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Jul 17, 2009

Book parallel import restrictions a ludicrous anachronism

The "remainder" problem for Oz authors obviously has to be addressed -- and it’s an area the Productivity Commission has barely addressed.


You can call it the Macedonia phenomenon. You can be talking to a Greek intellectual, activist whatever about borders as prisons, global flows of the new multitudes, the media flux of the instantaneous infosphere, the deconstruction of left/right politics and the brave new world we’re entering — and then you ask a question about Macedonia.

“There is no such thing as Macedonia!” they shout, rising from the cafe table knocking over the retsina, which then dissolves the tile work. “The former Yugoslav territory is an usurper of…,” etc etc, for about half an hour or more, in an excursus that goes all the way back to Alexander the Great. You tapped that one point at which globe stops.

Segue to parallel import restrictions (PIR) on books, and Australian authors. Most people have watched bewildered as this arcane subject has gone back and forth between the productivity commission and the army of authors and publishers opposing their recommendation to wind the thing down over the next three years, without getting much of a handle on what it is, or why mild-mannered writerly types are ready to tie on the bandanna and charge the Commissions headquarters. In that respect they haven’t advanced their cause terribly well. The problem is the cause is so ambiguous that it’s hard for authors to mount a case that is much more than a strangulated cry of “help!”

In a nutshell, the PIR rule effectively allows Australian publishers the option of putting out an exclusive edition of a foreign or Australian book, as long as they bring it out within 30 days of overseas publication, and keep it restocked as it sells out of bookshops (within 90 days of it becoming generally unavailable).

The PIR has different pros and cons for different groups. For Australian publishers, it creates a sector monopoly — they can cherry pick the best international books, acquire the rights and publish them here without the competition of a pallet of the US edition suddenly arriving. The most in-demand books thus have a different jacket, interior design, and maybe foreword or intro to the Oz edition — and all the costs that go with an extra print run, etc, rather than simply getting a slice of a larger US or UK print run.

That benefits most Australian authors indirectly — in that it supports a local publishing industry to publish their books, most of which will never get an overseas edition, there thus being no competing editions to prevent from being imported.

For top rank Oz authors however, it’s quite different — because the PIR prevents overseas “remainder” editions from being dumped on the market. The “remainder” is the books left over from an edition after the publisher has unilaterally declared that the book has stopped selling in numbers large enough to make it “remunerative”. Once a remainder is declared, in general so does the author’s income — most contracts state that authors receive no royalties on remainder sales. Remainders are usually sold as a job lot to book wholesalers. Publishers argue that remainder sales are at a loss, so no royalties should accrue. They’re meant to give authors the opportunity to buy up the whole remainder, but the first the author often knows of it is the nausea inducing feeling of seeing 100 copies in the $1 bin at the “Book and Car Parts City” outlet.

Given that Australian authors are more likely to be continuous sellers in Australia than overseas, that becomes a problem — without restrictions, an overseas edition of a Tim Winton or Helen Garner that a publisher took a failed punt on, can be remaindered while the Oz edition is still going gangbusters. Without PIRs a book chain could buy up the remainder, and compete with the Oz edition by selling it for a fraction of the price and with no reward going back to the author. Even is royalties were offered on remainders, the price cut would take the author from a $2 royalty per book, down to 30 or 40 cents.

But the problem for Australian readers in protecting authors from this, and in making it possible for small publishers to cultivate a list of foreign titles that keep them in business, is that foreign books are rendered more expensive. Michael James may have demonstrated that this does not apply to top ten fiction sellers, but that’s not the main concern — the price of overseas non-fiction books is. Books on politics, history, science etc that sell for $US15 or so ($A18 at current exchange rates), sell for $A30 or $A40 here. Of course, even a mass foreign import would have a higher price because of transport costs, etc, but it wouldn’t have all the oncosts of a local edition.

The result is, I believe, a real restriction on Australian intellectual life, because sometimes quite short books have ludicrous prices that make picking up 3 or 4 of them on one topic impossible or onerous. I don’t know about other people but I spend a reasonable amount of my time in Borders reading books for the price of a coffee, that I would buy, if they were $5 to $10 cheaper, as many might well be. Or I order them second-hand overseas and put up with the three to four week wait.

The foreign edition rule made some sense 20 years ago — it makes much less now. And with the arrival of online books, it makes none at all. Many authors seem to imagine that the decline of the physical book is far away off in some Jetson’s future — as did the mainstream news organisations, before their sales and ad revenues fell off a cliff.

With books, once the threshold is crossed, the decline may be even more precipitous, since the differentials are so great. A kindle (which can’t be used in Australia) pays for itself in ten books, and after that a thirty dollar book costs eight bucks, is instantaneously delivered.

So how would a regime of “local editions” be enforced once online books become more comprehensive? The whole idea is paradoxical. Is it proposed that Australians be restricted access to online books so that local editions can be preserved? Or that an entirely separate Australian online system be established, to be run as well as Telstra, Optus etc run everything else they touch?

One sympathises with local authors and publishers, but really, they’ve been utterly reactive in this fight. PIR was always jerry-built. Now it’s ludicrous, and as usual it’s been defended in the worst possible way, with all this guff about how we “have to tell our stories etc etc”. The more you leave an untenable situation unexamined, and simply defend the status quo, the more you look like a bunch of rent-seekers — word-farmers defending the intellectual superphosphate bounty. With the inevitable result that sympathetic people wash their hands of you.

The “remainder” problem for Oz authors obviously has to be addressed — and it’s an area the productive commission has barely addressed. But publishers who have built a business on PIR protection better start thinking smarter, faster, about the new media environment. And the sector as a whole should come up with concrete new proposals for ensuring that Australian literary culture is viable, because it is pretty clear that the Rudd government is not going to be politically positioned as doing favours for its inner city elitist latte lapping sodomite author mates.

Macedonia, whether the Greeks — speaking of Greek — like it or not, exists.


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18 thoughts on “Book parallel import restrictions a ludicrous anachronism

  1. sheryl gwyther

    Guy, why haven’t you commented on the fact that overseas (e.g. North American) editions of Australian-authored children’s books would then be allowed into Australia? These would be changed in spelling, content, humour, reference, landscape etc to suit American tastes.

    Why would any parent or teacher want this for Australian children? Imagine the spelling difficulties then?

    I’ve seen two versions of the same picture book written by an Australian author. One was the original available here, the other was a copy from an American publisher and sold in the US. It had been changed into a bland, superficial-sweet facsimile of its twin. Luckily it was only available in the US – lifting the Parallel Import Restrictions would allow it to be available here in competition of the true version.

    I know which version I’d want my kids to read.

  2. skink

    I too have given up on buying from Australian bookshops. I have found it cheaper and easier to buy new or second hand from overseas sellers, who often carry a broader range than found here. Powell’s is brilliant. Even with postage costs, it is cheaper than buying here, that is if you can even find teh title you are looking for. I bought a children’s book by an American author last week: A$27, for a soft cover book of 16 pages. Cue outrage.

    ‘latte sipping sodomite authors’ ?

    not that there is anything wrong with that

  3. Steve Carey

    Guy, a suggestion. Authors, publishers and independent booksellers insist that the result of the Productivity Commission’s proposals would be disastrous for the local publishing scene. Big retailers insist that it won’t be, and will bring down prices. Why not make a little ‘Time Capsule’? I’d love to hear either side make a specific, verifiable prediction about what will happen in, say, five years time. Let’s put our mouth where our money is.

    Me, I reckon you’ve got it right that other factors – the Kindle and its ilk – are much bigger issues than Parallel Importing. So for what it’s worth, my very specific prediction is that in five years time neither side will be able to point to any clear result of these changes, if they happen.

  4. Roy Travis

    You are right in stating that the Kindle is not available in Australia, however there are at least three similar models freely availabe and bying books on line is easy.

  5. Duncan Beard

    “I know which version I’d want my kids to read.”

    The version that you can buy for less than half the price? I’m willing to live with a couple of exta ‘z’s for that. Actually, I could probably buy a UK edition at half the price and have exactly the same spelling.

    I’m a voracious reader and I haven’t bought a book from an Australian bookstore for about 2-3 years. The remarkably asinine, self-interested responses from authors and publishers to this debate has done nothing but firm my determination to continue buying cheap books online (although apparently my doing this will somehow be responsible for the ‘death of books’ – snort).

  6. Anne Coulthurst

    A few points:

    Although I agree that a bookshop can be a haven and a lovesome thing, God Wot….

    First, some years ago I wanted to purchase ex Secretary of Defense Robert McNamara’s book apologising for the Vietnam War. It was, unbelievably, not available in Australia, and the few bookshops which I approached (one prestigous local name amongst them) weren’t interested in buying it in for me. It was then that I turned to the internet and was delighted to see how much more cheaply most books which I wished to read could be purchased from overseas. I’ve stuck to this, since, in the main.

    Second, this week on the ABC’s Jon Faine’s 774 morning program he read an anonymous email from a ‘publishing industry insider’ which said that the latest Harry Potter, a best seller if ever there were one, was 40% more expensive in Australia than anywhere else in the world. If true, this is outrageous, and blatant profiteering, in my opinion.

    Third, silly comparisons, like one this week, comparing dental expenditure (necessary) with book-buying (discretionary) do not help. I’ve yet to learn that any of our valued Australian writers needed to spend nearly $150,000 in the last 2 years upgrading the tools of their trade to enable them to practice and enhance their professional duty.

    Fourth, I’m genuinely sorry for our gifted writers. However, I’m not responsible for their economic woes. I’m poor, too.

    Last, I’ve often sent Australian books which I particularly admire to friends overseas. Sadly, and usually, they just don’t get it, and that’s the rub. Too often, our books are too idiosyncratic for others to enjoy.

    In sum, I’m on the side of the consumer (c’est moi). If the bottom falls out of Australian publishing, then them’s the sad and deplorable breaks. However, I’ll still have the internet and I’ll still be able to read what I want, no thanks to the publishing industry which has screwed this Australian consumer for all of her life.

  7. sheryl gwyther

    Duncan, it’s not so much the extra ‘z’ that stick in my neck, it’s the sanitising and forced blandness by the American publishing ‘gatekeepers’. Why do American parents allow it to happen to the books their children read?

    And re the UK, you wouldn’t believe how much harder it is to get published in the UK than the US. As a certain British literary agent said, ‘Publishers are very parochial over here.’

    Re your comment re self-interested authors – wouldn’t you fight to protect your job?

    Mind you, you might be paying a few dollars more for a book now (about what you’d pay for a meal out, I presume) and I’m still only getting 10% of the RRP of that book (if I’m lucky) – and certain large booksellers are getting up to 50% of the RRP, some of whom even add more to the RRP. I know who are the greedy sods in this debate.

  8. Michael James

    Guy, nice article but still a tad frustrating because, while we can all agree that there has been much confusion, and those poncy latte sipping writerly types (not gonzo-types like yourself!) don’t seem to be able to put up a defence to save their lives, one of your last statements also had me gritting my teeth:
    “The “remainder” problem for Oz authors obviously has to be addressed .” Doh, yes! But what is your solution if you kill the PIR?

    As to Kindle and other technology (first wait for Apple….later this year probably) that is a world wide problem for the industry, and so it may or may not kill the paper book industry but it is really not part of this discussion. But the potentially fantastic thing about e-books will be the elimination of many middlemen. With the phenomenally successful iPod App Store run by Apple, some authors (mostly games but sometimes other things) get rich overnight–almost literally as tens of thousands start downloading their creation at $4.99 or whatever. Apple keep one third but the author keeps the rest! It is transparent to borders so forget international agreements–there is no longer the need. I think we will see the old publishing industry fight this more than anything else.

    Back to books. All my data tables were never intended to settle the argument but rather provide a bit of real world data to at least partly test some of the wild statements being put about. (to remove some of that confusion; probably an utter failure). To this day there are still bloggers boasting they can save 46cents on buying Breath from Book Depository. Oh yes, that is all the argument we need to destroy the local book industry! (And I sense that not a single reader or rabid blogger has actually bought and received Breath from BD.) And while you and I may not spend much time reading the top ten (my list was actually the Indie list, not the best seller list) it does represent most of what joe public is buying. And consequently carry more political import (hence why Allan Fels holds up a copy of Breath to “prove” his point….).

    For some of your conclusions or even statements to be true (and they might be) we would need more facts. In the category of books that you buy (or read in Borders) how many are subject to PIR? I did not look at that because it was not easy, or perhaps even possible for me. My second list were books that almost certainly were not subject to PIR and are hardly stocked in Australia and which I buy from Amazon, saving hundreds of dollars per order.

    The reason we need that data (and maybe some of the massive data collected by the PC is available?) is to know what is actually responsible for those higher prices. I don’t know if it is the PIR but I do know that when I have discussed it with my smaller independent bookstore, the owner has said that most of these books have too small a market and so the wholesaler/distributor/importer jack the prices up or they are just not going to bother to stock it. If most of the books you would like to buy are in this category, removing the PIR may do absolutely zilch for retail prices. (And remainders play no role in that market.) And frankly for that category of book I cannot see anyone in Oz or almost anywhere on the planet, competing against Amazon (and maybe now BD).

  9. Michael James

    Anne Coulthurst (2:33 pm). Alas, you are one of the confused readers we have mentioned. The McNamara book, its price and availability in Australia have absolutely NOTHING to do with the PIR. This is a very separate issue of the small size of the Australian retail book market, the fact that we are probably the most expensive place to ship heavy books to (maybe Ushuaia is worse?) and the fact that wholesalers et al. do not see enough profit from such small volume books, especially once it gets a few years old. For this category of book there is probably no solution except for you, me and Guy to buy from Amazon. Or allow small independent bookstores to buy direct from Amazon, which I am told they are not allowed to do.

    But please, do not make up your mind on the current argument based on the false notion that McNamara would be magically cheap if PIR disappeared.

  10. Anne Coulthurst

    Michael, you’re cavilling at my example, not the principle.

    My point was, simply, that not one bookseller would even try to get the McNamara book for me. Hence, I turned to the internet. Hence, I learnt how much cheaper it was to buy any book overseas. Hence, Australian booksellers and publishers created a problem for themselves,which, like Topsy, just growed.

    I’m sick of all the circumlocutions, such as: ‘books are only a few dollars more than a restaurant meal’ when it’s 10 years since I’ve had an outside meal which I could afford to pay for. These sorts of comfortable, middle-class assumptions disregard the fact that many people, avid readers even, might find it a daunting struggle to find the funds to buy a book.

    My bottom line is that anything which makes it cheaper for me and my ilk is a bloody good thing. For too long, the less well-heeled have been denied access to too much of the latest writing. I’m indeed sorry for the fall-out, but self interest impels me to welcome anything which might enable me to enjoy new writing, from anywhere, more frequently.

    And no, I don’t confuse the issues. I didn’t expect the McNamara to be cheaper, I just expected that I’d be able, somehow or t’other, to actually get a copy from an Australian bookseller, at any price, but none would help. At the time it was important to me. The internet, then, and by default, became my primary bookseller, i.e. slackness and disinterest forced me elsewhere, never to return.

    And do you have an opinion about the Harry Potter’s being 40% more expensive in Australia than anywhere else in the world? Is this true, do you think? If so, why was it so?

  11. Duncan Beard

    Michael James, Anne clearly stated that her inability to locate a local copy of the McNamara book was the reason that she’d discovered the world of cheaper online books.

    If you’re going to get all snippy about the issue, at least make an effort to demonstrate some basic reading comprehension.

    And yes, Anne, I too find the justifications (“books are only a few dollars more than a restaurant meal”) galling. Publishers/authors/etc. can argue about PIR all they want, but at the end of the day booklovers are going to simply sidestep the local market (via internet sales and, increasingly, ebooks) and get what they want for a reasonable price elsewhere. The stats bear this out, and the trend is only going to continue.

    Sadly, rather than look to the future and attempt to ensure that the local market takes advantage of new technologies and changing business models, the response from publishing has been notably akin to that of the music industry when it faced a similar challenge: fear, denial and resistance to change.

  12. Duncan Beard

    Sorry Michael: that second sentence of mine sounds (a lot) ruder than I intended, poor wording on my behalf. My apologies.

  13. Michael James

    Anne C (4.00pm). You are frustrated at high prices of some books and don’t have patience with the reasons why, except that you see them cheaper from Amazon. The problem is that the current argument is strictly about one thing: should the PIR be removed, unilaterally by Australia, and what would the outcome be for Australian authors, publishers & booksellers, and what would be the outcome for the prices of those books. BUT, it is only those books subject to PIR, and that is probably a quite small minority of the books you are interested in.

    It is for other reasons that McNamara is expensive or unattainable here. I cannot see any easy solution except perhaps the e-book thing eventually, if you are happy with that instead of a physical book.

    Harry Potter? Groan, truly I do not care and I wonder how it matters. Alright, young readers first books etc etc. (I am deeply unconvinced; I cannot bring myself to use my precious time on reading the books but I tried to watch the movies on TV this past few weeks but just got very bored and tuned out. Watching the Tour de France is more compelling! Much more compelling–real people, suffering real consequences, victories and defeats from their own actions. This wizards and stuff–Stephanie Meyer is similar I am told–does not seem to me to stimulate the imagination, in the way, say, Lewis Carroll does. Indeed if we want to go all new-age psychobabble I suspect it is one of the problems with Gen X, Y—Buffy and all that supernatural tv fluff, Harry Potter, where a bit of magic is enough and in one bound Jack/Harry/Buffy is free. Lazy and boring stuff. And I love good fantasy or futuristic writing/movies.)
    But I am not sure about those prices. Just like all those tables I published, most of such statements prove to be either completely wrong (unless you count 46c more expensive an outrage) or exaggerations. (In a technical sense, assuredly it is wrong: it will be much more expensive in plenty of non-English markets, certainly Japan, France etc. and the english edition too.) Perhaps for non-Australian authored works, a monopoly-rights publisher in Austalia should not be allowed. This would bring in competition. Dymocks would fight it to the death.

  14. Michael James

    Duncan (4.27pm) No problem. But I am not quite sure what you meant. Like Anne and Guy and you, I find plenty of books here to be too expensive. But I just do not know whether the PIR is to blame. Obviously looking at the popular sellers (and not just best sellers) I remain unconvinced that the differential is too outrageous. Of course I am of the type that says a few dollars is not much (this is Australia, it even costs Amazon $6.34 to ship a book here and they get the cheapest rate on the planet, and incidentally they are squeezing the whole publishing line behind them–all the editors, writers, printers, publishers–almost certainly the company will be subject to a US anti-trust suit before too long because their market power is excessive).

    Of the other books, say in the middle category–not rare or never-published-in-Australia–I just don’t know because I cannot easily ascertain which ones were restricted by PIR. There are multiple reasons for why different books are expensive. Greedy publishers/wholesalers and retailers like Dymocks but I have not been convinced by any of the articles that unilaterally abolishing PIR would help more than it would destroy a precious cultural thing.

  15. Richard Farmer

    “Macedonia, whether the Greeks — speaking of Greek — like it or not, exits.”
    Macedonia exits.
    How very cruel of you! You have let the Greek bullies win.
    I know. It is a simple typo.
    Macedonia exists.
    Send it as an example of your work when next you apply to The Grauniad.
    [Now corrected. Apologies to all concerned. JG]

  16. Kevin Tyerman

    Thank you for this article. In spite of the number of authors that have already contributed to this debate in Crikey, so far this is the first that explains the underlying principles of the situation to the lay reader.

    It does leave one underlying question though, whether with the removal of the PIR’s from the Australian marketplace, are Australian authors and/or publishers left with less rights in their own marketplace than their foreign counterparts in their respective home marketplaces? If so, what effect would the removal of the PIR’s only in Australia, have on Australian authors’ equity in the world marketplace compared with authors in other countries?

    Kind Regards, Kevin

  17. Guy Rundle

    Michael –

    The books i’m thinking of as most likely affected by the PIR are large sale non-fiction books like, say, Malcolm Gladwell or Bob Woodward, Niall Ferguson, just off the top of me head – ie local editions of globally popular (and important) books. These seem to be about 30-50% more expensive here than elsewhere, and even allowing for the exchange rate that’s quite a whack. Yes, I wasn’t taking your argument about top 10 as an exclusive one – simply acknowledging that you’d proved the point about bestsellers.

    I can’t believe that simply shipping 10,000 copies of the US print run here of a half-million selling book, would not be cheaper than a whole new Australian edition. It should be possible for a 200 page non-fic book to come in under $A20, rather than heading towards $A30 or more.

    I’m not necessarily against the PIR at the moment – but for the reasons above it’s time limited. And authors and local publishers have to defend it better. I’d suggest less emphasis on the idea of ‘right’ and ‘unsung heros of australian etc’ and more on simple common sense and the fair go.

  18. Buy books online

    As a small online bookshop, I have to declare I have interest in the retention of PIR’s however because we operate exclusively online we do have some flexibility regarding where we purchase our stock. i.e. locally or internationally, so on the whole, the removasl of PIR’s wouldn’t have a huge impact on our business.
    I know the current system isn’t perfect but I am curious as to what we would put in place to support Australian authors and ensure we have access to good Australian literature in the future.
    I know that both the US and the UK have PIR’s in place as total import bans, unlike here in Australia where we opperate under the 30/90 rule. Obviously those countries see a cultural and financial benefit to their publishing industry in the retention and enforcement of PIR’s.
    You also have to take into account that here in Australia, we pay GST on our books where as neither the US or UK levy a federal tax on books, although some US states do. The removal of GST on all books sold in Australia would have a significant and immediate impact on book prices here. That would be my starting point.


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