Parallel importation: a disaster for Australian writers ~ theatre notes

Wednesday, April 15, 2009

Parallel importation: a disaster for Australian writers

Update: The Australian Publishers Association, the Printing Industry Association of Australia, the Australian Literary Agents’ Association and the Australian Society of Authors have banded together to form Australians for Australian Books. Those concerned at the proposed changes can sign their petition online, which is a counter to Dymock's aggressive campaign that misleadingly claims to be about cheaper books for consumers. I urge everyone interested in Australian literature to do so urgently, before this Friday, the deadline for responses to the Draft Proposal.

Below is a slightly extended version of my submission to the Productivity Commission, which is presently conducting a study on the copyright restrictions on the parallel importation of books. Parallel importation is the practice of importing overseas editions of books which are already available here through Australian publishers. The recommendation in the present draft report is that copyright restrictions are dropped after 12 months. The commission claims, on its own admission on slender or non-existent evidence, that this will make books cheaper for consumers.

By effectively removing ownership of the copyright of a book in an Australian writer's home country, this would have a devastating effect on Australian publishers. And also on Australian writers. Publishers, agents, authors, unions, many readers and most booksellers are overwhelmingly against changing the present situation (their submissions can be read online here and here).

I would like to register my opposition to the proposal to lift restrictions on the parallel importation of books. Such a move would have a significant impact on my ability to earn an income as a writer.

I make my living from the sales of my popular fantasy books, and am now - for the first time in two decades of writing - earning an independent income. This means I no longer apply for grants from the Australia Council to support the production of my poetry and prose. The income from my fantasy books subsidises my poetry (I am a prize-winning and internationally published poet) and the theatre criticism I write on my blog Theatre Notes, both time-consuming activities I pursue for reasons other than financial reward.

My fantasy books are published first in Australia, by Penguin Books Australia, and overseas publication follows in the UK, the US and Europe. This means that there are at least two English language editions of my books sold overseas, as well as the Penguin editions.

There is a small but significant fact that is being glossed by booksellers’ blithe claims that authors “still earn their royalties”. I earn a significantly higher percentage of royalties from books sold in Australia than from those sold overseas. Books that are published and sold here earn me the full 10 per cent royalty of the cover price. Books that are sold in overseas markets often have a smaller royalty – ranging from 6 to 8 per cent – and after that, under the agreements from my original publisher, I lose from 25 to 50 per cent of the gross royalty to the original publisher. This is a standard agreement which publishers all over the world use to ensure that their initial investment in an author is financially recognised.

This means that for every book sold in Australia that is NOT published by Penguin, I could lose up to half – or more – of the income I would earn if it were published by the local publisher. Worse, if a foreign publisher decided to dump remaindered copies on the Australian market, I would earn precisely nothing.

The Australian market is a significant proportion of the income that I generate as an author. And this is why territorial copyright is important to my financial independence.

Territorial copyright is a right for all authors in the United Kingdom and America. Neither of those countries, for good reason, is considering abolishing this protection for their own authors. Under the Productivity Commission’s suggested changes to the copyright law, Australian writers will no longer be able to compete on the same terms with writers in these countries.

My books are selling much more strongly now, seven years after they were first released, than when they were first published. The 12 month rule would only punish their further success, and would provide no protection for years of hard labour to writers like myself, who depend on a book’s steady longevity rather than a burst of sales.

The argument as presented by those who seek to lift restrictions is that it would make books cheaper for the consumer, and that those who oppose it are greedy corporate publishers. This is a populist argument with little regard for facts: the relative expensiveness of Australian books is far from proven, and it is less than certain that removing restrictions of parallel importation would make books any cheaper. And it certainly ignores the potential impact on authors.

The best way to make books cheaper for consumers would be to make them exempt from the GST. It was always a scandal that books were included in the first place.

This proposal would have a devastating impact on the local publishing industry – it certainly had negative effects when it was introduced in New Zealand, where the publishing industry now struggles to survive – which, on top of cutting my income, would have indirect effects as well on my ability to continue to write and publish in this country.

If the proposals go through, I will be forced in future to publish initially with English or American publishers, where I will enjoy Territorial Copyright. This will remove the income these books generate from the Australian economy altogether, and ensure that only English or US editions – which, as any writer will tell you, are edited for their domestic markets and so differ from Australian editions – are available in Australian bookshops.

I fail to see how this benefits consumers, publishers, booksellers or myself.

The only benefits that seem likely are increased profits for some retailers, from being able to import cheap or remaindered copies of books. This limited benefit would come at a heavy price to our presently healthy and competitive publishing culture, and would significantly affect the diversity of the books available to consumers.

My situation is far from singular. Artists are routinely urged to become self-sufficient, but parallel importation would make this goal even more difficult than it already is. If the Rudd Government claims to be backing a Creative Australia, why is it entertaining a proposal which would make it much harder for authors to earn a living, in a profession in which earning a decent living is already a rarity?

April 9, 2009

Alison Croggon is a poet, novelist and theatre critic based in Melbourne. As a poet, she won the Anne Elder and Dame Mary Gilmore Prizes, and has been shortlisted for several Premier’s Poetry Awards. Her critically acclaimed fantasy quartet The Books of Pellinor is a popular success in Europe, England and the US and was shortlisted in three categories in the Aurealis Awards, as well as being a Children’s Book Council recommended book. She is Melbourne theatre critic for the Australian newspaper and runs the theatre blog, Theatre Notes.


Anonymous said...

Yaaay, Alison! Great sub!

Thoughtful Theatre said...

Because it isn't hard enough to make an income as an artist already in Australia???. I am APPALLED! I choose to buy books of living authors because I know they get some royalties, just like people who want to see my theatre pay to see it.

This just reiterates the shrinking value parts of Australia places on cultural activities. Can you imagine the outrage that would ensue if we capped the earnings of professional athletes?

TimT said...

Well lifting the import restrictions would tend to give a downward pressure to prices of all books. One example of how books could become cheaper is provided in this submission (in the sale of cheap/remaindered books).

Which in turn would make it easier for booksellers to be competitive, and open up the market to people on a low income. Now you might not agree that this would be good for Australian writers, but wanting more books to be had at a cheaper price would certainly seem to be the move of a government that cares about and values literature.

Alison Croggon said...

That's the argument of Dymocks and associates, of course. Which doesn't account for the majority of booksellers who are actually against the proposal.

If you take the GST from Australian book prices, you'll find that in fact Australian books are around the same price as books from the US and the UK - some are more expensive, some cheaper, some about the same. If you compare to book prices in markets like Japan, we're significantly cheaper. Bestsellers in Australia are about the same as amazon prices, including freight. (For more details, check out this page).

The most significant upward pressure on prices is the GST on books which, if you remember, was a huge debate at the time. And had a very deleterious effect on book sales. However, the PC says considering the impact of the GST is outside their remit.

But even the PC admits that evidence is scarce on the price of books, and also whether any savings would be passed on to consumers is less than certain. They seem to be balancing the certainty of reduced income for writers, reduced production of local books and reduced publishing for publishers - with all the job losses that entails in the publishing and printing industries - against the gamble that book prices would be cheaper in some shops. It's insane.

In the meantime, they are proposing to remove an important intellectual property - Territorial Copyright - of writers in Australia. If I were an English or American writer, that intellectual property would be protected. I don't see how taking the intellectual property of writers - which is all they have to make their living with - shows any real interest in or care for literature. Which is, after all, made by writers. And I shall indeed be publishing overseas first if that happens. My books make quite a lot of money for people other than me, and that money won't be made in Australia. And I won't be alone. Meanwhile, other writers who don't already have an international presence will find it much harder to get a look in. I'd hate to be a new writer in Australia, or to be writing books specifically aimed at Australian interests. Such works will face considerably reduced opportunities. And what for? A couple of dollars - maybe - off the RRP of an ever more homogenous selection of books?

Some people have posited the nuanced Canadian model as an alternative. There are probably ways of improving the present situation. But what they're proposing at present is basically vandalism. I can't see that it will actually benefit anyone.

TimT said...

Booksellers and publishers wouldn't bother sourcing overseas if they couldn't get cheaper prices and competitive deals - in which case a lifting of import restrictions wouldn't matter.

TimT said...

The surveys referenced in that link look rather selective, unsurprising for a webpage entitled 'Australians for Australian Books'!

Alison Croggon said...

Local publishers - unless they decided to pay their employees nothing at all - simply couldn't compete against remaindered books. One example: Toni Jordan made the Miles Franklin longlist with her rather marvellous romcom Addition. Consequently her Australian publisher, Text, issued a smart new edition. But at present her British publisher has several thousand remaindered copies in a warehouse, due to a dispute with amazon UK. Neither her fault nor Text's. If parallel importation were permitted, the British publishers could dump those books on the local market. They would probably be sold at discount prices, but not necessarily. Toni would make nothing at all from those books. Text would make nothing, and could instead lose a lot on their investment. Books aren't cheap to make. Toni will lose the chance of an income on which to live to write another book (unless of course she applies for funding - but aren't we supposed to be trying to be sustainable?)

Retailers in such situations stand to make a killing, of course.

It would only work one way - Australian publishers couldn't dump their books in England. That's not quite what I'd call an open market.

You might think that's a good thing, Tim. But I don't.

Alison Croggon said...

...and re the book prices: you could try reading the Productivity Commission's rather uncertain analysis on book prices yourself. It's online. They admit there's not enough evidence to claim with any certainty that books are more expensive in Australia than elsewhere. Yet even without that evidence, they are prepared to make claims that any higher prices are, per se, to do with Territorial Copyright (rather than, say, GST, which doesn't apply to books that anyone can legally buy on amazon anyway). It's a wobbly argument. Territorial Copyright also applies in those English-speaking markets that supposedly make books so much cheaper than ours. Doesn't make a whole lot of sense, no?

TimT said...

You've neglected to mention some other points: namely, that people who stand to benefit from cheaper deals/bargains (such as might result from the use of remaindered books in sales) would be those who are on a low income. Authors stand to gain new readers, which in turn puts them in a better position to bargain with publishers.

And there's the other point: the vast majority of the profit currently earned by booksales goes to publishers, not authors. It's not changes to copyright laws or parallel importation laws that makes it hard for authors to survive, it's tight-fisted publishers who screw as much money out of the system as they can get.

Anonymous said...

Low income readers don't give up reading because they can't afford to buy books. They become rampant library-goers.

I think it's hilarious that Dymocks CEO stated that books were still selling wonderfully recently despite the climate and makes statements like: ""The list highlights the enduring popularity of Australian authored books," says Don Grover, Dymocks CEO, "with perennial classics such as Possum Magic, Where is the Green Sheep and John Marsden's acclaimed Tomorrow series leading the charge of home-grown talent." "

And yet the story Dymocks tells to the Productivity Commission is completely different. That restrictions hurt sales and there is no need to care for local talent. Whatever spin suits the moment, I suppose.

I think you'll find it's the booksellers that take the bulk of the profit of each book sold. The publisher's portion is often reduced by distribution, warehousing and marketing, as well as the obvious editing and printing. They make more than the author but not a lot more.

Did you read the Productivity Commissions views on psychic income? Apparently an author's psychic income can make up for underpayment.

If the market were open... I suppose we'd all be reduced to only earning psychic income. I hope it boils down well to feed the kids.

Alison Croggon said...

Thanks Bren. It is hilarious that publishers are described as "tight-fisted" (they're businesses, right?) while booksellers are, on the other hand, enlightened champions of the oppressed masses. Pull the other one. And yes, it's the retailers - those who invest and risk least, especially on the sale and return policy observed by most publishers - who make the lion's share of the RRP.

As well as libraries, the Poor, of whom I have been a member many times, can patronise the excellent second hand bookshops we have if they want to buy books. I recommend this, even though I don't make a cent out of it.

TimT said...

I think I can understand why a lot of lower income people would pass on libraries - literary choices being made by other people on their behalf.

Alison Croggon said...

Since when did lower income people "pass" on libraries? Ours are pretty well patronised.

And booksellers don't make "literary choices" by choosing which books to display on their shelves? Checked out the poetry sections in commercial bookshops lately? How many contemporary Australian poets do you see on sale there? Maybe two or three...if you're lucky. That is, if there is a poetry section. You certainly won't find anything like the rich diversity of poetry published here every year, unless you go to a specialist bookshop like Collected Works.

I see also that Bernice, bless her, knows absolutely nothing about how royalties are structured. (I prefer ignorance to deliberate misleading). "I gather," she says, "that this (fear that income will be reduced) is based on the notion that as an author, your royalty payments from your Australian publisher will be reduced if your American edition were to be sold here. If you are lucky enough to be co-published in the US, I find it hard to imagine that you are not receiving royalties from that edition. And often at a higher percentage rate than you will receive on your equivalent Australian edition."

Often higher? Excuse me. Which US publishers is she talking about? Does she know anything about how those royalties are made and divided? Overseas and export royalties are almost without exception lower than they are here. One author claims she has to sell 10 copies overseas to make the same amount she makes here from one.

Easy to be blase about that, of course, when it's not your work being devalued and your intellectual property being stolen (and to ebenfit K-Mart, Target and Dymocks, which is particularly galling). Let them eat psychic income, etc.

But you're still missing the point, Tim. These destructive measures will not, by the PC's own admission, necessarily result in cheaper books.

Anonymous said...

From memory, I get around 20c a copy from the US at the time of printing. It's reprint rights, not royalties for me, I'm afraid. Royalties here are around 90c a copy. Lending rights are more, luckily... so support your libraries folks. Knowledge is free there... just take your own container.

Tim, I must be a pain to my library. I'm always telling them what to buy or ordering them to get old SF off the repair shelf and back onto the main shelf because they just don't understand its significance!

Some poor people feel disenfranchised and without voice but hell, if there's rates paid on the place you live in, get your money's worth, out of the library, out of the council, out of the education system... it makes it better for everyone if some people demand more from their local government. In fact, I'll go out on a limb and say, if you have a voice, you are morally obligated to ask your council to provide better services and thereby support those who thru personal circumstances or language barriers don't have a voice.

TimT said...

Booksellers buy what will sell. It keeps them in business, after all. They're not a perfect source for books, but they're a hell of a lot more convenient than a library, where books are often quite slow to obtain, sometimes can't be obtained at all, and when you can get them you can't keep them for very long.

The history of the economy generally indicates that the lifting of trade barriers results in lower prices. The scope of the productivity commission study is necessarily limited, so it's not going to be the final arbiter on book prices.

Alison Croggon said...

I totally dispute the characterisation of Territorial Copyright as a kind of tariff. It is an aspect of my OWNERSHIP of a book I have written. Before copyright protection, authors could make zilch from bestselling books - publishers just made and sold them. Intellectual copyright matters and has been hard fought for. It's called literary estate. Imagine if you spent 10 years building a house, and then were told you could live in it for only 12 months, and after that had to share it with your neighbours down the road? Well, that's what they're proposing here.

The PC is basically proposing a return to the days when the US and the UK divided up the Australian market between them, without having to take account of, well, Australia. It will benefit overseas publishers. It will benefit some big retailers. It will not benefit almost anyone else. It will particularly disadvantage Australian writers and publishers, and it will have an immediate and ongoing downward effect on the number of local books published here. And consumers won't even know that they've been dudded. Hooray.

TimT said...

The words I used were 'trade barriers'. Which they are: restrictions on importing copies of books from overseas is a restriction on trade - ie, a trade barrier.

According to Macquarie a tariff is a system of duties, a table of charges upon an import or export. Which is something rather different. So I'm quite happy to reject that characterisation as well!

Unfortunately the system at the moment is designed to benefit big retailers: they absolutely use parallel importation to push up prices and lift their profit margins and restricts competition. Whether we return to the 'bad old days' is a moot point - after all, in some ways, we've never really left them.

Alison Croggon said...

It's also a "trade barrier" that entrepeneurs cannot just publish any old text and sell it anywhere they like. Copyright restricts trade all right - publishers have to negotiate rights with those who own them.

And there's plenty of competition in the Australian book trade. Parallel importation will affect that negatively - independent bookshops, who don't have the buying power of big retailers, and smaller publishers without an international net will either scale down or shut down altogether. Yeah, really good for business.

TimT said...

It's understandable worrying about the future of independent and smaller retailers in the context of changing trade circumstances - but there are plenty of other examples in the past 40 years of situations where trade barriers, regulations and restrictions have been dropped and this has not resulted in the end of independent/small businesses. The end result is typically the reverse.

Smaller retailers stand to benefit as well - they don't have the mass spending power that larger retailers do, but they will have wider choices, and more flexibility to do deals and cut prices.

TimT said...

On an unrelated subject - Hey Bren, have I ever ran into at one of Lucy Sussex's SF Nova Mob Wednesday night meetings perchance?

(Word verification - criers)

Anonymous said...

Lucy is a friend, have been invited to Nova Mob to read, never been to a regular meeting.

(Word verification - supporting Australian publishing)

TimT said...

Wow - that's quite a word verification! Looks like 'Australians for Australian Books' have demonically possessed your computer!

TimT said...

(It was the talk about 'supernova' in your blog profile that made me cuious Bren. I think Alison's presented there once but before my time. And what is it with Melbourneans and exploding stars? Nova Mob, Supernova...)

Alison Croggon said...

Yes, I spent a very pleasant evening at Supernova when the Pellinor books were first published. I think only The Gift was out then. I can't quite remember.

Re the bookshops: it's interesting to see the flood of submissions on the PC's website from independent bookshops, responding to the PC's interim report (and as one man against any change to the present situation). They are not nearly so sanguine about their future under parallel importing as you are, Tim. And rightly so. Trade pressures from supermarket chains with massive buying power have all but killed indie bookshops in Britain. And seriously distorted the book market. But that's another issue.