Wule Bwitannia

Slipped into a recent Federal government Pricing Tribunal report, was a single line reference to the matter of book prices in Australia. Though short of detail, it suggested that the arrangements enjoyed by Australian based publishers may be reviewed, and may be altered.

Numerous pieces have appeared concerning this, and a number of Australian publishers have sprung to the defence of the current situation, which protects Australian publications from competition from overseas editions of the same book.

The legislation that governs this is complex, and while its stated aim is to ensure a publishing environment that prevents the loss of local publishing in the face of cheaper imports, the cost at which this is supposedly achieved is two-fold. Higher book prices are a reality in the Australian market, and further, a restriction on the free flow of knowledge. The argument is also, I believe, muddied by confusion as to what is being protected and for whom.

Australian publishing must firstly be separated from Australian distributing. And this truth is often the first casualty in this tale. The Australian market is overwhelmingly dominated by large international publishers and distributors who themselves are small parts of much larger multinationals, such as Penguin, Harper Entertainment (once known as Collins and swallower of Angus & Robertson), Macmillan and Random House. What must be remembered is that for these concerns, the majority of their profits are provided by their distribution divisions, spoils they are very keen to protect. This is a model that also applies to numerous other publisher/distributor operations in Australia.

Quite how this came to pass is part of our cultural history, but more interestingly, also part of our political history. It has been much more thoroughly explored elsewhere, but a wee bit of background may help shed some light on the why of now and the what shall we do.

Publishing in Australia was, up until World War II, largely the province of the obsessed small presses and a small number of local concerns such as Angus & Robertson and Ure Smith. For many fiction authors, being published meant a British publisher. My Brilliant Career was published in Edinburgh in 1901, The Fortunes of Richard Mahony trilogy was published by Heinemann in London, as were Dymphna Cusack’s books and Mr White appeared courtesy of Jonathan Cape.

The need for a vibrant Australian publishing industry seems to have rarely exercised the imaginations of our pre-war political leaders, our cultural attachment to a very British Home assumed and accepted.

World War II and the inability of British publishers to any longer provide books into the Australian market which had taken up to 10 per cent of stock published (highly profitable and significant enough for publishers to hold off setting print runs until the Australian orders were in), gave Australian based publishers a moment in the sun. A thousand flowers bloomed, and a Tariff Board review in 1946-47 saw groups, including writers, call for the imposition of tariffs to protect the nascent publishing culture in the face of an expected flood of British materials once exporting was again possible. It was refused.

In 1947, what would become known as the Traditional Market Agreement, was signed between US and UK publishers. “Under the agreement British publishers agreed not to compete in the US market and in return they received the 70 or so countries that were or had been Commonwealth members.” Including Australia, the most profitable export market of all.

Given the extraordinary profits to be had, and the demise of publishing as a gentleman’s game, it should come as no surprise that companies were more than happy to indulge in what our American cousins would describe as anti-trust behaviour in a test case won in 1972. What is glaringly absent from most discussions concerning this is the role or lack thereof of the governments of those dominions included in this extraordinary trade deal.

Quite why is a fascinating question. The federal government at the time was a Labor government, and certainly its New South Wales division had senior members with close ties to Angus & Robertson, who were the Godzilla of both Australian publishing and Australian bookselling. Nor was the issue revisited by the Menzies government after its election in 1949, despite the federal government developing the Commonwealth Literary Fund (CLF) during the 1950s which subsidised the publishing of Australian books.

Allowing the privileging of British publishers wasn’t going to help the development of Australian publishing. Nor was it going to allow for the free flow of knowledge, which in the West, used the book as its principal vehicle of transmission and worse yet, the Copyright Act 1968 would enshrine this in Australian law.

As the Australian market grew, publishers began to set up Australian operations the principal purpose of which was to distribute books published and printed in Britain. Their sole right to sell into the Australian market provided extraordinary protection and made the development of Australian publishing divisions a less than risky venture. Our rise as a nation of consumers would include the ’umble book, til we would become the world’s leading buyers by per capita. A dainty dish to set before the London-based owners.

The consequences of this are still determining the nature and development of the Australian book industry. Below is a section from a Current Issues Brief of 1996-1997 for the Federal Government entitled Copyright and Monopoly Profits: Books, Records and Software by David Richardson:

The PSA’s 1989 report into book prices found, among other things, that the importation provisions of the Copyright Act 1968 prevented competition in Australia between alternative UK and US editions of the same book. Publishers were able to close the market through Australian subsidiaries or exclusive agents to import or produce and distribute in Australia.

This market structure allowed Australian prices to be kept above international levels. For example, Canada, which had access to both UK and US editions had prices below the UK. In Australia, with access only to the UK publishers, prices were 31 per cent more than Canadian prices. For specialist and technical books the price in Australia could be up to four times higher than in the UK.

The PSA felt the price of books would fall by about that much if the market were opened up for competition. Booksellers had complained of waiting up to two years before a book published overseas became available in Australia. There were additional problems when no British publisher took up the opportunity to publish American books. For example, the Vietnam war was not of major interest to British readers and so important American books never made it to Australia.

This apparently remains a problem despite recent changes. The PSA reported that competition would increase the number and range of titles available as suppliers would be forced to be more responsive to consumer needs. With direct importing the PSA also believed that availability after overseas publication would be immediate. Generally the Australian consumers were seen to be paying too much and waiting too long for overseas releases.

I would argue that the changes introduced in 1991 have made little difference, except for availability of major trade titles as simultaneous releases in the Australian market, often in paperback when released only in hardback in the US or UK. They represent significant proportions of publisher and bookseller profitability, but are a tiny part of the huge number of books published in English globally each year. The problems identified in the above quote are still ever-present.

Australian divisions of international publishers are both distributors and publishers, and claim with great vigour that their Australian publishing can only be maintained if overseas editions of Australian titles are protected and their rights to the Australian market are singular. The problem is that this extends to books not actually published here. A distributor buys the rights to the Australian market, and has the sole legal privilege to import and distribute the said book to the retail trade. A bookseller who imports such a book from the US or anywhere else is breaking the law and can be prosecuted, though the legal truth of this has yet to be tested in law.

You as a consumer can, however, source that book from wherever you like, and it is estimated that quite a few of you are doing so - to the tune of $100 million pouring into the coffers of Amazon from Australian customers in the last year. You pay no GST, you purchase it often at a highly discounted price from Amazon, with the added benefit of a weak US dollar in the current economic climate. You can probably buy that book from the US cheaper than your local independent bookseller can buy their required edition from the Australian-based distributor.

In order to sidestep the charge of price fixing, we have a recommended retail price set by publishers or distributors. Booksellers, apparently, can sell the book for any price they chose. Given discount structures offered to independent booksellers, this will return as profit to the owner, something in the vicinity of 1 per cent over a year’s turnover. One per cent. And given that that was based on analysis done in the 1980s and therefore pre-GST, I wouldn’t vouch for that any longer being the case.

I’d also ask you to remember that the average knowledgeable soul in your local independent or chain bookshop is being paid shop-assistant wages - which in NSW is a princely $15 an hour, or $15.46 if you are also in charge of a horse. Whoever is making money out of books in Australia, it isn’t your local bookshop, and it doesn’t seem to be the authors either.

This raises the spectre of another argument against unrestricted importing. It is claimed that the Australian market would be flooded with cheap imports, drowning the Australian published book. This firstly assumes that all books are interchangeable commodities - one book is replaced by any other. Presumably book buyers are completely indiscriminate, and entirely driven by price when making a selection in their local bookshop. Secondly, Australian authors will be dudded. I gather that this 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. What should be stated is that without some protection for Australian published books, publishers would be less inclined to publish. But is it hardly logical to argue the author as an individual would be worse off.

Returning to the notion of the book as an interchangeable commodity for one moment, let us imagine this is the case. The necessary advantage to then succeed in finding a buyer would then lie in the accompanying marketing. The impact of major marketing campaigns can be seen with the likes of Bryce Courtenay - with media blitz the likes of which we’d rarely seen before, forward sales of 200,000 copies into bookshops around the country were reported. The effort required to achieve that is simply not going to occur for every one of the 250,000 or so titles published in English around the globe each year. Someone can take it upon themselves to “flood” our market (which ignores the fact of British publishers doing exactly that for decades), but unless it is in some way supported by marketing, they’ll end up pulped and being fed to your dog in a bowl of meaty bites. The book as a disposable commodity may function in the chain stores such as K-mart but it is a ridiculous piece of hubris when applied to a customer in a bookshop.

It also overlooks the rather bleeding obvious fact that Australians rather like reading books about themselves. A cricket captain’s diary of a tour to somewhere else can sell in excess of 50,000 copies. Apart from those 50,000 cricket nuts spread across our wide brown land, I think we can rest assured that first, there won’t be another edition to “flood” our market, and second, those 50,000 cricket tragics will want to buy Captain Heroic’s next tome, and probably the biography, the four joke collections and barbecue book as well.

And this leads us to another sticky point. There is money to be made in Australian publishing, a lot of money, regardless of market protections, if you are publishing what the punters want, and want a lot of. What does not usually sell in any quantity is Lit-er-a-ture or academic titles. “Aha” cries the multinational publisher/distributor - if we’re not protected as distributors, we cannot subsidise the publishing of all that low volume stuff. At which stage, I shall merely point at Text, Scribe, Giramondo and Black Inc and legions of smaller publishers who publish quite a lot of that small volume stuff and without the benefit of being distributors. I think we can also safely argue that the people who buy Lit-er-a-ture currently are also likely to continue to do so, and won’t be seduced by the lure of cheap imports of American cast-offs of unknown authors to the Australian market.

Which brings me to my final point - the academic book in Australia. We publish little here, and most of the titles within this definition are imported from overseas. A lot of which enjoys protection as a restricted import, and has been very profitable for both the UK publisher and the Australian distributor. Bear in mind that the books have to be shipped a bloody long way from their usual points of publication - the UK, Europe or the US, and then warehoused and marketed. All of which has to be paid for, adding in another layer of cost. But I find it very, very interesting that distributors such as Footprint, Unireps or Inbooks who import and distribute books of similar topic and quality as their multinational colleagues, retail their titles at lower prices.

Until the rise and rise of Amazon, it was difficult to buy as an individual consumer from overseas sources. This I would argue allowed for one of the key but often forgotten aspects of price setting in a free market economy to operate - that you do not set your price merely according to your costs, but you set your price to that which the market will bear. Long shipping times, high individual postage costs, unfavourable exchange rates, and the high costs of using overseas retailers had until the last ten years insulated both Australian booksellers and more importantly Australian distributors from the rigours of competition. This is simply no longer the case. The price comparison for anyone with the most basic of Internet access is Amazon. And the disparity is no longer sustainable or defendable. A title due for release in the UK in August of this year, edited by two Australian academics, is to be sold on Amazon for US$32.97. It will finally be released in Australia in October, retailing for AU$80.

What this example - like so many others - demonstrates is the, at best, short-sighted self-interest on the part of the distributor to demand sole right to import the book for resale, and greed on the part of the original publisher determined to the honour the spirit of the Traditional Market Agreement of 1947, insisting upon a legal right to exploit a market. The end result will be an ever-increasing flood of purchases from Amazon, and the disappearance of academic titles from bookshop shelves in Australia.

My major concern is the loss of access to knowledge, to the somewhat ironic fettering of information in this the supposed age of endless information. The prospect of my ability to find new titles in areas of academic interest coming to rest upon Amazon’s function of “Recommended Based on Your Browsing History” is not a happy one; the possibility that it will become the de facto cultural filter for the written word would be a fitting coda to the intent of 1947.