Cowry shells, goats, and geographic restrictions

There’s a massive thread of painful death over at Dear Author about the geographic restriction problem.

Full disclosure: I sold Harlequin world rights, including translation rights, for my books, and they have done a phenomenal job of getting my book out there–and if you want to get an idea of how awesome take a look at this, which isn’t even a complete list–but even though I have been extraordinarily lucky in having a publisher that exercises the rights I’ve granted them, there are geographic delays involved and different pricing levels in different countries, and I’ve heard from readers that this is frustrating.

For those who don’t know, the geographic restriction problem is this: Historically, authors sold rights to territories. You would sell your U.S. publisher rights to publish your book in the United States, a U.K. publisher rights to publish in the U.K., and so forth.

In a world of print books, this just makes sense. It would make no sense to sell a US publisher both US and UK rights, because the US publisher would have no way to publish the book in the UK: no sales force to get the book into bookstores, no warehouse to store books when sent over to make sure they arrived on time, and so forth.

The end result, of course, is that some books would not be published in some territories. English-speakers who happened to live in Thailand would have to resort to expensive importing schemes. But the number of such sales lost would have been small, not sufficient to justify producing a book in the country of choice, and so publishers and authors shrugged–you can’t win every battle.

Enter e-books, and this stops making economic sense. In a world of e-books, you don’t want to slice things up by territory. You want to slice them up by language, so that the book is available in English, everywhere, at the same time, at the same price.

The problem is that we’re still locked in to the old system. Why did cowry shells work, in some parts of the world, as currency? Because people accepted them. And what would someone do if you tried to hand them some useless bits of paper in exchange? Well, they wouldn’t think much of it. And, in fact, if everyone else used cowry shells, you can’t walk in and say, “Hi, everyone, I’d like to buy your goats, and here are these AWESOME things called dollars.”

This is true even though paper currency is more efficient and easier to transport and less subject to being crushed when a goat steps on it.

Some of this problem is caused by authors. Authors want to maximize the amount of money we get, and so authors may only sell a publisher US rights. If the publisher sold the book to someone outside the US, they’d be in violation of their contract, and they don’t want to do that.

Some of this problem is caused by publishers. Some authors do sell publishers rights to world English–and the publisher won’t sell the book outside the US territory, because they know that (1) they can only effectively use the rights in the US (and by “effectively” I mean “both print and digital”); and (2) if they want to get the most money for what they’ve purchased, they want to resell those rights to a publisher in another territory; but (3) they will not be able to resell the rights to a territory if they do not give that other publisher exclusive rights in that territory. So a publisher with world English rights may choose not to release a book worldwide because it believes it will make more money if they try to get someone else to release it in another part of the world.

It’s even worse than I’ve made it out to be because the global consolidation of what used to be national publishers has locked publishers into the territorial divide by contract.

I could not insist in my next contract that Harlequin release the digital version of my book for a worldwide audience simultaneously. Or, at least, I could insist on it–but Harlequin almost certainly could not comply with my demand, even if they really, really wanted to.

I’m interpolating from available facts, but this is my basic idea of how Harlequin works. I sell world rights to everything to Harlequin S.A., a Swiss corporation. Harlequin S.A. then licenses my book to the various foreign arms of Harlequin, one of which is Harlequin Enterprises, Limited, a Canadian corporation–who produces the US edition. I am guessing that these foreign arms are in fact separate corporate entities, and that they are held together in the complex web of “Harlequin, Mills & Boon” by contracts that dictate territorial scope.

If Harlequin Enterprises, Limited, decided that it wanted to release e-books worldwide, it would probably be in violation of contracts it has with Mills and Boon over in the UK as well as Mills and Boon Australia. I’m guessing, but I suspect that there are very firm anti-poaching rules written into these agreements.

I suspect the same thing is true with the US and UK branches of Simon and Schuster, and HarperCollins and so on and so on.

At this point, if you sell your books to a major New York publisher, one that has foreign arms, they are probably bound to respect some foreign publisher’s territory by contract. And so even if you sell your publisher the right to release your book everywhere, simultaneously–they won’t exercise that right, and they probably cannot do so without breaking contracts already in place.

Like I said, this is interpolation: I have not, in fact, ever seen a contract between Mills and Boon and Harlequin Limited or HarperCollins Australia and HarperCollins US, but I can infer their existence on the basis of behavior.

In other words: Even if I wanted to sell something other than cowry shells, my publisher has probably entered into contracts that bind them to sell in units of cowry shells.

This is lock-in: a situation that may not be best for anyone today, but because of the way things arose historically, we’re stuck. At least for now. At some point in the future, when global e-books take off more than they have done now, the contracts between sister arms of publishers are going to start to disintegrate.

None of this problem is caused by readers, and they’re the ones who get stuck in the middle and slapped around and told they can’t buy books they want to buy.

This is definitely a failure. It encourages piracy. It leads to lost sales. It means that people who want to read books can’t. All of those things make me sad.

But I can’t fix this by making demands in my contract. My agent can’t fix this by making demands in my next contract.

I could fix this if I published with an epublisher that releases worldwide. I haven’t done that because I know that I will reach more readers if my books are in print.

And that is my decision–and I do take the responsibility and the blame for it, because it does leave some people out–but I know that I would get as much frustrated e-mail from readers who couldn’t find my book in Barnes and Noble and the grocery store as I would from readers in Thailand.

Courtney Milan writes historical romances, which might lead people to think that she could be cool. In reality, she's about four different kinds of geeky. At present, this blog is where Courtney applies semi-dormant geek skills to publishing.

14 thoughts on “Cowry shells, goats, and geographic restrictions

  1. And that is my decision–and I do take the responsibility and the blame for it, because it does leave some people out–but I know that I would get as much frustrated e-mail from readers who couldn’t find my book in Barnes and Noble and the grocery store as I would from readers in Thailand.

    I made the opposite decision, and my books are widely available in DRM-free format world wide. I make a very nice living…

    …and oh boy, do I get annoyed e-mails from people who can’t get print copies in the size, time & place of their choosing.

    Some day, hopefully, we’re going to have a perfect solution. It’s not here yet. And as much as I love digital-focused small press publishing, it’s certainly not the way to please all of the readers, all of the time.

  2. Thanks Courtney. This clarifies things, at least on the rights front. I do have one question though… I live in Canada and we usually have the print books available at the bookstores on the scheduled release date (printed and shipped from the U.S.) from most publisheers; however, the ebooks are often delayed or not available. In these case, I would assume that territorial “rights” are not the issue. Have you heard of any explanations for this? The explanations from Kobo and Sony are that the publisher has not made these ebooks available for sale in Canada.

  3. Lynnd,

    I have no idea about Canada. I know, for instance, that electronic sales of my Christmas anthology last year were…. let’s say, sluggish in Canada. In fact, let us say it was sluggish to the tune of six slugs.

    It was available. But I’m not really sure where or how or to whom.

    One possibility that is pure speculation on my part is this: US agency pricing (something that’s only legal in the US due to the change of law on resale price maintenance by the Supreme Court a few years ago) might conflict with Canadian law.

    Resale price maintenance (of which agency pricing is a variant) isn’t illegal in Canada either (although it used to be), but it’s more heavily policed for anticompetitive effect than it would be in the US.

    So–pure speculation–I am not convinced that agency pricing is compatible with selling books in Canada, depending on whether the agency pricing agreements require across-the-board pricing.

    One way to test whether this is true would be to see if it’s the Agency 5 whose books are mainly unavailable. Can you get Harlequin and Random House ebooks in Canada? How about Penguin or Harper Collins?

    If the publishers who aren’t making the books available are the same as the Agency 5, that would at least imply an answer. If they aren’t… I’m back to square one, and I’ve got nothing.

  4. This was pretty much what I expected was the case with global corporations: they can make matters worse, not better. Thanks for the clarification!

    Because of rather unique circumstances and the fact that I have no dependents to feed, I’m choosing to self-publish or go with a smaller independent press for now. If I lived in an expensive city or had more mouths to feed, I would be more tempted to search for a traditional publishing contract.

    All I can say is that publishers really, really need to move on this. The percentage of the public that reads regularly is already small and in decline; the last thing they want to do is alienate those who want to buy books at a high frequency.

    Bree/Moira: I was interested in hearing that you manage to make a living using a publisher who has no geo-restrictions. Now I’m going to try your Southern Arcana series. 🙂

  5. Thanks for the response Courtney. I’m sorry to hear that electronic sales of This Wicked Gift didn’t do very well in Canaada, but I think that (hopefully) this might have more to do with the slow development of the ebook market in Canada and the resistance of many in the Canadian publishing and literary establishment to ebooks in general. I think that the release of the Kindle in Canada and the Kobo reader last May is starting to make a huge difference in the electronic book market. Hopefully your ebook sales in Canada will improve soon – I’m making what small contributions I can to that effort :-).

    With respect to delays in ebook releases, it is the agency 5 that are the problem (no surprise there), but the delays aren’t consistent across the agency 5 or even across the publishers. For example, I have been able to buy some ebooks from Harper Collins and Penguin on the release date (or shortly thereafter) at Kobo, Sony and Books on Board, but others from the same publisher are shown as “Not Available in Canada”. I have also seen delayed releases from Kensington/Zebra. This would lead me to believe that it isn’t necessarily a Competition Act problem but that there is something else going on – and it may be the small size of our market that is the problem (we don’t count in the numbers). I wish that the powers that be would provide a reasonable explanation so that I could direct my complaints to the proper source.

  6. Thank you very much Courtney for clarifying the geographical restrictions situation. I thought it was a mess before – now I know it is 🙂

    I live in NZ…and while I don’t buy any mainstream romances in eBook format (I borrow them from the library and purchase nonmainstream books as eBooks from smaller publishers with worldwide rights 🙂 I have two friends who do and who are beyond frustrated with the situation. One friend isn’t well, and so eBooks are far easier for her to read than print. It sounds to me like the various publishing arms of a corporation need to sit down and hammer out a consensus on worldwide eBook distribution. But, I guess they won’t do that until they realize (or are made to realize) the number of sales they are losing with the current system. And whether sales outside North America actually matter.

    On a slightly separate note, Nalini Singh’s books have just been released in NZ. Nalini lives (and writes) in NZ, but her books have only just been released here. Which is riduculous. If NZ law didn’t allow for the importation of overseas books (and places like Amazon didn’t permit me to buy them) I wouldn’t be able to read the books of someone who lives in…well, my backyard!

    It seems like someone in the publishing industry needs to take a step back and realize the current system doesn’t work any more in today’s global market. *gets off soap box*

    Thank you again 🙂

  7. Thx for clarifying this complex issue and at the same time understanding that we readers are “stuck in the middle and slapped around and told [we] …can’t buy books [we] …want to buy”.

    I buy books from the eHarlequin website using my actual Australian address and don’t seem to have any trouble with geo restrictions there, even though the same books might be available at the Australian Harlequin site too (I don’t know, as once I’ve bought the book I don’t need to go elsewhere of course!) Harlequin seem to have their act together more than other global publishers – I think that is because they tend to see the reader as their customer more than other publishers who see their customers are wholesalers and booksellers.

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