The image given by the empirical evidence is rather opaque, firstly because of the lack of data, and partly because of the sharp contrasts between countries. However, the industrial organization tools help to identify the salient features of the organization of the book market.
Differentiated products with uncertain prospects
Among the characteristics of cultural goods put forward by Richard Caves, four are particularly relevant in the case of books:
- nobody knows: the demand for a particular title is difficult to predict, either by the publisher, the seller or the reader;
- time flies: the period during which gets the bulk of sales of a new title is very short (literary season, books on current events);
- infinite variety: books differ on a very large spectrum characteristics, as opposed to conventional assets.
- to a lesser extent, they also share the properties of A-list/B-list (sales focus on a small number of titles, although less than in the field of cinema) and high initial costs (writing and editing of a title) under the marginal cost (print a copy).
Jonathan Beck adds to these features that half of book purchases are described as impulse purchases, as opposed to purchasing reasoned based on a good knowledge of the observable characteristics of the titles. Finally, the books are durable goods: a given agent rarely buy the same book several times.
Because of these characteristics the book market is dominated by a trade from the perspective of the editor between research efficiency (publish numerous copies of titles, to take advantage of economies of scale) and the diversity (publish many titles in order to offset the losses of securities that are not sold by those who are selling well). In this context, industrial organization demonstrates that depending on the characteristics of the market, this trade can lead to either too much or too little variety. In the particular case of the book market, diversity of production can also be an objective per se, assuming a greater variety of production increases the chances of exceptional works apparitions. The question of objective of desired diversity is therefore a central question of the book’s economic policy.
Booksellers, prescribers and word of mouth
The reader who wants to buy a book ask advice to his bookseller, who can help him with some questions about his tastes, help her choose the multitude of new products, but also offer him an older book. In this approach, the supply meets the demand. The opposite is less common in bookstores but exists, especially with windows. It is however the rule in other cases, the offer anticipating demand and binding to a title, almost always new. Certain television programs will act as a real prescription, the reader may be prompted as much by the emotional burden carried by the presenter as the intrinsic qualities of the book. It is common to see a reader go into a bookstore and asked “the book they talked in such last night show,” incapable of giving title, author, or even information on its content. A more thoughtful incentive is word of mouth, which runs equally well on recent titles and the new.