With the Productivity Commission’s final report on parallel imports for books around the corner, I wrote a piece about their current proposal in today’s Age.
Some publishers might suffer, but removing restrictions would help authors and readers.
HERE is a curious fact: as an Australian, I cannot buy my own book. Now that isn’t quite true. I can buy the locally published version of Parentonomics in bookstores here or I can get overseas bookstores to send me the non-Australian version. Even factoring in shipping costs, I would save about $7 by getting the book from the US and it would be hardcover to boot (although you would have to put up with reading “diaper” instead of “nappy”).
But that isn’t the cheapest way to get the book. If you have a Kindle – Amazon.com’s e-Reader – you can get the book for $A12.59, which is 40 per cent of the Australian bookstore price. I’ve had an opportunity to try it out and it is by far the best way to read my book as well as being the most cost-effective. Not being a US resident, I cannot own my book that way – well, at least not without jumping through hoops to violate Amazon’s terms and conditions or something like that. Let’s face it, when an author is barred from owning a copy of their own book, something is wrong.
So why is it possible for hard copies of books to move across international borders but not electronic copies? The answer is that publishers, who have intellectual monopolies over these works, for their own reasons have not done the deals to make it possible. Regardless of what I, as an author, might like, a gatekeeper is standing between my readers and my book.
At the moment, the Productivity Commission is reviewing a related area by which copyright restrictions prevent Australian consumers from accessing the cheapest options. At present, books printed overseas that have a local version cannot be simply imported by booksellers. Those booksellers have to go through local publishers and those publishers take their cut. Why wouldn’t they? Moreover, some of that cut might find its way back to authors which, all other things being equal, can’t hurt them either.
But, as with any area where choice is restricted, those harmed are those who might want to choose – the consumers. The Productivity Commission recognised this and so has put forward the possibility of a weakening of the restrictions to cover only the first 12 months following publication. The rationale for a weakening, rather than an elimination, of the restrictions was to preserve Australian culture by keeping book prices high for a time. But, in reality, the only books that sell significantly in the first year are best-sellers. For the rest, it takes a year or more for anyone outside of Australia to notice enough to even find an importing route. In this respect, the weakened law protects those least in need of protection on cultural grounds.
All this points to a complete relaxation of restrictions as the desired route, especially given that the Productivity Commission has already noted a lack of evidence for cultural destruction where such restrictions have been removed. In my mind, the importance of opening up is that it would foster innovation. For instance, Amazon.com would surely not have to deal with local publishers to parallel import electronic books. Indeed, it wouldn’t have to do so to open up an Australian online store-front. This would provide much-needed competition at the retail level for bookselling.
But there is more. The whole notion that local culture or producers are harmed by international competition is not new. Indeed, many submissions to the Productivity Commission cite a desire from readers to promote that. At the moment, the only option is apparently for readers to pay a tax on all books read.
But think about how the same forces generated new ways of selling in coffee. Concerned about grower treatment, the fair trade movement puts a price premium on coffee sold to protect far-flung growers. For books, there is no reason why the same forces could not come to play. Bookstores could tailor themselves to promote local authors and guarantee those authors are getting a fair deal. Those consumers who want to pay a premium for that diversity or culture would have options to do so and, at the same time, wouldn’t have to pay more to overseas publishers or authors. That seems to leave more money around for local authors, not less.
Parallel import laws are a blunt way of promoting culture and stand in the way of more innovative solutions. Our Government needs to be designing these laws to promote reading and think about other ways of promoting creation. As an author, I can’t in good conscience stand by while my readers are forced to pay higher prices so that I can be protected from myself.
Joshua Gans is an economics professor at Melbourne Business School. His book, Parentonomics, is published in Australia by New South and the rest of the world by MIT Press.