Thursday, July 16, 2009

A Layman’s Guide to the Cheaper Books Debate

There is a big debate raging here in Australia about the scrapping of Parallel Importation restrictions for books. Whilst the debate is fierce, if you are not closely involved in the industry, then the issue is hard to understand, particularly because it's become clouded by unsubstantiated promises of cheaper books for all. So, today, I present the following, in an attempt to demystify the issue for those not in the know.
A Layman’s Guide to the Cheaper Books Debate

I want cheaper books. Let’s face it – everyone does. I also want cheaper fuel, cheaper groceries and cheaper housing, among many other things. In recent months, newspaper headlines have proclaimed that scrapping the mysterious PIRs will result in cheaper books. At the same time, you have probably heard authors, publishers and other book-ish people opposing the changes. You could even be forgiven for thinking they are wrong – after all, if it’s going to mean cheaper books, that has to be a good thing. Right? Wrong. Scrapping PIRs is not a good thing – not for the book industry nor for you, the consumer. In order to show you why, I’m going to take some time to explain to people who perhaps haven’t followed the debate, what the issues are.

Firstly, What are PIRs?

PIR is an abbreviation for Parallel Importation Restrictions. Put simply, these are laws, currently in place, which prevent books being imported which are already being published in Australia. So, for example, when Harry Potter books are released, Allen& Unwin, an Australian publisher, has the rights to publish these books in Australia. So, a bookstore selling the latest Harry Potter must stock Allen & Unwin’s version rather than importing copies from overseas. If Allen & Unwin stops publishing the book, booksellers can then import it. Similarly, if a book is released overseas but no Australian publisher buys the rights to publish it here, booksellers can import the book and sell it in Australia.

The Productivity Commission has recommended the scrapping of PIRS. What this means is that, regardless of whether or not a book has been published in Australia, booksellers will be able to import the book from overseas rather than sourcing it from within Australia.

So, What’s Wrong With That?

There are several problems with abolishing PIRs. The most obvious is that, if Australian publishers can’t have exclusive rights to publish a book, they are unlikely to publish it. It would not be financially viable to put resources into producing an Australian edition of a book, only to find that booksellers instead source their stock from overseas. Why produce an Australian edition of Harry Potter when it will then have to compete, for example, against the US version?

Flowing on from this, Australian publishers will lose income. When an Australian edition of a book is purchased, the Australian publisher makes money. When that publisher makes money, they then have more money to spend on publishing Australian books. The money generated from big sales of the Harry Potter books, for example, can be put towards the cost of producing books by lesser known Australian authors, and on Australian topics. Without the income generated from selling these overseas books, publishers will be forced to cut back on their Australian publishing programmes.

If Australian publishers are forced to cut back on their Australian publishing lists, fewer Australian books will be published. Whilst some authors may manage to get their books published overseas, others won’t stand a chance. Books with an Australian focus are unlikely to be published by overseas publishers. Which American publisher wants to produce a book about Ned Kelly? A book about Aboriginal culture? A book about Australian birds?

A second, but related, problem is that, even if a book is written and produced in Australia, it may have to compete for shelf space with a foreign edition of the same book. At present, a book published first in Australia may be republished overseas with adaptations for that foreign market. The most obvious change is the alteration of Australian spelling to US spelling (Colour becomes color etc) – a prospect which should alarm teachers and parents. However, the changes run deeper than this. Cultural references, locations and even character names are adapted for foreign readerships. A vegemite sandwich might become peanut butter and jelly, a kangaroo might become a squirrel and so on. Australian identity is weeded out of the book to make it better fit the foreign market – and that is acceptable for that market. But to then import that watered down version of the book back into Australia because it may save a dollar or two is an idea with no appeal. Yet, with PIRs scrapped, it is a very real prospect that a bookseller may choose the foreign edition at the expense of the Australian edition.

These foreign editions have another disadvantage for the publishing industry. When an Australian book is republished overseas, both author and local publisher get less money per copy than if it were published here.

Looking briefly at an author’s share, it is important to spell out that most authors are NOT wealthy. Whilst some do earn a full time living from their writing, many many more rely on second and even third jobs to make ends meet. Whilst book prices might seem high, the income an author receives from the sale of each book is low. Author royalties are rarely more than 10% of cover price. More often, they receive less. So, when a book is sold for $25, the author receives a maximum of $2.50. At $2.50 a copy, the author needs to sell ten thousand copies of a book to make $25,000. Not a princely sum – and given that print runs are often much smaller than 10 000, you can see that writing books is not a wealth-generating strategy.

However, it gets worse. If a book first published in Australia is then also published overseas, the author’s cut diminishes greatly. Put simply, there are more links in the chain before the author gets her cut – and that $2.50 might become 50c. Now, if PIRs are scrapped, that author’s $25 000 income could become $5000. Hardly enough to feed a family, is it?

But Books are Too Expensive, Aren’t They?

Australian books are expensive, and that is sad. So too are Australian groceries and Australian petrol. There is no doubt that some books are available cheaper overseas, especially if you buy through sites like Amazon. However, there is little proof that it is the PIRs which are making books so expensive. The US (where Amazon is located) and the UK both have similar import restrictions. And, whilst Australia is considering lifting its restrictions, neither of these other countries are looking at lifting theirs. So, if the changes go ahead, they will have free access to Australian consumers, but Australian publishers will not have access to theirs.

One reason for the high cost of books in Australia is the margins which booksellers put on books. The bookseller’s margin is generally 50%. So, going back to that $25 book – whilst the author gets $2.50, the bookseller gets $12.50. But there’s more – some of the big name booksellers actually add a few dollars to the rrp – so the $25 book costs $27, the author still gets $2.50 and the bookseller gets $14.50. Discount stores such as Target and Kmart demand publishers give them higher discounts – up to 75% off the retail price. And guess whose income is cut when this happens? The author's.

But the Productivity Commission is Promising Cheaper Books!

No. The Productivity Commission is not promising cheaper books. In fact, their report states there is no guarantee that scrapping PIRs will reduce book prices for the consumer. The people who are promising cheaper books are the organisation which seems to have won the ear of the Productivity Commission – the Coalition for Cheaper Books.

Sound like a bunch of nice people, don’t they? Working hard together to bring cheaper books to the public. Unfortunately, anyone can give their group a touchy feely name. It doesn’t mean they have a touchy feely purpose. The ‘Coalition’ is in fact made up of some very familiar names: Dymocks, Woolworths, Coles, K Mart, Big W and Target. Only one of these has selling books as a core business. All of them have retail as a core business – and a responsibility to maximise their profits to keep shareholders happy. And yet we are asked to believe, because they call themselves ‘The Coalition for Cheaper Books’ that their primary aim is to reduce book prices.

Think, if you will, about recent press about grocery prices. Consumer groups have been hugely concerned that the virtual duopoly held by Coles and Woolworths in the grocery market has driven grocery prices up. This pair also holds a vast share of the petrol market – where prices again go up even as world oil prices drop. Coles and Woolworths (and their subsidiaries) make up a major proportion of the so-called Coalition for Cheaper Books. If they are not concerned with lowering grocery and fuel prices, why should we believe that they will decrease book prices? Even if they are able to source books more cheaply, there is no legislation to ensure that the savings are passed on to consumers. So, cheaper books for the retailers, possibly, but not for the consumer. Again, note that the Productivity Commission has not found nay evidence that book prices will drop.

In the only other country where PIRs have been scrapped, New Zealand, book prices have not decreased. What has decreased is the number of New Zealand books being produced, the income of New Zealand authors, and the number of New Zealand publisher. Why are we not learning from the New Zealand experience?

So, Who Should be Worried about the Removal of PIR’s?

In short – YOU.

But in more detail:

Authors/Publishers/Printers/Publicists: Thousands of people are employed in the Australian printing and publishing industry. The scrapping of PIRs directly threatens every one of these jobs, because it will diminish the number of books written, published and printed here in Australia.

Lovers of Books: Have you been to the discount bookstores cropping up all around Australia? These are full of cheap, remaindered books. Remaindered because they couldn’t sell. These shops have their place. But would you like every bookstore to be a remainders shop, full of imported books that couldn't sell overseas? If PIRS are scrapped, this a real possibility.

Teachers and Parents: Your children and students are already well immersed in American culture, thanks to television. If they no longer have access to books with Australian spelling, Australian history and Australian context, then we may as well kiss goodbye our unique Australian culture.

All Australians: Again, our culture is at risk. This is not an anti-US, or anti-any culture argument. It is good to be exposed to books from around the world, in the same way it is good to be exposed to music, food, experiences from around the world. But that global perspective MUST contain Australian experiences. In books, Australian stories are told and published in Australia, not overseas.

Okay, But What Can I do about it?
Get angry and get loud. The Productivity Commission has recommended that the government scrap PIRs. The Coalition for Cheaper Books has loudly (but falsely) announced that cheaper books will result. You need to let the government know that you don’t support the scrapping of PIRs. Write to your Federal MP, your Prime Minister, and his cabinet and tell them of your opposition.

Tell all your friends, neighbours, work colleagues about this issue, and tell them to get loud too. Write to your daily newspaper voicing your concerns.

Let people power stop these changes being implemented.

Please, get involved.


  1. Excellent post. I have been finding it difficult to explain the issue to many of my friends but I'll just redirect them here. Simple, straight-to-the-point and so easy to understand.Thanks, Sally.

  2. Fantastic post! Clearly outlines the issue. Like Sandy, I've had trouble explaining what the problem with the Productivity Commission's findings is. This will go a long way to answering their questions for me.

    I was sus about the whole thing as soon as I heard the Productivity Commission was involved. It's all in the name really - it screams 'economic rationalism'. Ideology over cultural integrity, that's all this is.

  3. Thanks Ladies. By all means, send people to read my piece. I have tried to make it as accesible as possible and found that writing it clarified things in my own mind as well.

  4. I was forwarded this link by my sister and was looking for a way to make it accessible for my Year 11 Media class when we cover Australian content, etc. This will certainly help me plan for it!

  5. Thanks Sally - I finally felt empowered enough to write protest letters. I was scared of getting myself in a muddle before. But this sets it out all so beautifully clearly.

  6. This would be fine if we could trust booksellers to use the extra money to develop the industry and pay authors, but it sounds as though they have their snouts in the troughs ("One reason for the high cost of books in Australia is the margins which booksellers put on books"). Who is there to ensure that the protection money goes to the right people?

  7. The UK has no tax on books, but does have parallel import restrictions. If Australia should lift anything, it should be GST on books.

  8. Excellent post, it explained it really well for me, i think i will put your link on my facebook page if that's ok? Thanks for taking the time to write it.

  9. Thanks Sally - I'll be facebooking and PIOing this.

  10. This is a sad situation for all in the industry as well as the book buying public. As an Australian writer trying to get a publishing break, it is a very scary prospect.


  11. HI Sally, thanks so much for this wonderful explanation of the issues. I am an Australian author published around the world. I proudly set my thrillers in Australia but they are Americanised for the US market. This is automatic. In addition, I have been asked to change the endings for American readers. If we don't all make a stand, Australian readers will not read our own stories in the way they were written, but be compelled to read American interpretations of our stories. Not only will we see our stories in American spelling, but we will lose references to our culture and language. Instead of The Chant of Jimmy Blacksmith, we would be more likely to see The Chant of Jimmy Washington!!! And with no guarantee of cheaper books, this is a travesty. Please don't let this happen to our culture and identity. Kathryn Fox