A Trip to the Library’s Used Book Sale

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My haul from the library used book sale this morning.

This weekend is the Fall used book sale at my local library here in scenic Chestertown, Maryland. They have these sales twice a year, Spring and Fall. They set up a large room with hardcovers and trade paperback books piled high on a series of tables, lined up on shelves surrounding the room with more piled three rows deep underneath the tables. The hallway outside the room has another set of tables packed two layers deep with mass market paperbacks, and also has the piles of books underneath each. It takes a couple of hours to properly browse the available material. And you can’t beat the prices!

Some writers and publishers have a love/hate relationship with used books (mostly hate). I’m not one of them. It’s love all the way. If not for the availability of used books, I wouldn’t have read half of what I have in my life and the number of different authors I’ve become fans of would be demonstrably smaller. Some may not like it but when you consider none of those books are there for sale without someone having bought it full price first (or discounted as the publisher wants), all I can say is get over it! You want to know where discoverability happens? It’s right here in this room full of books so cheap as to nearly be free. It’s also why discoverability with digital is more problematic and why free is uncomfortably (for them) popular among readers; no used market to speak of.

I spent my hour this morning browsing and finally headed out with a bag of nine books that, in total, set me back roughly three times the price of the cup of coffee I bought at Royal Farms on my way home. The notion that cheap nigh-on free books is some new development from the Internet is absurd. This kind of sale has been going on for longer than all of us have been alive. It just wasn’t trackable in the ways digital is. And it’s always been a beneficial component of the industry, not a detriment. “Cheap books are good for business” is not an idea Jeff Bezos invented, despite what some would have you believe.

There are a few things I took away from this morning’s jaunt, more than just the new bag full of books I needed like a hole in the head. With a little mortar, I’m pretty sure I could build a summer home out of my to-be-read pile alone.

1. Traditional publishing produces a lot of crap

You hear this a lot about indies but, man, glancing through stacks of the stuff that’s been “properly vetted” by the great tastemakers only makes me snort louder every time I hear someone say how indispensable they are to quality literature. I don’t have any particular moral judgment on this, just try not to be the pot telling the kettle it’s too black, please.

2. Lit Fic doesn’t have much of a secondary life past first sale

I’ve been going to this sale for four years now and one of the interesting things I’ve noticed is that you see the same types of books over and over again, year after year. Something with a windswept field and a sunset on the cover, inevitably with the phrase “From the NY Times Best-selling Author” scrawled across the top, titled “Yesterday’s Tomorrows” or some such inexplicable thing. The cover blurb sounds like a story my uncle would try to tell about his troubled life, after Thanksgiving dinner and one too many shots of Southern Comfort, before I get so bored I have to fake an excuse to leave the room. These books never move. They were there four years ago and I don’t doubt they’ll still be there four years from now. Even for a buck, they can’t get them to walk out the door.

3. Nobody keeps the books from the long-time mega-bestsellers

The place is filthy with them! Nearly every table is overflowing with Pattersons and Turows and Kings and Crichtons and Clancys. And not just one of each, dozens of copies of the same books, mostly all pricey hardcovers. It makes me wonder if those books were actually bought by the readers who donated them or were given as gifts. The churn rate on high dollar hardcovers evident there just seems out of place. Who drops $25 on a book then dumps it on the library? These authors may be selling large numbers of these books but nobody’s keeping them. They’re disposal entertainment. And a damned expensive version of it at that. Again, even at $2 per hardcover, these books never move.

4. Newer, short series bestsellers are an exception

There was a half a dozen copies of the 50 Shades trilogy books combined there. There was one copy of the first Hunger Games book and that’s it. There were four copies of the Twilight series books in total. There were a grand total of zero copies of any of the Harry Potter books. No George R.R. Martin, either. People are keeping those books in ways they aren’t with either literary or mass market best sellers. I’m not sure what that means, but if I had to guess, it may speak to the completionist mentality of many readers relating to a concise several-book series that doesn’t stretch on forever into 16 or 17 volumes.

5. Romance is another exception

Nora Roberts was another mega seller whose books overran the place. The difference, though, is that they move. Nobody’s buying the Pattersons but most of Roberts’ books will be gone by Sunday. I’ve watched it happen in the past where an entire table of Roberts and Danielle Steele books that are there on the opening day are picked down to bare bones by closing. The Turows and his ilk, though, end up clustered all together, with the previously mentioned best selling lit-fic, as nearly everything else around them is picked clean. Romance seems to have the same level of churn going on but they also seem to have a vibrant life after the first sale that the mega-sellers don’t.

Now, let’s discuss price. I walked out of there with six mass market paperbacks, one trade paperback, one hardcover and one paperback that was a half-inch taller than a regular paperback. I added up the cover prices of all nine books. It was $94. I paid $5.25. That’s roughly a 95% discount. Not bad. The question, though, is would I have bought any of these books at full price? The list price on all the paperbacks was $7.99. The weird taller paperback was $9.99. The hardcover was $24.95. The only one that seemed reasonably priced to me was the trade paperback of Robert Anton Wilson’s Schrodinger’s Cat Trilogy containing all three books. It was just $10.95.

The answer is that, no, I likely wouldn’t have paid those prices except for that one book. The hardcover of Joe Hill short stories looks cool and I’m excited to read it. I wouldn’t pay $25 for it. I don’t like Dean Koontz to speak of but I’ve always been morbidly curious about his Frankenstein series. There’s zero chance I’d pay the $24 list price for the three volumes but for 75 cents? Hell, I’m in on that. The Matheson and Straub books I may have gone up a few dollars on cover price and bought nicer trade editions but I wouldn’t have dropped $8 a pop on these versions, either. Ender’s Game was a lark that I couldn’t pass up for a quarter. I just saw the movie and, while it was no great shakes, it did make me curious about the book.

Which brings me to the last book I picked up this morning. Yes, I bought a Doug Preston book. I’ve never read anything he’s written (outside of his Authors United blustering. I really hope his fiction stylings are way better than that), so I’m curious. The description sounded interesting, so I thought, “What the hell? I’ll give it a go.” There was another one of his books there that sounded interesting, too. But it was a hardcover and hardcovers were $2 and I just didn’t want to pay that. (I can hear the screams of “entitled” now.) The reality is that I have no idea if I’m going to like his work. For a quarter, it’s a no-risk proposition. For $2, it’s a slightly less than no-risk. But $2 bought me that aforementioned cup of coffee. And, yes, I’m saying that fleeting cup of coffee was more important to me this morning than trying one of his books. That’s life. Get used to it.

If I read that book and enjoy it, the dynamic changes. I don’t question dropping the $2. Hell, I might even buy one (or more) new, depending on how much I like this one. But none of that happens if I don’t have access to this book for a negligible sum. At the last book sale in the Spring, I loaded up, getting about 25 books of all different stripes. Since then, there have been six new book purchases by me as a direct result of those buys. That’s six sales that would not have existed otherwise. Preston’s odds of getting me to buy one of his books new is virtually non-existant without the super-cheap used variety available to experiment and check out the lay of the land, as it were. His odds of me turning into a fan may be slim in any case, but they’re non-existant if my only choices are list price or small discount.

Even if his ebook version was $5.99, I’m not buying that. I wouldn’t pay $2 for one of his hardcovers. If the book I bought today was priced at $6, it would still be on the table where I found it. If those are my only options (or my cheapest options) he has precisely zero chance of turning me into a full paying customer. Here’s my concern with ebooks: no used versions at miniscule prices means it’s either the library or some random chance someone gives me one. Publishers have gouged libraries with exorbitant ebook prices and overly restrictive licenses. That option isn’t as viable as print either. You want discovery for ebooks to be better? Stop handicapping it. Libraries, used books for slightly above free and sharing between readers is where most discovery happens. You may think it’s bookstores but odds are most shoppers are “discovering” something there they already knew about. Discovery in that sense is more surprised to discover something you actually want is there in stock.

You can’t have things both ways. You don’t get the benefit of people putting in the legwork to discover your work and expect them to pay you for that discovery. Like most worthwhile pursuits, the back end is where the money is. I get this one for a quarter today, he may well get 5 or 6 sales over the next few years at store prices. Get rid of this one, and he gets nothing.

Cheap bordering on free books that have no direct revenue link to publishers or writers are an essential component to discovery. If we just keep progressing with ebooks as we have (and they continue to replace mmpb’s) with no used versions, limited library checkouts and prices higher or comparable to a mmpb, that discovery problem is only going to get worse. And it’s going to start to carry over into print, too, from fewer used paperbacks available like what I bought today. Subscription services can possibly mitigate some of that, but only if the catalogs are basically unlimited and the service itself isn’t too expensive or restrictive. But then, we might also be running a real risk of replacing sales with subscriptions rather than supplementing and supporting them as used books and library borrows do now. If we keep pretending books have some innate value while ignoring how, where and why the people buying them were first turned onto your work, and where they developed their notion of its value, trouble will continue to ensue.

Dan Meadows is a writer living on the banks of the Chesapeake Bay. Follow him on Twitter @watershedchron

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Published in: on November 7, 2014 at 2:32 pm  Comments (10)  
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Free The eBooks! New petition calls for supporting consumer ownership of ebooks…I think

Yesterday, I saw a link to a new petition on the U.S. government’s website to allow the “unlocking” of ebooks and reaffirmation of ownership rights by consumers for these digital goods. This comes on the heels of the Obama administration coming out strongly in favor of fully legalizing the jailbreaking or unlocking of cell phones. I agree with both sentiments, but the new petition has some issues. Here is the text: 

Protect Readers’ Rights by Unlocking Ebooks

The White House recently came out in favor of allowing consumers to unlock their own cellular telephones. We are asking the White House to apply the same laws and provisions to ebooks.

The purchase of a book, whether online or not, is a purchase, not a license. Digital books should be legal to read on any device that supports standard text files. Legally purchased digital books should not self-destruct, expire or disapper, except under conditions of damage or obsalescence. Within reasonable limits, book purchasers have the right to lend or give books to friends, charitable organizations and libraries. Finally, libraries should be permitted to lend ebooks under the same rules as physical books.

We ask the Obama Administration to champion the rights of readers to own their ebooks.

So, typos notwithstanding, let’s discuss. And by the way, if you’re going to post a petition concerning important issues like literature and consumer rights, you really should spellcheck the damn thing, otherwise your credibility could “disapper.”

For starters, the White House didn’t apply any laws or provisions regarding unlocked cell phones, they only expressed support for the notion going forward. The relevant laws concerning this, specifically in the DMCA, clearly ban the activity. Their opinion on this is all it is, just an opinion. For cell phone unlocking to actually be legal, it’ll take a legislative fix. Good luck with that. Not to mention, they stopped short of showing support for similar unlocking of ereaders and video game consoles, etc (they did mention tablets but only in the limited sense that they were becoming more like smart phones which dedicated ereaders are definitely not). A logical view would follow that if jailbreaking phones is okay, then doing so with all devices should be as well. But the White House doesn’t stretch that far, with their stated position directed at preventing lock-in by telecomm service providers and has nothing at all to do with content providers. In fact, the White House specifically called for “narrow legislative fixes in the telecommunications space.” That’s a far cry from rallying around customer rights for content they purchase. It’s certainly a step in the right direction, but there is no law or provision in this that’s even applicable to content rights for consumers.

I completely agree with the statement that buying an ebook is a purchase not a license, but that’s far from a popular position to hold. Over the past couple months, in arguing in favor of resale rights to digital goods, I found myself in many places arguing just that point of view. Content providers, including many independent writers, are clinging to the license scheme, and with some solid justification. There have been a few conflicting court decisions, but it’s far from decided that the sale referred to here is, legally speaking, actually a sale. I believe it is, and I think the licensing regime we’ve got going on here is potentionally the greatest threat to consumer rights in any of our lifetimes, but I’m definitely on the minority side of that point of view. It’s going to take a favorable SCOTUS ruling to affirm such rights, as a legislative fix simply isn’t happening in this atmosphere, and I wouldn’t hold my breath for it, even if I absolutely believe it’s what needs to happen to retain balance between producers and consumers in the stream of commerce.

I’m somewhat confused by the statement that says digital books should be legal to read on devices that support standard text files. Ebooks aren’t standard text files and, as formats improve (epub3, html5, etc) they’re even less comparable to simple text. Unless the petitioner is advocating for stripping off the bells and whistles to bare bones text, I don’t understand the point of this statement. Seems naive and, much like the recent lawsuit from bookstores against Amazon and the Big 6 calling for “open-source DRM,” whatever the hell that is, it comes off as very tech-ignorant.

As for libraries being able to loan ebooks under the same rules as print, I have two questions. One, ebooks aren’t print so why would you want to limit libraries to a physical standard that doesn’t necessarily apply? Secondly, and most importantly, the petition plays fast and loose with the first sale provision of copyright law. The ability of libraries to lend physical books as they have comes from first sale. The petitioner’s opening statement that an ebook buy is a purchase not a license supports a first sale position, but it also seems to go out of its way to avoid even mentioning consumer’s rights under the same provision, notably resale. Is the suggestion here that libraries should be granted a waiver to exploit first sale rights customers shouldn’t have, even though it opens with a strong statement supporting a first sale argument? I don’t get it. If the point here is to free ebooks from lockdown control of content providers, why skip the most important tool to achieve that, a true ownership stake in the ebook for the purchaser?

What I see as the big flaw in the argument here is the warping of the concept of first sale rights. Libraries can have them, apparently, the license scheme used to block them is dismissed, yet for some reason, consumers should still be left wanting for their full rights under copyright law? Why? And what, exactly, are reasonable limits to purchasers lending ebooks? Why should libraries get more rights to lend books than consumers? How is it that I can give away or donate said ebook, a library can then use first sale to lend it, but I can’t use the exact same provision of copyright to resell it? I thought this was about freeing ebooks for consumers, but it seems more like exempting libraries than truly benefitting paying readers.

The petition ends with a call for the Obama administration to champion the rights of readers to own their ebooks. I agree, but that’s not what they’re calling for here. This petition still ignores first sale rights for consumers while championing them for libraries and even accepting restrictions on consumers to lend or give away said ebooks. This isn’t ownership at all, but simply a desire to read a Kindle ebook on a Nook or similar type of arrangement. If all you really want is to prevent content provider lock-in to specific devices, then say that. Don’t muddle the issue with notions of first sale or ownership that you’re not even advocating. The wording of the petition also allows for ebooks to be deleted or removed due to obsolescence (misspelled obsalescence, which is a fascinating freudian slip, as license schemes are already limiting the very idea of what constitutes a sale).

I think this is a nice thought, preventing vendor lock-in has some definite merits, but ultimately this petition is poorly executed and unnecessarily convoluted. And again, spellcheck, dammit!

Stop Stealing From Your Customers! Eroding non-creator copyright protections hurts us all

The past week, I’ve been caught up in philosophical meanderings related to the digital goods business and the notion of copyright law. I’ve read quite a bit here and there around the web on the subject and I see more than a few disturbing things.

1. Most people, including creators, don’t really understand copyright

I am continually bothered by the number of writers, musicians, etc who seem to believe copyright gives them some sort of all powerful right to totally control what happens with their work, even after it’s been sold and is out in the world. Copyright doesn’t do that. It grants you a limited monopoly right to use your work commercially, nothing more. One of the primary reasons there is so much consternation about copyright is that those limitations are slowly being eroded away. Life plus 70 years is a flat-out joke that totally spits in the face of what copyright is all about. Think about this for a second and tell me that copyright’s ends of protecting the public interest even still exist: Not one single American creative work entered the public domain statutorially this year. None. Nada. Zero.

Things like the upcoming Kirtsaeng decision in the Supreme Court, depending on how they rule, and the intricate licensing schemes pioneered by the software industry and dove into whole hog by the media industry purposely erode first sale rights, giving creators control of secondary markets (or the ability to prevent them altogether). That also undermines the idea of limited protections. The newspaper industry fighting against Google News and aggregation is an all-out assault on fair use, yet another attempt to wipe away or severely lessen copyright law’s limitations.

I can’t totally blame creators who behave as though they have some kind of all encompassing powers under copyright, media companies have been working very hard behind the scenes to make it that way for their own benefit. But those limitations exist for a reason. Take them away, and the entire purpose of copyright gets perverted away from a protection that gives creators a fair chance at exclusivity for a while to try and make a buck and allows the public to benefit from these works in a way that promotes future progress. Without those limits, the very progress copyright law is supposed to promote gets stunted.

Copyright law grants you the opportunity to make money, it doesn’t guarantee it, and the value to society on the whole is supposed to be balanced against creator’s interests, protected from the very exploitation the erosion of those limits is actively causing.

2. Very few on the creator side seem to give a damn about consumer rights

This, to me, is the most disturbing trend I see emerging, especially when it comes from Indie authors. You can’t talk out of one side of your mouth about appealing better to readers, then ignore or argue against the idea that readers also possess protections under copyright law that we’re actively taking away through the licensing scheme ebooks are sold under. The digital goods market is built upon a foundation of taking away consumer rights. What’s worse, is that we also have creators out there throwing around loaded terms like piracy and stealing that aren’t accurate. Many times, they’re used to demonize people bahaving in ways they always have with regards to sharing material. Every man, woman and child in this country commits an infringing act on par with downloading a torrent file every single day. Probably several. We just don’t see it and most probably don’t even realize we’re doing it. The internet has brought part of that behavior out into the light of day. That doesn’t mean it wasn’t happening on a major scale before the internet. It absolutely was. It didn’t destroy these industries, in fact, I believe it made them considerably stronger. File sharing won’t destroy these industries today, either. What will, however, is if we continue on a path that makes copyright effectively infinite, steals rights from consumers at every opportunity, and tries to force unprecedented controls onto people for works they’ve already bought. It also doesn’t help if creators act like entitled assholes, throwing accusations of theft around while totally ignoring the fact that their entire business model is based on gutting consumer rights. Take a deep breath, go read up on the history of copyright and try to grow a little perspective.

And remember, the perversions of copyright are being driven by giant media conglomerates for their own ends. They don’t care about your rights as a creator any more than they do the rights of consumers. Don’t confuse your interests with theirs. When they’re done wiping out consumer rights, they’re very likely to turn to undermining yours, if they haven’t already. And don’t expect what fans you have left to sympathize when that happens.

3. Everyone seems to believe digital goods are infinite despite the obvious reality that they’re not

I still don’t understand how otherwise intelligent people buy into this heaping load of bullshit. A big part of the argument justifying swiping consumer rights is that digital goods are infinitely perfect. Come on! Do you really believe that we’ll be reading these same epub or mobi files on these same devices five years from now? Or ten? Technological progress is just going to come to a grinding halt, is it? We’re not going to have better, more capable devices in the future with improved or even radically different formats for these works?

If consumers don’t have any ownership rights in these products, what’s to stop an entire generation of culture from being essentially erased on the whim of corporate interests the next time a shift in standards or new technology comes along? One of the key arguments I’ve seen against second hand goods is the idea that no one will ever buy new if the used versions are identical. To begin with, nothing gets sold second hand without it being bought first hand. And don’t give me the line about people wholesale copying the same file and selling it over and over again. That’s a tech problem no one has bothered to solve because the entire industry was built upon the notion that readers were never going to have these rights. More importantly, when we do have a media shift of sorts, these current files will no longer be identical or the best thing going. If we have resale rights, I could be buying today’s epub files cheaply used or choose to buy the newest holographic version that hits the market in 2025. The long tail may be somewhat infinite, but that doesn’t mean the specific containers we’re using today are. I’m not a big fan of the notion that corporate interests can remove a giant swath of our creative culture just by switching standards or technology. Show me where in copyright law that kind of thing is allowed. It runs directly counter to its stated intent of benefitting the culture.

My perusings through this issue, mostly because Amazon filed a patent they may never even use, have been pretty eye-opening. As much as I love ebooks, and the new digital frontier, there’s always been this nagging little voice in the back of my head and I finally figured out what it’s saying: “Hypocrite!” Despite the fact that I frequently argued against increasingly controlling software licenses during my years in the industry, I never really connected the fact that, when I sell an ebook to a reader, I’m engaging in the same activity that I felt was so exploitative from the other side. I’m starting to get a picture of the weaknesses in selling digital goods, and most all of them stem from the erosion of limits in copyright law. Economic karma, perhaps. It may seem odd that I, as a writer who earns money because of copyright, would argue against more power granted to me as a creator, but I take the long view. It’s simply bad business to rip off the people paying us, and that’s what we’ve been doing from day one. By advocating for or even turning a blind eye to the giant theft of customers’ rights we’ve all taken part in, we’ve created a system that is already doing damage to our culture. Copyright doesn’t just protect creators, it protects consumers and society on the whole in a fine balancing act. What it shouldn’t be doing is warping that balance in support of business models that wouldn’t function without the self serving perversions.

Say what you like about copyright, but its value is much more than simply protecting my rights as a creator. Our system has lurched away from any semblance of balance, and it’s getting more slanted every day.

Over the past few years, I’ve read many articles from creators containing a plea for people to “stop stealing” from artists through downloading. I’d like to end this by throwing that plea back at creators.

Stop stealing from your customers!

Here are the links to the other copyright related pieces I’ve written lately, for you reading pleasure.

The Benefits of Globalization Don’t Apply to the Little People

Second Hand Blues: First Sale Rights and Used eBooks

Amazon and the Mystery of the Great Used eBooks

Second Hand Blues: First Sale Rights and Used eBooks

That sound you just heard was the collective heads of everyone in the traditional mass media industry exploding as news of Amazon filing a patent for a process to resell digital goods spread. Many of them are having enough trouble keeping their heads above water in the current digital marketplace as it is. Now, suddenly, they might have to deal with competition from an area they thought was locked down, resale rights of customers. Oh shit.

Personally, I’m all for this development, although I would much rather someone other than Amazon be the one to push this possibly emerging market. However, the fact that they’re taking steps to be prepared for it again shows why they have essentially made fools of the traditional industry. They think ahead, they pay attention, they prepare and, most of all, their business model adds value for their customers instead of taking it away.

I’ve long been a proponent of an aftermarket for digital goods. I believe it’s lack is the one key flaw in the ebook market. In fact, I’ve started to develop a little theory about this. Far from being just simply a loss of value for consumers, I’m starting to get behind the notion that the lack of an aftermarket is a primary cause of three of the most troublesome issues with ebooks and other digital media; piracy, discoverability and the downward pressure on prices.

1. Piracy

I usually take issue with even defining the activity of file sharing, even obviously infringing file sharing, as piracy. I just don’t think it is. I also think it clouds the issue by broadening the scope of conduct corporations would like to monetize into a individual crime, which hurts efforts to combat actual, destructive commercial-scale piracy. But for the sake of brevity, I’m just going to use the term piracy here. It’s easier to type than “possibly infringing and much maligned but potentially fair use protected file sharing,” which would be a far more accurate description of the conduct to which the industry objects.

The biggest joke of all from the anti-piracy brigade is the assumption that every download is a full price lost sale, complete with lost royalties for the creator. That’s obviously a skyscraper-high pile of horseshit I’m not going to waste time refuting. But let’s say, for the sake of argument, that it’s somewhat true, who’s to say that lost sale would have even been one that affected the industry or artists at all? It’s easy to suggest that someone downloading an ebook wasn’t going to buy it anyway. But what if they were going to buy it, only a cheaper second hand version? Even if it was a lost sale, it wasn’t one that would have earned the industry a dime anyway. Or any royalties for the artists. Amazon routinely lists used alternatives to new versions right on the product page, always significantly cheaper. Is it really a stretch to think that people who choose downloading for free over buying full price wouldn’t also choose to buy cheaper used than new? Even if every download were a lost sale, if those sales were going to be of the cheaper, used variety, the industry and artists lose nothing. And it’s perfectly legal under the first sale part of copyright.

Ebooks circumvent first sale by being sold as a license for use. When that happens, customers lose the ability to resell those goods (among other things). It’s why I can’t just sell the ebook I bought last week from Amazon to somebody else on eBay. But the book publishing industry has long existed side by side with its used counterpart. There has always been a place to buy books at a significantly discounted price. When eBooks took off, however, there was a vacuum left where that discounted market used to be. Isn’t it possible that piracy grew to fill this very gap that the loss of first sale left in the digitized side of the market? We went from a system where you could get books full price new, heavily discounted used, or free from libraries to a system where it was full price new, extremely limited and inconvenient from libraries or free through piracy. The industry, through the means it chose to sell ebooks, removed the discounted option completely, hamstrung the legal free option and then loudly wondered why people pirated.

I think a lot about rights, I am a writer, after all, and I spend a fair amount of time complaining about rights grabs from publishers. But it just dawned on me that I’ve essentially missed the biggest rights grab of all. The way ebooks are sold protects publishers under copyright law, protects authors under copyright law (although I would argue in too ancillary of a way through publishers but that’s for another day) and takes away almost all the rights of consumers under copyright law. It is pretty egregious when you look at it. The first theft was committed when publishers agreed to the licensing scheme and took away customer rights. Then they turned right around, started pointing fingers and yelling, “Thief!”

Removing first sale rights created a vacuum in the ebook market and piracy was what grew in its place. Nature does, indeed, abhor a vacuum.

2. Discoverability

Here’s another thought that’s been kicking around in my head: what if, instead of causing the drop in sales, piracy actually prevented that drop from being significantly worse? Think about it. When digital music hit the scene, that industry panicked, fought the rudimentary early age file sharing spots like Napster and Limewire tooth and nail, right down to suing their own damn customers. At that point, broadband was slower, not nearly as widespread, and most people didn’t know how or have the capacity to download sometimes large music files. As first sale rights fell away, the secondary markets thinned, discovery was hampered and sales dropped precipitously. When ebooks hit publishing, there were well-established file sharing networks in place, broadband was much faster and more ubiquitous. The discovery hit from loss of first sale was mitigated somewhat by piracy and the drop in sales was much lower. Book publishing, quite possibly, was somewhat protected from itself by the very pirates it so loves to demonize.

Look at it this way, when I buy a print book, I can go sell it to someone else. They in turn, can sell it again, the next owner can sell it, then that owner could donate it to the library where it can be checked out over and over again. That one book could pass through numerous hands, all legal and all based on one sale, the first sale, from which publishers and creators reap their proceeds. The rest of that book’s lifespan constitutes exposure, or discovery, if you prefer. Now, if I buy an ebook, other than a limited ability to share with a few people under specific conditions, the life span of that ebook essentially dies immediately after the first sale. All of that exposure and discovery that was present with print books sold with first sale rights is washed away. And again, the industry is perplexed about why people aren’t finding new books as easily as in the past. That kind of thing happens when you destroy the primary mechanisms of discovery by swiping rights from customers.

I’ve seen numerous polls that suggest bookstores are the number one place for discovery of new works but I’ve never seen one differentiate between what kind of bookstores they’re talking about. Is it more likely you’ll try out new authors in Barnes & Noble where you’re paying $10-25 or so on average per book, or in a used bookstore where hardcovers are $2 and paperbacks can be had for 50 cents? I suspect discovery has been done far more at bookstores selling heavily discounted used books (and libraries, where it’s free) than at stores selling only higher priced new books.

Everybody seems to be wondering why online book discovery is struggling so much. Could it be because publishers have hamstrung libraries and blocked the development of discounted used ebook stores by eliminating consumer rights to resale, places where discovery is far more likely to happen than full price, brand new alternatives? Nah, couldn’t be that, must be the pirates, you know, the only place actually emulating the primary means where book discovery was done in the past.

3. Downward Price Pressure

Taking away first sale rights from consumers does one other key thing, it takes away the customer’s ownership stake in the product. If you can resell something, that has value, and when you buy a print book, it retains that value because of first sale rights. But with ebooks, the monetary value drops to zero immediately after you pay for it. Don’t think for a second people don’t understand this basic fact. The loss of an ownership stake, and the instant elimination of any monetary value necessarily degrades a product in the customer’s eyes. By swiping first sale rights, publishers have devalued their own products. It’s the reason why so many people complain so loudly about ebooks priced anywhere near what print versions cost. We’re not stupid out here, we know damn well you’re selling us a product that doesn’t have anywhere near the tangible value of a print book, and that has nothing at all to do with the quality of the book. I can’t sell it and its uses are limited. I possess significantly fewer rights with ebooks. Consequently, it makes no sense to pay print prices for way-less-than-print value.

Then, there’s this. With the aftermarket for ebooks nonexistent, wiping out a highly discounted layer of sales, it created a huge gap between the prices of trad pubbed ebooks and indie books. That, in turn, created a situation where indie books could be priced much cheaper and attract significant sales through super-low prices alone. That, then, set off a race to the bottom fight for those sales, culminating in 99 cent novels, and generally increasing the downward pressure put on all ebook prices. But consider, if there were a used layer there where trad pubbed ebooks could have been picked up for $2-3 or so, the massive gap in prices between indie and trad books never would have happened, the severe price advantage wouldn’t have sparked the uptick in sales that set off the race to the bottom. Indie authors would have been forced to compete on factors beyond simply super-low prices, and the downward pressure they’re experiencing now declines appreciably. Also, if those same customers now bitching about $15 ebooks knew that could get a few bucks back on them through resale, they wouldn’t be so likely to complain about price. They’d retain their ownership stake, and very likely, not balk at paying a few dollars more. There’s two key elements right there driving prices down that go away if customers hadn’t had their first sale rights taken from them.

First sale rights are hugely important. I’m of the mind that swiping them from consumers as ebooks have is responsible for most of the biggest problems in a growing industry segment. An aftermarket isn’t something to be afraid of, it aids discovery, maintains value in the product chain and gives your customers not just a right to resell, but an actual ownership stake in the product, albeit a small one, relatively. It now becomes in their best interest to maintain the value of ebooks because they have some skin in the game. Take them away, and it seriously damages discoverability, drives prices down as the reality of lost value sinks in, and it drives possible customers to alternatives like piracy.

Whatever the technical difficulties in creating a digital goods aftermarket, or giving consumers back the first sale rights that have been swiped by the ebook licensing scheme, the consequences will be far less severe than continuing to treat customers as naive dullards who don’t mind being gouged by higher prices for a lesser product. There’s a good reason first sale exists as part of copyright law, free markets don’t work when one party has too much control over economic activity. If we don’t change course soon, the ebook market will find out exactly how dysfunctional things can get when the playing field gets unfairly slanted. Customers have rights, too, and it’s high time publishing remembers that.

The Benefits of Globalization Don’t Apply to the Little People

The U.S. Supreme Court is set to rule on a case that has profound implications for the concept of ownership, (See SCOTUS blog here and read up. It’s fascinating) and could conceivably eliminate the last lingering vestiges of the notion that copyright law has any limits.  If the court rules the wrong way on this, copyright ceases to have any pretense of societal good. And why is it that we’re faced with the possibility from SCOTUS? To defend a publishers’ right to segment the world into territories.

In the past, I’ve argued that the idea of territoriality is already outdated and should be done away with. This case illustrates pretty clearly why that’s the case. Given the technological realities we have today, there is simply no easy way to defend this practice in statute that doesn’t have the unintended consequence of severely undermining first sale, fair use and ownership and resale rights for nearly everything we buy. The benefit to society for allowing territoriality to stand is negligible. In fact, it’s the consequences of doing so that are severe and destructive.

First, let’s look at the publisher, John Wiley & Sons. They are textbook publishers who, as many do, routinely use the concept of territoriality to both exploit poorer markets and maintain the ability to overcharge more affluent ones. The key issue in this case is that an individual, Thai national Supap Kirtsaeng, purchased textbooks sold by Wiley at lower prices in Thailand, brought them to the American market and sold them on eBay to help pay for his education at USC, where the exact same textbooks are priced much, much higher. My first response to this was, “good for him!” This guy identified a seam in the sales channels and exploited the price variance for the same product in different markets to make a buck. That’s market-based globalized free enterprise at its best.

But Wiley was having none of it, suing (in my opinion, inexplicably) for copyright infringement. The guy in question didn’t copy anything. He legally purchased said textbooks at full price offered by the publisher, then used his first sale rights to turn around and sell them for whatever the hell he wanted. There’s no copyright infringement here at all. (Note: I’m speaking in practical terms. Yes, I’m aware that there are portions of copyright law dealing with importation of foreign goods, but those parts were written long before globalization and free trade took hold, before the internet was even a thing and back when importation was a little more complicated than a few mouse clicks and a week’s wait for shipping. Those rules have about as much relevance to modern life as the use of grindstones to make bread). But the 2nd District Court disagreed, invalidating his defense through first sale, declaring his actions as infringing and fining him a substantial amount of money. The key problem lies not just in the decision, which I believe is catastrophically wrongheaded, but in the justification used. The court ruled that first sale rights don’t apply to any goods manufactured outside of the U.S.

Apparently, the judges of the 2nd District missed the memo about the new global economy we’re all supposed to be giddy about. They seem to have not noticed American corporations offshoring jobs and manufacturing at economy-gutting levels to save on labor costs and such. They’ve obviously never set foot in a Walmart or any other retail outlet and taken a few minutes to check the “made in” labels or they would have realized that a plurality of goods we buy every day aren’t manufactured in this country. If first sale doesn’t apply, then this court just swiped ownership rights to the majority of our possessions.

To make matters worse, how many foreign manufactured components do you think are present in our homes and cars? If I own a home that has a central heating system installed that was put together from any amount of foreign made components, do I even have the right to sell my home without first buying licenses for every non-U.S. element it contains? What if I want to sell my home complete with appliances, also made from foreign manufactured components? Do I need separate licenses for my refrigerator, washer, dryer, dish washer, etc? What will the costs of acquiring these licenses do to the overall value of my home. If you said “plummet” you hit the jackpot.

I can no longer legally even sell the smartphone I’m currently typing on. And what about the licenses HTC acquired for the plethora of foreign-made components that make up the phone itself? Does those licenses transfer? Is it enough to get resale permission from HTC or do I also have to get permission from every component manufacturer too? The same applies to cars. Can an ok from Toyota allow me to sell my car, or do I also need an okay from the stereo manufacturer, the maker of the chips in the car’s computer, and whoever made the tires, brake pads, oil filter and anything else in the vehicle that wasn’t American made. What does this do the value of your car? Again, “plummet” is the correct answer.

Yet, this value loss is totally on the consumer side. When the resale market gets gutshot in this way, there is no logical reason to expect car makers to do anything except up their prices. Really, all they have to do is refuse permission for resale and the used car market ends instantly. No more competition on that front.

There’s two key problems I see here. One, this kind of ruling creates a massive incentive for businesses to continue and actually speed up offshoring jobs and manufacturing. If first sale doesn’t apply to foreign goods, companies that trade in foreign made goods will control not only the primary market, but any secondary markets would only be allowed to exist on their terms at their discretion. The entire point of first sale was to prevent this very thing.

In a global economy where much if not most of what we buy isn’t made in America, how long would it be before companies still producing goods in the U.S. argue that first sale prevents them from competing and must be done away with here as well? I put the over/under on three hours.

Then there’s the legal illogic of somehow claiming one part of copyright doesn’t apply to foreign goods (first sale) yet other parts will (fair use). Supporters of Wiley have almost all claimed that the above concerns I’ve mentioned are scare tactics because consumers will retain fair use rights to defend their actions. But why should fair use be any more applicable to foreign goods than first sale? This is a flat-out lie by those who want Wiley to win. If the District Court decision on first sale stands, it’ll be roughly a half an hour before someone tries to invalidate fair use for foreign goods as well. And they’ll win because they’re right, logically and legally. If first sale doesn’t apply, then neither does fair use.

Get it yet? Think for a second, how many people in this country just bought, wrapped up and gave away foreign made goods as presents this past Christmas. If this ruling stands, every one of those gifts was an incident of infringement. I’m pretty sure we just rang up a $100 trillion worth of infringement penalities last month. Don’t think businesses will try to exploit this fully? Take a look at how publishers have been extorting exorbitant fees from libraries on ebooks. First sale doesn’t apply to digital goods (I believe strongly that it absolutely should, by the way) and fair use rights for the same have been willfully undermined as a consequence, resulting in absurdly, indefensibly high prices. And these are goods made in this country supposedly subject to the fullness of copyright law. Take away even those limited protections, and I think we can all see where this is heading.

All of these possibilities only exist because the courts are trying to carve a legal protection out of copyright that allows publishers to gouge rich markets while also simultaneously charging more reasonable prices in poorer ones. We could all effectively lose our right to resell virtually anything because a publisher wants the law to protect them from their own pricing strategies.

We’ve all had “the benefits of globalization” crammed down our throats the past few decades, and this case puts the lie to those notions. Corporations will readily tell you how great the global economy is as they ship manufacturing to third world countries with no worker protections, minimum wage laws or safety standards, but here, a regular guy finds a way to profit from globalization, and those same corporations are screaming that hellfire, brimstone and economic ruin will descend upon us all if its allowed to stand. If the District Court decision is held, that will be a clear sign that globalization belongs only to corporations and the wealthy. They get all the benefits and profits, while we get all the sacrifices and consequences.

There are two big societal problems made worse by an upholding of Wiley’s case: offshoring jobs and the cost of higher education. I’ve already mentioned how this decision creates a massive financial incentive for businesses to stop trading in American made goods, making a serious problem exponentially worse. The cost of education is, in part, too high thanks to textbook publishers. Territoriality is one way in which they keep textbook prices in the American market artificially high. This decision would also make that problem significantly worse as well. Textbook makers already undermine resale value by routinely producing new editions with little or no substantive changes specifically to prevent students from selling their books for any tangible return. This decision provides a clear path for them to further erode consumer rights; simply print the books overseas and now students lose all rights to resell (or give away) those books at any price.

The potential damage to the public and the overall economy from upholding the District Court decision outweighs the damage done to publishers by striking down the infringement claim defending territoriality by so many levels that even considering it scares the hell out of me.

What better case can be made that copyright is irretrievably broken than this one? The District Court ruling essentially makes copyright unlimited in scope, with manufacturers retaining not only primary sale rights, but also grabbing total control of any secondary markets as well. Considering that expansion of copyright terms has essentially made copyright length infinite (Life of creator plus 70 years. It is certainly infinite for the creator as my copyright wouldn’t expire until several generations after I’ve been dead and buried. And that’s only presuming it doesn’t get expanded again, which only an outright fool would believe won’t happen when Mickey Mouse next approaches public domain) where exactly are the statutory limits on copyright that were the principle element of the protection in the first place?

If the possible consequences weren’t so severe–as in instantly stealing at least half of the value of the goods we’ve paid for, eliminating secondary resale markets, and extorting copyright monopoly rents with additional licenses on products we’ve already paid for, not to mention possibly gutting fair use which could well have serious deleterious effects on free speech–I’d say maybe a decision this inordinately stupid needs to happen so regular people can see clearly how distorted and unfair copyright law has actually become and demand much needed change. But then, I’m opposed to further destroying what little productive economy we have left to make a point about copyright. Unfortunately, our corporate leaders and government don’t seem to agree.

The only logical choice here is to strike down the copyright infringement defense of territoriality. The alternatives do a hell of a lot more damage. I wish I was more confident that SCOTUS will get it right. We can all dream, can’t we? Unless, of course, your dream includes an infringing appearance by a copyrighted character, in which case that nap’ll cost you $150,000.

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