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The Used-Book Threat to New Book Sales & Royalties

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The erosion of new sales and royalty income by used book sales on the Web is a recipe for the hasty demise of small publishers and debut authors, negating the opportunity that the Internet opened up for these groups only a few years ago. Book content, as intellectual property, now needs additional protection.

Awareness of the used book issue spiked in April of this year upon the release of an e-mail letter from Amazon.com defending its policy of selling new and used copies of the same title alongside each other. The letter provided a feeble rationale for their practice and stated that offering used books beside new ones actually helps the sales of new books by causing customers to visit the Amazon site more often.

The broad issue is not just about Amazon. It is about third-party brokering of the sale of used books on the Web which, in effect, provides a Napster-like service that subverts the authors’ ability to earn royalties from their work. This hinders struggling authors from making a fair return on books that likely represent one or more years’ worth of effort, and it hampers small publishers from making a sufficient profit after the steep discounts they incur. The bottom line is that it severely impacts both the creative individuals who hope to make a living from writing and the publishing process that brings their words to consumers.

 

The Solution

The Authors Guild has already recommended that members remove links from their Web sites to Amazon in response to the used-book sale policy, but this measure doesn’t go far enough.

In the short term, authors and publishers must emban ann a public-relations campaign, with statistical backup, to show consumers and lawmakers how little they get from new book sales after expenses and how the proliferation of used books on the Web saps the life-blood of this industry. Stamping review copies to identify them as such–and thus as “not for sale”–would also help. In addition, authors and publishers (and their employees) should personally boycott online retailers who offer new and used books side by side, and they should ask their friends to do likewise.

But even if this convinces online merchants to segregate used books from the new, the broader issue of used book sales in the Information Age remains–and this will require a solution that deals with the fundamentals of the copyright law.

One potential bottleneck to rapid change in this area is a provision in the copyright law referred to as the “first sale doctrine” (Section 109 of the Copyright Act, 17 U.S.C. 109), which permits the owner of a legal copy of a book to sell or otherwise dispose of it without the authorization of the copyright owner. Congressional action would be required to amend the law to allow royalties on sales subsequent to the first sale, but the industry could adopt another method in the interim.

 

A New Kind of License

A new approach could involve the sale of books under a license agreement with the first end-user, in much the same way that computer software is sold. The book’s back cover would contain a detailed statement of the license agreement prohibiting subsequent sale without the payment of a royalty to the author. A sticker would need to be applied to the front of individually shrink-wrapped books to highlight the condition of sale. This would benefit both authors and publishers and should incur only minimal cost. Of course, exceptions would be made for public libraries and those of educational institutions.

Commercial used-book sellers (or those engaged in book rentals) and third-party intermediaries would need to pay a royalty fee to authors in a process similar to the one that conveys residuals to performing artists. Here, once again, the lawmakers might need to intervene to ensure compliance.

While this all sounds promising in theory, it’s important to note that the first sale doctrine has stood for almost a hundred years and challenges to it (or attempts to work around it via licensing) would almost certainly face an uphill battle. Accordingly, the only surefire way of implementing book licensing may be through e-publishing.

Please send your thoughts on this issue to me at JohnElray@aardwolfe.com if you wish to be a part of the solution.

John Elray is a PMA member and the author of “Khalifah: A Novel of Conquest and Personal Triumph,” published by Aardwolfe Books. For more information, visit

http://www.aardwolfe.com.

 

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A Thought-Provoking Parallel

by Richard C. DeBold

Jan Nathan’s article “Book Sales Figures Today & Tomorrow” (June PMA Newsletter) was much appreciated here. I am grateful to Jeff Bezos [Founder and CEO of Amazon.com] for making books easily available to many people, but it is very irritating to see your page on Amazon.com list pre-owned “new” books (obviously freebies) at half the price of yours.

While I am not a rights lawyer, or any kind of lawyer for that matter, I think some kind of solution may lie in examining and expanding the copyright laws… I think the publishing world could try for legal decisions that might obligate “factors” or commission merchants in the pre-owned book market to pay a fee to the publisher and author–some percentage of the sale price.

Most book buyers consider it their right to sell books whenever they please. I think these sales are illegal since they involve remuneration for transfer of copyrighted material. Probably any judge would consider the traditions of our culture as binding and allow the sale under “ordinary” practice.

But if owners of physical copies may be forgiven for selling books, it does not follow that someone who profits from facilitating their sale and makes them far, far easier to get is also forgivable.

Support for my analysis comes from the computer software industry. The long, overly wordy documents about restrictions that we must agree to respect forbid resale. On-campus distribution goes on anyway but imagine the battery of lawyers Microsoft would throw at Jeff Bezos if he began to list “pre-owned” Windows© software on his site.

Richard C. DeBold is the Publisher at Higganum Hill Books in Higganum, Connecticut.

 

 

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