Iceland's Book Market and Unions Stopping Big Box Retailers in Montgomery County

At BookSeller.com, there is an interesting list of what makes Iceland's book market so successful despite the country's small population.  While some of the success comes from societal factors (they are "book lovers" and respect intellectualism) most comes from what appear to be conflicting business practices and funding sources.  Practices that are unsustainable and inefficient are slowly being phased out to make way for more robust and profitable types of ventures.

Here are some intriguing qualities of the book market:

Expert retail
The first secret is that Iceland's bookshops are staffed by experts. Buyers will have at least a BA in Comparative Literature or Icelandic, or be a retail veteran with an encyclopedic knowledge of publishing. Even part-time staff brought in during peak seasons tend to be second or third-year students in a degree relevant to publishing or literature. This isn't unique to bookstores in Iceland, but an unavoidable consequence of a-highly educated population in general. Icelandic booksellers have, generally, more knowledge, more experience and are better educated than your average big chain employee in the UK or the US. 

Why this won't last: Unfortunately, Penninn-Eymundsson, Iceland's only chain of bookstores, has gone into bankruptcy owing to the company's ill-advised investments outside of the book and office supplies sector. The administrators have raised prices and laid off a large proportion of the staff that made these bookstores so unique. Add to this the wave of experienced employees who will be retiring over the next few years and the retail industry could become completely deskilled in fewer than five years.

A college degree to work in a bookstore?  Why again does one study for 4-5 years to memorize good authors and be able to catalog well?  The economic times have clearly caught up with this trend judging by the mentioned bankruptcy.

No back catalogue
The Icelandic publishing industry's back catalogue is all but non-existent. Most books are not kept in print and become unavailable after the initial print run is sold out. Unless the book demonstrates a constant and steady demand, it will go out of print and be unavailable, even if a bestseller. The only books that sometimes get kept in print are those considered to be literary classics. Many Icelandic publishers leave the back catalogue market to public libraries.
Why this is changing: There is an increasing amount of profit to be made in maintaining a back catalogue, especially when, as is the case in Iceland, you have a large number of experienced authors who have been writing books for decades.

It's a wonder why any author would strive to make a profit in an atmosphere where their book has a short time to make an impact.  I can see the appeal to a kind of "creative destruction" but I wonder by what criteria are books judged to stay in print.

No paperbacks
Historically, owing to a lack of resources and income, most books are published in hardcover and never in paperback. The knock-on effect of having a market almost exclusively in hardback is book prices have remained high, but have not been raised (see point nine). Why this won't last: Icelandic publishers have been experimenting more with paperbacks, especially after the 2008 crash.

The first part of that sentence doesn't make sense.  Don't hardcover books require more resources to create than paperback books?  I suppose it has to do with an author having their book published in hardcover first, but it looks like the much needed switch to paperback is happening.

No competing with Amazon
Icelandic bookstores carry fewer and fewer English language books and the number has been steadily decreasing over the past decade. They realised early on that they can't compete with Amazon and so their focus is on books in Icelandic.

The division of labor proceeds but don't expect Amazon to neglect this market much longer if it continues to be as profitable as asserted in the article.

Cheap and fast production and design
The first books on the economic collapse were published only weeks later. The first books on the Eyjafjallajökull volcano appeared shortly after the eruption ceased. Icelandic publishers have put a lot of effort into speed and responsiveness as a way of grasping the few opportunities available to them. This is a story they like to tell whatever chance they get. What usually doesn't follow is the reason why they can respond so quickly: Icelandic publishers run very lean by international standards. They do more with fewer people than any of the major English language publishers would ever dream of. But, the clearest evidence of this is that most Icelandic books have awful covers.

This rigorous and fast production model is probably one of the keys to success in Iceland's book market.  When big events happen, people generally want information quickly as to make sense of such occurrences.  The lack of bureaucratic inefficiencies helps this process along.  This process should be a boon for consumers looking to get their fix of a comprehensive explanation for controversial affairs.  Obviously the issue of cover art isn't a problem considering books shouldn't be judged by it...

Massive government support
Another big reason why the Icelandic publishing industry is so healthy is government grants. The government runs the Icelandic Literary Fund, which funnels money into the publishing industry and supports literary efforts, translations and writing. It's not a lot of money to larger publishing markets, but for a small country it is one of the things keeping the industry alive. Why this won't last: The insane austerity fad has spread to Iceland as well and both Culture and Education departments are facing massive cutbacks.

I shouldn't even have to go into the kind of distortion such a policy creates.  While the production model for book publishing has become efficient, it may have come at the behest of other industries in Iceland that saw tax money and other resources funneled away.  The true test of Iceland's book industry will come when all government support is taken away and it has to float on its own.

Pricing
Despite being part of an economy with a collapsed currency and-double-digit inflation, where prices of many other goods have doubled or even tripled, most Icelandic publishers have not raised their prices since 2008. This does mean book sales have remained robust, although publishers have had to run leaner, with even narrower margins.

It's hard to tell how much longer publishers can last in an industry that loses its profitability every day.

Underpaid authors
Finally, one of the biggest reasons why the Icelandic publishing industry is so vibrant is almost counter-intuitively that Icelandic authors are underpaid . . . and accept it. Before the translation boom, the only way even bestselling Icelandic authors could expect to make a (slim) living off of their books was through government grants and a day job.
Why this might change: The current translation boom is changing authors' pay. Some top selling Icelandic authors can reasonably expect some revenue from translations to supplement their income. Yet, the popularity of Nordic writers is a fad. The question is: when the boom collapses, where does that leave the authors and the market?

Yes, it will certainly be interesting to see if the so called "fad" lasts but it just goes to show the positive effect on profitability that opening your audience and selling beyond borders can have.  I might look more into this market as it seems both restricted and efficient but this article seems to only scratch the surface ultimately.

For your daily dose of idiocy, see the newest battlefield retailers Walmart and Target have to make their way through, via WashPost:

ABILL BEFORE THE Montgomery County Council would force big-box retailers such as Wal-Mart, Home Depot and Target to negotiate with neighborhood groups as a condition for getting their new stores approved. This is such a spectacularly bad idea, on so many levels, that it’s hard to imagine how it came to be taken seriously in the first place.

Introduced by Council President Valerie Ervin (D-Silver Spring) at the behest of a union that represents workers at competing stores (including Safeway and Giant), the legislation is aimed mainly at Wal-Mart, which wants to build two stores in the county. Four other members of the nine-member County Council signed on as co-sponsors, which suggests that the bill stands a good chance of enactment — although lately some of the lawmakers have developed cold feet.

Those cold feet probably come from the fact that those city council members realize they are about to shoot themselves in the foot.   Washington Post is actually on the right side of the issue for once.  This is a clear power grab by the union as the big box retailers would certainly bring competition, and hence better prices and market reflective wages, to the resident of Montgomery County.  This is why I love to hear union leaders wax on about the plight of the worker while they themselves are responsible for the impoverishment of the public as a whole.

The whole idea of negotiating with a "neighborhood" group is asinine in itself.  How many people are adequate to represent a neighborhood?  Individual methodology is not only lost on federal and state politicians, but even falls to local government officials so entranced by their own ability to engineer society they come up with power grab schemes such as this.

If the citizens of Montgomery County have any sense, they will throw out the council members who are beholden to the union rather than the county as a whole.