Australian Book industry, retailing & parallel import restrictions (PIRs)

5 01 2012

the Australian Book Industry Strategy Group released its report a couple of months ago, and Bob Carr, board member of Dymocks, lays down a baseless dismissal of it on his Thoughtlines blog, and while he’s at it takes a few snide shots at a few book industry types, including Henry Rosenbloom of Scribe Publications, who rises to the bait adequately (I get the feeling these two have been barking at each other from opposite sides of a flimsy fence for several years now).

Bob’s suggestion:

Here’s the better course. Let the market work. Allow Australian bookshops to purchase books from the cheapest source, an overseas or a local publisher. Liberate them to compete with overseas sites that don’t pay a GST when they sell books into the Australian market.

as i said in part 2 of my ‘Seeing REDgroup’ posts, i agree, it’s naive folly to ask for the Australian government to drop GST on book sales. (instead, in this era of rapidly growing citizen importation from offshore online retailers, Australian Customs should be drastically lowering the duty &/or GST exemption threshold (from its current $1000?), back to similar or lower levels prior to the introduction of the Liberal Party’s GST, and slapping a GST invoice of every box that comes into the country from offshore retailers.  in other words, welcome to Part 6278 of Globalisation.

but the most infuriating aspect of Bob Carr’s argument is that he has no answer to the reality that a substantial proportion of the income that Australian publishers – and their authors, and printers, etc – derive from the parallel import restrictions would be lost by their abolition!

i posted a comment in reply to Bob’s post, and another commenter summed up my argument nicely (if a little incredulously).  check it out.  i wanted to reply, but for whatever reason further comments on the post have been disabled.  i don’t like my argument either, but my point is, what’s the solution?

ideologically i hate the notion of the PIRs (which if you don’t know, force Australian retailers to buy books – be they Australian or from overseas – from Australian publishers, rather than directly from overseas publishers, resulting obviously in a substantial increase in the shelf RRP), just as much as i hate the notion of territorial copyright, but it’s not as if PIRs on books is unique to Australia.  The USA and UK, who have similar restrictions, would just love it if Australia dropped its PIRs and all our book retailers bought directly from them – its one less middleman in the RRP equation that gives them more cream on top.  They’re not even thinking about dropping their own PIRs, btw!

undoubtedly books would be cheaper in Australia if we didn’t have the PIRs.  but at what cost?  at what consequence to Australian publishing and authors?  many, if not most, Australian-authored books serve mainly an Australian audience.  as such, throwing them to the ‘wolves’ of USA-based authorship deals, whose figures are based on the assumption you’re aiming for the USA or UK-sized markets, rather than Australia’s comparatively minuscule market, just doesn’t add up to a viable income.

having lived through, and successfully come out the other end of REDgroup Retail’s administration period, i’ve become keenly aware of how easy it is to destroy a business – even a profitable one, and how difficult it can be to re-establish it.  my involvement was merely as a minor creditor, a supplier of IT consulting services to one small business within REDgroup.

despite being a viable entity, the liquidity it needed to see through its next 12 months disappeared last February, never to be seen again (and, surprise surprise, none of those ultimately responsible for REDgroup’s pathetic failure, nor those who owned it, were held accountable or liable for is major debts – everyone else, including me, had to pay for their failure as supposedly competent capitalists).  what followed was a nervous six months of limbo and delicate negotiations to find a new owner for this theoretically profitable business, so long as their pockets were deep enough to fund it over the hump of its annual income cycle.

but it wasn’t just the REDgroup group of companies threatened (and most of them liquidated), and not just small-fry creditors like me effected – it was the entire Australian and New Zealand book and calendar retail ecosystem effected.

this is why i get rather pissy when ideologues like Bob Carr (and several “you tell ’em, Bob!” fans on his website) blithely condemn Australian book publishers, authors, and printers to dire and immediate threat, simply to achieve a “free market” economic ideology (removal of the PIRs) – despite existing in an industry where there is no such level playing field to start with, without coming up with an actual, demonstrable solution or alternative means to support Australian publishers and authors.

sure, eBooks and offshore online retailers (of physical books) are taking an ever-larger bite from Australian publishers & authors lunches anyway, and will – probably within 5 years – kill many of them.  but what’s the point of abolishing the PIRs, other than to THEORETICALLY lower Australian book RRP prices (far from guaranteed, given the New Zealand experience)?  who in Australia benefits from forcing this change in one short sharp shot, when the passage of a few short years will afford at least the opportunity (admittedly no guarantee) of a more organic adaptation of the industry to the quickly shifting landscape of book retailing?  why not give the Australian book industry the opportunity to get its eBook shit together, and allow eBooks several more years to overtake paper books sales, in a way that’s viable for Australian publishers and authors within the scale of Australia’s market?  by then the PIRs will be irrelevant anyway, but the industry will at least have had the years needed to transition.





One response

6 01 2012

Applying GST to incoming imports, especially I the case of books, won’t change the trend one iota. And the only folks making money out of it then is the government. Which is fine but still doesn’t help the local publishing industry.

A week ago I bought a photography book from The Book Depository for $34 with free shipping. The same book was listed in the A&R website for $112 and $12 shipping! Even with 10% added I’m still buying overseas.

I work for an Australian publisher, an independent, not one of the arms of Penguin or Harper Collins or the like. While it may be true that some of these local arms of internationals may fall, I think the small local publishers can step up and fill the void and keep the Australian voice out there. And then there’s also the rise of self publishing at seems to be getting stronger, especially in the ebook world.

Ultimately though few are buying books of Australian content from overseas, it’s not often available on these sites. We the small publishers are creating these stories and are making local and international sales without the big publishers marketing budgets behind us.

The REDGroup did a lot of stupid things (they were our distributor, we were also hurt a little by the collapse) I think in the long run we’ll be better without them.

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