The Shatzkin Files


Why offshore ebook customers are so often frustrated


People of a certain age — mine — probably first encountered the world of rights as a content consumer with pop music in the 1960s. British albums, which came in sleeves that were flimsier cardboard than American album sleeves, routinely had 15 songs. American albums had 12. And the British would put songs out as singles that didn’t make their way into albums more often than Americans did.

So we teenage afficionados of the Beatles and the Rolling Stones, of which there were many in my time, learned pretty quickly that there wasn’t a one-to-one relationship between the music available to the Brits and what was available to us. Their Rubber Soul and Help albums had more songs than our Rubber Soul and Help albums. Beatles for Sale was a British album which never came out over here. We had Something New pulling together songs that they had released as singles or on other albums.

It’s damn near 50 years later, but rights are still getting in my way in a different medium: sports. Even though the technology would make it very easy to make it available, I couldn’t watch the football games the Giants played while I was in Europe for Frankfurt. There would be money in this, of course. I’d pay and so would lots of others. But the deals haven’t been struck. Undoubtedly larger deals (some NFL games are televised in Europe and I’m sure those rights acquirers are happier if I can’t pull in the game I want on my computer) get in the way of this smaller one.

In the past several months, readers of this blog from around the world have commented on the unavailability of ebook titles in their territories even though publishers would have the right to sell them. As near as we can tell, this problem often tracks back to big publishers that have gone to agency pricing. (That’s where the publisher sets the price to the end consumer and becomes the seller-of-record rather than the retailer intermediary being the seller.) It would appear that many (if not all) agency publishers have withheld their titles in territories outside the United States, even if they would have the rights to sell in those territories.

That particular cause of the problem of unavailability is probably temporary. In fact, some publishers are just now announcing the availability of agency books in Australia. The agency model was a complicated challenge taken up in great haste by the US publishers to meet the hard deadline imposed by iPad’s introduction into the market and Apple’s iBookstore opening to serve it. Non-US consumers weren’t the only ones to suffer. It is now more than six months since agency began, and one large domestic independent ebook retailer, Diesel Ebooks, just blogged about how few retailers had, six months out, been able to secure the titles from all five of those publishers. The publishers are finding that the need to do lawyered-up deals with each particular point of transaction for their books is no trivial barrier to distribution. But it isn’t a permanent one; the deals get made eventually.

Here’s another complication I learned about this week. Amazon.co.uk, the British arm, sells only in the UK. It is Amazon.com, the US site, that sells globally. So if the rights to, let’s say Switzerland, are owned by the UK publisher, that publisher would have to have the ebook available through the US branch of Amazon or it wouldn’t be available to the Amazon customer in Switzerland!

This piece of information comes to me because of a discussion last week on the Brantley list triggered by the launch of a website by agent Jane Litte attempting to track lost sales. The site simply asks readers who wanted to buy a book (print or digital) and either couldn’t or didn’t why they didn’t.

One publisher on the list immediately looked up the complaints against his house, which the web site makes very easy to do. Among the first books he saw was one where his company had US rights only. The complaint was from a person who couldn’t get the book in a territory controlled by the UK publisher. Yet the US publisher was listed as the “culprit” failing to make the book available.

A long series of comments failed to get to the bottom of the problem. For one thing, we didn’t know whether the unavailability complaint applied to print or digital (which resulted in an improvement to the site that will enable the complainant to make that clear in the future.) But then we also don’t know how hard or efficiently the complainant looked for the book.

In other words, the site does the job of aggregating complaints about book unavailability, but does not adequately curate them. And it turns out that not all the “lost book sales” were due to unavailability; some were simply due to the consumer wanting a lower price. That is, perhaps, useful information but it is of an entirely different sort.

(Quite aside from the point to this post, every publisher should be harvesting and analyzing data from Jane’s site as, I’m sure, Amazon, Barnes & Noble, Kobo, and The Book Depository will! If you accept the responsibility seriously for being in touch with the people who read your books or are interested in them, you will want all the data points you can get and if this site gets a lot of traffic, it will provide unique data. “Harvesting and analyzing” does not mean “over-reacting”, by the way.)

It is clear — from this site’s data but even more from the complaints in comments on this blog and Cader’s reporting on Publishers Lunch — that ebook availability is frequently being blocked by rights controls. It has seemed to many of us that having a single global publisher would make that problem go away.

But that solution offers little comfort since global publishers are or were (at least temporarily) blocking sales from happening in territories where they actually have rights, because they hadn’t worked out all the logistics of agency selling in all territories yet.

The failure of availability of ebooks due to territorial restrictions is, to many, confirmation that the time-developed system of rights allocation, compounded by DRM in the digital world, is simply broken. This is another point of conflict between people whose highest value is ubiquitous availability of content (some without regard to the content consumer’s ability or willingness to pay) and those who value even more the right of the content creator or owner to maximize the revenue from that content’s use.

Just about the first rule any agent or publisher engaged in rights dealing learns is “acquire rights broadly, license rights narrowly.” Any agent who is a competent professional holds back any rights they can in any deal they make. And most agents trying to maximize an author’s English-language revenue starts with the assumption that they accomplish that by making separate deals in New York and London. Those deals are still primarily about print books. Ebook rights and various other territories, like Europe, are still pawns in the bigger game.

I am one who believes that digital change will lead us to a world where there is one global publisher for most books depending on a network of alliances to execute some aspects of marketing and to maximize distribution everywhere. But I also think our wait for that change to be widespread is going to be a long one; it is many years away. In the meantime, consumers of books will find — as music consumers did in the 60s and sports fans still do today — that what appear to be nonsensical barriers block them from purchasing and consuming content that technology could easily deliver to them and for which they’d be happy to pay a fair price.

But the barriers placed by rights to digital distribution are far less onerous than the barriers placed by practical realities have been to physical distribution. And they’ll come down faster. The agents who carve up the rights to maximize the author’s financial return (and their own) will be thinking about the implications of consumers blocked from purchasing them and one wouldn’t be surprised to see future deals require publishers to make ebooks available in all the territories for which they demand ebook rights. They will have author clients bugging them to do that. Unfortunately, nobody playing football for the New York Giants cares whether I can watch them in Frankfurt or not.

On another topic, but my favorite topic, I have come across this post by Andrew Davies, the MD of a tech company called Idio in the UK. I had the pleasure of meeting Andrew for an hour’s chat in London last month. But I call your attention to his post because it states the case I’ve been trying to make for years – that publishers need to get into community leadership while they can because the business of selling content must inevitably decline — incredibly succinctly and eloquently. I don’t know enough about Idio’s technology to recommend it, but I can sure recommend this piece as an example of clear and cogent thinking about the future today’s publishers face.

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  • Robotech_Master

    I'm not sure you can really link territorial restrictions causally to the problem of implementing agency pricing. It's been at least a couple of years since Fictionwise and other US e-book vendors suddenly stopped selling e-books outside of the USA, but agency pricing was only implemented earlier this year. It's hard to imagine that the publishers were worried about agency pricing a year before it ever came about.

    • /blog Mike Shatzkin

      I have heard this before but never gotten to the bottom of it. It is hard to

      tell what is retailer behavior here and what is publisher behavior. I

      suppose one of the benefits of Jane Litte's site is that it may give enough

      examples of the problem to start understanding the cause. But surely no

      publisher or retailer stands to benefit from turning down sales. And just as

      surely they know that. What the explanation is, I don't yet know.

      Mike

  • Edward Smith

    I have a friend in Italy who regularly buys from amazon.co.uk…..so maybe it is a country-by-country thing?

    • /blog Mike Shatzkin

      Or maybe the particular conversation I was drawing my information from was

      misinformed. Or maybe it is one thing for print books and another thing for

      ebooks.

      My point is that it is confused so I get to be right no matter what the

      facts are! (Clever positioning, don't you think?)

      Mike

      • Robotech_Master

        For my part, I've ordered DVDs from Amazon.de and some other European Amazon (not sure if it was .fr or .co.uk, I think the former, or it might have been .de again) that weren't available in the USA. (The uncut PAL versions of The Last Unicorn and Buster Keaton's The General.) They shipped them right over to me.

        And I know that it used to be a LOT of Americans ordered Harry Potter paper books from the UK, in the early days when the UK editions pre-dated the US ones by several months—that was what spurred Bloomsbury and Scholastic to make a virtue of necessity with the world-wide midnight Potter release parties for subsequent books in the series.

        But when I wanted to order a selection of Doctor Who toys from .co.uk, I had to do it while my bro was in the UK and could hand-carry them back to the USA for me, since they wouldn't ship [i]those[/i] trans-atlantic.

      • /blog Mike Shatzkin

        Part of the challenge with paving the digital roadway is that these problems

        ultimately track back to the contracts each agent negotiated with each

        publisher. And each person in the chain wants to be absolutely sure they

        have the right to do the transaction: the publisher and then the wholesaler

        (if there is one) and then the point of purchase. The default would be to

        turn down the sale, not to make it.

        But I keep coming back to ” we're not unique.” I have a baseball package

        with mlb.tv. It's supposed to block me out of New York games when I'm in New

        York, but let me see them when I'm not. Obviously, it's supposed to execute

        that by referring to the IP address from which I log on, rather than any

        cookie in my computer. It is has failed on me over and over again, in the US

        and outside the US. In the US sometimes the problem is that a hotel in

        Chicago is on some sort of IP aggregation that ends up somewhere local to

        NY. I learned that the one time I took the time to connect with customer

        service about the problem. And that's for a service I pay for!

        There are a lot of details to be gotten straight by a lot of computers in

        order to apply rights decisions with the granularity — by the book for

        millions of books and by the market for hundreds of markets — we need for

        our business. People with a lot less haven't gotten there yet either. It

        will take a while.

        Mike

  • http://twitter.com/andjdavies andjdavies

    Thanks for the link to my article Mike – glad you liked it enough to post. Was great meeting you, and I look forward to chatting further at some time.

    • /blog Mike Shatzkin

      You're welcome. Your piece is really terrific. I'm happy to refer people to

      it. And I will want to learn more about what Idio can do to help publishers

      act on our agreed-on vision.

      Mike

  • Michael Allen

    As usual, an excellent analysis, and a salutary reminder that it is not just total incompetence which is behind the unavailability of, say, Kindle editions in the UK. Mind you, the incompetence/stupidity factor is still, I estimate, the major one.

    I write from a UK perspective. A couple of months ago I purchased a Kindle reader, but I have not used it as much as I would like to because, in at least 7 cases out of 10, there simply isn't a Kindle edition. Yesterday The Times reviewed several books, and I would certainly have sampled a couple of them if I could. But no chance.

    Perhaps the next time you are in London, Mr Shatzkin, you might care to shove a sample Brit publisher into a corner, put a gun to his head, and ask him to explain, in words of one syllable, just what exactly is the point of publishing a book in London this year without, at the same time, issuing a Kindle edition.

    As for prices: If UK publishers imagine that they are going to maximise their income (not to mention the author's) by charging more for an ebook edition than half the cost of a paperback — and preferably less — then they must be living in a dreamworld even more remote from reality than the one in which I currently perceive them to be.

    • /blog Mike Shatzkin

      On your largest point — that every book published in the UK (OR the US)

      that is basically narrative writing should also be published on the Kindle

      – I couldn't agree more. To not do so disappoints a growing audience of

      avid readers and costs a lot of lost sales and word-of-mouth.

      But to put things in perspective, Kindle sales in the US may be around 10%

      of the units sold of many books, and even more. But the number is probably

      1% in the UK. It will grow very fast and there really is no reason to wait,

      but they're still leaving pence on the table, not pounds. Very shortly to

      change.

      The pricing question is very complicated and may be highly title-specific. I

      paid the very high price of $19.99 for the Ken Follett book, Fall of Giants

      5 weeks ago. I figured they'd drop the price pretty quickly when they saw

      resistance but I really wanted to read it. (I devoured it.) Last I looked,

      the price was still $19.99. It will certainly come down, but meanwhile I

      think they're getting quite a few high-margin sales. It is a $35 hardcover,

      but the print book often sells for less than $19.99.

      Mike

      • http://freesf.strandedinoz.com/wordpress Blue Tyson

        Follett kindle edition is 9.99, hardback 18.74 when I looked a minute ago. Pretty sure it was about that a couple of weeks ago.

        Of course the version they are selling to you in the USA with their desire for hardback book protectionism may still be 19.99! :)

        http://www.amazon.com/Fall-of-Giants-ebook/dp/B0040JHNZ2/ref=tmm_kin_title_0?ie=UTF8&m=A24IB90LPZJ0BS

      • /blog Mike Shatzkin

        Just checked ours. $19.99 for the ebook and $18.74 for the hardcover!

        Mike

      • http://freesf.strandedinoz.com/wordpress Blue Tyson

        Funny. :) That's definitely a few http://lostbooksales.com entries waiting to happen.

  • http://twitter.com/gr0uch0marx gr0uch0marx

    Ever been in a UK hotel? Include the hotel address in you kindle profile.

    Done.

    grouchomarx

    http://portostreetshooting.blogspot.com

  • http://www.InklingBooks.com/ Mike Perry

    Keep in mind another factor: the sheer complexity of international pricing with varying costs and exchange rates. That makes global sales particularly difficult for small publishers who can't afford to hire someone to deal with the many issues.

    My Inkling Books is an example. We release books and ebooks globally when we have distribution available. But we do so realizing that the pricing starts off inconsistent and is likely to only get more so over time. Yes, there should be some semblance of consistency between the pricing of our books around the world, but there isn't simply because we're not 'into' managing such things. We'd rather muddle through. Other, more cautious, publishers, simply don't tread in such murky, swirling waters. And they are not being evil. In many cases, the sales of a modestly popular English-language book in a non-English-speaking country simply doesn't justify the trouble.

    That's why I'd love to see ebooks develop a more effective system of middlemen. I don't want to deal with separate contracts for every Tom, Dick and Harry who wants to sell ebooks online, even it Tom is Amazon and Dick is Apple. If I liked that sort of thing, I'd have become a lawyer. And I don't want to diddle with the pricing either. If I liked that, I'd have become a CPA. I want to create books and release them with a reasonable U.S. price, letting someone else handle the stuff I find dull.

    Remember the Chinese proverb about the curse of living in 'interesting times?' We live in a rapidly changing time when nothing works as it should. That means trouble both for those who create books and for those who read them. We need to cut one another a little slack until things settle down to something sensible.

    And yes, the problem isn't helped by executives at large publishers who want the present to be as predictable as the past. They too will either learn or fade from the scene. Be patient.

  • marytod

    Hi Mike – I often try to look at your blogs through the lens of an author, which is appropriate since I know so little about publishing  A couple of thoughts about offshore ebook customers:

    • Author to customer direct: Authors, with a little help from a service like Paypal, could sell their books directly to ebook customers around the world. Some are already doing so, of course, risking rights abuses but perhaps still making more money than they otherwise might following traditional paths.

    • Author to customer via Goodreads: I’m a newbie to Goodreads (and I’m sure there are equivalents), playing around with it to get a sense of how it works and might evolve. It seems to me that authors could use a service like Goodreads to find and participate with a community for their content. Purchasing could then be facilitated either directly or via some agent service which could be Goodreads itself, or a third party. I was struck by observing my husband on the weekend, reading a New York Times book review, thinking it would be great then checking the book out on Amazon where he found many negative reviews from ‘ordinary folk’ and decided NOT to buy.

    • The challenge is for authors to find their audience. You have spoken about content curators in the past and I imagine that effective curators will have significant influence over potential buyers. I further imagine that curators will come in all sizes and shapes and that over time an author’s agent will negotiate to find ‘shelf space’ on appropriate curator ‘shelves’. My view is that this is more likely to be an agent role than a publisher role.

    So what, I ask myself, will publishers do? Frankly, if publishers, as you pointed out in another post, see themselves in the rights business with the mantra of ‘acquire rights broadly, license rights narrowly’, then the convoluted, time consuming and exasperating world you describe in this post may be the death of them.

    Just a few thoughts, as always. I think this might warrant another diagram!

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  • Mary

    I have bought many books from amazon.uk and had them shipped to the U.S. Recently also bought a CD from them because it turned out to be cheaper buying from there and paying the shipping than buying it Amazon in the U.S. At least I had the choice. But I have no choice as far as digital books are concerned. Whereas I can buy a paper copy of a book and have it shipped to me before it is published in the U.S., I cannot buy the digital copy. This makes no sense to me.

    • /blog Mike Shatzkin

      Apparently the territorial rules are enforced more effectively for digital

      products than for physical ones. I agree that it is odd.

      Mike

  • http://twitter.com/Drivelry Mike

    People are already getting around this in practice by simply signing up with non-existent residential addresses in the relevant country (Amazon even goes as far as asking 'Have you moved recently'… ). You can still have a credit card registered outside the country to pay…. There are also services that will give you say a US post box address.

    • /blog Mike Shatzkin

      No system like this is or is intended to be foolproof. So far, not very many

      people have taken the initiative to establish purchasing capabilities in

      other countries.

      Mike

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