Dim Prospects Seen for Future Of U.K. Territorial Rights
Gayle Feldman -- 6/29/98
Richard Charkin, new CEO of Macmillan U.K., and Knopf v-p and rights director Carol Janeway both saw dim prospects for the preservation of the U.K. as a separate rights market for U.S. titles, in speeches they made at a well-attended day-long conference sponsored by the New York University Center for Publishing, June 18.
The conference, to discuss the present state of the European book market and future prospects for U.S. publishers wanting to do business there, also included a tantalizing glimpse at some Bertelsmann plans provided by Seth Radwell, who recently signed on as v-p and general manager of the U.S. division of Bertelsmann Online.
Charkin was less than sanguine about U.K. publishers' prospects in the fight to preserve traditional territorial rights, predicting that "in 2010 there will not be any territorial integrities... Ireland will be next to go [after New Zealand's recent decision to allow parallel importing]. The U.K. will lose the battle, and it will be of huge value to U.S. publishers. It will be really difficult for medium-size U.K. publishers unless they increase the amount of local publishing they do."
Taking on the long-running serials pricing controversy, Charkin called scientific journals "a cancer" eating up library budgets, and declared that "the typical archival scientific journal has peaked; the business can't continue as such, it has to change." This, too, will have implications for trade publishing, because of the "cross-subsidization between sci-tech profits and trade profits within the same corporation."
On global publishing implications of the Internet, Charkin asserted, "we're way behind in educating our marketing departments on how to use it. The level of ignorance is extraordinary." But Internet retailing, he added, was definitely not the publisher's domain -- apart from Bertelsmann. "I personally think Bertelsmann Books Online is a bigger deal than their acquisition of Random House -- if they get it right."
Seth Radwell, who used to head the Prodigy Shopping Network, is one of the people recently hired by Bertelsmann to do just that. Radwell said the Web site would be launched in September in the U.S., U.K., Germany, France, Spain and the Netherlands. It will be in five languages, and "will be very different from others. We're ultimately a book company, and our relationships with book clubs are very deep." Radwell asserted that the Bertelsmann recommendation engine will be more sophisticated than Amazon.com's. Finally, he predicted that "the leading players, whether books in shops or books being sold online, will achieve price parity."
Youngsuk Chi, senior v-p of product services at Ingram Book Group, also spoke about changes in pricing-not retail pricing, but pricing vis-a-vis rights sales. "You have to debundle your pricing on a country by country basis," he advised. Chi said American companies wanting to play in Europe have to "get big, get niche or get out." They have to have a "multi-local" mentality and understand the needs and tastes of local readers before they can play the game.
The U.K. "game" provocatively described by Carol Janeway was not unlike Charkin's, but its future shocks were if anything greater. After the "draconian downsizing" of the last 10 years, the British book trade "came out fighting" last year. But "unless U.S. publishers own U.K. subsidiaries," she said, "there's little incentive to police territoriality. The worst-case scenario is that in five years, the U.K. will become an export market and cease to be a licensing market."
Janeway was also gloomy about Germany, the key European market. "For the first time since World War II, there has been a percentage decline in the German book market. German publishing is suffering a wasting infection, and will undergo something like Britain until 2003 if the Euro works. If it d sn't, [the infection] will be tougher and longer."
Peter Mayer, president of Overlook Press and former CEO of Penguin, pointed to the small fraction of literature in translation published here each year, fulminating that "as a consequence of U.S. domination of the media, it is we who are getting impoverished. There's an increasing parochialization of culture here, a very dangerous imbalance between what we take in from abroad and what we give out."
Be that as it may, looking to the shorter term, Janeway predicted, "The next five years will be wild, but none of us will die of boredom."
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