Wednesday, September 30, 2009

Craig Emerson's Proposed Compromise

Competition Minister Craig Emerson's proposed 'compromise' on the issue of the reform of Australia's parallel importation laws, as outlined here, is deeply flawed in that it clearly breaches the Berne Convention and a mirror provision in the Australian Copyright Act which is based on it. It will therefore go nowhere. The Attorney-General's department will quickly point this out, as they have on numerous other occasions.

Here are the relevant clauses:

Berne: Article 3 (4) A work shall be considered as having been published simultaneously in several countries if it has been published in two or more countries within thirty days of its first publication.

Copyright Act: Section 29 (5) For the purposes of this Act, a publication in Australia or in any other country shall not be treated as being other than the first publication by reason only of an earlier publication elsewhere, if the two publications took place within a period of not more than thirty days.

Thus no Australian government has the authority, while ever Australia remains a signatory country, to alter the 30 days definition of simultaneous publication. And the reason for the 30 days is to allow foreign titles sufficient time to get published here in order to extend the exact same basic copyright protections to those titles that local Australian-originated titles receive. This is a foundational fairness principle in Berne, and will never change. Local titles, in any signatory country, cannot be privileged.

Try again Minister.

Wednesday, September 16, 2009

Random House and the global Dan Brown rip-off

The book trade has a phenomenon called 'megasellers'. They are highly orchestrated, globally released bestsellers where the authors and publishers make truckloads of money but the retailers none at all.

Harry Potter is the perfect example. Dan Brown's The Lost Symbol, released yesterday, is the latest.

Random House's ARP is $49.95, an outrageous piece of price gouging if ever there was one. Similarly, the US and UK prices are at the very high end of the scale. They are all hardback editions, so the consumer is tricked into thinking that there's extra value and quality in that binding and therefore the price must be justified.

This is garbage. What's really happening is that a quintessentially mass market title is being offered in an elite package simply to screw more dollars out of the author's expectant fans.

Most Dan Brown readers came to The Da Vinci Code, Angels and Demons, and Deception Point late into the life of these titles and were buying them at paperback prices of around $18 - $25. So The Lost Symbol is finally released and they walk into a bookshop and are confronted with an expensive hard back and a price that absolutely turns them off.

The retailers, who know and respect their customers, are on the front line. They sacrifice their own margins to get the business and keep faith with joe public. A&R/Borders is offering it at $29.99 and Dymocks has it at $32.99. Independents Readings and The Avenue in Melbourne have it at $39.95, the best they can do because they simply don't get the sweetest terms from the publisher. Most other smaller independents can't discount at all, and have stuck to the RRP of $49.95. So if you buy from them you're being ripped off - not by them but by the publisher. What a treat for loyal customers!

I'd like to buy the book, so I'll go to Dymocks. And I'd be silly to buy from an independent, despite my usual habits and preferences.

What irks is the cynicism of Random House. A mass market product like The Lost Symbol should be produced, first up, in a paperback edition for no more than $32.95, which would then be discounted by retailers. Independents would get their usual share of demand because we're not talking big dollar price differences between stores.

But the real issue is meeting customer expectations and not alienating them. And just being a bit ethical, if that's not too difficult a concept for a global corporation to understand.

Random have printed over 600,000 copies for the Australian market. I'd love to see them eat half of that because of consumer distaste.

Monday, September 7, 2009

The Australian Book Trade and Parallel Importation: a Compromise Proposal

There it was again on Sunday morning - the question to this government that simply won't go away: 'But what unpopular decisions have you taken so far? What painful policy proposals have you implemented?' Barrie Cassidy was interviewing Wayne Swan on The Insiders.

Swan listed a few semi-forgotten things but nothing really emblematic stood out. The parallel importation issue presents a perfect opportunity for the Rudd government to firmly, clearly and very symbolically demonstrate its reform credentials; to send an unmistakable message to the big end of town, the commentariat, the ordinary voter: 'I don't just write essays about the need to improve Australia's productivity performance, the need to continue the process of reform so successfully undertaken by the Hawke and Keating governments - I'm getting on with it'.

But let's get real. Even with the cover of the Productivity Commission's report, it is extremely unlikely that this government will seize the day. First and foremost in its mind will be the loud and continuing shrieks and howls of outrage from the cultural elite if it took this course. And from the printing unions. And from state governments. And the Fairfax press. Support from the usual suspects - the Fin Review, The Australian, Bob Carr - none of this would compensate. This is a government focussed on 'palatable' policy, not policy purity.

Therefore, seeing that we're now close to the end - Cabinet's decision is expected within weeks - and we're at the final hand-to-hand combat stage, it's probably time to frame some sort of compromise position that I believe all players, however reluctantly, would accept.

I sent this letter to Kevin Rudd on September 1:

Dear Mr Rudd

The Australian Book Trade and Parallel Importation: a Compromise Proposal

The media is reporting that Cabinet may be close to debating the recommendations of the Productivity Commission to abolish the Parallel Importation Restrictions (PIRs) in the Copyright Act that currently regulate book importation into Australia by retailers.

I have been an active participant in this debate for over 20 years in my capacity as Managing Director of John Wiley and Sons Australia Ltd, a board member of the Australian Publishers Association for ten years, a past President of that association, and now, having recently retired, through my industry blog Pub Date Critical ( and my recent appointment as Adjunct Associate Professor at the University of Queensland.

I have always been in favor of reform and have been a lone voice on the publishing side of the ledger.

My sense now, however, is that the industry needs to come together around a compromise position. Such a position could be constructed by your government and I believe it would receive the support of the vast majority of authors, publishers and booksellers, and all their industry associations. It would likely also receive the support, albeit grudging, of those retailers like Dymocks who are strongly in favor of complete abolition.

My proposal would involve two elements:

1. Maintain the 30-day frontlist protection, but only for the first five years of a title's life.
2. Abolish the 90 day backlist provision altogether.

Providing local authors and publishers with protection from parallel importation for the first five years of the life of a particular title would, in virtually all cases, be more than sufficient to get a full return from the investment associated with local development, printing, marketing and selling. Very few publishing projects these days are costed with a view to a life beyond five years, although of course many continue to sell well for years beyond this period. No publisher would seriously consider not investing in a project or author on the basis that parallel importation protection would expire five years after first publication. And no author, established or otherwise, could seriously mount a case that the government had eroded his or her rights to local publication or income.

The current 90 day backlist protection is a legacy of sea freight time frames from the UK and the US and makes no sense these days when air freight is the norm. There have been calls from some industry players that the period should be shortened to 30 days or even 7 days. But allowing retailers the immediate freedom to import if the local publisher is out of stock is by far the best way to maintain competitive pressure on the privileged supplier. In the great majority of cases the retailer will wait for the publisher to re-stock because it is simply less expensive and more efficient to do so. Mostly the wait would be for only a week or two. Once the title is back in stock the local publisher would regain the protection initially afforded.

The virtue of this compromise position is that no industry party could credibly object. Those in favor of adopting the Productivity Commission's total abolition recommendations would obviously be less than happy, but they would at least be able to celebrate a significant movement their way. Close to 80% of English language titles in print would be available on the open market. The authors and publishers, on the other hand, would welcome such an outcome with a fair measure of enthusiasm. They would certainly perceive it as a victory for their lobbying efforts. The 50,000 or so protected titles on the market at any one time would constitute the bulk of industry revenue.

The other virtue of this position is that it does not involve any re-thinking of the current programs of government support for literature or publishing.

I trust you will find this proposal helpful.

Yours respectfully

Peter Donoughue