Wednesday, July 15, 2009

DE paper and books

The other event that occurred yesterday was the release by the Productivity Commission of their report on the parallel importation of books. I don't propose to engage directly here with most of that discussion - except to note in passing that David Marr in the SMH misapplies the "jumble of gargle" and should see the nonsense that Crikey sited yesterday written by authors about culture.

The books report is relevant to the discussion of the Digital Economy paper in a number of ways. One is the fact that the DE paper refers to the PC's draft report commentary on online sale of books - this commentary is carried forward into the final PC report. The commentary talks about the relatively low penetration of "on-line" books - with "on-line sales" contributing only 5% of all sales. The purpose of the commentary is to ascribe some purported slowness of Australian business to embrace online retail models.

It is a confused discussion. The world leader in online book sales - Amazon - is unique because it was a purpose built online seller, not a migration from a bricks-and-mortar store to online. It represents a clear example of how both supply and demand side economies of scale favouring market concentration lead to the ability to build strong single firms in global markets. And finally it is a nearly unique remnant of the original boom, it had a business model that worked whereas most other on-line "thingummy's" of the era did not.

What is mildly disappointing is that the e-book did not feature in the DE paper, nor as one of the formats provided for downloading it. I've already suggested that all Government reports should be made available in e-book format.

The PC's report notes hat;
Indeed, the treatment of electronic literary works, as far as parallel importation laws are concerned, is already more liberal than for hard copy works. Section 44E of the Copyright Act 1968 allows the parallel importation of an electronic literary work, when embodied in a physical digital form (such as an e-book on a CD or DVD).

If that interpretation is correct there is no reason why the Kindle eco-system should remain closed to Australians. The oppotunity to create that eco-system becomes immediate if it is not necessary to separately negotiate with every publisher over the copyright of the e-book version.

I suspect that Amazon's current vigorous restriction of e-book sales to North America is (a) that the regimes in many other jurisdictions are not as liberal and they are adopting a lowest common denopminator approach, (b) that negotiating with publishers to e-publish might be harder if Amazon marketed outside the US and hence this is a voluntary restraint and (c) the Kindle model is tied to not only selling the digital book, but the reader (like the iPod strategy) and to the particular connectivity model over the Sprint EVDO (CDMA) network.

So maybe there is hope. But another negative for the vision inherent in the Digital Economy - "online" and "books" is seen as being about purchase and delivery of bound papr rather than purchase and delivery of e-books.

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