Net Book Agreement
Encyclopedia
The Net Book Agreement was a British
fixed Book Price Agreement
between publishers and booksellers which set the prices at which book
s were to be sold to the public.
It came into effect on January 1, 1900 and involved retailers selling books at agreed prices. Any bookseller who sold a book at less than the agreed price would no longer be supplied by the publisher in question. In 1905, The Times
tried but failed to challenge the agreement by setting up a low-cost book borrowing club.
In 1962 the Net Book Agreement was examined by the Restrictive Practices Court
, which decided that the NBA was of benefit to the industry, since it enabled publishers to subsidise the printing of the works of important but less widely-read authors using money from bestsellers.
In 1991 the large bookshop chain Dillons
, followed by Waterstones, began to offer some books at a discount.
As the agreement did not cover books that were damaged (or second hand) shops that wished to sell "new" books below cover price for any reason (for example to get rid of obsolete stock or titles that were not otherwise selling) while still sticking to the terms of the agreement adopted a simply strategy: they deliberately defaced or damaged the book(s). The two methods most commonly used were to either use a hole punch
to punch a hole in the cover of the book or to use a marker pen
to mark the edge of the pages. The marker pen method was the most common as it took the least effort.
In August 1994 the Director General of the Office of Fair Trading
decided that the Restrictive Practices Court should review the agreement. In September 1995 several major publishers (including HarperCollins
and Random House
) withdrew, and in September 1996 the Booksellers Association decided to take no part in the case. In March 1997 the Restrictive Practices Court ruled that the Net Book Agreement was against the public interest and therefore illegal.
The collapse of the Agreement strengthened large bookstore chains and reduced book prices. It also paved the way for the large supermarket
chains to take a chunk of the book business, typically offering a small number of best-selling titles at deeply discounted prices. As of 2009, 500 independent bookshops
had closed since the demise of the agreement.
An early example of the changes in the book publishing markets following the termination of the agreement was the entry of the US-owned booksellers Borders
into the British high street, following their purchase of Books Etc. This was the first non-British company to enter the UK books market.
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
fixed Book Price Agreement
Fixed Book Price Agreement
The Fixed Book Price Agreement is a form of resale price maintenance applied to books. It commonly takes the form of an agreement between publishers and booksellers which set the prices at which books were to be sold to the public...
between publishers and booksellers which set the prices at which book
Book
A book is a set or collection of written, printed, illustrated, or blank sheets, made of hot lava, paper, parchment, or other materials, usually fastened together to hinge at one side. A single sheet within a book is called a leaf or leaflet, and each side of a leaf is called a page...
s were to be sold to the public.
It came into effect on January 1, 1900 and involved retailers selling books at agreed prices. Any bookseller who sold a book at less than the agreed price would no longer be supplied by the publisher in question. In 1905, The Times
The Times
The Times is a British daily national newspaper, first published in London in 1785 under the title The Daily Universal Register . The Times and its sister paper The Sunday Times are published by Times Newspapers Limited, a subsidiary since 1981 of News International...
tried but failed to challenge the agreement by setting up a low-cost book borrowing club.
In 1962 the Net Book Agreement was examined by the Restrictive Practices Court
Restrictive Practices Court
The Restrictive Practices Court is a senior court of record in the United Kingdom. It was created in 1956 to foster competition through enforcement of the Restrictive Trade Practices Act 1956. Though the Court was overhauled in 1976, by the end of the century, the legislation was perceived as...
, which decided that the NBA was of benefit to the industry, since it enabled publishers to subsidise the printing of the works of important but less widely-read authors using money from bestsellers.
In 1991 the large bookshop chain Dillons
Dillons Booksellers
Dillons was a bookshop and subsequently a bookselling chain, based in the United Kingdom, which traded between 1932 and 1999.Founded by Una Dillon in 1932, Dillons was for most of its history most closely associated with its signature building on Gower Street in London, near University College...
, followed by Waterstones, began to offer some books at a discount.
As the agreement did not cover books that were damaged (or second hand) shops that wished to sell "new" books below cover price for any reason (for example to get rid of obsolete stock or titles that were not otherwise selling) while still sticking to the terms of the agreement adopted a simply strategy: they deliberately defaced or damaged the book(s). The two methods most commonly used were to either use a hole punch
Hole punch
A hole punch is a common office tool that is used to create holes in sheets of paper, often for the purpose of collecting the sheets in a binder or folder.The origins of the hole punch date back to Germany via Matthias Theel, where two early patents for a...
to punch a hole in the cover of the book or to use a marker pen
Marker pen
thumb|MarkerA marker pen, marking pen, felt-tip pen, flow or marker, is a pen which has its own ink-source, and usually a tip made of a porous, pressed fibres; such as felt or nylon.-Permanent marker:...
to mark the edge of the pages. The marker pen method was the most common as it took the least effort.
In August 1994 the Director General of the Office of Fair Trading
Office of Fair Trading
The Office of Fair Trading is a not-for-profit and non-ministerial government department of the United Kingdom, established by the Fair Trading Act 1973, which enforces both consumer protection and competition law, acting as the UK's economic regulator...
decided that the Restrictive Practices Court should review the agreement. In September 1995 several major publishers (including HarperCollins
HarperCollins
HarperCollins is a publishing company owned by News Corporation. It is the combination of the publishers William Collins, Sons and Co Ltd, a British company, and Harper & Row, an American company, itself the result of an earlier merger of Harper & Brothers and Row, Peterson & Company. The worldwide...
and Random House
Random House
Random House, Inc. is the largest general-interest trade book publisher in the world. It has been owned since 1998 by the German private media corporation Bertelsmann and has become the umbrella brand for Bertelsmann book publishing. Random House also has a movie production arm, Random House Films,...
) withdrew, and in September 1996 the Booksellers Association decided to take no part in the case. In March 1997 the Restrictive Practices Court ruled that the Net Book Agreement was against the public interest and therefore illegal.
The collapse of the Agreement strengthened large bookstore chains and reduced book prices. It also paved the way for the large supermarket
Supermarket
A supermarket, a form of grocery store, is a self-service store offering a wide variety of food and household merchandise, organized into departments...
chains to take a chunk of the book business, typically offering a small number of best-selling titles at deeply discounted prices. As of 2009, 500 independent bookshops
Independent bookstore
An independent bookstore is a retail bookstore which is independently owned.-Literary and countercultural history:Author events at independent bookstores sometimes take the role of literary salons. The bookstores themselves, "have historically supported and cultivated the work of independent...
had closed since the demise of the agreement.
An early example of the changes in the book publishing markets following the termination of the agreement was the entry of the US-owned booksellers Borders
Borders Group
Borders Group, Inc. was an international book and music retailer based in Ann Arbor, Michigan. The company employed approximately 19,500 throughout the U.S., primarily in its Borders and Waldenbooks stores....
into the British high street, following their purchase of Books Etc. This was the first non-British company to enter the UK books market.