Productivity Commission expected to recommend open market for books

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Today’s SMH reports that the Productivity Commission is likely to recommend the removal of parallel importation restrictions (PIR) on books to Australia.

If this happens, despite the Productivity Commission receiving a majority of submissions in support of retaining all or part of the current restrictions, it will be clear that the loudest voices in the media have prevailed.

It helps, of course, if your lobby group includes former NSW Premier Bob Carr, and former ACCC chairman Allan Fels.

Lobbying for cheaper prices

Carr has written several editorials in support of an open market for books, citing affordability and availability to children. It’s ironic that local authors of children’s books believe they’ll be one of the hardest hit by an open market. This is because illustrated children’s books are more expensive to produce due to their larger, non-standard formats, and because authors have to split the royalties with illustrators.

Fels cites a parallel with the music industry’s experience after Australia removed parallel import restrictions on CDs, and claims that book prices will decrease without adversely affecting the industry. Mark Seymour’s opinion article in The Age dispels this argument, claiming not only that the two industries are too different to compare, but that the Australian music industry is in trouble.

The main lobby group in support of an open market is the Coalition for Cheaper Books, which sounds like the kind of group you’d want to support if you love books and buy them often. It’s a fabulous piece of marketing genius for the Coalition partners—Dymocks, Woolworths, Target, K-mart and Coles. Notice that, of these, only Dymocks is a dedicated bookstore, and that Bob Carr sits on its Board. Notice also that all of these stores represent big retail chains. In fact, the Australian Booksellers Association supports changes to PIR but not complete abolition of the restrictions.

How to get people to sign your petition

Early this year Dymocks sent out an email to subscribers of its Booklovers program, urging customers to sign a petition in support of an open market for books. I took strong exception to this email. It’s one thing for Dymocks and its representatives to present their arguments in the press, where the issues can be debated; it’s another to send a one-sided email to consumers who will most likely never hear the other side of the argument.

Here’s an excerpt from that email. Note the sections I’ve highlighted, which contain either misleading or all-out false information:

Under the Dymocks proposal, copyright will still be protected; authors will still receive royalties and publishers will still be paid for the rights they hold.

…The Productivity Commission has just released a draft report which includes the draft recommendation that import restrictions should continue to apply for 12 months from the date a book becomes available in Australia.

Most books are purchased within 12 months of publication therefore this recommendation will not result in cheaper books for you.

Many authors have argued that not only will they receive reduced royalties from foreign imports, if booksellers import remaindered books, the authors will receive no royalties at all. (Remaindered books are considered unsold by the publisher.)

And many authors, publishers and booksellers have said that for the life of a book most of the royalties are earned well after the first year of publication. Events that can cause a resurgence in sales, such as literary awards, often happen more than 12 months after first publication. If an author makes it to the bestseller lists, often the author’s backlist will also receive a significant boost in sales.

Show me the money now

There’s another problem with Dymocks’s arguments, and I don’t think this has been pointed out to consumers often enough. Some bookstores are currently marking up book prices above their recommended retail price. I can’t see these stores passing on savings in an open market. It’s more likely that they’ll pocket the difference, thank you, consumers.

Even Dymocks is trying to have it both ways. Compare Dymocks prices with the heavily discounted books sold by any of its Coalition partners and you’ll see that Dymocks isn’t exactly offering the most discounted price possible.

And as I’ve said before, the problem isn’t about the price consumers have to pay for books. We’re quite capable of buying from online stores such as The Book Depository and Amazon, or even local stores offering great discounts, such as Fishpond and Booktopia—why can’t Dymocks match their prices?

The reason we buy books from a bricks and mortar store isn’t because we want cheaper prices. It’s because we want personal book recommendations, the experience of leisurely browsing unknown books, and that feeling of discovery when we find a gem in the shelves that we didn’t even know we were looking for. This isn’t easy to duplicate online. Comparing Dymocks’s George St store to Amazon is misleading. But comparing Dymocks online to Booktopia makes more sense, and when I asked Booktopia about its opinion on PIR, I was told it didn’t even matter. Why does it matter so much to Dymocks?

If this report were a thesis, it would fail miserably

Based on the draft report released earlier this year, the most disappointing aspect of the Productivity Commission’s investigation has been its willingness to champion the ideology of a free market against factual data. As the SMH article notes,

The commission’s draft paper noted there was little evidence that books were more expensive in Australia than overseas.

However, it said removing restrictions was likely eventually to lead to lower prices.

I can imagine how frustrating it’s been for authors, publishers, booksellers, and book printers to realise that the Productivity Commission would be quite happy to risk the health of the book industry on some intuition about a reduction in book prices.

It’s a sloppy way to do conduct a study, and I don’t think it has served the best interests of the public.

For an excellent overview of the different opinions around PIR, check out this Radio National segment on the issue. It includes interviews with publishers, booksellers, authors and other interested parties. The presenter, Paul Barclay, asks some very good questions beyond the issue of cheaper books, including the effect on Australian culture and the livelihood of local authors.


  1. Kat says:

    Thanks, Cat. I’ve been told that it’s unlikely that the goverment will actual do anything. Still, I think it’s a missed opportunity to recommend useful strategies to obtain more data on the book industry and point out where we can implement smaller but meaningful improvements.

  2. Cat says:

    (teehee, we’re both cats… ;-))
    Well, it’s my hope that the government decides to shelf yet another review of parallel importation (there was one several years ago too) and I completely agree with you about the data gathering is  missed opportunity – who knows, perhaps that’s the bit the government will do, i.e. get the ABS on the task (though doubtful given recent ABS job cuts).  What I like about your summation of what’s occurred is that you’re objective, showing an intelligent reader’s perspective, not emotive like most of us have gotten, depending on which side of the divide your on ;-)

  3. Sally says:

    Great examination fo the issues – and the inadequacies of the Productivity Commissions review. I do hope both you cats are right and that the governemnet will no do anythign about the recommendations.
    I am really maddened that the Coalition for Crappier Books has hoodwinked the public  into thinking that books will be cheaper if PIRs are scrapped. Authors are being out as greedy for wanting to protect the industry. It’s okay for the Coalition to want to increase their mega-earnigns, but not okay for authors to proetct their meagre ones.  Grrrr.

  4. Charlie says:

    I agree with the recommendations. I don’t believe that protecting the publishing industry is the best way to support Australian writers and readers. Protectionism stifles innovation and competition and leads to high prices and poor quality product for consumers. That may sound like right-wing, capitalist rhetoric but I believe it’s true. There are better ways to support Australian literary culture.

  5. Kat says:

    Fair enough, Charlie. I think we’ll have to agree to disagree. I think the current restrictions  need to be amended, definitely, but I don’t think the recommendations were based on reliable data and an impartial frame of reference. I also think that making authors more reliant on government funding is a good way of stifling innovation and is less likely to produce the kinds of books I want to read.

    But … I could be wrong!

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