Last week, the Government announced it would support a recommendation to remove the Parallel Importation Restrictions (PIRs) that are applied to books by the Copyright Act, last proposed by the Productivity Commission in 2009. This is a serious issue for anyone interested in the book industry, as PIRs are a vital financial foundation of Australian publishing. As the Productivity Commission stated in their 2009 report,
“Parallel Import Restrictions (PIRs) provide territorial protection for the publication of many books in Australia, preventing booksellers from sourcing cheaper or better value-for-money editions of those titles from world markets.”
The report goes on to suggest that PIRs place upward pressure on book prices to the benefit of publishers and authors and detriment of consumers. What it does not state are the benefits to the consumer from the PIR regime, namely access to a higher quality product and greater opportunity to read and discover local authors.
Certain commentators have been dismissive of these benefits and the affect of PIR on them. They have argued that the removal of PIRs will have virtually no effect, as the industry is much stronger and competitive than it claims, or should become so as an effect of the changes. They haven’t offered any real evidence to these claims.
One complainant has even objected to the use of colourful language, to which I say: This is the business of words, why would they not be used for effect? And distinctions of the colour of the language aside, the result of this recommendation would be disastrous, so let’s not waste time critiquing the semantics.
If we must discuss the language, then let’s talk about the buzzword that all economic reform in this country now hinges upon: innovation. Let’s be clear, destroying territorial copyright is not innovative, it’s destructive. For this economy to succeed through innovation, it’s about making Australian product and industry innovative, not “innovating” policy to allow world markets to crowd Australian book producers out. That’s not the creation of competition. It’s the end of competition.
The Australian publishing industry is a diverse and competitive place. The proof of this is in the success of Independent Publishing, which is thriving in this country, in large part due to innovation. To hollow out the value of the market by flooding it with cheap international titles will destroy the conditions by which this innovation and competition is possible.
Why invest in local books when the risk of a return is made even more untenable? We already function as an extremely high-risk industry, and all this policy does is diminish the reward.
As a result of of removing PIRs, investment in Australian publishing and writing will be down, which means jobs will be cut and the voices of many local authors will not be heard here or overseas.
So how do we address this and stop it from occurring?
I had considered an open letter to the Prime Minister and Treasurer, but respected authors Richard Flanagan, Peter Carey and Tom Keneally beat me to it. Their letter was fantastic and covered many of the same areas I wanted to cover. But I absolutely wanted to reiterate some of those concerns and add my voice to this debate, because without vocal opposition, this policy could very well come to pass.
The Australian publishing industry employs some 20,000 people, and is worth around $2 billion. Territorial copyright is a pivotal financial plank of the industry. One of the counter arguments to this is that most of this money is made by Australian branches of multinational companies. But this naively ignores the various economic and cultural benefits that those companies bring to the Australian publishing industry. To see the vacuum that could be created by diminishing this input, one only needs to look to New Zealand.
One thing that these recommendations don’t seem to understand is this: Booksellers cannot compete with Amazon on price. The removal of PIRs may bring a temporary breath of cool air to booksellers, allowing them to drop prices, but they know as we all do, that Amazon cannot be beaten in a price war and nor should we want that. Not only would it signal the further deterioration of the perceived value of the book, it would diminish us as a book industry.
It’s a flight of fantasy that books cost too much. In Australia, the standard price of a paperback has dropped by around 20% since 2009. This fact alone shows that the Harper recommendation doesn’t understand or comprehend the mechanics of this industry. Yes, PIRs may place upward pressure on book prices, but local competition, as well as competition with overseas online retailers, places downward pressure on book prices. Competition from online retailers is not going to decrease in the future, so if anything the PIRs are vital to sustaining some upward pressure to keep publishing both profitable and able to employ the 20,000 or so people that it does.
I’d like to ask the Government this: if they are intent on removing PIRs on books, then they should first commission a review of the Book Industry by a panel that understands that this stunning practice of culture and commerce is an altogether different beast. As it stands, the removal of PIRs for the reasons stated in the recommendation is shortsighted and based on a poor understanding of the economics of the book trade. In short, it’s moronic.
I’d love to fight with people in the comments. I love doing that. So please, have a crack.
As a wrap I would suggest the following for further reading on the subject (not all of which I agree with):