The Frankfurt Book Fair this year was an interesting one for me. It crystalized a few of the many ideas that have been bouncing around in my head. Publishing Perspectives in particular touched on one of the MAJOR issues for smaller market publishers and I wanted to hammer home the point in this post.
I have bad news for publishers of English language books in smaller markets and by that I mean English language markets outside of the UK and US:
Being a small market english language publisher is going to get harder as digital grows
Put simply I believe that US and (initially less aggressively but shortly with the same fervour) UK Publishers will seek to control world english language rights for digital and with it any rights (enhanced/video/audio etc.) they may need in order to sell ebooks and enhanced ebooks on a global basis. This may spread to an all out claim on world English language right including print, somehow I suspect that’s a ways off for now and the emphasis will be on ebook rights.
Why is this?
The reason is that US & UK publishers a compelling economic case for holding those rights while smaller English language markets have less of a business case for retaining those rights.
As Kindle sales, and B&N’s Nook and Apple’s iBookstore and sales through the multiplying ebook retail outlets grow to 10% of group revenue US and UK publishers can begin to plausible include revenue projections for digital editions of new titles.
And some of the growth in ebooks is global. Kobo talks about serving over 200 countries with their ebooks:
Meanwhile, our direct business at Kobobooks.com is rocking and we’ve delivered ebooks into 200 countries from Azerbaijan to Vanuatu – we’re making books available in more places to more people than ever before.
What’s more, they know that the markets that are currently buying ebooks globally are likely to grow rapidly if they even partially reflect
So we have large publishers seeing sales internationally that they can EASILY service at little marginal cost. Acquiring the right to sell to those markets is a sensible strategy that hedges against future global digital sales while delivering real if small sales now.
But the impact on smaller markets is large
Take for example Ireland (I could as easily choose the English language markets in Spain, Slovenia or San Marino), where ebook sales are lower than 1% right now. From that perspective any Irish publisher approached to do a deal for a title they have published in Ireland would be fools to let that deal flounder over digital rights.
And yet, at what point would a publisher be crazy TO do a deal that required them to cede global digital rights; 5%, 10%, 20%, 25%, 50%? What’s more, if a publisher agrees the principle now at sub-1%, how can they hope to grab back that principle at 5%, 10% or 75%?
And it’s not just English
This will be a problem for smaller markets in all languages as larger publishers realise they can reach markets profitably in a digital world that they once could only do expensively and perhaps unprofitably in print.
And it works both ways
US and UK publishers may sell print rights to smaller markets, but they will become increasingly reluctant to sell ebook rights. How would a print only publisher hope to make a run viable in a small market served 10% or 15% or 20% by digital sales from the UK or US based publisher?
Be prepared
So, publishers, what will you answer when US and UK publishers demand your ebook rights? And whatever way you answer, are you prepared for the implications?
There’s more on Frankfurt, but this is the top priority I think.
Eoin
Eoin Purcell's Blog 
But why is it necessarily the case that the small publishers will feel the need to cede the control to the major houses? Why is it assumed that they will control the channels in a digital world? If ebooks become an ever growing share of the market in all markets, then why can’t the small house, a network of houses, a publisher in cooperation with a specialist firm or group of firms, hold onto their digital rights, forget about publishing on paper in the smaller markets, and reap whatever benefit there may be to be had?
It’s not about ceding control, it’s about doing a deal in a major market and the price you might have to pay to make that happen.
I don’t assume majors will control the digital channels at all, in fact they’ll play second fiddle to major tech firms and others who do. What I do assume is that they will seek ebook rights on a global basis wherever they can and when buying a book from a smaller territory their power allows them to make this demand.
I see alliances of indies coming together and in fact that is already happening, and I’m suggesting that as a possible solution even for smaller markets, but this issue is actually quite a tricky one for them.
It’s a brave decision for a publisher from a small market to refuse a deal while print still predominates and if they don’t hand ebook rights, a US or UK publisher may well decide to pass on the deal. Making those major market deals work is pretty important to smaller market publishers and they generally don’t have the capital to do it themselves.
So yes, your points are all valid, but in this specific case, a problem persists or is looming that will not be solved with ease.
Eoin
Funny perspective. I have published 600 terrific small market literary and regional titles over the past 30 years that are exactly the kind of books big publishers couldn’t care less about. I don’t see that changing. I typically take world rights to my books because the authors know I am their best chance of being published anywhere. I am looking forward to the triumph of the eBook because it will allow me to market our titles world wide right from our home website with no need to talk to a distributor or a chain store ever again. The only trouble is, the eBook conversion is proceeding a lot slower in the specialty markets than the bestseller markets and since our markets are far smaller to begin with, it may be a long time before eBooks reach critical mass for us.
Hello Howard,
I’m delighted that you’ve found a nice that works, I’d encourage your fellow publishers to do the same.
I love your enthusiasm too, I think MORE publishers should think that way, ebooks do offer possibilities to publishers, that should be embraced. Encouraging your readers onto ebooks seems like a sensible move to me for small and specialist publishers.
However, for general publishers, with titles that DO appeal to large foreign publishers and who rely on these sales, the issue of ebook rights WILL get trickier.
Eoin
Eoin, I’m surprised you take such a gloomy position on this. I work for a medium-sized independent Australian publisher and we successfully obtain ebook rights for titles we purchase from North American and UK publishers and agents. These days it’s pretty well routine for ebook rights to follow print rights when we buy in a title. We also routinely expect to sell territorial ebook rights along with print rights at least to English language publishers, and increasingly to foreign language publishers. This is not new.
We certainly have to haggle over terms, and we’re frequently offered some pretty peculiar terms, but that’s usually the issue, not the ebook rights themselves.
We think it’s absolutely essential that all small and medium publishers insist on getting ebook rights whenever they purchase print rights. If we don’t establish this now, we certainly won’t be in a good position to so when ebook sales in our part of the world reach critical mass – as you very rightly point out.
Please, everyone who works for smaller publishers, let’s plant a stake in our publishing futures and insist on territorial ebook rights with all print rights purchases! Of course that also means we need to at least dip our toes in the water of the ebook market. In the English language world, for books of words at least, that’s no longer some kind of distant future, but happening right now. Apple has sold 7 million iPads in 6 months, and 14 million iPhones in the last 3 months. That alone is a huge installed base of e-reading devices.
My gloomy outlook is based on the divergence in power. Relative to most small markets, the large UK & US publishers pack a hefty punch. Selling them rights to a print book can make or break a year for a small market publisher.
In many ways though, this post is as much about calling out to publishers and saying, get ready for this, and plan either to resist or agree on terms that you believe make sense for your company and for your authors!
Eoin
What is missed in this gloomy analysis of how things are, imho … is that this is not how things will be.
Territorial rights are yesterdays model and are on the way out. They just don’t work in a world of global web reach and global online sales. And that can also be GOOD for small Publishers and local writers.
With the abolition of territorial rights writers can contract with an Ireland based online eRetailer who can then sell that title to anywhere in the world.
Smaller online eRetailers have an enormous opportunity now to develop and implement far better eBook selling web sites that offer superior interactive, superior social networking functions.
Book readers are the quintessential types for being eager to avoid the mega stores and look for smaller more interesting places to buy their books.
Instead of looking at the downsides of this huge change in the industry, publishers and writers alike need to be looking at the new and exciting opportunities that are arising.
Howard,
I totally agree about the possible upsides, in fact I hope more publishers can see that and take advantage of it.
BUT, while print remains a huge part of the market, the challenge around territorial rights will remain.
I’m actually much more positive in general terms than this post might appear, I just fear that on specific points the positive thinking becomes harder!
Eoin
Eoin,
There is in fact some sense in having “global” language based rights (especially for ebooks) BUT leading publishers’ recent moves to ban WH Smith and Waterstones (any others?) from selling ebooks to anybody other than a UK resident is an absolute disgrace and possibly, in my view illegal.
As an author of a book which is available worldwide, i.e. no geographic restrictions, as a POD title and an e-book it concerns me why these retailers have accepted the imposition of this restriction from leading publishers.
I accept that some books, whether ebooks or physical books have territorial restrictions BUT these are generally regional and not country specific in Europe, e.g UK and Europe or UK and Commonwealth, not UK only. In my case, my book (all formats) has NO geographic restrictions and is shown as such on the Nielsens Book Data database and so this restriction is costing me sales to english speakers in continental Europe (especially Spain where the book is based and where it is being marketed to the English speaking community) and I question the ability of third party publishers to force retailers to restrict the sale of my e-book to people in the UK – restraint of trade comes to mind.
Nielsens data has geographic restrictions for most books on the database and so do most distrubutors so it should not be difficult for retailers to identify which countries a book/e-book they stock is available for sale in. I know that some publishers are reluctant/have not provided Nielsens and distributors with complete data on e-books but that is their problem. If they do not provide territorial restrictions for e-books then the default should be those for the physical book until they do and, in any event, it is very rare/unlikely at the moment that territorial rights for an e-book will vary from those for a physical book (where both exist).
I have actually raised this issue with The Society of Authors and would like them to raise this issue with lawyers on behalf of their members.
Robert
That’s an interesting angle, I suppose their (waterstones etc.) answer can only be that they are stuck between a rock and a hard place and the rock has the money to sue them!
This is hardly fair on the smaller guys like yourself or indeed small publishers with global rights who would ideally sell globally.
On the general point, I’d like to see global rights for ebooks emerge, it seems sensible, but it seems to me that in such a world, local and small scale publishers will suffer pretty badly from the shift in the industry.
Eoin
Hi Eoin,
Have since had some feedback from Smiths and also Book Depository (they are not operating a blanket ban). Its seems that both Smiths and Waterstones claim their back end systems cannot distinguish/apply territorial rights from the data feeds they have whilst Book Depository’s system can. I know Waterstones use Nielsens data – which does have geographic restrictions (but not for all e-books) and Book Depository use a combination of Nielsens, Gardners and Ingrams and their systems can identify relevant geographic restrictions. Gardeners themselves have told me they need to know where end user is so they can apply territorial restrictions at their end. So in essence, what I thought is possible and being done but not by Smiths and Waterstones (yet). I also go back to one of my points is that if retailers/wholesalers don’t have any specific territorial restriction data for e-books then they should apply the ones they have for the physical book until the publishers update/provide the relevant e-book data – which 9 times out of 10 will be the same as for the physical book. The onus here is surely on the publishers to provide the relevant information.