Thursday, May 26, 2016

A 'competing editions' market for Australia?

One of the favourite disaster scenarios imagined by publishers once Australia's parallel importation restrictions (PIRs) are removed from our copyright law is the one where no Australian publisher will ever again be able or even willing to buy exclusive Australian rights to an overseas title for publication here.

The theory is that US and UK publishers will exploit the opportunity to sell into the Australian market themselves and thus will only offer 'non-exclusive' rights. After all Australia will have been rendered an 'open market', a market where competing editions fight it out - the US edition, the Commonwealth edition, the Indian edition, and whatever others are out there.

Henry Rosenbloom, owner of Scribe, and a very experienced and well regarded publisher in Australia, clearly articulates this position in his recent blog post here.

There are two main things wrong with this scenario:

1. It rests on the belief that, absent the PIRs, Australia will no longer a be a territory for rights sale purposes. I've written numerous blog posts and articles and given many speeches, presentations and lectures over the years pointing out how absurd this proposition is. It rests on the assumption that everything that actually makes Australia a territory in the first place will, at the stroke of a pen, disappear - our geographical distance, population size, literacy levels, book trade infrastructure, etc.

2. It exhibits a rather quaint commercial naivete. It imagines that overseas publishers and literary agents will en masse shoot themselves in the foot and start indulging in behaviour that would be strategically silly and seriously unprofitable, not to mention bad for their authors.

It has been true for years that UK publishers in particular have been blindsided by the 'open market' terminology. They reflexively think Australia will become one. Continental Europe, the Middle East, Africa, South East Asia - these are open to all editions. Selling exclusive English language rights to a new Jonathan Franzen to a Hong Kong publisher makes no sense, nor would a HK publisher fork out for them, because of easy trade flows across borders in the region. Both importers and foreign exporters can 'free ride' without prohibitive costs. It's standard business for everyone.  

Australia, in contrast, is vastly different. Booksellers rarely 'buy around' because their needs are overwhelmingly satisfied by efficient local publishers and it is way too expensive and risky to airfreight in quantities from abroad to satisfy local demand. Overseas editions are therefore kept out commercially. 

The critical point is: this will be the natural way of things when the PIRs are abolished, and it's simply illogical and naive on every level to think otherwise. 

As I write this the Australian dollar is heading for another few years of historic lows. Our book prices today are therefore situated at the right levels. While they were an average 30-40% too high when the dollar was strong a few years ago - and publishers were too slow to reduce them - that landscape has radically changed. 

That actually means that retaining the PIRs or abolishing them now will have no effect whatsoever on trading patterns either way. 

When the dollar strengthens again though, as it undoubtedly will, it is entirely predictable that too many publishers will again be slow to respond and their prices will remain unjustifiably high. 

That's why we should take this opportunity to abolish these protectionist provisions now.

No comments: