2: Why Shafie Apdal is Wrong

From the Domestic Trade and Consumer Affairs Ministry, re: Harry Potter price war:

“If there is a drop in price that the suppliers can afford, this is for the good and does not violate the law.

“If traders can reduce their prices and not sell at a lost, we should encourage this as it really benefits the people,” (Datuk Mohd Shafie Apdal) said.

NO IT IS NOT GOOD! WHY ARE YOU EVEN A GOVERNMENT MINISTER?!

Good god, do you even understand the concept of capitalist monopoly and macroeconomics?

(At least, I think that's the proper term for it. It's either that or "This is How We Will Fuck You Up AND YOU WILL LIKE IT".)

I already went into this yesterday, but it bears going into greater detail since most people don't understand why what the hypermarkets are doing is so dangerous. Fair enough. Take a seat and let's get into it. You too, Shafie.

Bookstores sell one and one thing only: books. Okay, magazines, stationery, etc. But their primary source of revenue comes from selling books.

Hypermarkets sell groceries. Sugar, toilet paper, cranberry juice, that kind of stuff. That's where they get the biggest portion of their revenue from (except maybe for parking tickets, I'm not so sure about that one).

But as it turns out, they've discovered that people like books. In spite of literacy issues around the world, people do want to read, especially if it turns out that the book in question is really cheap. So they get the biggest bestsellers - Harry Potter, Dan Brown, Stephen King, Michael Crichton, that sort of thing - and sell them at ridiculously low prices, which draws customers to their big stores, and they in turn will hang around to check out the other goods that the "consumer-friendly" hypermarket is selling.

"But it encourages people to read, doesn't it? Books should be cheaper!"

Oh, I won't disagree on that last one. And I do think there's something deliciously wrong about corporate bookstore chains complaining about being priced out by an even bigger corporate fish; it's exactly what they've been doing to the smaller, independent/specialist bookstores. When was the last time you saw a specialty bookstore in Malaysia?

But long term, as much as it might pain me to say this, it's horrible for the book industry. Firstly, it's impossible for bookstores to compete with that kind of discounting, because you cannot make money from it. The hypermarkets aren't making money from selling the books, because that's not their primary source of revenue. It's just a way to draw more customers. Books are all bookstores have.

There's no way they can compete with the hypermarkets, and inevitably many if not most of them will go out of business, surrendering more and more of the market share to the hypermarkets. It's already happening in other parts of the world; 15% of all books in America are sold through Wal-Mart.

And it's an extremely bad idea to let the hypermarkets, who aren't even in the business of selling books, to control that much of the market share and hold the publishing industry by the scrotum.

Let's think about that. We've established that hypermarkets are only using the books as incentive for the consumer to visit their big stores and buy other goods. In order to accomplish this, they retail only the established bestsellers. The Harry Potter series. The Da Vinci Code. Anything by Dan Brown or Jeffrey Archer.

(Incidentally, 63% of the top one hundred bestsellers from 1986 to 1996 were written by only six authors: Michael Crichton, John Grisham, Tom Clancy, Dean Koontz, Stephen King and Danielle Steele. Food for thought.)

A couple of major problems arise from this. One, if books are used only to draw customers, what incentive would they have to stock critically-acclaimed but much less popular books? There isn't any, so they get shunted out while the usual bestsellers continue to get fat, because they're considered by far the safer choice, which is why Stephen King can write a book about a killer cellphone and get away with it.

Where would the lower selling but more important books like May 13 and so on be? If all we sell and buy are books by the same popular authors over and over, how can we expect either the book industry or literacy levels to grow?

Secondly, if the hypermarkets do end up controlling the major portion of the market share, they can essentially dictate what publishers print. We've already seen this with music, where Wal-Mart banned Sheryl Crow's album because one of her lyrics criticised the store for selling guns, costing her about 10% of potential sales.

What if there's a book that criticises Tesco's business policies? Of course Tesco isn't going to stock it - and just to punish the publisher for even thinking about printing that book, it could theoretically refuse to stock all of the publisher's books. (Though in the libel suit-happy country that is Malaysia, that probably isn't going to be a problem anyway.)

Hell, Apple banned all books by John Wiley & Sons (publisher of the ...For Dummies series of self-help books) from their stores just because they published a biography on Steve Jobs.

Of course, if Shafie Apdal understood anything about monopolistic systems he would never have said what he said. And I'm a freakin' Arts student.

P.S. Sharon Bakar, who is a proper book editor, provides some detailed coverage on how the Harry Potter sales went down in Malaysia. Always a good read, that Sharon.