Half-priced books online jeopardize publishing firms

By Kim Tae-jong

The Korea Publishers Society (KOPUS), an association of more than 400 publishing companies, cried foul against online markets for selling books at drastic discounts, claiming their “unfair” practices are to blame for a series of recent publishers going out of business.

It said it may have to take legal action against Ticket Monster, a leading social media-based online retailer, unless it stops selling books at half the market price.

The warning came after major publishing companies went bankrupt in the past few months due to cutthroat competition fueled by e-commerce retailers here. Ticket Monster is a subsidy of Gmarket, a local unit of eBay.

“Many book companies are hurting due to huge cuts in book prices by online sites,” said Cho Jae-eun, a director of the KOPUS. “They know price reduction only causes massive losses in the long term but they have no choice but to cut prices in order to stay afloat. But such practices are now destroying the publishing industry as a whole.”

Cho said KOPUS is considering taking legal action against online shopping retailers that instigate such “self-destructive competition” among publishing firms.

Under the current law, a maximum 10-percent discount is allowed for new books, but online bookstores and social commerce companies have offered discounts of over 50 percent by issuing coupons.

As customers are attracted to such cheaper prices, book companies have been forced to join in the price-cutting to remain competitive.

As a result, a number of major publishers such as Thinking Tree Publishing, Ire Publishing and Taedong Books have already gone under.

Without reform in the current distribution structure and prevention of sales practices relying on self-destructive discounts, the publishing industry will soon be completely ruined leaving only a few survivors, Cho said.

Industry insiders also fear a domino bankruptcy effect in the industry as the collapse of book companies can adversely influence the distribution and printing industries as well.

“It’s already at a critical stage,” said Han Gi-ho, head of the Korea Publishing Marketing Research Institute. “If the trend continues and more book companies go bankrupt, the impact will be much bigger as the publishing industry is inter-linked with authors, distributors and the printing business.”

He also warned it will also affect readers in the end.

“The damage falls on not just publishing companies but also readers, as they may not be able to find a book they wish to read,” he said.

To slash prices, publishing companies have to reduce their budget in the publication procedure and it will result in sacrificing quality, he said.

To rectify the situation, he is now considering establishing a civic association with publishing groups and civic groups to monitor price policies of publishing companies and illegal sales practices.

“We also plan to collectively promote books from publishing companies which strictly follow permitted price regulations and hold campaigns against those who malign the market order,” he said.