The International Digital Rights Mess (or Amazon’s Cock Up)

Over the past year, as more and more readers have become interested in ebooks, we’ve begun to realize one of the biggest problems is the mess of territorial rights. We had Fictionwise and BooksonBoard removing books from its bookstore. Fictionwise went so far as removing access to books that people had already purchased.

This past week, Amazon announced that it would sell its Amazon Kindle to 100+ countries and those Kindles would have cellular access so you could take advantage of the on Kindle book purchasing.   (which is really the only advantage of the Kindle at this point).   Two problems emerged from this announcement.   First, the release of the Kindle didn’t do anything to make more books available to international readers.   Amazon confirmed that it would be observing all territorial rights agreements.   Second, Amazon will actually be charging more for books sold outside the U.S.

Territorial Agreements

As I discussed in this article published in May of 2009, rights have traditionally been sold with translation and territory rights sold as one bundle known as “foreign rights”.   I argued that rights should be decoupled.   World digital rights could be granted while reserving translation rights.   One of the drawbacks of this is that it can inhibit the growth of a regional publishing industry.   Martin Taylor, Director of the New Zealand Digital Publishing Forum, argues that if the US published writers were to grant world digital rights to their publisher, it would serve to diminish the publishing power of the other countries:

Territorial rights are important to preserve. They allow countries to develop their own economically sustainable publishing industries and to reflect the specific dynamics of each market. The profits from country-specific international editions help sustain the infrastucture needed for local book publishing that is important both economically and culturally. Local pricing, and the ability to profit from locally generated sales and marketing initiatives are also important parts of this.

Language/translation rights can be a useful alternative to achieve this but only if you have a unique language. If, for instance, you’re a small English language market like New Zealand, it’s no barrier. The only way to have a chance of developing a local market is to have territorial rights.

Martin’s point is an important one, but in the meantime, what do readers do?   With no legitimate source, do readers in New Zealand, Australia or even the UK simply go without?

Higher Prices

Hidden behind the fluff of the news announcement of the great Kindle being available worldwide was the fact that Amazon intends to charge more, not only for the device itself, but also for the books.

When asked by the Guardian precisely how much downloads would cost, an Amazon.co.uk spokesman revealed that foreign customers – including those in Britain – would be paying $13.99 ( £8.75) per book instead of the American price of $9.99 ( £6.25). That amounts to a 40% premium for the same title.

“International customers do pay a higher price for their books than US customers due to higher operating costs outside of the US,” said the spokesman. “Additionally, VAT rates in the EU are higher on ebooks than on print books.”

Increased prices engender bad will for consumers. We don’t understand why the prices are higher (particularly if VAT rates have to be paid in addition to higher costs). The only thing we know is that the digital file is easily to store and deliver. It seems to us that there can be no extra cost. Indeed, we see there a savings for retailers and publishers.

The Result

The result of the digital rights confusion is readers not willing to adopt the ebook platform or for those who do adopt the platform, piracy is becomes a more attractive option. As guest blogger at Teleread points out, the seeming artificial boundaries prevent the customer from giving the content creator money.

I am not wanting to do something illegal. I want to make a perfectly legal purchase of an item on the Internet. I want to give the publisher (and hence the author) real, actual, genuine cash. Can I get the e-book any other way? No. So the old relict boundaries are preventing me from giving the author my money. What the-?

…

These kind of restrictions, in fact, do just create incentives for people to find ways around them, and thus almost certainly ending up meaning that the original creator gets nothing.

I’m not sure what the answer is – how best to balance the ability of countries to foster a publishing industry but still providing readers the books that they want. I do know that the internet is making boundaries seem superfluous and if those who want to make money from consumers must respond quickly or the boundaries will indeed be illusions as will profits. Publishing, worldwide, needs to start solving the problem of how to get books to the readers who want them.