And For Those Not Thoroughly Sick Of The Topic

July 31st, 2005 · 5 Comments
by Booksquare

In our proposal for adding a small levy to every used book sale, we noted that other models for this type of fee exist. Many countries in the world assess a fee on blank media, assuming that these items will be used on copyrighted materials. The basic theory is that blank CDs or DVDs will be used to copy material from television, other CDs, or media. The levy mitigates lost revenue from this copying.

And while it’s not exactly the same thing as selling a book on the secondary market, it is a model. Oddly enough, this is not our point. A recent CBC story discusses a recent court decision in Canada that abolishes this levy on MP3 players, like iPods. The Canadian Private Copying Collective argued that the fee was appropriate because they believed the devices were used to create illegal copies of material.

It’s an interesting argument, but we can see why the courts didn’t buy into it. The devices in question don’t actually create the copies — they’re no different than a DVD player in this respect. Nor can most of these devices (actually, any of these devices from what we know) take direct input from source material and convert it to MP3 format. As far as we know, they are not capable of taking direct downloads from Internet sites. In this case, the map is not the territory.

File Under: Square Pegs

5 responses so far ↓

  • Bob // Jul 31, 2005 at 8:19 pm

    I have to respectively disagree on this point. An author already has collected a fee (hopefully) on the initial sale of the book to the consumer. It, the physical book, is the property of the consumer and theirs to do with as they wish. If that wish is to sell it and recover some of their investment, then is that not their right? If you say “no,” then you need to be careful for what you wish. There is a very slippery slope ahead.

    If their wish is to give it away after they have read it, is that not also their right? Yes, of course it is. But, would you also charge a small transaction fee for that as well? If so, how would you collect it?

    Alternatively, what would you do to the book collector who bought a first edition collectible? Charge a small transfer fee for the sale of that book? I would hope not.

    If you would charge a transfer fee for a gifted book, would you charge one for a loaned book? How about a library book?

    Would it not be fairer and simpler to calculate a percentage for books which are re-sold and then include the fee for that re-selling as a part of the original price and as a part of the author’s compensation as well? Same for records, CDs and other media. Include compensation as a part of the price for the item when original;y sold. So much simpler. So much neater. And, no one would complain.

  • Booksquare // Aug 1, 2005 at 11:54 am

    I’m not sure that increasing the price would be the answer (I have thought about originating the charge at that point — haven’t been able to figure out a good way to do this). This does place some burden on the original consumer for the actions of subsequent consumers. I’ll need to see if I can wrap my thoughts around this idea. Again, I’m not denying the right to resell media (though I would argue strongly against the right to resell media acquired free, but that’s another issue entirely).

    The compensation system for artists in other media anticipates payments for future uses of their work. Residuals are paid on subsequent television runs, video sales, etc. in the motion picture industry. In the music business, artists receive performance royalties and songwriting royalties, depending on their roles and the use of the material. In the publishing world, only that first sale is compensated, despite the fact that the book could pass through various hands.

    For what it’s worth, you are already paying for additional residuals and royalties in other media, either through endless commercials or increased prices due to payments to ASCAP or other organizations. Barws, for example, pay these fees. Your drink prices are fixed to cover this cost.

    I would distinguish between gift-giving and for-profit business, clearly. As for libraries, I am of two minds there. The first being that libraries purchase a lot of books which is a strong plus for authors. The other is that sales are lost due to library borrowing (Canada has adjusted for these lost sales). I’m not sure what approach makes more sense, but I am turning the idea over in my mind. That is the beauty of just thinking —

  • Bob // Aug 1, 2005 at 8:24 pm

    The current method of royalties and performance fees lends credence to my suggestion, as does the thought that Canada already adjusts for library usage. It would not be too difficult to come up with an economic model which reflects forms of compensated exchange for books sold on the secondary market and then to apply the resultant formula for author compensation and adjustment of primary retail pricing.

    The record keeping required to account for legitimate secondary sales and borrowings at libraries would probably result in prohibitive costs for the entrie process and collapse the entire legal secondary market.

    You should also consider that much of the used book trade consists of trade/barter transactions where no cash is exchanged. For example, you trade two used books to me, and I sell you one, at the same price you received for the two…net cash exchange is 0. Otherwise, used book stores could not make money at all. In fact, they depend upon a net of paying customers to make up for the non-cash exchanges necessary to populate their shelves. The actual volume of books exchanged in a used book store could well be 2 to 3 times the volume that moves on the basis of outright purchase some days. Most likely, in a profitable used book store, the ration is somewhere between 1.5 and 1.8 books exchanged for every book sold. That is a lot of record keeping. For no compensation.

    Another factor to consider…compensation after copyright expiration. That would further complicate the record keeping and policing of the process. Which, by almost any measure, would be virtually impossible.

    Good luck in thinking it out.

  • Booksquare // Aug 1, 2005 at 9:40 pm

    Bob — Thanks for responding. You’re right on a few points, though the current royalty model relates to compensation for the secondary market. My mental barrier to your suggestion relates to the idea that increasing costs for the initial consumer bothers me. As to the barter situation, it’s a tough one, I admit. From an accounting perspective, barter transactions are treated as revenues, despite the lack of cash. From a business perspective, lack of funds changing hands is an issue. I do have a flexible mind and believe the more ideas tossed out, the better the solution.

    I did, if you followed the “droit” link, suggest that a portion of the levy be retained by the booksellers to cover their increased overhead. I realize the the biggest barrier is their buy-in, if this should come to fruition and become law. There will be administrative costs and they shouldn’t be put entirely on one party. My suggestion is not a perfect model, because no matter how I view it, there will be unhappy parties, whether they be booksellers, authors, or publishers. Note: I haven’t even explored my thoughts on distributing this theoretical money. I will say that entities like Amazon are better positioned to accomodate this type of proposal, and those booksellers who utilize Amazon to expand their market are as well. Such is the beauty of databases.

    Your thought about compensation after copyright compensation is interesting, because it’s a real concern. Though, given current copyright law, it would not directly affect artists. There are a couple of things happening here. First, is what to do with funds after a copyright ends. My thought is that money should revert to the “public domain”. By that I mean, the funds should go to furthering defined industry-related causes (I won’t define said causes here because my personal favorites might not work for everyone). I’m a big believer in the public domain.

    The second concern for me is the fact that artists in all industries don’t actively update their mailing information. This, actually, is a big deal. Though there is a level of bureaucratic ineptness when it comes to finding “lost” artists, there is a larger level of “I don’t care” behavior on the part of artists. They move and don’t properly notify their publishers (guilds or labels or whatever). Keeping these type of records up-to-date is, necessarily and contractually, the responsibility of the artist. However, if a single entity were to aggregate and distribute funds, keeping accurate records might be made easier for all parties.

  • Bob // Aug 2, 2005 at 10:10 am

    I agree with your concern for an increase in cost to the consumer. However, I am willing to bet that, at least until the internet became a “transfer” agent for used items, that the nmbers of books being sold on the used market were small enough to make the increase in cost relatively low.

    Now, one final point, though it may be purely philosophical, The implication of paying an artist’s fee on resales implies that I do not own the item I purchase. If that is the case, then how long would it take for another industry to find a creatively legal way to say that I should pay them a fee when I transfer ownership of an item that I purchased from them or their agent…say an item such as a painting, photograph, an idea, a design, a house, etc.? Seems to me that, if I purchase an item, I am purchasing ownership (at least within certain legally defined construct) of that item. Not contingent ownership.