Books: How to kill an industry and wound national identity

In April the Productivity Commission made a startling recommendation in its draft Productivity Commission Report into Intellectual Property Arrangements. It was that the life of a writer’s copyright be cut to 15 to 25 years after creation, rather than 70 years after the death of the author as it is currently.

This was met with horror by both writers and the book industry and yesterday the Minister for the Arts, Senator Mitch Fifield appeared to knock that idea on the head.

In a statement he stressed that this idea didn’t come from the government. He said: “The Turnbull Government is committed to ensuring that the intellectual property system provides appropriate incentives for innovation and the production of creative works”.

But he continued: “We also need a system that does not unreasonably impede further innovation, competition, investment and access to goods and services”.

The book industry is now fighting a revived Productivity Commission recommendation from 2009 arguing that the abolition of parallel-import restrictions (PIRs) on books will reduce the price of books and make international editions more readily available to consumers.

So what’s wrong with cheaper books? Firstly, there’s no proof they will be cheaper and books can already be bought cheaply from overseas websites (depending on the exchange rate). More importantly, the abolition of PIRs risks the livelihood of authors, Australian publishers and local book stores — and its effects will trickle through to readers.

Henry Rosenbloom (pictured), the founder and publisher of Scribe, a small independent publisher, argues below that the abolition of PIRs “would cause massive adverse consequences for writers, publishers, booksellers, and the culture as a whole”.

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Last November, the Turnbull government committed itself to the abolition of parallel-import restrictions (PIRs) on books, following the final report of the Competition Policy Review led by Professor Ian Harper. The relevant part of that report relied on a previous conclusion by the Productivity Commission (in 2009) that removing such restrictions would be in the public interest. The Rudd government eventually decided not to accept that recommendation. Recently, the PC has issued a draft report that agrees with itself and the Harper Review, and abolition is now caught up in the federal election campaign.

This is an argument that has been waged for many years. Each time it is defeated, its proponents gird their loins and sally forth again. This is because, to give them their due, the abolitionists’ argument is based on their genuine belief that doing so will reduce the price of books and make international editions more readily available to consumers. The economic worldview behind this is a neoliberal one, which holds that there should be no impediments to free trade, and that the benefits to society as a whole from eliminating protectionist instruments will always outweigh the damage to affected industries caused by taking such a measure. If industries can’t survive without some form of protection, they should get out of the way and disappear. Their resistance to the loss of protection should be disregarded by policymakers as merely self-serving.

The problem with all this is that it is a highly ideological and hermetically sealed position. It is not based on any factual analysis, and it ignores a number of important industry realities. It is a brutal solution in search of a problem, and in turn it would cause massive adverse consequences for writers, publishers, booksellers, and the culture as a whole.

Australian book prices only look dear or cheap according to the ruling exchange rate. Why should an entire industry be hoist on the petard of international exchange rates?

Facts first. There has been no analysis that I’m aware of which compares current Australian book prices with like-for-like editions in other English-language markets. The only price comparisons that I’ve heard of are several years old, when the Australian dollar was much higher relative to the US dollar and the British pound. This is a highly significant omission, both by a usually hostile media (which was full, several years ago, of adverse price comparisons), and by the proponents and advocates of the abolition of PIRs. The reason for this is simple: it is an inconvenient truth that, currently, Australian book prices are not high. Astonishingly, this means that the core problem for which the abolition of PIRS is proposed as a solution is either non-existent, or, at best, has not been proved.

More importantly, there has been a refusal by proponents to recognise that Australian book prices only look dear or cheap according to the ruling exchange rate. In the next few months, the Australian dollar may drop even further — in which case, our book prices will seem even lower. If the opposite happens, they will seem higher. In each case, the apparent fluctuations would clearly be beyond the control of publishers. Why should an entire industry be hoist on the petard of international exchange rates?

The other main ground for PIR abolition has historically been the supposed poor local availability of international editions. And yet hardly anybody complains about this any more. All Australian publishers release their licensed editions of US- and UK-originated books within 30 days of initial publication (which they’re required to do by law, if they want to secure territorial copyright). Many publish within 14 days, and some do so more or less simultaneously. Besides, consumers can buy the overseas edition from offshore online retailers whenever they feel like it, and local e-book editions are also often available simultaneously.

If PIRS were abolished, the bedrock of Australian publishing would cease to exist.

So the price-and-availability argument is bogus. But what is worse, in my view, is the ignorance of core publishing-industry realities. The most important of these has to do with the acquisition of rights. When publishers acquire the right to exploit an author’s copyright, they can only give effect to that right by exercising it territorially. That is why the territory or territories being granted are always stipulated at the beginning of every publishing contract.

If PIRS were abolished, the bedrock of Australian publishing would cease to exist. Local publishers would be unable to acquire rights from overseas publishers or agents with any confidence, as Australia would be an ‘open’ territory, so different export editions of the one book could compete with theirs, or local booksellers could import copies against their edition. Even if they acquired rights, local publishers would be wary of investing in marketing or promotional activities — such as bringing an author out to a writers’ festival — lest they enable free riders to benefit from their expenditure.

They could still acquire rights from local authors, of course, but they couldn’t license those, with any confidence, to overseas publishers, as it would be open to those licensees — or third-party distributors — to export stock to Australia, to compete with them. It is even conceivable that there could be four editions of an originally Australian book competing in our marketplace: the Australian edition, and a US, UK, and Indian one. Local authors and their publishers would be placed in a highly invidious position: either give up on overseas licensing of their books, or hope that the size of the overseas advances compensated for compromised local sales and the export or nil royalty rates that might flow consequentially from such deals.

The consequences of all this would be catastrophic. Without the income and the profits from overseas-originated books, or the income from overseas English-language rights sales, local publishers would become much reduced — and in some cases would disappear. Local authors would find their incomes and opportunities diminishing further, in response to their publishers straitened circumstances. And in one of the greatest of ironies, book prices would probably go up, as publishers sought to compensate for their limited market.

Ultimately, Australian publishing would wither on the vine, as power shifted back to New York and London. When licensing rights to Australia, US publishers would come to demand access to it on a non-exclusive basis, as they do now with Europe vis-a-vis UK publishers. And UK houses, in acquiring UK and Commonwealth rights, would lower the implicit value of the Australian component, and their commitment to Australian distribution would come under pressure. Australia, which is such an important export market for UK publishers, would become a highly contested one.

The Labor Party has carefully avoided stating its position, probably because its front bench contains many free-trade fellow travellers.

As for us, it would be back to the 1960s. Unable to secure the exclusive right to publish in our own country, Australian publishers would become oxymorons. Australia would once again become a book depot for US and UK houses. Local authors with international potential would be forced to acquire overseas agents, to seek initial publication in the US or the UK, and to accept overseas editing. Local authors would struggle to find local publishers, and midlist books would become an endangered species.

Bookshops would soon reflect the consequences of all this. With the ecosystem winnowed out — as independent houses declined, and those remaining, along with multinational subsidiaries, reduced their output and the variety of their lists — the shops would lose the vibrancy and range of their offerings.

And the culture as a whole? Fewer local authors, fewer local stories, fewer local publishers, worse bookshops, and a diminished national identity. And all this to satisfy an uninformed worldview, and on the basis of an unproven case.

Perhaps the greatest irony of all for the proponents of a policy that would have such consequences is that their ideological home, the United States — the capital of capitalism, and the bastion of free trade — does not allow the parallel importation of books. Nor, of course, does the UK, even with the City constantly championing free-trade theory and policies. Neither country is stupid enough to endanger a vital cultural industry in this way.

The proponents and their political camp-followers seem to know very little about the above industrial realities. But even if they did, they wouldn’t care. They see us as simply collateral damage, incurred for a greater good. It takes a special kind of messianic zeal to propose such damage with a straight face.

The outcome of this latest battle in the PIR wars will depend on the result of the 2016 federal election — especially in the Senate. The Labor Party has carefully avoided stating its position, probably because its front bench contains many free-trade fellow travellers. However, this is a red-hot issue for many people in the writing, publishing, and literary communities. They see the abolition of PIRs as an existential threat — correctly, in my view — and they all vote. If the ALP wants to avoid a substantial defection to the Greens, it needs to come to its senses immediately.

This article was first published on Henry Rosenbloom’s Scribe Australia blog

8 responses to “Books: How to kill an industry and wound national identity

  1. Self-interested venting. Completely wrong in tenor. Copyright law should promote the greater good, not sectional advantage.

    Prices may not come down but with this antiquated form of protection for publishers they could so easily go up again. And why shouldn’t publishing “be hoist on the petard” of variable exchange rates? All other industries are: tourism, education, clothes, etc. Time for publishers to grow up. All this moralising is just bilge.

  2. My favourite part is where you say that you can buy cheaper books overseas and then deny that books are cheaper overseas.

  3. the usual hysterical alarmism circulated by the proponents of a system designed for an industry 50 years ago, warning of a “catastrophe” and that “the bedrock of Australian publishing would cease to exist”. the industry must actually be quite relieved that this old saw has raised its head at this time, so they can blame the removal of the outdated protectionism on their demise (which is already almost terminal). to pretend that the non-abolitionist position is somehow not ideological, and that there is some kind of coherent research to support these hysterical claims about the end of australian culture as we know it… all of this is frankly dishonest

  4. This is a brilliant and very clear explanation of a complicated argument that should need to be put. I’m sure I don’t have to urge Henry to make sure it finds its way into the Commission’s hands – preferably in flashing lights. The Free Traders must not be allowed to destroy a vital part of Australian culture through ignorance of the wider issues involved.

  5. I believe a similarly dangerous experiment was done in Canada with predictably negative outcomes. Does anyone know if there has been a protest movement there that Australians could learn from?

  6. Regarding ‘reducing the term of copyright to 15 to 25 years ‘ that would need a rewriting of a number of significant international treaties , unlikely to happen , anytime.

    Do agree that the rise of Amazon etc has brought a lot more competition into ,our local market -the days when local editions of international books were a lot dearer is well over.

  7. This position must be published far & wide,most of “US” don,t know the American & English positions on this! If U could “OUT” this in accompniment with Labors SELLOUT on TPP—ISDS there might hopefully B a huge groundswell 2 prevent this unfair change taking place.

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