Book Industry Collaborative Council

FINAL REPORT
The material contained in this report has been developed by the Book Industry Collaborative Council. The views and opinions expressed in the materials do not necessarily reflect the views of or have the endorsement of the Australian Government or of any Minister, or indicate the Australian Governments commitment to a particular course of action. The Australian Government accepts no responsibility for the accuracy or completeness of the contents and accepts no liability in respect of the material contained in the report. ISBN: 978-1-921916-97-7 (web edition)
Except for any material protected by a trade mark, and where otherwise noted, this copyright work is licensed under a Creative Commons Attribution 3.0 Australia licence. To view a copy of this licence, visit: http://creativecommons.org/licenses/by/3.0/au/.
BOOK INDUSTRY COLLABORATIVE COUNCIL
Contents
Membership of the Book Industry Collaborative Council Terms of Reference Foreword Executive summary Introduction: Adapting to change Priority issues: Areas where reform is needed Copyright Data Distribution Exports Lending rights Scholarly book publishing Future skills strategy Strategies to improve capability Copyright Data: Models for industry data collection Distribution Exports Lending rights Scholarly book publishing Future skills strategy Implementation Copyright Data Distribution Exports Lending rights Scholarly book publishing Future skills strategy The book industry and Australian culture Towards a sustainable industry leadership body Rationale Role and functions Structure Financing Progress towards establishment Conclusion Copyright Expert Reference Group Executive summary Background The Copyright Expert Reference Group Purpose and structure of this paper Part One: Copyright and the book industry Copyright regulation in Australia Understanding the regulatory framework and its impact on copyright content Global trends in copyright regulation
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Part Two: Extracting value from copyright in a changing environment Views of various participants in the supply chain Principles Case studies Conclusion Data Expert Reference Group Executive summary Overview Background Data Expert Reference Group Current data collection approaches International approaches Seeking a new approach Identifying data needs Data collection options Data sharing principles Framework Models for data collection Implementation plan Recommendations Distribution Expert Reference Group Executive summary Immediate actions include: Medium to long-term change requires: Part One: Gaining perspective Why distribution efficiency matters The Distribution Expert Reference Group Purpose of this report Understanding the book distribution system Challenge and opportunity Part Two: Framing a solution Book Distribution Efficiency Framework Barriers and potential solutions The future Export Expert Reference Group Executive summary Background The Export Expert Reference Group Issues Challenges and opportunities Outcomes The way forward Conclusion Appendix 1 - Rights, co-editions and export income and activity survey Introduction
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Survey results Appendix 2 - Rights, co-editions and export case studies Rights Rights author with international agent Co-Edition Export Initiatives Lending Rights Expert Reference Group Executive summary Part One: Defining the issue Ebooks in libraries About the Lending Rights Expert Reference Group Purpose of this paper Part Two: Current models for ebook supply to libraries Part Three: Finding solutions Principles for consistent models for supply of ebooks to libraries Framework for a digital lending right Part Four: Next steps Recommended actions References Appendix A: Stakeholder consultation Appendix B: Current models for supply of ebooks to Australian libraries Scholarly Book Publishing Expert Reference Group Executive Summary Introduction 1.1. About the Scholarly Book Publishing Expert Reference Group 1.2. Purpose of this position paper 1.3. What is scholarly book publishing? 1.4. The role and benefits of scholarly book publishing The state of play 2.1. Key stakeholders 2.2. Current business models 2.3. Funding sources 2.4. Challenges and opportunities 2.5. Emerging business models
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A way forward Conclusion References
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Acknowledgements Appendix A: Submissions in response to the SBP ERG survey
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Appendix B: Definitions from the Higher Education Data Collection 2013 Specifications 227 1.3.10. Research 227 1.3.12. Research publications 227 9.3.1. Books 227 1.3.4. Commercial publisher 228
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1.3.9. Peer review 9.6. Peer review Appendix C: Disciplines represented by the Learned Academies The Australian Academy of the Humanities The Academy of Social Sciences in Australia Skills Expert Reference Group Executive Summary Part One: Gaining perspective Why skills development is a priority The Skills Expert Reference Group Current status Challenges and opportunities Part Two: Framing a solution Industry Development Framework Part Three: Realising the benefits Engaging stakeholders Next steps Appendix 1: Current training and development activities
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Membership of the Book Industry Collaborative Council

The membership of the Book Industry Collaborative Council (BICC) comprised representatives from peak book industry associations and experts in fields related to the book industry, including digital communications, research and copyright. Chair Professor David Throsby Department of Economics, Macquarie University Deputy Chairs Ms Louise Adler Melbourne University Publishing Dr John Byron Faculty of Humanities, Curtin University Authors and agents Ms Sophie Masson Chair, Australian Society of Authors Ms Sophie Hamley President, Australian Literary Agents Association Book publishers Ms Louise Adler President, Australian Publishers Association Ms Gabrielle Coyne Penguin Australia (to October 2012) Ms Lou Johnson Simon & Schuster Australia (from November 2012) Dr Nathan Hollier Monash University Publishing Booksellers Mr Jon Page President, Australian Booksellers Association Mr Bill Concannon Mary Ryans Books Book printers Ms Susan Heaney President, Printing Industries Association of Australia Mr Ben Jolly Griffin Press Copyright Mr Nicholas Pullen Partner, HWL Ebsworth Lawyers Libraries Ms Margaret Allen Australian Library and Information Association Ms Evelyn Woodberry Chair, Public Lending Right Committee Research Dr John Byron Faculty of Humanities, Curtin University Telecommunications and the digital economy Mr Paul Budde BuddeComm Unions Ms Lorraine Cassin Australian Manufacturing Workers Union
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Mr Christopher Warren Media, Entertainment and Arts Alliance Ex-Officio member Dr Anne Byrne Department of Industry, Innovation, Climate Change, Science, Research and Tertiary Education
BICC dates of operation: 1 July 2012 to 30 June 2013
Terms of Reference
The terms of reference given to the BICC were to: 1. 2. 3. 4. 5. 6. Give advice to the Minister on the priority issues for the book industry. Oversee implementation of the industry-led reforms identified in the Book Industry Strategy Group report and ensuing Government response. Identify strategies across the book supply chain that increase industry capability and competitiveness and communicate these to industry and government. Develop, communicate and monitor implementation plans for identified industry-led reforms. Build strong productive relationships and linkages with other bodies and assist in bridging any divide between business and research. Identify options for the establishment of a sustainable and independent industry body which can address issues of standards and competitive improvement in the Australian book supply chain.
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Foreword
In 2010, the Australian Government established the Book Industry Strategy Group (BISG) and asked it to identify the key priority issues for addressing the need for structural change across the industry supply chain and to recommend appropriate actions to be taken to meet emerging challenges. The BISG identified 21 recommendations for industry reform and presented these to the Government for consideration. One key recommendation from the BISG was for continued collaboration among the sectors of the book industry supply chain to address those challenges that were best approached through cooperation within the industry. In response, the Government established the Book Industry Collaborative Council (BICC) for 12 months to provide industry leadership and develop practical implementation plans to progress the issues identified by the BISG. Guided by the findings of the BISG, the BICC began its work by defining seven priority areas and establishing Expert Reference Groups (ERGs) to consider the issues and to propose forward-looking strategies for industry progress in each of these priority areas. The seven ERGs were set up in the following areas, listed in alphabetical order: Copyright Data Distribution Export Lending rights Scholarly book publishing Skills
The ERGs were chaired by members of the Council, and their membership was drawn from key experts in each field from across the industry and beyond. The full membership of the ERGs is shown in Part II of this Report. This report presents the outcomes from the BICC process. Its purpose is five-fold: 1. 2. To report on the achievements of the BICC and its network of Expert Reference Groups to the Government and industry. To provide information to the industry on key areas where adaptation in response to the challenges facing the industry is required and where opportunities exist for innovative initiatives at various points in the supply chain. To identify specific actions which can be adopted and progressed through industry-driven initiatives once the BICC and ERG networks have completed their term. To emphasise the importance of the book industry to Australian culture and to show that the cultural and creative benefits of Australian books go hand in hand with the industrys economic contribution to output, incomes, exports and employment. To provide an authoritative reference source for issues related to the Australian book industry for use by business, government, journalists, students and other interested parties.
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This report comprises two parts. Part I contains the final report of the BICC, which responds to the Councils terms of reference and provides a blueprint for industry reform. Part I is addressed to Government, the book industry at large and the general public. Part II of this Report contains the full ERG Reports. This second part is addressed particularly to the industry, to its peak bodies and to individual businesses both large and small. It contains a great deal of detail in each of the priority areas that will be of interest to authors, publishers, agents, printers, booksellers, libraries and book buyers.
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The BICC expresses its appreciation for the wide-ranging contribution and commitment of the members of the ERGs and of other individuals and organisations across the book industry in the completion of the BICCs task. Council also acknowledges with gratitude the professionalism and hard work of members of the Book Industry Team in the Department of Industry, Innovation, Climate Change, Science, Research and Tertiary Education. Thanks are also due to Dr Jan Zwar of Macquarie University who contributed extensively to the final content and drafting of this Report, and to Laura Billington in the Department of Economics at Macquarie who assisted in editing and formatting.
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Executive summary
The emergence of digital technologies and the subsequent influence of the internet have together brought about profound changes in the nature of the global book industry. The advent of large multinational corporations such as Amazon and Apple into the global book market has fundamentally affected the way the supply chain operates, especially in English-language territories such as Australia. The balance between consumers and suppliers is shifting and the influence of the traditional large players is diminishing or, at least, changing as new rules of global engagement emerge. Over the last few years, the traditional parameters that have guided the creation, production, distribution, lending and sale of books have undergone radical and rapid transformation, as the influence and momentum of new production technologies, internet commerce, online communication and social media have accelerated. These developments have affected all stages in the book supply chain, from writer through to reader. As a result, the book industry must be prepared to adapt in order to thrive in an increasingly digital environment. Why should we be concerned about the book industry? There are two principal reasons. Firstly, it is an economically significant industry that makes a major contribution to the Australian economy, measured across the whole supply chain in terms of output, incomes, value added, employment and exports. Secondly, and in many respects more importantly, it is one of Australias most prominent cultural industries. In the wide-ranging scope of contemporary Australian cultural life, books play an indispensable role. Australian books reflect who we are as a nation, where weve been and where we are going. They stimulate debate and informed discussion of public issues in Australia and beyond, and are a primary vehicle for the production and dissemination of Australian content across all genres. And they are particularly important in educating our young people about the country and the society in which they are growing up and whose future development they will help to shape. The Book Industry Collaborative Council (BICC) was set up by the Australian Government in 2012 to identify priority issues facing the book industry in times of far-reaching technological change, and to recommend appropriate actions to bring about the structural reforms needed to meet these challenges. Seven priority issues were singled out for detailed attention: copyright; data; distribution; export; lending rights; scholarly book production; and skills. Corresponding to each of these areas, the Council set up seven Expert Reference Groups (ERGs). The membership of these Groups was drawn from key industry players with particular experience and expertise in each field; their tasks were to investigate the priority issues and put forward strategies for meeting the industrys challenges. The outcome of the BICCs work, informed by the reports from the ERGs, has been to develop a blueprint for industry reform that relates to all sectors of the supply chain. The Councils most significant conclusion is that a fundamental cultural change is necessary right across the supply chain a change that will allow the industry to prepare for active transformation and to be open to the opportunities that such transformation will bring. Furthermore, the BICC has determined that to manage the process of change, collaboration and cooperation across sectors must be seen as a key priority if the industry is to survive and prosper in the turbulent years ahead. Council sees it as the responsibility of the industry itself, with the full engagement of the peak industry associations, to ensure that the actions arising from the BICC process are put into effect. How are the needed transformations to be brought about? To begin with, an industry-wide approach to achieving distribution efficiencies will be necessary, focussing on a variety of measures including reducing handling and further exploiting economies of scale along the supply chain; a collaborative approach to parallel importation restrictions; engaging with Australia Post to secure a volume-based discount; advocating that the government lobby for a terminal dues increase with the Universal Postal Union; and cooperation between publishers, parent companies and international partners to develop more efficient global critical paths. These measures are based around the principles of speed-to-market, availability and value principles that place the consumer at the heart of business decision-making. A detailed program has been drawn up specifying actions that the industry associations must take in order to implement the measures as recommended.
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We noted above that the Australian book industry is operating in an increasingly global environment. While this presents obvious challenges, it also offers considerable opportunities for the industry to engage more actively in international markets, particularly in our region. Books provide unique Australian content that no other country can supply. Council recommends an industry-wide approach to export development that leverages grants and other support provided by government to assist industries to realise their export potential. An export strategy for the Australian book industry needs particularly to be focussed on identifying new and emerging markets, promoting Australias presence at international book fairs, and establishing training programs to support digital export initiatives. Mention of training raises the broader issue of skill development to support industry adaptation and growth. It is important that members of Australias book industry can provide the leadership and technical skills which will underpin the industrys survival and success. A skills strategy has been developed which places strong emphasis on management training in order to promote industry- and enterprise-level leadership in the competitive digital environment. Practical mechanisms have been mapped out to improve industry skills in management, in marketing and communication, and in the use of digital technologies. Decision-making at all points in the supply chain needs reliable, timely and comprehensive data. The Council identified a clear need for improved collection of industry data to cover areas of activity which are undocumented at present such as ebook sales, online book sales, direct book sales from publishers, and book sales from non-traditional retailers. An important outcome from the BICC process has been a set of proposals for industry-wide cooperation in the collection of core data requirements. The next step will be to develop and implement a data-sharing agreement. Over time these various initiatives in regard to data will begin to close existing gaps in the availability of representative industry statistics, and greatly enhance the capacity of all industry stakeholders to make well-informed decisions. The publication of scholarly books, like other areas of publishing, is undergoing change as ebooks become more prevalent as a form of publication for academic research-related material. Digital publication opens the way for researchers, if they so choose, to make their books available on an open-access basis. As a result, it is likely that the current blended system of business models in Australian scholarly publishing will continue to evolve, with an array of wholly and partly commercial and open-access publishers. Strategies to advance the scholarly books sector, which is so vital in disseminating the results of Australian research and scholarship to ourselves and to the world, include the development of clearer pathways for supporting book publication via research funding channels, and raising the standing of electronic-only publication in academia. An important avenue for meeting the needs of book users is through the library system, at levels ranging from the great national and state collections to libraries serving local communities. One of the most difficult issues confronting libraries in the present environment is how to adapt to the increasing numbers of books being supplied in electronic form. Through the ERG, the Council has developed a set of original and innovative principles for the supply of ebooks to libraries. These principles provide guidance for individuals and enterprises in this area, and inform models of consistent practice. A corollary to this issue is the question of how to account for ebooks in public and educational lending right schemes. A framework for a digital lending right is proposed whereby ebooks could be included in existing or separate schemes. An area that impinges on all aspects of the Australian book industrys operations is copyright. The BICC recognises the importance of an effective copyright regime that provides appropriate balance between the rights of authors and publishers to be remunerated for their creative efforts in producing copyright works, and the needs of users for orderly access to these works. The Australian Law Reform Commission is conducting an inquiry that focuses on the use of content in the digital environment. More generally, the Australian Copyright Act provides a regulatory framework whereby the necessary balance can be achieved. However enforcement of the Act leaves much to be desired; rightsholders and users need to be provided with improved capability to assert and defend their rights and to seek redress for infringement.
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We have stressed the importance of industry-wide collaboration to the future of the book industry. Traditionally, each part of the supply chain has seen itself as independent, without meaningful reference and consideration of issues along the supply chain that impact on the industry as a whole. The Australian industry needs to identify those issues where working together is likely to achieve better outcomes for the entire industry and put in place the requisite structures to facilitate more cooperation. There has been unanimous agreement amongst the members of the BICC that a collaborative basis on which to meet the various challenges facing the industry is not only productive but also essential to further progress. In this regard, one of the most important terms of reference that the Government asked the BICC to respond to was to assess options for movement towards a self-sustaining industry body to carry through reforms needed across the supply chain. The BICC addressed this task with vigour and determination. After lengthy consideration of a range of options, Council determined that an industry body, entitled the Book Industry Council of Australia (BICA), will be established to carry forward the work program identified by the BICC in this Report. The structure and functions of the new body have been determined, and a process agreed upon for its establishment. The new body could also be set up under an alternative government-supported arrangement for book industry advancement, if the government so desired. The Book Industry Collaborative Council urges the Australian book industry to consider the farreaching measures outlined in this report and to begin the process of implementing the various reform strategies that we have identified.
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PART I
THE BOOK INDUSTRY COLLABORATIVE COUNCIL FINAL REPORT
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Introduction: Adapting to change

Digitisation and the rise of internet commerce have fundamentally changed the interface between supply and demand for books, and the Australian book supply chain is now competing in a global marketplace. Consumer preferences are evolving in response to these technological imperatives, with consumers choosing to access and read books in new and rapidly changing ways, expecting speedy delivery and competitive pricing, and using technology to work around territorial systems which restrict access to books in other markets. These developments have affected all stages in the book supply chain, from writer through to reader. As a result, the book industry must be prepared to adapt in order to thrive in an increasingly digital environment: bookshops have no choice but to compete with global online retailers; printers have to continue investing in the capability and capacity to deliver print on demand and support the changing requirements of consumers and publishers, as well as providing other services that will enable them to remain relevant in a multichannel information and communication world; authors need to leverage the opportunities of digital media across all book genres; publishers must adapt their business models to encompass new and evolving format types and routes to market; and libraries are obliged to provide access to electronic as well as print resources. As the forces of globalisation intensify, the Australian industry can no longer rely on the protections previously afforded to it by geographical and territorial boundaries. The industry must evolve to adapt to this transformed market, developing new business models in order to remain competitive, meet the needs of consumers and capitalise on the opportunities offered by the global marketplace. The way forward for the industry is to be consumer focused this emphasis is a necessary shift in the industrys outlook. A considerable amount of adaptation has already taken place. Some amalgamations, mergers and acquisitions have occurred, aimed at improving competitiveness and profitability. New business models are emerging, including the adoption of new distribution systems. A number of efficiencies have been adopted across the supply chain in recent years, including further investment in technology and capacity, a higher level of automation by booksellers, and greater automation and consolidation of the major book distributors. However, notwithstanding these adaptations, the Council is of the view that fundamental cultural change is necessary right across the supply chain a change that will allow the industry to prepare for active transformation and to be open to the opportunities that such transformation will bring. Cultural change is necessary to deliver innovation and flexibility. Collaboration across sectors, while recognising the commercial imperatives of individual businesses, has been identified as a key priority for the industry to survive and prosper in the turbulent years ahead. Continued cooperation and collaboration between sectors will be necessary to manage these change processes. At the same time, the BICC recognises the enduring contribution of the book industry to Australian cultural life. It is an industry that brings both economic and cultural benefits to our society. Australian-produced books are indispensable to our culture, our society and our creativity. They are particularly important in educating our young people about the country and the society in which they are growing up and whose future development they will help to shape. For all these reasons and more, the continued growth of a healthy, dynamic and sustainable book industry in this country is vital for our future. In line with the terms of reference given to the Council, this Report sets out priority issues where reform is needed, identifies a range of strategies for dealing with the challenges the industry faces in each of these priority areas, and provides a detailed set of recommendations to the industry for carrying these strategies forward. One of the most encouraging outcomes from the BICC process has been the degree of collaboration and cooperation shown by all sectors of the industry in coming together to address the issues and to seek solutions. It is imperative that this spirit of engagement across the whole supply chain be maintained into the future. Accordingly, one of the BICCs most significant actions has been to establish an industry body, entitled the Book Industry Council of
Australia, to take effect immediately on an interim basis and to be fully established as soon as a preparatory process has been completed. Isobelle Carmody, a well-known and internationally-selling novelist for young readers, decided to republish one of her earlier books, Greylands, which was out of print, as an ebook. She launched it with an imaginative micro-site that also featured The Great EBook debate: daily essays from a range of international book industry luminaries (although the site is now closed, some information is available at: http://greylands.theslipstream.com.au/index.html). Isobelle's initiative bore great fruit, with the print rights to Greylands bought by Ford Street Publishing, and audio rights by Bolinda Audio. A book that had been out of print now became available in three editions, thanks to this initiative. The Great Ebook Debate is archived at: http://theslipstream.com.au/category/great-ebook-debate/
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Priority issues: Areas where reform is needed

The BICC began its work by identifying a number of priority issues and areas where reform is needed, arising from the BISG report. All the key issues that Council identified need to be urgently addressed, and it is impossible to put them into any priority order. Accordingly, in this report these issues are treated simply in alphabetical order. The following is a brief summary of these priority issues: Copyright is an overarching priority issue for the Australian book industry that ramifies through all sectors of the supply chain. A key issue is identifying where intervention is needed, and what forms of intervention are effective in a rapidly changing world. There is a clear need for improved collection of industry data to cover areas of activity which are undocumented at present (for example, ebook sales, online book sales, direct book sales from publishers and book sales from non-traditional retailers). Better and more comprehensive data would also enable the Australian industry to more effectively benchmark its performance against overseas industries. An important theme of this report emphasises opportunities to build on existing improvements to distribution, based around the principles of speed to market, availability and value. A cultural change is proposed to shift the industrys models of distribution from a traditional focus on the start of the supply chain to an inverted model: a transformational opportunity to place the consumer at the heart of business decision-making. Measures to promote exports of rights and books (print and digital) are necessary if Australias book industry is to survive and prosper. While the industry has been a quiet achiever in terms of export success, a new global orientation is required, and this needs to be accompanied by awareness of new, emerging markets for Australian content and the development of new skills and knowledge to establish an Australian industry presence in non English language markets. It is essential that the problems caused by the myriad of business models for supplying ebooks to libraries be addressed. Furthermore, enhanced collaborative approaches between libraries, authors, distributors and publishers are necessary to help with the inclusion of ebooks in public lending rights schemes. The Australian scholarly publishing sector presents some particular challenges. Scholarly books perform an important public, democratic function within society, by advancing social development through improved specialist knowledge of cultural and social issues, and also by promoting public knowledge, thinking and discussion. However, business models relating to the costs of publication, which are a critical part of the scholarly process, are under increasing pressure. Finally, the Council recognises the importance of skills development so that members of Australias book industry can provide the leadership and technical skills which will underpin the industrys survival and success. A key message here is that the industry should recognise the need for change in approaches to skill development and be willing to achieve it across the supply chain, even in the context of commercial pressures and conflicts.
All of the above priority areas intersect. For example, skills development strategies are needed for advancing cross-promotion of Australian content on multiple platforms and in new export markets. Likewise, the industry must have improved data in order to develop distribution systems that place consumers needs at the centre of their operations. As noted earlier, each of these priority areas was considered in detail by the Expert Reference Group (ERG) process. The priority issues themselves are discussed further in the following sections.
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Copyright
The role of copyright in supporting creation and dissemination of content, particularly in the online environment, is subject to debate in Australia and elsewhere in the world. A key issue is identifying where intervention is needed, and what forms of intervention are effective in a rapidly changing world. The Australian Law Reform Commission (ALRC) is conducting a wide-ranging inquiry that focuses on the use of content: the exceptions in copyright legislation that allow use of content without permission. Proposals under discussion include repeal of the statutory licences that enable educational and government use of content without permission but subject to fair payment, and introduction of a new copyright exception that would allow use of copyright material for any purpose if the use is fair having regard to a set of criteria listed in the legislation (based on the fair use exception that operates in US copyright law). These changes would have a significant impact on Australias book publishing industry. Several other proposals are being considered by the ALRC which relate to the work of the BICC. These include proposals on digitisation of library collections, document supply by libraries, the use of orphan works (where the copyright owner cannot be identified), and contractual provisions that may prohibit reliance on copyright exceptions. The ALRCs final report is expected later this year. The BICC, through the Copyright ERG, has sought to avoid duplication with the work being done by the ALRC and has therefore focussed on issues not under consideration by the ALRC, including nonlegislative initiatives that affect those involved in the book supply chain. It is worth noting that some important developments overseas have been non-legislative ones. For example, a key recommendation of the recent review of copyright in the UK was the development of a digital copyright exchange. The UK government accepted the recommendation, and funded a feasibility study by Sir Richard Hooper, that has resulted in an industry-led Copyright Hub. In adopting this approach, the BICC is cognisant of the reasonable expectations of consumers, without whom there wouldnt be an industry. The transition to digital delivery has had a profound effect on the way consumers can use books. This transition has led to consequent adjustments to the terms on which ebooks are provided to consumers. An important issue is the extent to which consumer expectations can be effectively addressed through the terms of use developed by content creators seeking an audience for their content, and to what extent legislative intervention is necessary. Consumers are, of course, affected by the affordability and availability of content1. Thus, for example, if content providers impose measures perceived by consumers as being too onerous or restrictive, they are more likely to pursue access to content through other, non-legitimate means. It is also important to acknowledge the fundamental role of libraries in our society in providing access to books and other content, particularly to those for whom there may otherwise be barriers to access. The role of libraries is changing to reflect the possibilities that technological and other developments offer, with necessary changes to their relationships with the creators of the material in their collections. As noted by the ALRC, [t]hese changing practices increasingly involve the digitisation and communication of collections in ways that conflict with emerging publishing platforms. While the copyright system provides the platform for legitimate use of content, through licensing arrangements and copyright exceptions for special purposes such as research and reporting news, publishers and authors continue to face significant challenges from the unauthorised use of their work that interferes with legitimate arrangements for licensing and sale of content. While some unauthorised use is small scale, and sometimes results from a misunderstanding about the legal environment, other unauthorised use is deliberate, often involving large volumes of illegal copying.
1 These issues have been well documented by the Federal Government inquiry into IT pricing; see House of Representatives Committee of Inquiry into IT Pricing, http://www.aph.gov.au/Parliamentary_Business/Committees/House_of_Representatives_Committees?url+ic/itpricing/index.htm
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The Australian Society of Authors (ASA) provides a service called Authors Unlimited for its full members, which is a combination of showcase, ebook conversion service and sales portal for members' works in ebook form. The ebook sales portal was set up specially to ensure the continuing life of rights-reverted titles where authors have taken on re-publication, as well as presenting new works available only in e-form. Ebooks are sold in up to three formats: PDF, ePub and mobi. https://authors-unlimited.org/ The portal offers Australian authors an opportunity to sell their ebooks on much more favourable terms than some major international online retailers.
Data
Industry data are critical for any industry. Data show where an industry has been, where it currently is and where it is heading. They allow the industry to spot trends and changes in the marketplace and allow the industry to plan and invest for the future. They are also vitally important when dealing with Government. Data on ebook sales are critical for bookshops, publishers, authors and libraries. It is estimated that ebook sales will grow to 25 to 30 per cent of the total book market within the next two years if the Australian market continues to follow ebook trends in the US and UK; this shift alone will fundamentally change the way the book industry operates and needs to be planned for and managed. This cannot be done without industry-wide data. Therefore, data collection pertaining to the Australian book industry requires collation and expansion across the industry to cover areas of activity identified that include: book sales from non-traditional book retailers (e.g. Australia Post). direct book sales from publishers. book sales in Australia by overseas retailers. online book sales within Australia. ebook sales.
Six datasets are identified as essential: total market for books (volume). net revenue and net units produced by category. revenues by channel (e.g. retail, online). revenue by overall net dollar & unit sales. revenue by format (ebook, hardcover etc.). consumer data.2
Ongoing consumer data are also vital, as the reader should be the primary focus of the industry. The industry needs to better understand what consumers want and how they are behaving. Specific consumer research projects must be a key area of expansion for industry data collection. Formulating a means for the Australian book industry to meet these data challenges is thus a major priority issue.
2 For a detailed discussion of the industrys data needs, including core, secondary and discretionary data requirements, see the final report of the ERG on Industry Data Collection. 21 BOOK INDUSTRY COLLABORATIVE COUNCIL
Distribution
The distribution process is complex in all markets but Australia has a number of additional challenges. A large proportion of books supplied into this market originate in the US and UK. Access to titles and subsequent supply is affected by international rights agreements and Australias relative size and geographical isolation from a principal product source. Sixty-one per cent of titles are originated internationally.3
As a consequence of Australias relatively small and dispersed population, internal freight costs and speed-to-market issues associated with shipping stock to Australia are significant challenges. To illustrate this further, distribution costs are roughly double those in the UK/US and it takes eight weeks on average for books to arrive by ship. Airfreighting can take up to 15 days and is twice the cost of sea freight. These challenges, coupled with higher labour costs and penalty rates, make the underlying cost structure in Australia significantly higher than that in international markets and competitors.4 Also, a large amount of printing work continues to be produced offshore, which places further pressure on print pricing and capacity within Australia. The current parallel importation restrictions (PIRs) provide a mechanism to support copyright holders, although they continue to be a source of some tension within the supply chain. Australia is subject to significant offshore competition, which is exacerbated by the strength of the Australian dollar and disproportionate postal charges levied on local businesses due to the treaty arrangements that govern international postal services. Furthermore, GST inequity exists between books purchased by consumers through overseas retailers and those purchased in Australia. Current regulations stipulate that to attract GST, imports collected through Customs must be greater than $1000. It is estimated that three billion dollars of GST revenue is being lost as an unintended consequence of changes in consumer buying behaviour. Offshore competition is escalating the already shifting dynamic of retail and format types in Australia/NZ and other markets that source a high proportion of inventory offshore. Some publishers report that Australia is Amazons biggest customer base outside the US. The research conducted by PricewaterhouseCoopers (PwC) for the BICC uncovered a number of barriers significantly affecting the efficiency of the Australian book supply chain: The quality of some metadata provided by publishers is poor. The quality of industry-wide sales data could be improved. Some businesses have yet to adopt electronic data interchange (EDI) 5 for ordering and the returns process remains manual and time-consuming. Integration between the systems and processes of publishers and printers could be improved. The 14/14 days arrangement6 has improved the lack of timeliness of distribution, but there is a lack of absolute consensus about how the PIRs can best align with consumer preferences and market conditions. While distributors have improved the efficiency of their operations, further improvements are needed. There is a lack of awareness or appreciation among some publishers about the role printers can play in improving the life cycle management of print titles.

3 Source: Nielsen Bookscan 2012. 4 A detailed explanation of the complex of book distribution systems for printed trade books in Australia is provided in the final report of the ERG on Distribution. Note that the analysis focussed on the distribution of trade books: it is hoped this work may provide a template that can be utilised by the educational sector. 5 EDI stands for Electronic Data Interchange and is the direct communication of trading messages between computer systems, using national and international telecommunications networks. EDI trading messages can be as basic as orders and invoices, but EDI can also develop into a much more sophisticated information exchange, so that trading partners manage their whole supply chain more effectively. Sourced from the APA website. Further information is at: http://www.publishers.asn.au/index.cfm?doc_id=434 6 Following a recommendation from the BISG report, industry associations successfully negotiated and implemented a voluntary agreement to reduce the conditions around parallel importation of books from 30/90 to 14/14 days. FINAL REPORT 22

Current treaty arrangements disadvantage the Australian book industry relative to competitors based in the UK. Delays in securing ANZ rights for overseas-originated titles can have significant impacts on the efficiency of distribution in Australia. Novelist Alan Gold and award-winning screen writer Mike Jones have joined forces to create Heritage Project, pioneering the multiplatform creative process of the Storyworld. A Storyworld is a new and imaginative concept which takes novels into the digital age, with an holistic approach to storytelling by designing a narrative, from the ground up, to span a host of different platforms. Each of these acts as an extension rather than an adaption, presenting an expanded storyline for audiences based on characters and events from the Storyworld. Gold and Jones said, With the exponential growth of the internet, authors can create an entire cosmos of inter-related characters and events, of which the novel might describe just a few; then the movie maker can pick up on linked events, a television series becomes part of the whole, then games creators, and of course the consumer, via TV, computers, tablets or smartphones can continue to participate in the creativity. The Heritage Project is a sweeping narrative played out over 3000 years, a fast-paced modern thriller that entwines the fortunes of two families across centuries. Simon & Schuster Australia, lead developer of the project, is working in collaboration with Atria, a division of Simon & Schuster Inc, who will be publishing the trilogy in North America. http://www.theliteraryplatform.com/2013/06/the-heritage-project-astoryworld-from-mike-jones-alan-gold/
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Exports
As the Australian market shrinks, profitability will require a concentrated effort to develop a global market mindset both across the whole publishing industry and within individual publishing businesses. Australian publishing, whether trade or educational in focus, now operates in a global marketplace. For some businesses, export is central to their business model; for others, export revenue is currently a secondary activity. In this globalised marketplace, the copyright regulatory regime becomes all the more important to publishing in this region. Australian intellectual property holders and their purveyors now have the opportunity to export content to both existing and new markets. However, in the international marketplace, the rights of copyright holders become both more valuable and more vulnerable. The research conducted by PwC confirms that the traditional English language markets (US, UK, NZ) are still dominant markets for Australian content. However, there are also significant potential opportunities for export into nonEnglish language markets. Brazil, South Korea, India, China, Argentina, Singapore, Malaysia/Brunei and Indonesia are new markets worth exploring.7 Australian publishers currently lack exposure to these new markets and lack the knowledge, skills and training required to build the necessary relationships. These new markets are certainly prospective export opportunities for Australian content. However, the challenges involved in establishing these markets include lax copyright regulations, piracy, pricing models, the costs of translation and distribution models. Each new market will require extensive research, consideration and analysis by individual publishers. If the industry is committed to growing its presence in the global market and in the Councils view it is imperative then the support of government agencies such as Austrade and the Australia Council for the Arts is vital. The success of The Broken Shore by Peter Temple was carefully managed by his Australian publisher, Text. Text developed an international network of publishers which acquired rights in all eight Peter Temple titles. Sales of the German edition of The Broken Shore, called Kalter August have topped 80,000 copies. It was a number-one bestseller and also number one on KrimiweltBestenliste, a prestigious monthly crime fiction bestseller list. Temples work has been awarded Australian and international literary prizes (including the Gold Dagger, the worlds most prestigious crime writing prize; Temple was the first Australian to win this prize), and in 2014 a television adaptation of The Broken Shore will screen on ABC TV. The rights for Temples work have been sold to territories in Canada, the Czech Republic, Denmark, France, Germany, Greece, Israel, Italy, Japan, Korea, the Netherlands, Norway, Poland, Portugal, Russia, Slovakia, Spain, Sweden, Turkey and the USA.
Lending rights
The success of the tablet computer and the surge in the growth and availability of ebook readers has resulted in a rapidly growing demand for digital book content. Not surprisingly, this has extended to become pressure on libraries by patrons for ebooks to be made available for borrowing. The priority issues emerging from these changes can be summarised as follows:
7 In-depth analysis of these export opportunities and associated challenges is available in the PwC report New export markets for Australian books (2013) commissioned by the Department of Industry, Innovation, Climate Change, Science, Research and Tertiary Education under the auspices of the ERG on Exports. FINAL REPORT 24
Concern by publishers, distributors and authors about the potential impact of ebook lending. Publishers, distributors and authors are concerned about the potential of ebook lending by libraries to undermine the value of their work, their income and their rights to their work, and many of them are still grappling with business models and licensing practices for supplying ebooks to libraries.8 Supply models continue to evolve, and currently vary between publishers. In some cases, publishers also limit the content which they allow libraries to access. Ebooks are most commonly made available to libraries through distributors, who supply copies of ebooks and access to ebook titles. Authors and publishers are concerned that the increasing volume of works lent in digital form will put the objectives of the lending rights schemes at risk unless similar rights are extended to digital formats. There are two bases for this concern: first, without a digital lending right, works that see a high proportion of lending in digital form will not receive any share of the pool of funds available for compensation; and, second, the emergence of ebooks has the potential to increase library holdings and overall lending activity without a corresponding increase in overall compensation. Difficulties on the part of libraries in dealing with disparate supply models, and the additional impact of budget pressures. Libraries are struggling with the variety of supply models, and the constantly changing scenarios, licences and contracts, compounded by increases in pressure on library budgets. This is often further complicated by the fact that major suppliers are overseas and the terms and conditions of supply relationships are often dictated by corporations operating in the United States and the United Kingdom. Balancing the needs of creators/producers/distributors on the one hand and libraries/library patrons is a challenge. Sustainable models for ebook supply to libraries are at the heart of this balance, as is the inclusion of ebooks in the lending rights schemes.
Scholarly book publishing

The circulation of scholarship is an integral part of knowledge production, and increases public access to publicly-funded research. It also serves a vital cultural function, as most Australian scholarly books tend to focus on content about Australia and the region. With highly delineated fields of inquiry, a relatively limited readership and challenges with costs of production and distribution, the viability of Australian print and digital publication cannot be taken for granted. Clearly, supporting Australian scholarship on Australian issues is essential, as it is the only realistic source of thoughtful, expert knowledge about our culture, our society, our history and our future.9 The challenges particularly relevant to scholarly book publishing in the humanities, arts and social sciences can be grouped into several main themes: Escalating business pressures facing commercial academic publishing. Electronic platforms and the increasing demand for open access. Contributing to the disciplinary conversation by being read and cited. Academic library acquisitions budgets for monographs compared to serials. The dominance of research-quality metrics largely based on scientific journals. The complex array of revenue sources for scholarly book publishing.
While these pressures are considerable, the sustainability of scholarly book publishing in Australia is crucial for future generations of scholars, and the civil society their research contributes to building.10
8 Further explanation of the variety of models for the supply of ebooks to libraries is available in the final report of the ERG on Lending Rights. 9 For a discussion of the role and benefits of Australian scholarly publishing, see the final report of the ERC on Scholarly Publishing. 10 A detailed explanation of these challenges is provided in the final report of the ERG on Scholarly Publishing. 25 BOOK INDUSTRY COLLABORATIVE COUNCIL
In 2004 Mark McKenna was commissioned by Melbourne University Publishing to write a biography of Manning Clark, Australia's most influential and best known historian. With the support of a research grant from the University of Sydney and an advance from MUP the biography was published seven years later to critical acclaim. The book was the result of exemplary scholarship and the conviction that the life of Manning Clark had significance beyond the academy and should be written for a broader reading public. In 2012 An Eye for Eternity won the Prime Minister's Literary Award for Non-Fiction, the Non-Fiction Book Award at the Victorian Premier's Awards, the Douglas Stewart Award for Non-Fiction at the NSW Premier's Literary Awards, the Queensland Premier's Literary Award for Non-Fiction and the biennial Adelaide Festival of the Arts Award for NonFiction. Mark McKennas biography is an outstanding example of the far-reaching impact of first class and original research that could only have been sustained and brought into the public sphere with the support of the academic environment.
Future skills strategy

While we still talk about the craft of writing and the printers craft, in an environment of rapid technological change it is clear that entrepreneurship, IT expertise and world-class operational and management practices are vital to meeting consumer expectations and increasing productivity and output. The challenge for Australian business is to be ahead of the game in terms of understanding the operating environment and possessing the skills required to respond.11 While the various segments that comprise the Australian book industry all actively address skills needs within their sector, to date this has largely been undertaken in a fragmented approach which focuses on sector-specific needs and targets technical, rather than executive management, skills. Targeting skills development through a coordinated and strategic approach can better prepare the Australian book industry to be innovative and competitive in a high-pressure commercial setting, better prepare writers and illustrators to market themselves on the world stage, and better prepare library staff to support creators and publishers by delivering excellent services and promoting Australian content for Australian readers. In almost every sector there are existing mechanisms to support basic craft and operational skills, but common areas requiring further skills development are: management marketing and communication use of digital technologies 12
Rationalising the process to provide necessary skills and leadership for the Australian book industry is a clear priority issue to be dealt with across the entire book supply chain.
11 A study of Australian manufacturing businesses conducted in 2009 identified key determinants for commercial performance and productivity improvements. A summary of these findings is available in the final report of the ERG on Skills. 12 The Skills ERGs Terms of Reference emphasised vocational training pathways related to the development of digital skills; however, the limits of this approach became apparent and the ERGs emphasis shifted to a more holistic approach to industry development, including facilitating wholesale cultural change across the supply chain. This is presented as a comprehensive Industry Development Strategy in the final report of the ERG on Skills.
FINAL REPORT
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Seizure is an initiative created by Alice Grundy, David Henley and Xoum which exists to promote and develop literary culture in Australia, through providing opportunities for writers and editors as well as fostering links to designers, photographers, illustrators and visual artists. Since 2009, Seizure has been building an online and offline community of creators and consumers through a combination of popular live events, online and print publications, competitions and collaborations with other arts groups and festivals. Seizure aims to be to literature what Triple J is to music, an avenue for creative expression and a means to reach an audience. As a director of Xoum, the publishing partner of Seizure, David Henley has witnessed much turmoil in the industry and has encountered the inability of large corporations to nimbly adapt to new realities. Publishers are finding it more difficult to reach their markets and within these companies, employees encounter roadblocks to career progression. Grundy and Henley have a combined industry experience of 17 years and are both writers, editors, project managers and digital content producers. We believe the industry needs more factotums, says Henley. Aside from producing a biannual magazine, podcasts, a flash fiction program and a well-patronised series of events, Seizure launched Viva La Novella in 2012, to discover, publish and promote a new work of fiction in the shorter form. This year Seizure has expanded the competition and created a unique prize for editors alongside the author prize. This is just one example of how Seizure is creating bridges for editor-publishers, enabling new creative partnerships, and developing the idea of the editor as brand for the world that is to come. Further information: http://seizureonline.com/
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Strategies to improve capability

In response to the issues identified in the previous sections, strategies have been developed by the BICC for consideration and adoption by relevant stakeholders. These strategies are summarised as follows: In the area of copyright, an important strategy for the industry is to present a unified voice in asserting the fundamental principles of copyright and its enforcement in the interests of rightsholders and users alike. The gap in representative industry data must be addressed by establishing a comprehensive means to collect and distribute data to meet the core industry-wide requirements that have been identified. Two options are presented below for data collection. In order to achieve distribution efficiencies, an industry-wide approach, overseen by a collaborative body made up of representatives from the supply chain, is proposed. The groups focus should be on: reducing handling and increasing economies of scale along the supply chain; a collaborative approach to parallel importation restrictions (PIRs); engaging with Australia Post to secure a volume-based discount; advocating that the government lobby for a terminal dues increase with the Universal Postal Union (UPU); and improving global critical paths through needs demonstration. Likewise, the BICC recognises that an international outlook is essential. An industry-wide approach to export development is outlined, which maximises use of the Export Market Development Grants program 13; raises the issue of support for international trade book fairs with Austrade; proposes specific education and training market sessions around eight new markets identified by PwC, including training to support digital export initiatives; expresses continued support by the Literature Board of the Australia Council for the Arts to promote the international exposure of Australian authors; suggests working with Austrade to promote inward and outward country delegations; builds relationships with sister publishing associations in other countries; and advocates for the maintenance of territorial copyright. The development of principles of ebook supply for libraries as part of the BICC process is the first time that industry representatives from all sectors have worked out principles which reflect all sectors of the industry and not just one sectoral interest. As well as multilateral co-operation, bilateral ties have also been established as a direct result of interaction within the BICC: e.g. with authors and libraries. These principles to inform more consistent models for the supply of ebooks to libraries are accompanied by principles recommending the incorporation of digital lending rights into Australias Lending Rights schemes. It is very likely that the current blended system of business models in Australian scholarly publishing will continue to evolve, with an array of wholly and partly commercial and open-access publishers. The BICC initiative has improved collaboration between scholarly publishers to investigate initiatives in electronic publishing and open-access publishing, and options for continuing this are presented in the full Report. Additional strategies include advocacy to research funding organisations, the tertiary sector and governments to recognise in practical ways the costs and contributions of scholarly publication, and to raise the standing of electronic-only publications in academia. A skills strategy has been developed which places strong emphasis on management training in order to promote industry and enterprise-level leadership in the competitive digital environment. Practical mechanisms have been mapped out to improve industry skills in management, marketing and communication, and the use of digital technologies.
13
The Export Market Development Grants (EMDG) scheme is a federal government financial assistance program for aspiring and current exporters administered by Austrade. http://www.austrade.gov.au/Export/Export-Grants 28
FINAL REPORT
Taken together, these strategies map out a blueprint for industry reform. The following sections contain further elaboration of these strategies. Eleanor Curtain Publishing is an independent, family-owned Australian specialist education publishing company whose main business is in the development and sale of early literacy programs. Their first literacy program was launched in 1997 in the USA and Australia/New Zealand simultaneously. A minimum of 60% of the companys revenues have always come from export. Other overseas markets now include the UK, Canada, Asia, the Middle East and Southern Africa. The business expanded through licensing deals and partnering with specific publishers. The companys owners noted the importance of Austrades Export Market Development Grants program in their success.
Copyright
The main priority for the Australian book industry as outlined in section 2.1 above is to ensure copyright creation and dissemination are regulated in an environment that promotes respect for the process and provides a workable model for its operation. Implementation of the Copyright Act is important but it cannot be relied on as the only means to deliver the necessary certainty required in the on-line environment. Industry business practices that are focused on the needs of consumers are also critically important. The industry faces many challenges in reaching consensus amongst all of its participants in regard to the precise detail of what should be achieved through legislation or other initiatives. Nevertheless, the industry must present a unified voice to assert upholding the fundamental principles of copyright and its enforcement in the interests of rightsholders and users alike. Strategies to improve capability in licensing and rights management include: Measures to facilitate the more effective use of sanctions against unauthorised use of content (including piracy) that interfere with the opportunities to realise returns on investment in content through licensing and sale of content. Extended and better-coordinated arrangements for the online licensing of content. Measures to facilitate international cooperation and agreement for management of copyright through such means as treaty forums and trade agreements.

Data: Models for industry data collection

The core data requirements that were noted in section 2 above form the focus of a recommended strategy to deal with the data challenges facing the industry. The appropriate mechanism for pursuing this strategy depends on whether or not an effective industry body, whose establishment is discussed in section 6, becomes a reality. If it does, the implementation of the data strategy being recommended here will become one of its first priorities and one of its major benefits to all industry players. If this body does not eventuate, the task of addressing data issues would have to be picked up by one of the industry associations, such as the APA. Assuming the proposed body comes into full operation, as the BICC intends, the strategy it is recommended to undertake covers the following tasks:
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Map existing data needs. Map existing data collection e.g. APA, Nielsen, Copyright Agency and others.

Identify data gaps. Negotiate and enter into a formal data-sharing arrangement with existing data collectors. Use the bodys in-house resources to fill as much of the data gap as is possible with the available resources. Identify and seek the required funds to complete the required data collection.
Implementing the data strategy in this way would have a number of advantages: the industry body would provide a single focus that represents the entire book industry and not a specific segment; because of its status the body would leverage greater capacity to negotiate for grants and funding on behalf of the industry; it would have the potential capacity to provide more comprehensive data for the industry through the negotiating of effective data-sharing arrangements, as well as more effective and comprehensive surveys and other collections; and it would assume a responsibility and accountability to the industry that should ensure that the best-quality statistics within the available resources are collected for the industry as a whole. If the proposed industry council does not eventuate, responsibility for data would rest with one of the book industry supply chain associations. Among these organisations, the APA has the most comprehensive data collection procedures in place. The APA has committed significant resources to this process and has done so for more than a decade. The publishers who make up the APA also hold significant core data on sales that are not available to Nielsen or other industry associations. As in the US, where the publishers have teamed with the Book Industry Study Group to collect book data, this option for data collection in the Australian book industry would be to agree that the APA will be the primary collector of book industry data. As part of this responsibility, the APA would: Work with the rest of the industry to map data needs. Identify other parties in the industry that hold significant, useable data collections and negotiate an effective data sharing arrangement (as per guidelines). Identify data gaps. Develop and cost the process of filling the identified gaps. Negotiate a cost-sharing arrangement with the industry or identify how investment will be recovered possibly through sales of data.
The use of the APA to collect industry data would have some advantages: it would build on a process that is already established in the APA rather than needing to start from scratch; it has the potential to provide access to data currently held by the APA but not provided to the rest of the industry; and it could enhance the relationship between booksellers and publishers in a data-sharing agreement. However, funding would be an issue and negotiations between the sectors could be very difficult. Overall, it is clear that the best option for implementation of our recommended data strategy will be for the establishment of the industry body, to be an industry champion such as exists in the USA and in the UK. Such a body would enable the data collection model to be put into effect with full cooperation and trust from across the industry.
Distribution
In order to benefit from the opportunity presented by consumers appetite for books, and to prevent further erosion of local sales to offshore competitors, industry must be able to offer the following: Speed to market access to books at a comparable time to when they are available from offshore providers. Availability access to the books consumers want.
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FINAL REPORT
Value access to books at a price that is comparable to the price they can access them from offshore providers.
We are also likely to continue to see consolidation between businesses as well as disintermediation. The industry needs to be ready for further change and must actively look for opportunities emerging from within the radically changing environment. Of particular relevance are the principles of consumer first, agility and collaboration. Achieving this in the long term will require immediate actions that can kickstart the momentum necessary for enduring change. While the efficiency of the book distribution system as a whole is not optimal, different book types enjoy different levels of efficiency. For example, the digital supply chain for ebooks to paying consumers is relatively efficient. This is partly reflective of the nature of ebooks, in that they can be distributed over long distances instantaneously and using existing communications infrastructure. It is also a reflection of the growing maturity of the ebook market. With ebook sales on an upward trajectory, publishers, retailers and ebook suppliers have sharpened and bedded down their processes and systems governing the supply of ebooks, particularly those relating to file preparation, DRM (digital rights management)14, title access and ecommerce functionality. Likewise, certain types of print books (e.g. frontlist and perennial titles) tend to be distributed more efficiently than others (e.g. books that are out of stock locally or those that have low print runs and are untested in the market). The key reason for this is that the former provide a firmer basis for planning and are more cost efficient to manage than the latter. This greater certainty allows publishers, distributors and retailers to realise efficiencies in print volumes, stock holdings, order volumes and delivery timeframes. In many respects, improving the distribution of print books in Australia is about improving the distribution of the unpredictable backlist. The book industry has already made (and is continuing to make) changes to improve the efficiency of the book distribution system. Many of these changes relate to issues raised by BISG in its Final Report to Government. For instance: Both of the major book printers (Opus and Griffin) have invested in print-on-demand capability. A growing number of booksellers and publishers have embraced EDI, allowing for efficiencies to be realised in the ordering process. TitlePage Plus 15 will be launched this year, strengthening the data foundations of the distribution system, enabling direct-to-consumer delivery within a 48-hour period, and providing participants with a white label print book and ebook ecommerce platform.
The book industry is thus not standing still but actively trying to improve its competitiveness in a challenging and dynamic environment. The pathway to industry adjustment requires a mix of actions which alleviate existing barriers to efficiency, overlaid with an understanding of the need for adaptation and an active desire to adopt the necessary cultural change. The following strategies are recommended to achieve a competitive distribution system: Industry to form a collaborative body (or a designated standards group) as a vehicle for improving the distribution system. Note, the BICC is not calling for one consolidated industry body or designated standards group. Our recommendation is for these bodies to exist within the APA and Australian Booksellers Association (ABA) to work together (and with printers) on areas of intersecting interest. As such, it is important that the industry bodies are fully representative of their relative sectors. Industry to continue to review the PIRs collaboratively.

14
Digital Rights Management (DRM) describes a range of technical measures designed to inhibit unauthorised use of a digital file. This definition and further information about metadata and DRM are available from Digital Publishing Australia at: http://digitalpublishingaustralia.org.au/digital-publishing-guide/7-metadata-identifiers-and-drm/ 15 http://www.titlepage.com/ 31 BOOK INDUSTRY COLLABORATIVE COUNCIL

Industry to reduce handling and increase economies of scale along the supply chain. Publishers and distributors to engage with Australia Post to secure a volume-based discount. Publishers and booksellers to work collaboratively in expressing challenges to government around postal costs, GST etc. Publishers and printers to work collaboratively to review the supply chain holistically to determine opportunities.16
In short, we propose reframing the goal of improving efficiency to one of achieving best practice in distribution. TitlePage is an online service developed by the Australian Publishers Association and operated by Thorpe Bowker that allows publishers and distributors to offer price and availability information to booksellers and other book suppliers. In 2013 Thorpe Bowker is launching TitlePage Plus. This initiative, now in soft launch, provides information about stock levels, allows booksellers to access greater metadata, enables direct-to-consumer delivery, and allows booksellers to utilise a white-label (i.e. able to be rebranded) online print book and ebook commerce platform. http://www.titlepage.com/
Exports
Individual publishing businesses, both independent and multinationals, have for many years been able to export Australian content. That activity has been a title-by-title activity in trade publishing, a matter of individual relationships cultivated over an extensive period. Given the increased pressures on Australias book industry and the potential commercial opportunities, export should become an industry-wide priority. To be successful in expanding export activity, particularly in the new and emerging markets, the industry will also need to continue its close collaboration with government. The key strategies to improve export performance are: Export market development. The industry needs to work to ensure it fully understands and exploits the Export Market Development Grants (EMDG) program. For publishers, intomarket travel is critical but each new market carries significant speculative risks. EMDG support for visits and expenditure on export activity in the identified markets would hasten and strengthen participation especially for small and specialist publishers. Collaboration (clustering) among small and specialist publishers in their export activity should also be encouraged, as it increases the reach by each publisher in a productive manner and maximises the effect of the EMDG. Trade book fairs. Fairs are very important and Austrade has recognised this by supporting APA stands at fairs; however, many publishers need more flexibility or prominence than an industry stand can provide, and this should be a matter of discussion with Austrade. Education and training. In addition to the existing training the industry undertakes on export market development and rights sales, specific market sessions around the eight identified new markets and specific training to support those publishers looking to use digital export marketing strategies should be a priority.
16
These recommendations can be read in conjunction with a PwC report, Fulfilled consumers: Improving the distribution of books in Australia (2013) commissioned by the Department of Industry, Innovation, Climate Change, Science, Research and Tertiary Education under the auspices of the ERG on Distribution. 32
FINAL REPORT
Author-as-industry-advocate. Case studies indicate, and experience shows, that the presence of authors to promote a book or to develop their audience through writers festivals is the most effective way to build exports. The Literature Board of the Australia Council has supported some authors international exposure and we recommend that support continue. Country delegations. Publisher delegations from Australia to target markets, or invitations to key players from target markets to visit Australia on delegations, will accelerate understanding and begin to establish relationships between individual publishers. Smaller publishers would benefit most from some collective form of approach to these markets, e.g. clustering. The Chinese Government continues to send relatively unfocused delegations here, but it would be worthwhile targeting Brazil and other identified opportunities in sectors where there is a credible chance of success. Working with Austrade to assist in maximising the benefits of such outward and inward delegations is recommended. Building relationships. The APA needs to develop more sustained relationships with potential sister market associations to ensure an exchange of information. This exchange will enrich both the industry as a whole, and individual publishers as they build export activity. Maintenance of territorial copyright. Territorial copyright is essential if a full export culture is to be developed. The re-export from markets with cheaper or different editions, adapted editions or overstocks poses a serious threat to industry investment if territorial rights diminish to satisfy those requiring cheaper imports to Australia.
This report would be remiss if it did not also suggest that the industry will need to advocate to government that increased support will be required to ensure the local book industry is genuinely competitive in the changing global marketplace. Entering new markets carries significant speculative risks and government support mechanisms provide vital support which hastens and strengthens export activity especially for small and specialist publishers. The industry recognises the importance of it taking a lead role in driving export activity; however, to make best use of government support such as EMDGs, Australia Council grants and the network of Australian Trade Commissioners, export strategies will be most effective if developed in partnership with government. Matthew Reillys Australian publisher, Pan Macmillan, successfully negotiated international rights for his first three books. Reilly was then approached by the William Morris Agency in the US, and its international division now sells translation rights in the novels. As well as achieving bestseller status in English-language markets, his books are published in the following translation territories: Germany, the Netherlands, Italy, Bulgaria, Spain, Portugal, Norway, Denmark, Brazil, Thailand, Japan (in a graphic novel version) and China.
Lending rights
Strategies are required to address the changing, inconsistent models of supplying ebooks to libraries. However, due to variations in industry practice and the role of independent commercial contracts, it would not be possible to develop a single consistent model for supply, as proposed by the BISG. The BICC has developed (a) a set of principles for the supply of ebooks to libraries, and (b) a framework for the operation of a digital lending rights scheme.
Principles for consistent models for supply of ebooks to libraries

A set of principles is presented for developing more consistent models for the supply of ebooks to libraries. This is an exciting development, and an important step forward for the Australian industry. It is intended that the principles will go on to influence the actions of individuals and enterprises
throughout the Australian book supply chain. The following principles are recommended to the Australian industry: Libraries role in promoting a reading culture. The Australian book industry should remain committed to enhancing readers access to Australian books through libraries and encouraging reading, in all formats. Models for the supply of ebooks to libraries should be as consistent and transparent as possible; they should aim to simplify access for readers while providing measurable data for authors, publishers and libraries, and enough flexibility to be commercially sustainable for all parties. Availability of ebooks through libraries. The industry aims to improve the availability of content, providing libraries with a variety of terms for acquisition and re-use, at a minimum consistent with the Australian Copyright Act. Finding viable and sustainable models that support concurrency of market release and the interests of publishers and libraries is a priority. Continuity of access. The industry will undertake its best endeavours to provide access to purchased or licensed titles for library users even if the distributor/publisher ceases business. Fair remuneration for authors and publishers. Authors and publishers should receive fair remuneration, including a lending right through an extension of the Lending Rights schemes, for each ebook title licensed or sold to libraries. Fair pricing. Libraries should expect to pay fair and reasonable prices for ebook titles and distribution services. Rights protection. All digital models should uphold Australian copyright law and strike a balance between ensuring adequate and proper rights protection for authors and publishers against illegal use of their work, and allowing libraries and their patrons to enjoy reasonable use of purchased titles. Device-neutral ebooks. The industry should aim to give all library users access to ebooks on a range of devices from across all platforms, in such a way as to facilitate discovery and maximise choice.17

Framework for a digital lending right

Australias lending rights schemes compensate authors, compilers, translators, editors, illustrators and publishers for royalties and sales income lost due to the free availability of printed books in public and educational libraries. In making annual payments to eligible creators and publishers, the schemes also aim to enrich Australian culture by encouraging the growth and development of Australian writing and publishing. In recent years, an increasing proportion of materials lent by libraries has been in digital forms, to which existing lending rights schemes do not apply. For example, digital distributor OverDrive reports that patrons used OverDrive systems to borrow 70 million titles from public and school libraries around the world in 2012, up from just 15 million titles in 2010. Compounding this demandside trend is a supply-side trend: an increasing proportion of works is now produced only in digital form, and in the last couple of years digital-only publisher imprints have emerged. On this basis, the BICC believes that the current lending rights schemes should be extended to include ebooks. The Lending Rights ERG recommends that the following principles be taken into account in the formulation of a model for the inclusion of ebooks in the lending rights schemes: New eligibility criteria for works and creators. Equitable, practical and meaningful compensation method. Measurement and payment mechanisms that do not limit the compensation pool.18
17 Further elaboration of these principles is contained in the ERG final report on lending rights. FINAL REPORT 34

The challenge for scholarly publishers is to adapt for the sake of efficiency, financial viability, and maximum exposure (to markets of consumers or to communities of scholars), while preserving the integrity and reliability of the scholarly works produced. The following strategies need to be considered: Advocacy to research funding organisations, the tertiary sector and governments to recognise in practical ways the costs and contributions of scholarly publication. The scholarly monograph remains the global gold standard research output in the humanities, arts and social sciences, and these fields account for the very significant majority of all scholarly books. Clarity is needed on the financial value to universities of scholarly books published by their staff (along with other research outputs), including through the HERDC-driven block-grant formula.19 Many participants are concerned that a lack of clarity may distort scholarly publishing decisions at the university level. Importantly, however, any work along these lines must take account of the complexities and policy correlation of the exercise, and any figure must be based on reliable data and rigorous methodology. Raise the standing of electronic-only publications in academia. The BICC has endorsed the principle of format neutrality; i.e. that scholarly publications should be treated the same way in every respect, regardless of the format in which they are published. Whether a book is published as a printed volume, an electronic document, a formatted ebook, for print on demand (or any combination or hybrid of these) makes no difference to the books importance, the validity of its scholarship or the credibility of its publication. The intellectual value and publishing integrity of a book are functions of its content and the processes around its creation, not the format of production or delivery. Initiatives in electronic publishing. Electronic-only publishing is increasingly a feature of scholarly book publishing worldwide. New experiments in electronic provision include new kinds of licensing models, consortium-based investment, title bundling, patron-driven selection and back-catalogue digitisation. Some of these experiments will likely not prevail, but it is clear that electronic-only and hybrid forms of production and distribution are here to stay, and future business models and policy frameworks will need to take them into account. Open-access publishing. There is strong support in many quarters for developments in open access, as a way of providing better access, wider dissemination and a possible reduction in the cost of production. Various models are emerging, designed to balance the needs of copyright owners, licence holders, libraries, scholars, universities and research institutes. Striving to maximise exposure and minimise costs, to balance budgets and maintain financial sustainability of all parts of the scholarly publishing supply chain, these models will be the subject of continuing monitoring and discussion.
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18 Discussion of the ways in which the supply model for ebooks differs from print books, and recommended principles for the further development of a digital lending right and its incorporation into Australias lending rights schemes, are contained in the final report of the ERC on lending rights. 19 The Australian Government provides public research funding to universities through two main streams: project funding through the Australian Research Council and the National Health and Medical Research Council; and a suite of block grants paid directly to institutions, calculated using a range of activity measures including the publications submitted to the Governments Higher Education Research Data Collection (HERDC).
Library-based scholarly publishers in Australia have developed new business models that combine open-access electronic publication with either printon-demand (ANU E Press, University of Adelaide Press, Sydney University Press) or professional distribution into the retail sector (Monash University Publishing), to increase the visibility of their published works. With the aid of XML-based workflows, they have also drawn on editorial boards based in their host institutions to increase their overall publishing output. A statistical package (upStage) developed for Monash University Publishing and the ANU E Press in 2012 reliably revealed thousands of downloads of these presses titles by users around the world. One ANU E Press title (Black Words, White Page, by Adam Shoemaker) received a total downloads figure for the year of over 34,000 copies.

The development of a digital skills strategy is an important resource for responding to the structural changes currently having an impact on the book industry. Without compromising the distinct needs of individual sectors, a new culture of collaboration and innovation is crucial to strengthening the future for Australian books. Skills and professional development have an important role in this evolution. Two streams are proposed: training and professional development.
Training
The distinction between executive and technical training pathways provides a useful mechanism for categorising specific skills gaps and corresponding education and training needs; however, the two are intrinsically interdependent and strategies for stimulating industry development must include both streams. For example, effective executive training aims to facilitate the management skills necessary to determine the technical skills that are needed to implement innovative process or product solutions. Executive training targets participants at the management level and includes courses which provide the advanced business and leadership skills needed to think critically about the challenges facing the industry. This could incorporate short courses and certificates as well as postgraduate qualifications. These can be formally recognised, such as through the attainment of a university degree or nationally-recognised vocational education and training qualification, or not formally recognised, such as industry-based training delivered through associations. Flexibility and accessibility are vital to encouraging adoption by existing as well as aspiring industry leaders. Technical training targets participants engaged in product, process and service delivery areas. It involves a range of nationally recognised vocational education and training options provided through Registered Training Organisations, such as TAFEs, which may lead to Certificate through to Advanced Diploma-level qualifications, as well as industry-based training delivered through associations or equipment providers which is not formally recognised.
Delivery streams include higher education, vocational education and training and non-accredited training (industry delivered).
Professional development
Professional Development (PD) in the book industry describes ongoing learning opportunities helping to keep knowledge, skills and industry insights up to date for both the businesses and the individuals within them. Professional Development opportunities encourage engagement and communication
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within and across sectors, thus enabling industry professionals to learn from one another in a time of transition. The separation of PD implementation pathways into program and forum streams is made to distinguish between those initiatives intended for an individual and those intended for groups/businesses and the individuals within them. However, all pathways support businesses to respond with agility to deficits in knowledge and understanding as they occur in a time of rapid change, and provide pathways for specific staff recruitment and retention opportunities. Delivery streams include fellowships, internships and mentoring programs, and established forums such as conferences, industry seminars, short talks, roundtables with overseas visitors, and potentially the use of online chatrooms, blogs, video conferencing and webinars.20 Hazel Edwards has written over 200 published books, from the bestselling There's a Hippopotamus on Our Roof Eating Cake series, which was recently translated into Chinese, to a diverse range of genres including picture books, young adult fiction, adventure writing, how-to books, adult nonfiction and classroom resources. When the rights for some of her books became reverted, due to takeovers or mergers, she developed her own epublishing platform. Part of this was due to a desire to keep her books available, but it also delivers more control and financial return for the work involved. Edwards was awarded an OAM in 2013 for services to literature. One of her recent books is Authorpreneur, advising other authors on business strategies in digital publishing. http://www.hazeledwards.com/
20
Further information about these training and professional development delivery streams is provided in the final report of the ERC on Skills. An appendix provides an overview of current training and development activities. BOOK INDUSTRY COLLABORATIVE COUNCIL
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Implementation
The terms of reference for the BICC emphasise opportunities for members of the Australian book industry to implement reforms and initiatives to address the industrys challenges. Through the commitment of the ERG members, a momentum has been achieved and each ERG is keen to ensure that progress continues without interruption at the conclusion of the BICC. This section sets out the next steps recommended by each of the ERGs to implement the strategies outlined above and to build on the gains of the past year. Implementation proposals are summarised as follows: The priority for copyright is to ensure application of the provisions of the Copyright Act to enable copyright owners and users of copyright material to assert their legitimate rights more cheaply and effectively. A range of recommended measures to assist in achieving this goal is put forward below. Based on agreed ways to address current gaps and shortcomings in industry data, the next step is to develop and implement a data-sharing agreement. The recommended plan is for the first release of data to cover two years, in order to measure the extent of changes underway. Work to improve distribution efficiency has resulted in an agreed list of detailed, specific actions for the Australian Publishers Association, the Australian Booksellers Association and book printing firms. Examples of these on the part of the APA include: re-establishing a supply chain group to improve standards for book identifiers; metadata standardisation; adoption of the enhanced TitlePage Plus platform; international benchmarking of long-tail titles supply times; improved printerpublisher integration; more efficient returns processes; and working with international bodies to ensure that standards are internationally relevant. The ABAs proposed actions include establishing a forum for the collective representation of the bookselling sector, particularly a standards group to develop operational benchmarks, to promote professional development especially regarding the benefits of new technologies and opportunities for improved customer service and to promote best practice regarding distribution efficiency. Proposed implementation on the part of Australian book printing firms includes education about the benefits arising from new technologies and customer service improvements, and promoting best practice regarding distribution efficiency. To continue the work on export development, it is recommended that an export subcommittee on the proposed industry council should prepare a strategy to promote Australian trade and educational books (rights trading, digital and printed books) in established English-speaking markets and in emerging markets. The next stage in implementing the improved supply of ebooks to Australian libraries is to organise an industry roundtable to endorse the Principles for Consistent Models for Supply of ebooks to Libraries and to promote their adoption across the industry. A necessary and complementary action is presentation of the Framework for a Digital Lending Right to Government, advocating the inclusion of ebooks in lending rights schemes, either separately or in existing schemes. The progress made in collaboration within the Australian scholarly books sector can be pursued through an ongoing forum. Such a forum can be hosted by existing organisations. Ongoing collaboration will include the investigation of a shared platform for the production, marketing and dissemination of Australian scholarship; engagement with government and research agencies to recognise publishing and dissemination costs as legitimate research expenses; and promotion of format neutrality regarding academic attitudes towards the valuation of published scholarly work by research assessors and sources of funding support for publication. In order to oversee the implementation of the Professional Development Framework/ Strategy addressing skill development needs through vocational education and training,
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higher education and professional development, it is recommended that a steering committee be set up by the proposed industry council. Details of these proposals for the implementation of recommended strategies are provided in the next pages.
Copyright
Priority: To bring about more effective use of the Australian copyright regime to protect and advance the legitimate interests of rightsholders and consumers in the book industry. Unauthorised downloading and peer-to-peer file sharing of copyright material is of significant concern to the book industry. The ability of participants in the industry to effectively enforce their rights and guard against piracy under the current copyright regime is a matter of considerable debate at the present time. Australia has a copyright regime that provides an effective means to regulate the rights of copyright owners with the legitimate needs of users for access. The control and effective maintenance of the Copyright Act provides a fundamental foundation to the wellbeing of the book industry. However, the reality concerning the mechanisms in place to enforce the Act is that they are almost non-existent or too expensive and cumbersome to be effective. Federal authorities are loath to use their powers of enforcement on a regular and consistent basis and State police forces do not generally include economic crimes or intellectual property (IP) crimes in their community police initiatives. Additionally Public Prosecutors have shown a reluctance to prosecute IP matters as they can be time consuming and complex. The lack of criminal enforcement results in a poor understanding of the extent of IP crime and its impact on the Australian creative industries and in turn this results in further underfunding for police to detect and investigate serious IP crime, at both the State and Federal level. Furthermore, the court system in which content providers or users can maintain their rights and seek redress for infringement is impractical due to both costs and time. In order to implement the identified strategies for improvement in the copyright regime under which the book industry operates, the following measures are recommended: Improvement in the means for criminal enforcement by the Federal Police by reinstating dedicated funding for the specialist Federal Police IP unit with particular focus on online enforcement strategies to address serious infringement, and establishing formal liaison and cross funding with State police forces to address IP crime at a local level through crime prevention and enforcement practices. Improvement in access to civil courts. The Federal Court and the costs required to file and effectively prosecute a case are prohibitive for most rightsholders. This can result in most forms of infringement not being taken to court. Additionally the complexities of the Act create a prohibitive barrier to sensible enforcement of rights for creators, publishers and users. This is not due to any action being without merit, but more to the time and expense required in prosecuting a claim. The Federal Circuit Court has the potential to offer a more cost effective and timely alternative for rightsholders but the court must be given sufficient resources to deal with the full extent of IP infringement so that rightsholders can utilise this avenue to implement sustained, effective and efficient enforcement practices. Additionally, consideration should be given to the creation of a tribunal that can provide access to enforceable orders that can be achieved in a timely and cost effective manner. Such a model could be based on the civil and administrative tribunals that exist within the States of Australia. These tribunals provide experts that can adjudicate on the relevant issues and where parties are not normally exposed to prohibitive costs of taking action. Enhancing industry business models so that consumer expectations regarding cost and availability of content can be met, as a means to help reduce infringement.

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There should be greater accountability by internet service providers for peer-to-peer transactions and other unauthorised distribution practices. Online licensing. An industry-led initiative in the UK known as the 'Copyright Hub'21 allows for, amongst other things, facilitation of licensing of low-value uses of copyright content. Its primary aim is to give consumers comprehensive and easy access to copyright material. The project has received government funding for its creation. Although it is in its formative period, it would be of great advantage to the book industry if a similar project were undertaken in Australia.
Data
Priority: A new industry-wide data sharing agreement to collate existing data and cover existing gaps and shortcomings. Implementation The first priority should be to reach a Data Sharing Agreement between a proposed industry organisation (or individual industry associations) and the APA, for a survey of their members to capture the required industry information, and to sign off on the costs agreed to by all parties. A Data Sharing Agreement should also be drawn up with Nielsen to use their aggregated industry data. The next step involves executing a survey to capture the required core data. A questionnaire will need to be drawn up between the industry body (or individual industry associations) and the APA. This questionnaire should be kept to a minimum to ensure compliance from as many APA members as possible and will essentially cover: New publications in the year, classified by: status: new book / new edition market sector: adult fiction, adult non-fiction, childrens, primary education, secondary education, tertiary education, scholarly (academic trade), professional format: hardback, paperback, ebook, software, other. local / export direct sales receipts commission on local sales (distribution/agency), and the total publisher value represented by this commission on ebook sales, and the total publisher value represented by this. a detailed breakdown of the above figures by cross-category channel data: retail, direct, etc.
Revenue and units, classified by:
Desirable information for those publishers who are willing to contribute further:
The survey would be conducted on a financial year basis. The first survey would be conducted in July 2014 and a report for the industry produced in the fourth quarter of 2014. The analysis of data provided by this survey would be compared with data available from other sources e.g. Nielsen. For the first survey we would look to obtain two years worth of data. Members of the industry body (or contributing individual industry associations) and data contributors would have access to the report. The report would be sold to other interested parties.
21
www.copyrighthub.co.uk
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Distribution
Priority: To implement specific actions by the APA, the ABA and Australian printing firms to improve distribution efficiency. Implementation The proposed next steps for individual industry associations and firms are set out as follows.
The Australian Publishers Association (APA)

The APA should re-establish a supply chain group working collaboratively with other industry sectors where relevant to deliver the following: The development, maintenance and promotion of standards particularly around identifiers (e.g. ISBN and International Standard Text Code), bar coding, location numbering, file formats, EDI and ecommerce. The operation of certification and accreditation schemes. Metadata standardisation. The most effective adoption and utilisation of the enhanced TitlePage Plus platform, to be launched this year. Effective and timely supply of long-tail titles22 using international supply times to benchmark. This may need to be managed by individual businesses due to commercial sensitivities. Printer-publisher system integration to improve the standardisation of files provided by publishers to printers, and to facilitate the automation of the print ordering process. Improved efficiency of the returns process potentially through the use of EDI. Industry education of the benefits that can be realised through new technologies and process improvements through publishing case studies, communicating best practice to association memberships and providing access to skills and professional development.23 Access to effective data and encouraging adoption of data management tools. Engagement with like-bodies overseas (such as the US-based Book Industry Study Group and UK-based Book Industry Communication) to ensure the Australian book industry and its supply chain are aligned with, and on top of, international developments.

This report recommends that the APA also actively work with international partners to improve global critical paths. It is critical that local publishers highlight the opportunity and unique challenge of the Australian market to their parent publishers and international counterparts in order to positively influence global publication strategies. Consideration needs to be given to the most effective means to communicate this and effect change. The most obvious vehicle for this is via the APA working with individual businesses. Specific areas to focus on are: Timely supply of files for local printing. Reviewing all possible means of stock supply to deliver speed to market, value to consumer and cost efficiency. Efficient clearance of rights for distribution into Australia and New Zealand.
22
See the analysis of indent/ordered to order (OTO) titles in the PwC Report (Figures 6 and 7) referred to in the Distribution ERG Report. 23 This point and the next align with the recommendations in the Skills ERG Report. 41 BOOK INDUSTRY COLLABORATIVE COUNCIL
Australian Booksellers Association (ABA)

This report recommends that the ABA establish a forum for collective representation of the bookselling sector which includes: independent booksellers specialist chains discount department stores online booksellers.
The ABA should also establish a standards group to: Develop benchmarks around operational standards, i.e. EDI, customer service. Work collaboratively with the APA supply chain group on areas of intersecting interest.
Additionally, the ABA should provide access to professional development activities which: Educate businesses of the benefits that can be realised through new technologies and customer service improvements. Develop and communicate best practice in regard to improving distribution efficiency.
Australian book printing firms

Book printing firms are recommended to actively engage with publishers to improve delivery times, with the APA to encourage systemic changes, and with senior levels within individual firms (chief executive or chief operating officer level) to directly educate at a business-to-business level. They should continue to develop and actively promote service improvements for increasing speed to market, by developing the engagement model with publishers into one of partnership rather than being purely supplier-based. The numerous areas where service and speed-to-market improvements can be made will require publisher and printers to collaborate as efficiency improvement opportunities exist in both the publisher and printers businesses. Printers should communicate excess print capacity to publishers: with the reduction in print runs, importation via on-line channels and off-shore production, there is now significant excess capacity at the two largest Australian printers. Printers and publishers need to engage in urgent, active collaboration in order to utilise this opportunity. Australian book printers should also partner with publishers to assist global partnerships by providing technical knowledge on global publication strategies and highlight the value local printing can provide. Printers and publishers should actively work together to identify these costs to determine an effective break point to produce on-shore with the aim to improve turnaround times at a cost neutral (or better) level.
Other issues
The ABA and the APA should create a delegated industry group to: Engage with Australia Post and courier companies to work towards more competitive book parcel pricing, e.g. by working collaboratively to negotiate competitive bulk parcel pricing deals with Australia Post and/or commercial courier companies. Continue discussions with Government re postal costs and GST equity for books. The Australian book industry should give a consistent message to the Australian government about the imbalance between Australian and UK postal costs. The need is urgent and may require action beyond the protracted negotiations with the Universal Postal Union (UPU) which, at best, will not produce results for several years. The group should also continue discussions with Government on GST equity for imported books.
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Engage in continuous and collaborative review of the PIRs. Address potential barriers to collaboration, including developing an anti-collusion code of practice.
Finally, we note that the need for disintermediation and consolidation is likely to increase as the industry responds to the changing operating environment. It is important that individual businesses should not feel constrained in their ability to work collaboratively with other industry operators. Such collaboration will be facilitated by the proposed industry body discussed in Section 6 below. 3P Learning Pty Ltd initially started up under the name Mathletics, producing education outcomes in an online environment that incorporates game dynamics. The company started in Sydney in 2004 and now employs 215 staff, with offices in New Zealand, Hong Kong, Singapore, the UK, UAE, Canada and the US. The company generates about 30 per cent of its revenue from export markets. It reaches 10,000 schools (5,500 of which are in Australia) and three million students in over 130 countries around the world.
Exports
Priority: to build on existing export success by developing and implementing an industry-wide export strategy. Implementation The first step should be to establish an export subcommittee of the proposed industry council, which has membership from the following groups: Relevant industry associations (Australian Publishers Association, Copyright Agency, Australian Society of Authors, Australian Literary Agents Association etc.). A mix of trade and educational publishing firms that are active in book export. Authors who have been successful in export markets. Austrade and the Australia Council for the Arts, which could be invited to join the steering committee in an advisory role in order to encourage collaboration between the industry and government.
The export subcommittee should prepare an export strategy, based upon the research undertaken by the ERG and PwC, and provide the Australian publishing industry, and individual businesses, with a framework for making business decisions. It will be driven by a whole-of-industry perspective, but provide enough flexibility to accommodate commercial decision-making. The strategy should include proposals for strengthening the export of Australian trade and educational books (rights trading, digital and printed books) in established English-speaking markets. This will include, but not be limited to, ways to improve (a) returns to the industry of attending international book fairs and (b) access to schools and tertiary educational systems within those countries. Further, the strategy should adopt proposals for developing the export of Australian trade and educational books (rights trading, digital and printed books) in emerging markets. This will include, but not be limited to, working with the government (Austrade, the Office for the Arts, the Australia Council for the Arts, amongst others) to better utilise existing networks and government support programs to provide the book industry with a clear pathway to improving export to these markets.
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Lending rights
Priorities: (1) Adoption of the Principles for Consistent Models for Supply of Ebooks to Libraries across the industry; and (2) presentation of the Framework for a Digital Lending Right to Government, advocating the inclusion of ebooks in lending rights schemes, either separately or in existing schemes. Implementation A one-off industry roundtable, hosted jointly by the Australian Library and Information Association and the Australian Publishers Association or by the proposed industry body, should be held as soon as practicable to progress the endorsement and implementation of the Principles for Consistent Models for Supply of Ebooks to Libraries. Participants at this roundtable should include representatives from the boards of the: Australian Library and Information Association Australian Literary Agents Association Australian Publishers Association Australian Society of Authors Council of Australian University Librarians National and State Libraries Australasia.
In addition, representation from each of the Big Six publishers should be sought. This roundtable should deliver formal endorsement of the Principles for Consistent Models for Supply of Ebooks to Libraries by all relevant industry associations and key enterprises; and a strategy for promoting the adoption of the Principles by individual firms and organisations in the industry. Consideration will need to be given to the most effective means to communicate and effect change in this area, the most obvious of which would involve industry associations working with their members and other stakeholders. Next, the Framework for a Digital Lending Right should be presented to Government as a proposal to inform the potential inclusion of ebooks in existing lending rights schemes and/or the development of a separate framework for a digital lending right. This will require: A letter co-signed by all participating associations be sent to the Minister for the Arts, requesting that the Framework for a Digital Lending Right be considered in the context of the Modernisation Review. Ongoing advocacy on behalf of the industry and continued discussion with Government to ensure that industrys needs are reflected in any changes to the lending rights schemes.
The Australian Society of Authors may be best placed to lead these efforts, and should work with the Australian Publishers Association and the Australian Library and Information Association to ensure that creators, publishers and libraries views on this issue continue to be represented to Government.

Priority: to strengthen collaboration amongst Australian scholarly publishers and with research funding organisations in order to promote the financial sustainability of Australian scholarly book publishing. Implementation
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Four strategies are recommended: to establish an ongoing forum; to pursue a shared platform for Australian scholarly publishing; to promote recognition of the cost of scholarly publication and dissemination of research findings on the part of research funding organisations; and to promote the principle of format neutrality. First, a forum for ongoing policy engagement should be established, consisting of representatives from: Australian scholarly publishers. Government agencies. Research sector bodies.
The forum would have a similar constitution to the Scholarly Book Publishing Expert Reference Group (namely, the main Australian scholarly publishers, Universities Australia, the Academy of Social Sciences in Australia, the Australian Academy of the Humanities, the Australian Research Council, the Science and Research Division of the Department of Industry, Innovation, Climate Change, Science, Research and Tertiary Education, and the Australian Institute of Aboriginal and Torres Strait Islander Studies). Continued dialogue will favour policy optimisation, identify opportunities to strengthen performance, minimise unintentional impediments and keep scholarly book publishing on the national agenda. By consolidating the existing collaboration between business and the research sector, the roundtable will advance the intent of the BICCs Term of Reference 6, to build strong productive relationships and linkages, and to bridge any divides between disparate sectors. Second, the roundtable should continue to explore the development of a shared platform, which could be used by all Australian scholarly book publishers for the production, marketing and dissemination of Australian scholarship. While the totality of scholarly publishing is funded in different ways, there is considerable overlap. These funds could be used more collaboratively by means of a common platform for production, marketing and dissemination, producing cost efficiencies and quality improvements to benefit all Australian publishers. This platform would support activity across the diversity of Australian scholarly publishing, including open access, print-on-demand, and commercial publishing. Third, the roundtable should work to increase recognition of the importance and cost of publication and dissemination of scholarly research. Scholarly book publishers and university research leaders should engage with Australian Government agencies and the Australian Research Committee (ARCom) to ensure that both the role of and cost involved in publication and dissemination are recognised, and to work towards building these costs into funding programs as a legitimate research expense. Finally, the roundtable should promote the principle of format neutrality. Policy-makers, funders, regulators, universities and researchers should ensure that all procedures, approaches, funding and regulatory arrangements regarding scholarly publishing are neutral with respect to format of publication. This includes considerations such as academic attitudes towards the value of the work, recognition by research assessment processes and formulae, and funding support for publication. To progress this issue, the decision should be communicated widely to the publishing sector, the academic community, the Australian public, and peer organisations and entities internationally.

Priority: To implement the Professional Development Framework/Strategy addressing vocational education and training, higher education and professional development. Implementation
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We propose that the industry establish a steering committee to oversee implementation of the Professional Development Framework/Strategy. Ideally this committee will be formed under the auspices of the proposed industry organisation; however, in order to maintain the momentum gained through the ERG, it is suggested that an interim committee be established immediately. This will require ongoing discussion between the sectoral associations and a lead agency should be nominated. All industry sectors in the form of sectoral associations (where appropriate) should form membership of this committee. The steering committees agenda will progress activities in accordance with the framework, which includes: Vocational education and training: engage with Innovation & Business Skills Australia (IBSA) to form a workforce development plan which captures the needs of each participating sector of the book industry. Higher education: actively engage with higher education providers to encourage (1) an integrated approached which marries the needs of industry and educators; and (2) collaboration between higher education service providers. Professional Development: (1) To undertake a comprehensive audit to determine what programs currently exist (internships, mentoring, fellowships, etc.), how well they are working and any gaps or ways to improve the system that need to be addressed; (2) With respect to the forum streams (as part of Professional Development), the steering committee will undertake an audit to identify what, if any, opportunities exist to integrate activities in order to reduce duplication and improve efficiencies across the supply chain. Creatives Unite is a registry and networking site for book industry professionals, designed for writers who want to self-publish but also for authors generally, putting them in touch with editors, agents, artists, audiobook producers, marketing consultants, researchers, video trailer creators and other industry professionals. IT professional Min Dean and author Isobelle Carmody spent over a year developing the site, with beta testing by executives and members of the Australian Society of Authors. http://creatives-unite.net/
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The book industry and Australian culture

The book industry is an example of what have come to be known around the world as the cultural and creative industries those industries that together make up the so-called creative economy. The characteristics of the cultural industries are that they depend on creativity as a key resource, they produce goods and services that have important cultural content, and they are significant generators of intellectual property. Moreover, these industries tend to have strong connections with the digital economy, adopting new information and communications technologies, producing digital content and fostering innovation, as discussed further below. Book industries in many countries have become a focus for public policy because, as typical cultural industries, they provide a link between the production of economic benefits and the generation of cultural value. This policy interest is true in Australia, as the BISG and BICC processes indicate. Moreover, the cultural aspects of the industry have been recognised explicitly in Australian government policies towards the arts and culture over many years. For example, the cultural importance of books is referred to in the recently adopted National Cultural Policy, and is of critical concern to cultural agencies such as the Australia Council for the Arts. How does the book industry contribute to the development of our literary and broader culture? Books stimulate debate and informed discussion of public issues in Australia and beyond, and are a primary vehicle for the production and dissemination of Australian content across all genres: Fiction: Australian stories are the bedrock of our culture. Australian books reflect who we are as a nation, where weve been and where we are going. Australian books and stories give a voice, our voice, to our ideas and concerns. They entertain us, they make us laugh and they make us cry. And, most importantly, they make us think. Without our own stories, our own characters, we wouldnt have our own national identity and Australian books and stories should always have a treasured place in our society. This is an exciting time in fiction: works from longstanding traditions such as graphic novels and other popular genres have gained greater acceptance as part of Australias cultural mainstream, broadening and opening up an appreciation of the diversity of our literary traditions. Meanwhile, newer forms of writing and genres are gaining strength in the digital space, for example, e-poetry, the use of digital artefacts to extend the imaginative world of a book, and online collaborative projects. Non-fiction: Australian non-fiction books contribute much to our awareness of our history, our society, our art, our Indigenous culture, our environment well after Australians leave school they are discovering facts and stories about this country that they would not otherwise know. Non-fiction books in a variety of genres and subjects also celebrate Australias landscapes and wildlife, share our passions for sport and leisure pursuits, and provide opportunities for recreational reading covering a wide range of generalist and specialist topics. Childrens books: Australian childrens books are of vital importance in maintaining our national cultural identity; it is inconceivable that we would have a country where the only books children have access to are those published in the northern hemisphere. This is not a matter on which we can be complacent; children form their identities and their ideas of the world at an early age and we need to have Australian stories and content to give them at that age, lest they form a cultural identity that belongs to another nation. Educational books: Books provide quality content relative to Australian educational requirements across all levels from primary through to tertiary, whatever the format and platform through which they are supplied. Australian texts enable students to learn about history and other humanities, business, social sciences, medical and other scientific developments, and the attainment of professional skills directly in an Australian context. More fundamentally, they enable students to develop the critical skills needed to appreciate our unique heritage and to understand our changing circumstances, in the knowledge that responsibility is passing to them as citizens and cultural participants.
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Scholarly books: Australian scholars and researchers in every field use books as one of the most important means for conveying the knowledge their work creates to Australia and the world, and for acting as a permanent repository for their contributions to our society and culture.
The cultural importance of the Australian book industry is manifest at all points in the supply chain, from author to reader: Writers: As the originators of the creative ideas that inform and propel our written culture, authors are the essential first stage in the long process of producing a book. The contribution to the arts and culture that is made by Australian writers in all genres is of inestimable value. Australian authors are taking an active role in experimentation and exploration of the possibilities made possible in digital reading and writing spaces, as well as continuing a long tradition of innovation and creativity in extant forms and genres. Publishers: If Australian publishers dont publish Australian content, who will? The continuing health of a viable publishing sector in this country constitutes a vital link in the chain that brings Australian content to consumers. Digital publishing has enabled a vibrant sector of micro (very small) publishers which are contributing high-quality books on a previously unimagined small scale, with potential international reach. Meanwhile, larger publishers continue a legacy of developing markets, and readerships, for new Australian content. Printers: In an industrial sector subject to constant technological innovation, Australian book printers are a spearhead for development of the craft skills of the industry. This report proposes new strategic partnerships between printers and publishers as part of the industrys skills development. Bookshops: Despite the transformations in book supply in recent years, the bookshop remains an irreducible component of book culture. The bookshop is still the place where the overwhelming majority of books are sold in Australia every day. It is the place where Australian stories are cherished, championed, discussed, displayed and hand sold. It is where communities gather to meet and talk about books. And it is where the next star of the Australian literary scene is being put into the hands of a new reader. Libraries: As important cultural institutions, libraries play a central role in providing public access to books. Their contribution is realised at a range of levels, from the great national and state library collections through to local public libraries which provide an indispensable service to communities across the country. Readers: As the final recipients of the cultural messages conveyed by books, readers are the ultimate consumers who constitute a vast reading community engaged with books supplied in both print and electronic form. More than half the Australian population reads a book for pleasure at least once a week. Further, some readers are writing back in exciting new ways, for example, participating in online forums that provide new points of connection between authors and readerships.
In regard to the role of books in the digital economy, it should be noted that Australian content is earmarked as one of the key sectors that can benefit from new developments in the digital environment. But before it can take advantage of these opportunities, the industry needs to transform itself. The traditional ways of production, distribution and marketing will need to be further adapted to this new environment, building on existing applications of e-production, edistribution and e-marketing methods. New methods of funding, such as crowd sourcing, are opening up. Moreover, the global e-world allows Australian organisations to link up with supply chains in other parts of the world and to participate more easily in overseas markets. Digital advances in areas such as on-demand printing and the use of social media in marketing are all making these developments accessible for even the smallest players in the market. Altogether it can be seen that the book industry has an expanding role in the new digital economy.
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Overall, it is apparent that the Australian book industry produces a range of benefits for Australia that together comprise a significant contribution to our economy, our culture and our society. Many of these benefits are captured in market processes, but a wide range of them are public goods that reflect the importance Australians attach to books as an element in our cultural life. It is, therefore, important that the book industry continue to secure the active engagement of policy-makers in both economic and cultural policy arenas. By such broad-ranging political commitment in the future, the ongoing production of both economic and cultural benefits from a healthy and sustainable book supply chain in this country can be assured.
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Towards a sustainable industry leadership body

Throughout this report we have stressed the importance of industry-wide collaboration to the future of the book industry. Traditionally, each part of the supply chain has seen itself as independent, without meaningful reference to, and consideration of issues along the supply chain that have an impact on the industry as a whole. In the meantime, book industries in other parts of the world have recognised the need for supply chain engagement and developed various models of collaboration and cooperation which appear to be delivering real benefits while individual sectors are able to maintain and enhance their own associations. For example, the Book Industry Study Group in the United States, which was established in 1975, and Book Industry Communication in the United Kingdom, which began operations in 1991, provide models, some aspects of which may be able to be adapted to Australian conditions. The Australian industry needs to identify those issues for which working together is likely to achieve better outcomes for the entire industry, and put in place the requisite structures to facilitate more cooperation. Steps in this direction have been taken already with the collaborative mode of operation of the BISG, and with the subsequent consideration by the BICC of specific strategies for future cooperation across the supply chain, as discussed further below. There has been unanimous agreement amongst the members of the BICC that a collaborative basis on which to meet the various challenges facing the industry is not only productive but also essential to further progress. A key concern for improving industry capacity is establishing the systems, communication and trust needed between sectors to encourage commercial decisions that lead to efficiency across the supply chain, rather than decisions which benefit one sector/operator at the expense of others. Reaching this objective depends on two important factors: a cultural change within the industry, occurring as a gradual process which requires a stable base such as an independent industry-wide body to encourage open communication and trust; and strategic plans which provide understanding and guidance for facilitating change. The BICC process has addressed both of these factors, as shown in this Report. One of the most important tasks that the Government asked the BICC to undertake was to assess options for movement towards a self-sustaining industry body to represent the industry and to carry through reforms needed across the supply chain. The BICC has agreed that an industry body, provisionally entitled the Book Industry Council of Australia (BICA), will be established to carry forward the work program identified by the BICC in this Report. The structure and functions of the new body have been determined, and a process agreed upon for its establishment, as described below.
Rationale
The new industry body has the overall objective of creating a thriving and sustainable book industry across all sectors. It is intended that this will be achieved by: Developing a deeper understanding of consumers and the development of innovative and efficient systems to reach them. Building a visible identity for the book industry with Government and the community. Making Australian content readily accessible at a fair price, with fair recompense. Encouraging a vibrant reading culture in Australia.
The BICA is not the only vehicle through which book industry interests will be expressed; it is expected that associations representing the sectoral interests will remain the primary means of communication with the members they represent.
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Role and functions

The Book Industry Council of Australia will focus on those intersecting issues that affect all or most sectors across the industry. It will have four main roles: It will lead the industry in a cohesive and integrated strategy to build sustainability of the industry by developing and implementing whole-of-industry development strategies around issues such as infrastructure, standards and promotion, and provide support to assist sectors to represent the industry domestically and internationally. It will assist the industry to understand its current market, customers and production environment through the following activities: aggregating existing data and sharing them with industry representatives from across the book supply chain; consulting industry representatives about data and information needs and how best to meet them; and coordinating an ongoing program of research and data collection. It will develop and maintain an ongoing campaign to raise the profile of books and the book industry among industry, government and the community, through the following activities: developing and managing an industry-wide communications and promotions plan on priority issues affecting the book industry; co-ordinating campaigns on Australian content and reading; and undertaking advocacy on behalf of the industry with community and government. It will co-ordinate and increase accessibility to professional development activities in areas affecting the whole industry, through the following activities: undertaking analysis to identify common skills gaps in sectors; and co-ordinating professional development activity where there are benefits through an industry-wide approach.
Structure
The BICA will be legally incorporated with a formal constitution and governing rules. It will be led by a board comprising representatives of each of the member associations. The founding associations will be: The Australian Society of Authors Australian Literary Agents Association Australian Publishers Association Small Press Network Printing Industries Association of Australia Australian Booksellers Association Australian Library and Information Association Copyright Agency Ltd Media and Entertainment Arts Alliance.
The Council will be supported by a small Secretariat, comprising a CEO who will be responsible for strategy, advocacy, promotion and public relations and a Research/Administrator who will be responsible for research, data collection and co-ordination of professional development activities.
Financing
The BICC has agreed that member organisations of the BICA will contribute to the financial support of the organisation on a pro-rata basis determined by capacity to pay, subject to Board approval by member organisations. It will be necessary for the new organisation to seek additional funding from various sources, including through its own revenue-generating activities, sponsorship, grants and other income etc. An alternative possibility would be for the new body to be set up in partnership
with government, or under some other organisational arrangement focussed on industry innovation and advancement, if the government so desired.
Progress towards establishment

The BICC has resolved that, subject to satisfactory completion of an interim process, the new body will come into existence on an interim basis on 1 July 2013, to be formally established with a full board and independent chair by 31 October 2013. During the interim phase, progress towards formal establishment of the BICA will be managed by a small Interim Council comprising one representative each from the core constituent associations as listed above. The principal aim of the Interim BICA is to establish the BICA as a legal entity with a view to holding its first annual general meeting (AGM) on the notional date of 31 October 2013 or as soon as possible thereafter. During the period following 1 July 2013, the Interim Council of the BICA will be required to undertake the following tasks: Develop the organisations constitution and membership in consultation with key stakeholders. Register the new organisation as a legal entity. Select an independent chair. Prepare an operating budget for the new organisation, including how the revenue will be raised. Consider priority areas for expenditure in light of the ERG reports, for approval by the new BICA at its first meeting. Plan appropriate staffing to enable immediate commencement of operations. Guide the preparation for the first AGM.
As noted earlier, there has been widespread agreement from all sectors of the book industry that collaboration across the supply chain will be an essential requirement if the needed reforms identified in this report are to be successfully implemented. The BICC is of the unanimous view that a wholeof-industry council is the appropriate means to consolidate and extend this collaboration, and to entrench this spirit of cooperation that has so greatly informed the BICCs own process.
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Isabelle Merlin is the pen name of an Australian author of romantic thrillers for young adults, all set in France. Each work involves important Internet elements which are an integral part of the plot, such as a character's blog, a website on dreams, a band page and video clips which were created by Merlin but which 'belong' to the characters. Merlin was one of the first authors internationally to do this (the Isabelle Merlin books came out between 20082010). Readers, publishers and reviewers responded enthusiastically. Merlin later reflected that What you need is firstly a willingness to take risks and a sense of adventure; secondly a certain agility of mind; thirdly to never lose sight of traditional narrative skills in your enthusiasm for the new media; and lastly to think carefully about the way in which you use cross-media; it shouldn't just be a gimmick but a real integral part of the project. Most importantly of all, you need imagination in order to push beyond the boundaries of what has always been done. http://www.australiacouncil.gov.au/__data/assets/pdf_file/0003/42654/The_ writers__guide.pdf#page=88
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Conclusion
The Australian book industry is at a critical stage in its evolution from a long-standing industry relying on traditional methods of production, distribution and access to one operating in an entirely new digital environment that presents both opportunities and challenges at all points in the supply chain. The BICC process was set up to consider the priority issues arising for the book industry at this transformational time and to recommend strategies for dealing with the challenges the industry faces. The results of our work are contained in Part I of this report, and are elaborated in detail in the Expert Reference Group reports in Part II. The strategies that we have proposed are aimed at securing a sustainable future for the Australian book industry. There is much reason for optimism: Australians are great book readers, so consumer demand for books in all genres is strong; new export markets for Australian content are opening up; printers are adopting new technologies in adapting to changing conditions; bricks-and-mortar bookstores remain an important point of personal contact between the industry and the consumer; and Australian literary culture is continuing to flourish, with new creative works appearing, growing attendances at writers festivals, and so on. And a source of confidence in the future is provided by the prospect of the cultural change across the supply chain that is fostered by the outcomes of the BISG and BICC processes. Government will continue to have a vital interest in the growth and sustainability of the Australian book industry. This interest will relate not just to the industrys contribution to the Australian economy, but also particularly to its cultural importance arising from the essential role of locallyproduced books in Australian culture and cultural life. Issues surrounding the writing, publication, distribution and sale of Australian books will remain matters of considerable concern to the public sector into the future. In wrapping up its work, the Book Industry Collaborative Council urges the Australian book industry to consider the far-reaching measures outlined in this report and to begin the process of implementing the various reform strategies that we have identified. On 11 June 2012, if:book (www.futureofthebook.org.au) held Australias first 24-Hour Book project and the first in the world to produce both print and digital editions within its timeframe. The resulting book, Willow Pattern, features new work from writers as diverse as Nick Earls, P.M. Newton, Steven Amsterdam, and Krissy Kneen. It is now available both in print and digital worldwide. The purpose of this project is to further explore the possibilities of stories as data. From its original inception as a book (both print and digital), if:books goal is to explode the 24-Hour Book into a myriad of forms and responses both digital and physical, and to create an experience that will inspire visitors to step outside of the book and consider the future of how everyone can engage with stories on their own terms.
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The book was written and edited in Wordpress; as Wordpress is also a database, all of the data from the book including every edit, annotation and interaction with the online audience could be captured as a data set which explains what was written and what was changed. This has been turned it into an API (application programming interface) so the data can be interrogated by anyone who so chooses. This is a way of exploring a book as a data set, and that exploration, says if:book founder Kate Eltham, could take the form of an artwork, infographics or research. Simon Groth, the manager of if:book, says that on the basis of pure numbers, the 24-Hour Book can be considered a success. Within the given time frame, a group of dedicated writers, editors and support team took a set of vague ideas to a published volume. And although they couldnt touch the final printed edition which was printed on the New York Public Librarys Expresso book machine in Brooklyn Groth says that it was real enough to watch it rolling off the press in New York and wearily share a glass of sparkling. But the real success of this literary experiment, he says, was to demonstrate that the book can incorporate much more than 140-odd pages of finished text and that writers faced with such a task can rise to the occasion and collaborate to create something more than a discrete set of vignettes. In addition, says Groth, The 24-Hour Book offered instead, a glimpse into the reality of a books world, the hard graft from writer and editor that pulls a story together and makes sense of it and the publishing process that brings the result to the world. What this project enabled us to do is record information thats usually invisible, even to a books creators. As a result, Willow Pattern is not just the completed volume; its also the entire publishing process, the nuts and bolts and the broad range of information that went into creating it.
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PART II
EXPERT REFERENCE GROUP REPORTS
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Copyright Expert Reference Group
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CONTENTS
Background ................................................................................................................................................... 60 The Copyright Expert Reference Group 60 Purpose and structure of this paper 61 Executive summary .................................................................................................................................... 59
Part Two: Extracting value from copyright in a changing environment .................................. 73 Views of various participants in the supply chain 73 Principles 73 Case studies 74 Conclusion ..................................................................................................................................................... 78
Part One: Copyright and the book industry ........................................................................................ 62 Copyright regulation in Australia 62 Understanding the regulatory framework and its impact on copyright content 64 Global trends in copyright regulation 69
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Executive summary
Copyright serves to encourage content creation and reward creators and other rights owners, and is a crucial component of any thriving content industry. However, an effective market must meet the needs of all participants, and the rights of content owners must be balanced with the rights of content users. This includes consumers who purchase books and the rights of the wider community to access new ideas and information. Copyright laws play a vital role in striking equilibrium between the competing interests of rights owners and users. However, the advent of new technologies forces regular reviews of the law to ensure that it has not become an inhibitor of creativity and innovation. Digital technology has meant that copyright material has become easier to share within a community, and copyright content is often being re-used to create new works. The traditional lines between creation and use are becoming blurred and, through the internet, the concept of community has expanded to connect unrelated individuals from across the globe. This rapid change has opened up many opportunities and risks for rights holders and users. The Australian Law Reform Commission (ALRC) is currently conducting a review into the Copyright Act 1968 to consider whether the current law needs to be modified. The Book Industry Strategy Group report and the BICC acknowledged this dynamic environment for rights in a digital market. The goals of the Copyright ERG are twofold; Firstly to gather views from across the book industry and reading community to be able to better understand the substance of copyright law in Australian and its impacts. Secondly, to consider the principles that could serve as a guide in developing practical alternative approaches to copyright in a digital market. This paper provides information for the benefit of people with an interest in the Australian book industry and its interaction with copyright law. However, it is an amalgamation of differing views that exist within the Copyright ERG. It does not represent a consensus position of its membership. The ALRC review into copyright exceptions has served as the context within which the Copyright ERG has prepared its paper and many book industry stakeholders have continued to directly contribute to the ALRC review processes. The reforms proposed by the ALRC and the potential for change in copyright regulations are considered in Part One of this paper. The Copyright ERG has also arrived at three key principles (Enterprise, Relevance and Balance) each of which have been demonstrated, through a range of case studies, to be important when operating in a digital market. These principles may be applied by all book industry stakeholders regardless of the form or substance of copyright regulations.
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Background
The Copyright Expert Reference Group
Upon being established by the Australian Government in June 2012, the Book Industry Collaborative Council (BICC) identified seven key priority areas for reform, broadly based on the recommendations made by the Book Industry Strategy Group (BISG) in September 2011 (further information on the BICC and the BISG can be found at www.innovation.gov.au/books). To address these priorities, the BICC formed a series of expert reference groups (ERGs), each with responsibility for addressing the challenges being faced by the Australian industry in one of the seven identified areas. The impacts of an evolving digital market for books on Australias copyright environment were identified in the BISG report and continue to be an important point of consideration for the book industry. In response to the complexity surrounding copyright discussions, the BICC set up the Copyright Expert Reference Group (ERG) to examine copyright issues arising from the terms of reference for the BICC. The terms of reference adopted by the Copyright ERG reflect this goal.
Copyright ERG Deliverable:

A position paper which maps the current rights environment for books, proposes viable alternative approaches for a digital market and outlines how these may be practically applied.
Copyright ERG Terms of Reference:

1. Identify how the current rights environment could be used more effectively to address the needs of copyright owners and users within the digital setting for books Identify or develop alternative regulatory or non-regulatory models which capture financial rewards for rights owners and meet the needs of users in a digital environment for books and describe how these might be applied
2.
Given the terms of reference for the BICC, and the current inquiry by the Australian Law Reform Commission (ALRC) focusing on copyright exceptions and the interests of users of copyright content, this paper focuses on copyright issues that support strategies across the book supply chain that increase industry capability and competitiveness.
Copyright ERG Membership

BICC members
Nicholas Pullen Chair, Copyright ERG Partner, HWL Ebsworth Lawyers Margaret Allen Australian Library and Information Association
External industry members

Libby Baulch Ellen Broad Andrew Davis Kate Eltham
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Copyright Agency Australian Digital Alliance Random House Brisbane Writers Festival
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Jonathan Gadir George Giazi Angelo Loukakis Fiona Phillips Lynne Spender
Australian Consumer Communications Action Network Pearson Australia Group Australian Society of Authors Australian Copyright Council Australian Society of Authors, Management Committee
Observer
Attorney-Generals Department
Purpose and structure of this paper

The function and purpose of copyright, although easy to define, can be very difficult to reconcile with its application when assessing the interests of all stakeholders in the supply chain of the Australian book industry. The tension inherent in the purpose of copyright and its application has always existed. However, the rise of the digital economy and online demand has highlighted this tension in ways that are still being revealed. The views and beliefs of stakeholders are, at times, very different. This is not surprising. This report reflects an amalgamation of differing views from members of the Copyright ERG. It should not be seen as representing a consensus position paper. This paper does not make specific suggestions for change to copyright laws. To do so would, at best, duplicate the exhaustive process currently being undertaken by the Australian Law Reform Commission (ALRC) in addressing changes to copyright laws. In fact, most stakeholders in the industry have, through their representative groups, made extensive submissions to the ALRC. The purpose of this paper is twofold and is reflected in its structure. The first is to canvass the various views of stakeholders in order to provide an understanding of the issues that must be dealt with. It also provides some case studies as to how problems are being addressed in the new digital era. Further, this paper should act as a ready resource for any interested party as to the regulatory framework the industry works in, the direction being taken by the ALRC in dealing with proposed changes to copyright law, and how other countries are approaching the issue in both legal and non-regulatory areas.
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Part One: Copyright and the book industry

Modern copyright law has its origins in the book industry in England 300 years ago, championed by authors such as Jonathon Swift and Daniel Defoe, and copyright law continues to be an important factor in the regulatory environment for the book industry. Part One sets out the role of copyright in Australias book industry, and issues under review in Australia and elsewhere.
Copyright regulation in Australia

In Australia, copyright law is a combination of legislation (the Copyright Act 1968, a Commonwealth statute) and court decisions that have interpreted and applied the law. Copyright applies to particular forms of expression, rather than to the underlying information or ideas. The forms of expression include text, still images, moving images, music and computer programs. There is also some protection against the copying of the typographical arrangement of printed editions. Very small word combinations, such as titles and headlines, are generally not covered. The period of copyright protection varies according to a number of factors, but most recent content is covered for the life of the author plus 70 years. Unlike other forms of intellectual property, such as patent protection for inventions, there is no registration requirement. Copyright applies automatically as soon as something is recorded or fixed in some way (e.g. written down, or saved to disk). Copyright protection requires some level of skill and effort .The level required is not high, but the requirement can exclude protection for things like directories. If something is protected by copyright, people need permission (a licence) from the owner of copyright to do certain things, unless there is a special exception that allows the use without permission. Using just part of a work can require permission if it is an important or essential part, even if it is small. Uses that require permission include copying, translating and making available online.
Ownership of copyright
The Copyright Act 1968 (Copyright Act) determines who is the first owner of a copyright. It allows first ownership to be determined by agreement between the parties involved in the creation of something new (e.g. a writer and commissioning publisher), but also determines first ownership in the default situation where there is no agreement. In many cases, the creator (e.g. the writer or artist) is the first owner, but it can be the creators employer or, in some cases, a client who commissions a new work. Ownership of copyright can be transferred (assigned), like other types of property. In Australian book publishing, authors usually retain copyright and grant an exclusive licence to a publisher. Some publishers take an assignment of rights for commissioned material.
Exceptions
The Copyright Act contains a wide range of exceptions that allow uses of copyright content for certain purposes, such as research, criticism, reporting news, accessible formats for people with disabilities, and a range of activities in libraries. In some cases there are conditions, such as acknowledgement of the source. Provisions that allow uses without permission, but subject to fair payment, are known as statutory licences. Statutory licences in Australia include those for education and for governments. Existing copyright exceptions, including statutory licences, are currently under review by the Australian Law Reform Commission (ALRC), to determine whether they are adequate and
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appropriate in the digital environment. In June 2013, the ALRC released its Discussion Paper for the Inquiry into Copyright & the Digital Economy, which proposes the introduction of new exceptions into the Copyright Act. This Inquiry is further discussed on page 67 of this paper.
Infringement
There can be an infringement of copyright if a person does something that requires copyright permission, without obtaining that permission. As noted above, permission is not needed where an exception applies. Other situations in which permission is not required include: where copyright has expired; where the use is of the underlying ideas or information rather than the work itself; and where the use is of a part that is not substantial. Copyright can also be infringed by selling, renting or importing items that contain infringing copyright content, such as pirated books or DVDs. Importing legitimately produced books (parallel importation) can in some cases infringe copyright.24 A copyright owner can seek legal remedies for infringement such as compensation through court proceedings. In some cases, there are also criminal penalties for infringement.
Dealing in copyright rights

Copyright is a form of property and, like other forms of property, can be bequeathed, assigned or licensed. A legally effective assignment requires writing and a signature, but no special form of words. Licences do not need to be in writing, but an exclusive licence given in writing and signed by the copyright owner enables the licensee to institute court proceedings for infringement.
DRM and metadata

Australias copyright legislation includes prohibitions relating to circumvention of technological protection measures, commonly known as DRM (digital rights management). There are also prohibitions relating to removing or changing electronic rights management information such as metadata.
Moral rights
Australias copyright legislation also requires attribution of creators, even if they do not own copyright, unless theyve agreed not to be attributed or it is reasonable to not attribute. There are also obligations to creators to avoid treating their work in a derogatory manner.
International system of copyright

Australia is a party to a number of international treaties, such as the Berne Convention. These treaties have two broad requirements for national legislation: implementation of the minimum standards of protection set out in treaty (e.g. types of content, period of protection), and protection of content from other countries that are also party to the treaty (national treatment). In addition to the international treaties, Australia also has bilateral arrangements regarding copyright, mostly in trade agreements such as the AustraliaUS Free Trade Agreement.
Lending rights
In Australia, unlike in some other countries, authors and publishers entitlement to compensation for the lending of books held in public libraries and educational institutions is not based on copyright.
24 The Book Industry Strategy Groups 2011 report recommended that the book industry formalise a code of practice to enable booksellers to import books that are not published in Australia within 14 days of first publication overseas, and books that the Australian rightsholder cannot supply within 14 days: http://www.innovation.gov.au/Industry/BooksandPrinting/BookIndustryStrategyGroup/Documents/BISGFinalReport.pdf 63 BOOK INDUSTRY COLLABORATIVE COUNCIL
The Public Lending Right (PLR) and Educational Lending Right (ELR) schemes are Australian Government cultural programs, administered by the department responsible for the arts, solely for Australian authors and publishers.25 There are some provisions in the Copyright Act on rental of items containing recorded music (such as CDs) and computer programs, but these do not apply to books.
Legal deposit
While not strictly a copyright issue, the Copyright Act includes a requirement for publishers to deposit printed books, periodicals and other material with the National Library. There are similar provisions in State and Territories that require deposit of certain material with nominated State and Territory libraries.26 Once acquired, the material is treated as part of the librarys collection, and the library exceptions allowing supply to researchers and other libraries apply. As noted below, the extension of the obligation to digital and audiovisual material is a matter of current review.
More information on copyright

There is more information about copyright in the Australian Copyright Councils website (copyright.org.au), including a comprehensive list of exceptions and statutory licences in the information sheet Exceptions to Copyright. 27 Submissions to the Australian Law Reform Commissions Inquiry into Copyright & the Digital Economy also offer further information about existing exceptions and the statutory licences as they currently operate.28
Understanding the regulatory framework and its impact on copyright content

The digital economy provides both challenges and opportunities to the copyright industries. A regulatory system that is prefaced on rights holders taking civil action in relation to individual infringements poses particular challenges in the digital environment where rights are infringed en masse by individual consumers who often perceive their behaviour as justified. For the book industry, the digital shift and the mainstreaming of ebooks have increased this threat of infringement. The book industry has long been conscious of copyright infringement, particularly since the development of the photocopier. While more recently other copyright industries have faced the full brunt of the digital economy, both positive and negative, the book industry is now undergoing similar experiences with the shift to ebooks. While the ease of infringement of works has increased, it may be argued that concomitantly, so has the capacity for authors and publishers to exercise greater control over their work in the digital environment. The move to digital from hardcopy has also changed the structural distribution of works literary works are now licenced, rather than sold. This presents many opportunities for authors and publishers, while raising issues for libraries, readers and policy makers. Some important changes to the copyright system are on the horizon. The Australian Law Reform Commission is currently conducting an inquiry considering whether exceptions and statutory licences in the Copyright Act are adequate and appropriate in the digital environment and whether further exceptions should be recommended. The final recommendations may provide scope for the Government to restructure the current policy settings with regard to exceptions and limitations in the digital environment.
25 26 27 28
http://arts.gov.au/literature/lending_rights www.nla.gov.au/legal-deposit www.copyright.org.au/admin/cms-acc1/_images/7303569334ffcdc868f9a4.pdf http://www.alrc.gov.au/inquiries/copyright-and-digital-economy/submissions-received-alrc 64
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The World Intellectual Property Organization (WIPO) has also recently concluded a treaty on exceptions and limitations for the benefit of persons with a print disability. The ALRC inquiry, the new WIPO treaty and the recent Book Industry Strategy Group report raise some important questions relating to the nature of copyright, particularly in the digital environment. One of these questions is the role of copyright in providing incentives to innovate and to create, while mediating these incentives with public policy considerations in allowing access to works.
Innovation and access

The current policy discourse surrounding copyright is focussed, domestically and internationally, on some of the limits of copyright i.e. exceptions and limitations. However, there are other limits within the copyright framework that often go unrecognised. These limits include a requirement that the work must be original (some level of intellectual investment and must originate from a human author) and reduced to material form (i.e. speech, unless documented, is not protected by copyright). Other limits include limits on infringement (requirement to copy a substantial part, in other words, insubstantial copying will not be infringement) and the duration of copyright (i.e. Shakespeares works are not protected by copyright and people are free to copy his works). Copyright does not protect everything ever made. These limitations are inherent in the copyright system, which provides a legal framework for the production and consumption of cultural, technological and other works. In regulating the production and consumption of works, copyright provides incentives to innovate, while also providing concessions to public access for certain public policy reasons. Many submissions to the ALRC review, from both content owners and users, agreed that copyright is an incentive to innovation and creativity, that authorship is important and the purpose of copyright law is to provide an incentive for the creation of works for the benefit of society as a whole. However, the policy settings that give effect to these esoteric concepts are significant: to adopt an innovation-focussed copyright system would be to emphasise elements such as rights, enforcement, intermediary liability, and technological protection measures to adopt an access-focussed copyright system would be to limit the duration of copyright, provide broader and more substantive exceptions and limitations, reduce potential remedies and penalties for infringement.
Of course, a functional copyright system seeks to mediate these two objectives and seek a middle path between providing an incentive to create and innovate, while providing access for certain public policy objectives (i.e. education, judicial proceedings, reporting the news).
The impact of infringement on the book industry

The publishing industry, the first copyright industry, was the first to confront the issue of widespread private infringement. With the development of the photocopier copying books became simple, fast, cheap and easy; threatening extant business models. In Australia, the industry sought legal means to curb institutional infringement in University of New South Wales v Moorhouse 29 a decision remaining relevant today, as evidenced by its consideration in the Roadshow Films v iiNet litigation.30 The impact of infringement on the publishing industry in the digital era, while still significant, has not been as widespread as other copyright industries such as the music industry and the film industry. This may be because of the different natures of the markets and products. A pop song may be listened to in a few minutes. A film may be watched within two hours. Books, on the other hand, may take hours to read. With regard to digital products, the book industrys digitisation was slower to emerge than mp3s or equivalent file formats for films. Many consumers find books difficult to read on a computer screen. As a result, the publishing and electronics industries developed
29 30
http://jade.barnet.com.au/Jade.html#article=66531; http://www.austlii.edu.au/au/cases/cth/HCA/1975/26.html http://jade.barnet.com.au/Jade.html#article=263754; http://www.austlii.edu.au/au/cases/cth/HCA/2012/16.html BOOK INDUSTRY COLLABORATIVE COUNCIL
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dedicated devices and platforms for reading. Importantly, there are still significant numbers of readers who simply prefer to read from the printed page. In Australia, there is little empirical data on the impact of copyright infringement on the book industry. The Australian Publishers Association submitted to the Book Industry Strategy Group: Extrapolating from overseas and local studies, the APA estimates that, by 2016, unless internet copyright infringement is curtailed, 6 million Australian internet users will access online content illegally, the annual value of lost retail to Australian content providers will be $7.5 billion, 66,000 jobs could be lost in the sector as a result and the annual impact of internet piracy on Government revenues will be $1.7 billion. As a core copyright industry, book publishing will be substantially affected by these trends. The extent and effects of piracy are the subject of contention, and its impacts difficult to accurately quantify. A significant change from the era of infringement by photocopying is the ability for individual consumers to infringe copyright using personal equipment in the home. Even where infringement occurs via the internet, the impact of the High Court decision in Roadshow Films v iiNet limits authorisation liability. As a result, rightsholders ability to control widespread infringement is reduced to acting on a piecemeal basis. High levels of infringement also impact on readers, who as a result may have access to fewer book titles, and the titles available may be harder to access, due to increased use of technological protection measures.
Potential licensing opportunities for the publishing sector in the digital age:
While infringement poses a significant challenge to an industry undergoing substantial structural change, the shift to digital also provides substantial opportunities. One such opportunity is that the digital environment can enable a direct relationship with customers. A significant consequence of the shift to digital has been a distribution system based on licensing rather than sale. Library representatives say that this shift has had adverse impacts on activities provided by libraries, and the accessibility and useability of works for consumers. Previously, when hardcopies were sold, the purchaser obtained rights in the hardcopy as a good ie, the right to sell: the second hand book industry survives on the book as a tangible item. In the digital environment where there is little distinction between an original and a copy, literary works are increasingly distributed on a licensing model. Flowing from these licences, the publishing industry has great power to control licensees use of their works (with libraries and consumer advocates noting issues arising from this shift). These changes include: Licensing contracts may exclude the operation of copyright exceptions: such licences may contain contractual clauses that attempt to prevent the licensee from exercising exceptions under the Copyright Act for example, fair dealing for research and study Greater control over licensees use: libraries report that conditions of supply of digital books to libraries are still being settled, but that supply conditions are significantly more restrictive than for hardcopy books. Libraries and archives report that increasingly, they are finding in contracts for books and journals, temporally-based licences. Such licences provide access for a set period of time (i.e. 2 years), and will generally only be available to libraries and the public as long as the publisher is willing to licence them (or, until the publisher goes out of business).31 E-book licences provided to libraries may also prevent the printing, emailing or copying of pages of the text by an individual user and/or library. Some e-book licences specifically exclude inter-library loan, while others reduce the amount of a work that may be reproduced for the purposes of research and study to less than is permitted in the Copyright Act
31
Mr Ross Gibbs, oral testimony before House of Representatives Standing Committee on Infrastructure and Communications, Inquiry into IT Pricing, Monday 30 July p 14. 66
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Territoriality: the capacity for authors and publishers to segment markets in the digital environment is far greater than in the hardcopy market. Parallel importation restrictions, and corresponding exceptions, may not apply in the digital environment. Authors and publishers can geo-block consumers from purchasing works in foreign markets and adopt pay points targeted to particular markets No exhaustion of digital rights: copyright owners have limited rights in relation to the uses made by a purchaser of printed books (e.g. resale or rental), but the extent to which an owner of a digital file can lend or resell the file is a matter of contention Changing publishing practices: in the digital environment, authors and publishers have greater licensing control, but also greater control over content of works being able to update and revise works in real time avoiding the a need to publish editions of works.
Separate to licensing, the prohibition against the circumvention of technological protection measures (TPMs or DRM) is the key legal means by which authors and publishers may control their works in the digital environment. Whether or not a publisher uses TPMs, and how it uses them, is influenced by matters including their concerns about the potential levels of unauthorised use and feedback from customers about the effects of TPMs on their use of the work. Libraries and consumer advocates have noted the use of TPMs can have adverse impacts on the accessibility and availability of works.
Possible future regulatory changes

Australian Law Reform Commission inquiry
The Australian Law Reform Commission (ALRC) has been asked to review the operation of copyright in the digital economy. In particular, the Commission is inquiring into whether the existing exceptions are adequate and appropriate in the digital environment.32 On 20 August 2012, the ALRC released an issues paper to the public for comment and received nearly 300 submissions. The issues paper identified several clusters of issues relating to: technological processes (caching, indexing internet functions) emerging technologies (cloud computing, data and text mining) purpose-based exceptions (private use, private and domestic use online, transformative use) institutionally-defined exceptions (education, libraries and archives, crown use) orphan works fair dealing fair use statutory licenses contracting out of exceptions.
On 5 June 2013, the ALRC released a Discussion Paper with a series of proposals for reform, including: that the statutory licences for education and governments, managed by Copyright Agency, be repealed and replaced with a new free exception allowing fair use for education, direct arrangements with content creators, and voluntary licensing arrangements with Copyright Agency the introduction of a new fair use exception, modelled on the US fair use exception, that would allow uses not currently covered by exceptions in the legislation where the use is fair according to a set of criteria set out in the legislation.
32
http://www.alrc.gov.au/inquiries/copyright-and-digital-economy BOOK INDUSTRY COLLABORATIVE COUNCIL
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Some of the other proposals relevant to publishers include those relating to libraries and to provisions in contractual arrangements that prohibit activities that are allowed by copyright exceptions (sometimes referred to as contracting out). In the chapter on libraries, the Discussion Paper canvasses issues associated with preservation of materials in library collections, mass digitisation of printed materials in collections, harvesting of Australian websites to archive them, orphan works (where rightsholders cannot be identified), and document supply. It refers to developments on these issues in other countries, both legislative and non-legislative (such as the Memorandum of Understanding in Europe between libraries and rightsholders on digitising and making available out-of-commerce works). It also acknowledges the concerns of publishers and authors about the effects on emerging digital markets of copyright exceptions that allow document supply. On contracting out, the ALRC proposes that contractual provisions that purport to prohibit reliance on certain copyright exceptions be unenforceable. The copyright exceptions include those applying to libraries, and those allowing research, study, critique, quotation, parody, satire and reporting news. Submissions on the proposals are due by 31 July 2013, and the ALRCs final report is due on 30 November 2013. The ALRCs eventual recommendations, if accepted by Government, are likely to have an impact on the book industry. At the moment, government and educational statutory licences contribute over $100 million a year in licence fees to rights holders, of which nearly 70% is paid to authors and publishers of books in Australia and internationally. Any reduction in the scope of those statutory licences will have an immediate impact on rights holders income. In submissions to the ALRC, representatives from the education sector have said they anticipate it would continue paying some licence fees under voluntary arrangements (direct arrangements with content creators and collective licences with collecting societies), but they regard the current licence fees as too high. It is more difficult to quantify benefits that may flow to creators or publishers from the inclusion of more flexible copyright exceptions. These benefits could include reduced transaction costs for licensing underlying material.
World Intellectual Property Organization treaty on exceptions and limitations for persons with a print disability
The Marrakesh Treaty to Facilitate Access to Published Works for Persons who are Blind, Visually Impaired, or otherwise Print Disabled was concluded on 27 June 2013. Since 2009, negotiations towards a treaty on this issue have been conducted in the World Intellectual Property Organization (WIPO). WIPO is a special United Nations agency that administers the international intellectual property system. WIPO also provides a forum for the setting of new intellectual property standards. Under international copyright treaties, countries already have discretion to enact such provisions for the benefit of persons with a print disability, but only 57 countries (including Australia) have elected to do so. This treaty obliges countries to: enact limitations and exceptions in their domestic copyright law allowing authorised entities and individuals to make accessible format copies allow transfer of these accessible format copies across borders.
Australias objectives in the negotiations were to promote an outcome that: provides greater accessibility for persons with a print disability by reducing unreasonable barriers in copyright law that inhibit effective participation in society and culture ensures treaty proposals are consistent with existing copyright treaties which provide for economic and moral rights of copyright owners
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provides an international solution that does not hinder the development of new business models and technological advancements for commercial distribution to improve accessibility for persons with a print disability.
While Australia already has broad free use exceptions for persons with a disability (section 200AB) and a statutory licence for institutions assisting persons with a print disability, if implemented domestically, the greatest effect in Australia of the treaty will be greater cross-border transfer of accessible formats.
Other issues under review

There are some other copyright related issues that are currently the subject of review. These include: circumstances in which technological protection measures (TPMs, sometimes referred to as DRM), can be circumvented33 the scope of the safe harbour provisions for online service providers34 extension of legal deposit obligations35 review of Australian contract law.36
Global trends in copyright regulation

This section looks at some recent copyright developments in some other countries. Some of these are specifically referred to in the recent ALRC Discussion Paper.
United Kingdom
Recent copyright review and reform in the UK
The most recent review of copyright law in the UK began with the review of intellectual property law by Professor Ian Hargreaves, culminating in the report Digital Opportunity: A review of Intellectual Property and Growth in 2011 (known as the Hargreaves report).37 The report made 10 recommendations, all of which were broadly accepted by the UK Government. 38 The recommendations relevant to copyright included both legislative and nonlegislative initiatives. The UK Governments implementation of the Hargreaves recommendations included consultations with stakeholders, and a feasibility study of the major non-legislative initiative.39
Legislative initiatives
The legislative changes principally relate to new or amended exceptions to copyright infringement. The report considered the introduction of an exception similar to the fair use exception in the US, but did not recommend its introduction in the UK. 40 Instead, the report recommended some changes regarding uses of copyright material for specified purposes.
33 www.ag.gov.au/Consultations/Pages/ReviewofTechnologicalProtectionMeasureexceptionsmadeundertheCopyrightAct1968.aspx 34 http://www.ag.gov.au/Consultations/Pages/RevisingtheScopeoftheCopyrightSafeHarbourScheme.aspx 35 http://www.ag.gov.au/Consultations/Pages/ExtendingLegalDeposit.aspx 36 http://www.ag.gov.au/Consultations/Pages/ReviewofAustraliancontractlaw.aspx 37 http://www.ipo.gov.uk/ipreview.htm 38 http://www.ipo.gov.uk/types/hargreaves.htm 39 http://www.ipo.gov.uk/types/hargreaves/hargreaves-copyright.htm 40 The report noted (at page 5) that importing Fair Use wholesale was unlikely to be legally feasible in Europe and that the UK could achieve many of its benefits by taking up copyright exceptions already permitted under EU law and arguing for an additional exception, designed to enable EU copyright law to accommodate future technological change where it does not threaten copyright owners. It was also skeptical about the view of some that introducing fair use would enable the UK to compete with Silicon Valley: the success of high technology companies in Silicon Valley owes more to attitudes to business risk and investor culture, not to mention other complex issues of economic geography, than it does to the shape of IP law: see [5.17]. (http://www.ipo.gov.uk/ipreview-finalreport.pdf) 69 BOOK INDUSTRY COLLABORATIVE COUNCIL
Many of the exceptions recommended are already in place in Australia, such as those relating to parody, satire, private use, preservation of content in the collections of cultural institutions, and people with disabilities. The report recommended the extension of the existing exception allowing fair dealing for research or study to apply to audio-visual content, and changes to enable libraries to provide this content for research or study. The UK research or study provisions are narrower than Australias: they are limited to non-commercial research and private study. The report also recommended some changes relating to use of content by the education sector. The UK does not have statutory licences for education. The use of content is collectively licensed by Copyright Licensing Agency (text works) and Education Recording Agency (broadcast content), overseen by the UK Copyright Tribunal, but the licences are not as broad in scope as the Australian statutory licences. Some minor uses of content are allowed without permission or payment, as they are under Australian law, and the UK Intellectual Property Office has recommended some further minor uses be allowed, but that the framework for licensing significant uses of content remain, to avoid causing unreasonable losses to rights holders, and damaging incentives to creators. Two of the Hargreaves recommendations have recently passed into law. The amendments to the UK copyright legislation by the Enterprise and Regulatory Reform Act will allow licensing of orphan works (works whose rightsholders cannot be identified or located), including for mass digitisation by cultural institutions. It will also allow extended collective licensing, a legal framework that enables licensing by a collecting society of non-members works where it has a sufficient mandate from rightsholders. A key difference between extended collective licensing and statutory licensing is that rightsholders can opt out of a licensing scheme. The Intellectual Property Office has recently released draft legislation in relation to new or revised exceptions for the following: private copying; parody; quotation; public administration; data analysis for non-commercial research; education; research; and libraries and archives.41
Non-legislative initiatives
The major non-legislative initiative is a Digital Copyright Exchange or Copyright Hub. The Hub would, among other things, facilitate licensing for low-value uses of copyright content. As part of its implementation of the Hargreaves recommendations, the UK Government engaged Richard Hooper to conduct a feasibility study of the initiative recommended by Hargreaves.42 The Hub is now an industry-led initiative, chaired by Hooper.43 Another recommendation was the simplification of licensing arrangements for the education sector. The various licensing bodies have since taken steps to simplify their licensing arrangements and improve their communications about them. A further non-legislative initiative is for the UK Intellectual Property Office to release Copyright Notices that explain or clarify areas of the law that have given rise to confusion or misunderstanding.
Canada
There have been two significant recent developments in Canada: amendments by the Copyright Modernization Act five decisions on copyright by the Supreme Court (often referred to as the pentalogy).44
In 2012, following more than a decade of debate over copyright reform in Canada, in the Copyright Modernization Act was passed.45 Amongst other things, the Act implemented the standards in the
41 42
http://www.ipo.gov.uk/types/hargreaves/hargreaves-copyright/hargreaves-copyright-techreview.htm http://www.ipo.gov.uk/hargreaves-copyright-dce 43 http://www.copyrighthub.co.uk/ 44 http://www.iposgoode.ca/2012/07/the-pentalogy-the-supreme-court-clarifies-canadas-copyright-law-in-five-major-decision/ 45 Copyright Modernization Act (2012), Canada http://www.parl.gc.ca/HousePublications/Publication.aspx?Language=E&Mode=1&DocId=5697419&File=27#1 FINAL REPORT 70
World Intellectual Property Organization (WIPO) 1996 Internet treaties46 that were introduced into Australia by the Digital Agenda Act in 2000. The other changes are described by the Canadian government as follows: give copyright owners the tools they need to combat piracy clarify the roles and responsibilities of ISPs and search engines promote creativity and new methods of teaching in the classroom by providing greatly expanded exceptions for education encourage innovation in the private sector through exceptions for technical computer processes provide legal protection for businesses that choose to use technological protection measures or digital locks to protect their work as part of their business models give consumers the ability to, among other things, record their favourite TV shows for later viewing, transfer music from a CD to a digital device, and create a mash-up to post via social media.47
Some of the copyright changes introduced through the Copyright Modernization Act have generated concern for different sectors in Canada. Consumer groups, schools, libraries and archives opposed the introduction of rules relating to digital locks, or technological protection measures, which restricted the scope of uses of content that might otherwise be permitted by an exception. Canadian authors and publishers opposed the expansion of fair dealing for education, which enables schools in Canada to make greater use of copyright works for certain educational purposes without prior permission or payment. One of the five recent Canadian Supreme Court decisions concerned the application of the fair dealing exception for private study, and the extent to which a teacher could rely on the exception to copy for a student.48 The amendments, together with court decisions, have resulted in uncertainty about what activities require a licence in the education sector. As a result, in April 2013, the Canadian collecting society Access Copyright instituted three sets of legal proceedings seeking clarification of the law.49
United States
The last significant reform of United States (US) copyright laws occurred in the late part of the twentieth century, with the enactment of the Digital Millennium Copyright Act (DMCA). The DMCA introduced rules for online intermediaries engaging with copyright works, and new protections for works to which technological protection measures had been attached. The Copyright Term Extension Act (1998) also extended copyright terms in the US, to life of the author plus 70 years and for works of corporate ownership, to 120 years after creation or 95 years after publication (whichever endpoint is earliest). On 24 April 2013, the US House of Representatives Judiciary Committee announced that it would conduct a comprehensive review of US copyright law.50 Committee Chair Bob Goodlatte stated: There is little doubt that our copyright system faces new challenges today. The Internet has enabled copyright owners to make available their works to consumers around the world, but has also enabled others to do so without any compensation for copyright owners. Efforts to digitize our history so that all have access to it face questions about copyright ownership by those who are hard, if not impossible, to locate. There are concerns about statutory license and damage mechanisms. Federal
46 47
WIPO Copyright Treaty (WCT) and WIPO Performances and Phonograms Treaty (WPPT) - adopted December 20 1996 www.balancedcopyright.gc.ca/eic/site/crp-prda.nsf/eng/h_rp01153.html 48 http://scc.lexum.org/decisia-scc-csc/scc-csc/scc-csc/en/item/9997/index.do 49 http://www.accesscopyright.ca/media/35670/2013-04-08_ac_statement.pdf 50 Chairman Goodlatte announces comprehensive review of copyright law, media release 24 April 2013 http://judiciary.house.gov/news/2013/04242013_2.html 71 BOOK INDUSTRY COLLABORATIVE COUNCIL
judges are forced to make decisions using laws that are difficult to apply today. Even the Copyright Office itself faces challenges in meeting the growing needs of its customers the American public.51 The review follows testimony to Congress by the US Register of Copyrights, Maria Pallante, on 20 March,52 Which echoed a number of issues outlined in a lecture delivered at Columbia University entitled.53 In her testimony, Pallante said: A central equation for Congress to consider is what does and does not belong under a copyright owners control in the digital age. I do not believe that the control of copyright owners should be absolute, but it needs to be meaningful. People around the world increasingly are accessing content on mobile devices and fewer and fewer of them will need or desire the physical copies that were so central to the 19th and 20th century copyright laws. Moreover, while philosophical discussions have a place in policy debates, amending the law eventually comes down to the negotiation of complex and sometimes arcane provisions of the statute, requiring leadership from Congress and assistance from expert agencies like mine. The list of issues is long: clarifying the scope of exclusive rights, revising exceptions and limitations for libraries and archives, addressing orphan works, accommodating persons who have print disabilities, providing guidance to educational institutions, exempting incidental copies in appropriate instances, updating enforcement provisions, providing guidance on statutory damages, reviewing the efficacy of the DMCA, assisting with small copyright claims, reforming the music marketplace, updating the framework for cable and satellite transmissions, encouraging new licensing regimes, and improving the systems of copyright registration and recordation. Pallante has more recently expanded on the areas for review at the World Creators Summit in June 2013.54 The House Judiciary Committee is expected to commence a series of hearings on US copyright law over the second part of 2013. The US Copyright Offices stated policy priorities from October 2011 October 201355 include small claims solutions for copyright holders, mass book digitization, illegal streaming, online infringement of content via rogue websites, orphan works, copyright exceptions for libraries and market based licensing for cable and satellite retransmissions.
Court decisions
US court decisions on fair use are being watched from Australia with renewed interest, following the proposal in the ALRC Discussion Paper that Australia introduce a similar exception. Of particular interest for the Australian book publishing industry is the ongoing litigation surrounding Googles book digitisation project, including the HathiTrust case,56 and the Georgia State University57 case on copyright licence fees for university course packs.
Agreement between ISPs and content bodies on deterring online copyright infringement
In 2011, a Memorandum of Understanding (MOU) was formed between key content bodies in the film and music industries and major internet service providers. It covers the monitoring of online infringements, notifications to Internet Service Provider (ISP) subscribers, sanctions for infringement, and education. The Centre for Copyright Information has been formed to implement the MOU, including the Copyright Alert System, and information about sources of legitimate content.58
51 Ibid. 52 http://judiciary.house.gov/hearings/113th/03202013/Pallante%20032013.pdf 53 Maria A. Pallante, The Next Great Copyright Act, 37 Columbia Journal of Law and the Arts, http://www.law.columbia.edu/null/download?&exclusive=filemgr.download&file_id=612486 54 http://www.ip-watch.org/2013/06/06/pallante-goodlatte-lay-framework-for-us-copyright-review/ 55 Priorities and Special Projects of the US Copyright Office October 2011 October 2013 http://www.copyright.gov/docs/priorities.pdf 56 http://www.tc.umn.edu/~nasims/HathivAG10_10_12.pdf 57 http://homer.gsu.edu/blogs/library/wp-content/uploads/2012/05/GSU_decision.pdf 58 http://www.copyrightinformation.org FINAL REPORT 72
Part Two: Extracting value from copyright in a changing environment

Part Two seeks to identify the main copyright issues facing different participants in Australias book publishing industry, and articulate some principles for addressing these issues. It also sets out some case studies demonstrating some developments in publishing enabled by the online environment.
Views of various participants in the supply chain

A key focus for the BICC is ensuring the future viability of Australias book publishing industry. Its terms of reference specifically refer to strategies across the book supply chain that increase industry capability and competitiveness. The supply chain includes authors and other creators of content, publishers, printers, retailers, and other intermediaries. The viability of the industry is dependent upon consumers, and their concerns and expectation also need to be taken into account. So do the views of libraries, given their role in facilitating access to content that may not otherwise be readily accessible to consumers. The principal concerns of the participants most affected by the copyright environment, relevant to the sustainability of Australian book publishing, are as follows: Authors and other creators Publishers Libraries opportunity to be fairly rewarded for the value of their work to others income to support the time and skill required to create new material recognition of their authorship, including through attribution respect for their work, including through legal sanctions against derogatory treatment protection of their intellectual property confidence to invest in the creation and dissemination of new content; protections against unfair free-riding on investment in content and dissemination availability of content (including any associated costs) Accessibility of content (use of DRM, licence conditions) content available to be acquired by the library and made available to library users costs associated with acquisition of content the means by which content can be made available by libraries to library users
Consumers
Principles
Creators, publishers, retailers, libraries and consumers are all affected by the commercial and legal environment for books. The needs and interests of these stakeholders overlap, but may also be at cross-purposes as traditional business models are challenged by disruptive technology and market change. Technological developments have had a significant impact on writing and publishing, described by some as disruptive. 59
59 The use of disruptive in this context refers to the concept first outlined by Harvard Business School scholar Clay Christensen in his seminal article Disruptive Technologies: Catching the Wave and later expanded in his book The Innovators Dilemma. Bower, J.L., Christensen, C.M. (Jan-Feb 1995). Harvard Business Review. Disruptive Technologies: Catching the Wave.

Around the world, publishers and creators are seeking to develop new commercial models that meet the needs of consumers to access content, but which support sustainable creative enterprise for authors and publishers. In this context, the Copyright ERG, on behalf of the BICC, has developed a set of principles for addressing copyright issues affecting the sustainability of the book industry. The industry members of the ERG unanimously support the following principles, which are intended to inform the future actions of industry:
1. Enterprise
For Australias book publishing industry to adapt and survive, the copyright system will need to provide an environment that enables publishers to invest in new forms of content and delivery, and that provides sufficient income to creators to enable them to create new content. We support the creative enterprise of Australian authors and publishers. The Australian copyright framework should equip authors and publishers with clear tools to select and manage both commercial and non-commercial applications of their content as they choose.
2. Relevance
The commercial practices of the Australian book industry must be ready to innovate in anticipation of the changing marketplace. In some areas of publishing, rights in books are marketed and managed on a territory by territory basis. While this has drawn criticism from some, it has also allowed territorial rightsholders to invest in the marketing and distribution of book titles for that territory. Territorial management of rights for digital content is managed via technical rather than legal means. Consumer expectations regarding availability of content in digital form are challenging some current practices whereby content is available at different times, and/or on different terms, in different territories. Some have argued that unauthorised use of digital content is exacerbated by the lack of availability of legitimate digital content, but others point to unauthorised use despite availability of legitimate content.
3. Balance
Australias copyright framework should balance proprietary rights and the commercial interests of creators with the needs of users and support cultural enrichment of our community. There are social and economic benefits for Australia in ensuring the community has access to knowledge and culture. The Australian book industry should remain committed to ensuring readers have wide and reasonable access to books and culture in a variety of formats. Libraries perform an important social function in enabling access to content, and they receive significant government funding to enable them to do so, including for the purchase of content. The relationship between publishers and libraries is an evolving one, with libraries themselves becoming publishers in some respects, and with content being increasingly published through subscription access rather than sale of copies.
Case studies
The following are some case studies of ways in which the digital environment has enabled new forms of publishing, writing and rights exploitation.
Case Study: Osprey Group Publishing

Osprey Group Publishing (a British company) is an example of a publisher that has established direct relationships with its customers through online engagement.
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Osprey Group calls itself the enthusiasts publisher. Established nearly a half century ago, Ospreys business has been built on an understanding of the specialised communities of interest it serves. In a marketplace that is experiencing massive disruption, especially with regards to formats and supply chains, Ospreys business has grown. Osprey is an example of vertical publishing, creating brands and niches serving well-established and active communities of readers, including military history (Osprey), science fiction (Angry Robot), history and nostalgia (Shire). As Osprey CEO, Rebecca Smart, wrote in The Bookseller in November 2012: Until a few years ago, it didnt matter whether you were a reader of literary fiction or a lover of gardening manuals, the bookshop was where you went to buy books. Thus the trade grew, and with it the myth that there is a book market. The consumer publishing industry as we know it evolved around a format, not around a market. The migration to online purchasing of print books, and then to ebooks, means that the buying of books is now about processes of search and recommendation, rather than browse and display, and this leads to a focus on specific interest areas and trusted authorities. If you publish for a wide range of interests, promotion of each individual book is becoming increasingly difficult and expensive.60 Osprey imprints nurture direct relationships with their customers, not bookstores but readers, through direct sales, subscription models and merchandising. Because their end users are their primary stakeholders, Osprey has adopted business practices that are more reader friendly than those of large trade publishers. For example, publishing globally in all English-language markets simultaneously and in multiple formats, not to mention at prices deliberately targeted to be competitive with Amazon, makes Osprey an example of a publisher operating in the global digital marketplace. Osprey imprints have also proven to be innovators, experimenting with new opportunities made possible by the changes in book formats. For example, Angry Robots Clonefiles initiative to bundle DRM-free ebooks with print editions has been hugely successful, in some cases tripling print sales. Being a smaller publisher with a flexible structure that encourages each imprint to innovate, Osprey is impressively nimble in a fast-changing market. Their speed of response is a competitive advantage against large multinational publishers that have a more rigid command-and-control approach to strategy.
Case Study: Smashwords

Smashwords (a US company) is an example of a new type of online intermediary, though many of its services are similar to those developed for the offline world. It offers online distribution services, and editorial services. Smashwords is the worlds largest independent distributor of ebooks. Founded in 2008 by Mark Coker, Smashwords provides a free, global platform to publish and distribute ebooks to major retailers including Apple, Barnes & Noble, Sony and Kobo. More than 180,000 titles are listed in the Smashwords catalogue. Smashwords is an example of an aggregator who can make it more efficient for individual authors and small presses to reach a global marketplace for ebooks. While ebook publishing for English-language readers will never truly encompass the market without also distributing to Amazon Kindle customers, using a distributor like Smashwords is a fast and direct pathway to readers for most indie authors. Smashwords also illustrates one of the paradoxes of the disintermediation that has occurred in digital markets. The influence of traditional publishers over the means of production and distribution that connect authors and readers, either for print or digital books, has been reduced. However, with a
60 Smart, R. (2012). The Bookseller. Publishing in verticals. http://www.thebookseller.com/blogs/publishing-verticals.html Accessed: 16 Jun 2013
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proliferation of retailers, dominated by Amazon which seeks to attract and keep customers within its own retail ecosystem, distributing books to the majority of ebook customers may be cheap but it is certainly not simple. In this emerging marketplace there are not yet international standards or cooperation on metadata, quality assurance, formats or financial reporting. While digital markets have made it easier to eliminate the middle men in the book supply chain, paradoxically, new intermediaries like Smashwords actually make ebook distribution more streamlined and efficient for independent authors and publishers. Smashwords is a good case study demonstrating the new tools that indie authors and small presses can use to sell directly to readers and claim a greater margin of the sales revenue. However, it does not make an attractive template for Australian businesses to follow into the distribution space. Any new distribution business seeking to support Australian books and/or readers, would also need to achieve a critical mass of titles in order to negotiate favourable trading terms with retailers such as Apple and Kobo. This would necessitate a global positioning in direct competition with the likes of Amazon and, yes, Smashwords.
Case study: Fan fiction

The internet has provided enhanced opportunities for writers of fan fiction writing using the characters and other features of commercially published books to publish their work online and share it with similar fans. Fan fiction is usually written by amateur writers, and not for commercial gain. Some authors dont object to fan fiction, and might even encourage it, but others do object and have sometimes sought to have it taken down from websites. Fan fiction may in some cases infringe copyright, depending on the extent of taking from the original book and whether any copyright exceptions apply (and this can vary from country to country). Some argue that transformative uses of other peoples material, like fan fiction, should be allowed under copyright exceptions, but this would remove the opportunity for authors to give or refuse permission for fan fiction depending on their attitude to it.
Case study: Authors Unlimited and the ASA DigiJournals Scheme

These are case studies of the potential for Australian authors to generate income from their work after the arrangements for the initial offering of the work have expired. Until recently, Australian examples of new forms of productive management of copyright online have been scarce. However, positive initiatives are beginning to appear. The Australian Society of Authors (ASA) has developed two programs worth noting: Authors Unlimited and the ASA DigiJournals Scheme. Authors Unlimited is a creator-centred information and sales portal for authors, print books and eBooks. Authors Unlimited is a portal for authors where previously contracted rights have been reverted to them, allowing the author to reissue the work themselves. It is a collective endeavour, offered free to members and paid for from their membership fees. The ASA provides a further fair opportunity for literary creators to be able to control and commercially exploit their work; it also undertakes administration and management of licensing and copyright questions should problems occur. DigiJournals is a new form of licensing exercise DigiJournals seeks to secure payment for re-use of authors material where it has been digitised from an earlier, print form by a journal, but where this had not been authorised by the creator or further payment offered for its use. It operates as outlined below: With the increasing digitisation of backlist items originally published in print journals, it has become very apparent that a new form of licensing of such materials is needed to allow the proper exercise of copyright and the payment of author and owner fees as appropriate. The ASA DigiJournals Scheme is a licensing program for authors, managed on behalf of the ASA by the Copyright Agency Limited and covering the online sale of digitised works such as short stories and poems via certain electronic databases and journals.
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Where members authorise their works for inclusion in the ASA DigiJournals Scheme, the selected journals will be scanned and indexed, and subscribers will be able to access the PDF articles. Each licensed aggregator is required to use digital tracking software to monitor actual online subscriber access to works and this information is used to distribute the payments received. This scheme is only available to full members of the ASA and members of the Copyright Agency Limited. These exercises are unique in Australia at present. If successful over time, they may operate as models for other author collectives or groups to create further joint copyright and licensing tools in the interests of fair opportunity. Authors also stress that the present statutory licensing provisions of the Copyright Act are one of the chief means available to them to realise a fair return on their investment of time and expertise and money in creating content of value. Without this supplementary income, protected by formal copyright provisions, remuneration to creators would be even less than it is now.
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Conclusion
The ongoing debate and differing views reflected in this paper by members of the Copyright ERG will continue to be discussed as the book industry takes its next step towards the BICA. The role and function of copyright in the digital environment is being debated in Australia and elsewhere in the world. The pace of technological and other changes, and the evolution of business models for the digital environment, requires some caution when considering what interventions might bring about the best results. While some issues may require legislative change, others may be resolvable through non-legislative industry-led measures.
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Data Expert Reference Group
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CONTENTS
Overview ........................................................................................................................................................ 82 Background 82 Data Expert Reference Group 82 Executive summary .................................................................................................................................... 81
Current data collection approaches ...................................................................................................... 84 International approaches 84 Seeking a new approach ........................................................................................................................... 85 Identifying data needs 85 Data collection options 86 Data sharing principles 87 Framework 89 Models for data collection 89
Implementation plan ................................................................................................................................. 92 Recommendations 93
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Executive summary
Industry data is critical for any industry. It shows where an industry has been, where it currently is and where it is heading. It allows the industry to spot trends and changes in the marketplace and allows the industry to plan and invest for the future. It is also vitally important when dealing with Government. The Data Expert Reference Group (ERG) was established to develop a framework for book industry data collection with the view that such a framework would gain the support of all parts of the book supply chain represented by their industry associations. This report examines the issue of industry data collection and explores the options that are currently available to the Australian book industry to collect its own data. While noting that some parts of the industry do collect data, an attempt has been made to consider how this existing data collection may be effectively used and enhanced to provide a complete data set appropriate for use across the industry. The Data ERG makes five recommendations: 1. Data collection should become a key role of the Book Industry Council of Australia (BICA) and form part of the BICAs annual budget. 2. Initial data should be aggregated from existing data collected in the industry and collated to form an annual report delivered to the book industry. 3. Initial data should primarily be supplied by the Australian Publishers Association (APA) and complemented with Nielsens data. 4. Once this initial data is collected, the goal for future years should be to incorporate data collected by other industry associations and to start collecting data identified by the industry that is not currently being collected. 5. The Australian book industry should further investigate the potential to form partnerships with other international data bodies to share data and collaborate on industry data standards. To ensure a smooth transition towards data collection in 2014, a sub-committee from the Data ERG will continue to drive this process post June 2013. This sub-committee will engage with the industry associations and help establish a framework within BICA. This group will consist of Jon Page (Pages and Pages), Jim Demetriou (Allen & Unwin) and Paul Petrulis (Cengage).
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Overview
Industry data is critical for any industry. It shows where an industry has been, where it currently is and where it is heading. It allows the industry to spot trends and changes in the marketplace and allows the industry to plan and invest for the future. It is also vitally important when dealing with Government. This report examines the issue of industry data collection and explores the options that are currently available to the Australian book industry to collect its own data. While noting that some parts of the industry do collect some data, an attempt has been made to consider how this existing data collection may be effectively used and enhanced to provide a complete data set appropriate for use across the industry.
Background
The Australian Bureau of Statistics (ABS) ceased collecting book industry data in 2004. One of the results of this was that during the open market debate in 2009-10, critical data on the book industry could only be provided anecdotally as there was no hard data available. The Book Industry Strategy Group (BISG) also found distinct gaps in industry data. PricewaterhouseCoopers (PwC) Australia was asked to put together a snapshot of where the Australian book industry currently stood and it too found gaps in information on the industry that was needed for the BISG report. This dearth of industry data led the BISG to recommend: That the Government and the book industry share the cost of reinstating collection of book industry statistics by the Australian Bureau of Statistics (ABS) and that survey collection commence in the 2012-13 financial year. In its response to the BISG report, the Government supported the reinstatement of book industry statistic collection but stated that it would not fund the survey collection at this point in time. It became the role of the Book Industry Collaborative Council (BICC) to find an alternate way to fund or source the data that the Australian book industry requires.
Data Expert Reference Group

Upon being established by the Australian Government in June 2012, the BICC identified seven key priority areas for reform, broadly based on the recommendations made by the BISG in September 2011 (further information on the BICC and the BISG can be found at www.innovation.gov.au/books). To address these priorities, the BICC formed a series of expert reference groups (ERGs), each with responsibility for addressing the challenges being faced by the Australian industry in one of the seven identified areas. Data collection was identified as a priority area for the book industry and the Data ERG was established to develop a framework for book industry data collection, with the view that such a framework would gain the support of all parts of the book supply chain, as represented by their industry associations. The first responsibility of the ERG was to determine its own terms of reference and deliverables. The following were agreed by the Data ERG:
Data ERG Deliverable:

Develop a framework for the Australian book industry, including participating industry associations, to collect book industry data. The framework will form the basis for an agreement between industry participants on how sustainable data collection for the book industry can commence.
Data ERG Terms of Reference:

1. Agree on data needs for the book supply chain
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2. Develop an agreed framework for collecting data across the book supply chain 3. Establish an implementation plan for delivery of the data collection framework
Data ERG Membership

BICC members
Jon Page Chair, Data ERG President, Australian Booksellers Association Sophie Masson Chair, Australian Society of Authors

Jim Demetriou Warren Griffin Duncan Johnson Paul Petrulis Allen and Unwin Griffin Press Collins Booksellers Cengage
Ex-officio member
Andrew Middleton Australian Bureau of Statistics
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Current data collection approaches

The book industry has not been without data in the last decade. The ABS conducted an annual study between 2001 and 2004 and for the last 11 years the sales data of print books in Australia has been collected and collated by Nielsen BookScan (Nielsen). Nielsen data covers a majority of book retailers in Australia, from independents to chain stores (Dymocks, Collins and Borders/Angus & Roberston) to Australian online booksellers and Discount Department Stores (Big W, Target and Kmart). Nielsens data is an invaluable tool for everyone in the book industry. It allows publishers to see real sales data of their titles so they can make more informed decisions on print runs and when to reprint a book. It also allows retailers and publishers to quickly spot trends and track the longevity of particular books, series, and genres. Having this data means that everyone in the book industry can better understand and plan what they do in their businesses. However, Nielsen does not collect all book sales data. There are a number of bookshops that do not provide data to Nielsen (which Nielsen weights their figures for). Nielsen also does not gather book sales data from non-traditional book retailers (e.g. Australia Post) or direct sales from publishers. Data on book sales in Australia by overseas retailers is also not collected. Nielsen does collect book sales data in the UK and the US but is unable to determine the originating country for the book sale. Nielsen does not report on online sales data within Australia. Nielsen also does not collect ebook sales data. Publishers, of course, collect their own eBook sales data but there are no industry-wide figures. The ebook market is rapidly emerging and evolving. Data on ebook sales is critical for bookshops, publishers, authors and libraries. It is estimated that eBook sales will become 25-30 per cent of the total book market within the next two years if the Australian market continues to follow ebook trends in the US and UK. This will fundamentally change the way the book industry operates and needs to be planned for and managed. This cannot be done without industry-wide data.
International approaches
The book industry in the US formed the Book Industry Study Group (US-BISG) in 1975. The USBISG is a not-for-profit group whose members include all the major publishers and the Association of American Publishers, all the major book retailers including Amazon and Barnes & Noble, and other key stakeholders in the book industry. The group collects source data directly from publishers, and publishes primary research related to the US book industry. The US-BISG is funded through membership, sponsorship and sales of data and research. The US-BISG is also responsible for developing, maintaining and promoting industry standards and practices. In the UK, there is the Book Industry Communication set up by the UK Publishers Association, but it deals primarily with standards and practices, not data collection. In Canada, there is BookNet Canada (BNC), which is partially funded by the Canadian Government. The BNC collects industry data and maintains industry standards and practices.
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Seeking a new approach

The BICC identified data collection as a priority area for the book industry. As such the Data ERG undertook a number of tasks to determine a suitable data collection model which the industry could pursue.
Identifying data needs

The first task the Data ERG undertook was to survey all the book industry associations to understand their data needs. Based on these survey responses, data items were ranked from most to least required. Five data sets were deemed essential and have been characterised as required core data. Consumer data has since been identified as a sixth core data requirement. The remaining data items were then categorised as secondary and discretionary as detailed in the following chart: Figure 1: Core, Secondary and Discretionary data needs of the Australian book industry
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Data collection options

The next task undertaken by the ERG was to identify a data collection model and funding options. The Data ERG identified four potential options available to the industry to put in place viable mechanisms for collecting reliable data. These include: I. II. III. IV. Paying the ABS to collect book industry data; Arranging / paying a privately run, independent organisation to collect industry data; Industry working together to collect its own data by pooling and using existing resources; and A combination of (II) and (III) above
In considering these options, engaging the ABS to recommence book industry data collection appeared to be the least feasible because of the cost. In 2010-11 the ABS provided an estimate of approximately $1.3 million per year to reinstate data collection for the industry. Additionally, there is a long lead time in the order of 12-24 months before any data collection would actually recommence. Despite these costs, there are clear benefits to this approach, including assurance of confidentiality and high data quality and credibility. Arranging with or paying a private firm to collect industry data may be viable, as this approach is analogous to the arrangements between Nielsen and booksellers and publishers. These current arrangements however, do not provide a complete picture of the core data required by the book industry. A number of book industry associations or organisations collect their own data. While appropriate for the industry sector for which it is collected, this data is likely to be incomplete for the entire book industry. For example, the Australian Publishers Association (APA) has collected data over the past decade from its publishers. The Copyright Agency Ltd (CAL) has conducted surveys among publishers and authors. While these collections may be appropriate for the purposes for which they were collected, they do not currently meet the core data needs identified by the industry.
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Data sharing principles

A data sharing arrangement that brings together available data could go some way to minimising the cost to the industry in collecting the required data. The Book Council Secretariat at the Department of Industry, Innovation, Climate Change, Science, Research and Tertiary Education drafted the following agreement for the Data ERG (based on the Australian Bureau of Statistics National Statistical Service document: Good Practice Guide to Sharing Data). Principle Considerations Participating industry associations will agree to the principle of data sharing where appropriate and the data that will be shared. Aim and purpose There will be a clear and common understanding by all industry associations on the costs and benefits of collecting supply chain data. A written Data Sharing Agreement may be made in the form of a letter of exchange or a memorandum of understanding that is agreed by all parties. The agreement will cover all terms and conditions for the industry associations to collect, collate, publish and release supply chain data. All participating associations will clearly identify their core data needs. Scope of data collection Industry associations will agree on the processes through which core data will be collected. Each industry association will collect the data that is within its core data needs such that it may be shared and used by other associations individually or collectively. Industry associations may continue to collect sector-specific data as appropriate. Industry associations will agree to collect core data for the first 12 month period. Module approach Once one data collection phase has been completed the industry associations may agree to extend the scope of supply chain data collected. Industry associations will agree that the data collection process can be reviewed once a year. Amendments to the process and type of core data collected will need the agreement of all associations. Agreed Standards Industry associations will agree on standards for how methodology (metadata), quality, timing, frequency and security processes are implemented and used. Industry associations will agree on a consistent approach to collecting supply chain data, with each industry association using the same surveys and metadata. Industry associations will agree on the processes used to monitor and assess quality of data.
Existing data collected
Uniformed metadata
Data quality
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Data timing Data frequency Accessibility
Industry associations will agree on timing of data collection and release of data. Industry associations will agree on how often data collection will take place (eg. once a year). Industry associations will agree on how data will be released and distributed, whether it be for member associations and/or to general public. Industry associations will agree that some data may need to be aggregated to protect commercial sensitivities of individual firms.
Confidentialit y
A confidentiality clause should be included in the data sharing agreement. Industry associations will agree on processes for persons authorised to view raw data received that protects the confidentiality of the data.
Distribution
Industry associations will agree on how data will be released and distributed and the terms and conditions on data being released to different audiences. Industry associations will agree to divide responsibilities of data collection between associations.
Agreed management processes (Governance)
Data management may be centralised from a new supply chain body which determines the systems and processes to ensure data integrity and data security. Industry associations will agree to the processes to update metadata or change surveys. Industry associations will agree to the processes to share data, remove data, or transfer data (security issues). Each industry association will agree to abide by any legal requirements in the collection and sharing of data including protecting privacy and confidentiality. Industry associations will agree on who will have custodianship of any new datasets created. Industry associations will agree on who owns the copyright of data collected. Industry associations will agree on how costs of data collection, collation and release will be paid for. Industry associations will agree to examine various cost options on data collection which provides the best value for money. Industry associations will agree to a dispute resolution mechanism and conditions which the agreement can be terminated.
Legal restrictions
Costs
Cessation
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Framework
To be able to fulfil the book industrys data needs, a framework needs to be developed for industry associations to collect book industry data. This framework will form the basis for an agreement between industry participants on how sustainable data collection for the book industry can commence. At a book industry workshop organised by the BICC, industry representatives from the various associations agreed that data collection is desirable to assist the industry to understand its current market, customers and production environment and that this could be achieved through: Aggregating existing data and sharing with industry representatives; Identifying data and information gaps by consulting with industry representatives about data and information needs and how best to meet them; and Coordinating an ongoing program of research and data collection.
Models for data collection

In seeking to establish a cost-effective data collection process for the industry, the Data ERG proposes two models that arise from a combination and reformulation of some new and existing approaches. These are:
Model A Data Collection by Book Industry Council of Australia (BICA)

A key task of the proposed BICA is seen as providing market information through effective data and information collection. As part of this remit, the Council could: Map existing data needs; Map existing data collection e.g. APA, Nielsen, CAL and others; Identify data gaps; Negotiate and enter into a formal data-sharing arrangement with existing data collectors; Use its in-house resources to fill as much of the data gap as is possible with the available resources; and Identify and seek the required funds to complete the required data collection.
Advantages
Agreement by the book industry that this is a core responsibility of the BICA and that the BICA is the authoritative body to undertake the task; A single focus that represents the entire book industry and not a specific segment; A greater capacity because of its status to negotiate for grants and funding on behalf of the industry; The potential capacity to provide more comprehensive data for the industry through the negotiation of effective data sharing arrangements, as well as more effective and comprehensive surveys and other collections; and A responsibility and accountability to the industry which should ensure that the best quality data within the available resources is collected for the industry as a whole.
Disadvantages
The BICA will have to start from scratch and therefore will take some time to establish its credibility; and
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Resourcing, including funds and internal skills may be an issue.
Model B Data Collection by an existing organisation such as the APA

Among the book industry supply chain associations, the APA has the most comprehensive data collection. The APA has committed significant resources to this process and has done so for more than a decade. The publishers that make up the APA also hold significant core data on sales that is not available to Nielsen or other industry associations. As in the US where the publishers have teamed with the Book Industry Study Group to collect book data, another option for data collection in the Australian book industry is to agree that the APA will be the primary collector of book industry data. As part of this responsibility, the APA would: Work with the rest of the industry to map data needs; Identify other parties in the industry that hold significant, useable data collections and negotiate an effective data sharing arrangement (as per guidelines); Identify data gaps; Develop and cost the process of filling the identified gaps; and Negotiate a cost sharing arrangement with the industry or identify how investment will be recovered possibly through sale of data.
Advantages
Would build on a process that is already established in the APA rather than the need to start from scratch; Has the potential to provide access to data currently held by the APA but not provided to the rest of the industry; and Could enhance the relationship between booksellers and publishers through a data sharing agreement.
Disadvantages
Funding of the process will be an issue and negotiations could be very difficult; and An industry champion (such as the BISG in the USA) will be needed to make this model work as there could be issues of trust from other parts of the industry.
Model B should only be considered if the BICA is not formed.
Costs
For Model A, the costs of data collection should be incorporated into the newly established BICAs annual budget. For Model B, the APA currently has processes in place (including time and resources) to collect data from its member companies. The APA has agreed in principle to conduct a survey of its members to capture the core data identified by the book industry from its members. There would be no additional costs worn by the APA or its current members that receive data. The APA has costed the extra work require to aggregate its current data into an annual report as $22,000 per annum, with an initial set up cost of $20,000. Nielsen has also agreed to provide annual aggregated data (free of charge), and data from past years, which will complement core data collected by the APAs member survey. CAL has agreed in principle to support the initiative with inkind contributions. The following cost approaches could be utilised for Model B.
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1. Break even approach

The APA states how much it costs to collect data and the whole of the industry shares those costs. This approach keeps costs low for all participants including for existing APA members currently receiving APA data.
2. Pre-commitment approach (APA collects, collates and releases data)

The APA indicates how much it will cost for other associations and its members to access the data. Industry associations/individual companies commit to the APA that they will buy the data at the end of the process. Industry associations/individual companies could pay the APA its proportional share of the costs to collect the data (relative to existing APA members) and/or paying additional monies for the completed data when it is released.
3. Mixed cost approach

Companies/industry associations provide core data up front to the APA, and in doing so receive the APA data for free. Those companies/industry associations that do not supply core data can then buy the data for a nominal fee once it is collated and released.
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Implementation plan
A Data Sharing Agreement be drawn up between the BICA (or individual industry associations) and the APA for a survey of their members and the costs agreed to by all parties. A Data Sharing Agreement be drawn up between the BICA (or individual industry associations) and Nielsen to use their aggregated industry data. A questionnaire be drawn up between the BICA (or individual industry associations) and the APA to capture the required core data. This questionnaire is to be kept to a minimum to ensure compliance from as many APA members as possible and would essentially cover: New publications in the year, classified by: i. Status: new book / new edition ii. Market sector: adult fiction, adult non-fiction, childrens, primary education, secondary education, tertiary education, scholarly (academic trade), professional iii. Format: hardback, paperback, ebook, software, other Revenue and units, classified by: i. Local / export ii. Direct sales receipts iii. Commission on local sales (distribution/agency) and the total publisher value represented by this iv. Commission on ebook sales, and the total publisher value represented by this Desirable information for those publishers who are willing to contribute further: i. A detailed breakdown of the above figures by cross-category ii. Channel data: retail, direct, etc.

The survey should be for each financial year, with results submitted before 30 August. The analysis of data provided by this survey should then be compared with data available from other sources e.g. Nielsen. The first survey should look to obtain two years worth of data. This should be conducted in July 2014, with a report for the industry produced in the 4th quarter of 2014. Members of BICA (or contributing individual industry associations) and data contributors would then have access to the report. The report would also be sold to other interested parties. To ensure a smooth transition towards data collection in 2014 a sub-committee from the Data ERG is recommended to drive the process post June 2013. This sub-committee will engage with the industry associations and help establish a framework within BICA. This group will consist of Jon Page (Pages and Pages), Jim Demetriou (Allen & Unwin) and Paul Petrulis (Cengage).
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Recommendations
The Data ERG recommends: 1. Data collection should become a key role of the Book Industry Council of Australia (BICA) and form part of the BICAs annual budget. 2. Initial data should be aggregated from existing data collected in the industry and collated to form an annual report delivered to the book industry. 3. Initial data should primarily be supplied by the Australian Publishers Association (APA) and complemented with Nielsens data. 4. Once this initial data is collected, the goal for future years should be to incorporate data collected by other industry associations and to start collecting data identified by the industry that is not currently being collected. 5. The Australian book industry should further investigate the potential to form partnerships with other international data bodies to share data and collaborate on industry data standards.
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Distribution Expert Reference Group
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CONTENTS
Executive summary .................................................................................................................................... 96 Distribution Expert Reference Group .................................................................................................. 94
Part One: Gaining perspective ................................................................................................................ 98 Why distribution efficiency matters 98 The Distribution Expert Reference Group 98 Purpose of this report 99 Understanding the book distribution system 99 Challenge and opportunity 102 Part Two: Framing a solution ................................................................................................................ 104 Book Distribution Efficiency Framework 104 Barriers and potential solutions 104 The future .................................................................................................................................................... 110
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Executive summary
The distribution process is the key driver in delivering consumers access to books when they want them, in the format they want them and at competitive value. If the Australian industry cannot meet the needs and expectations of consumers within Australia, they can easily make a choice to shop elsewhere. The Distribution Expert Reference Group (ERG) has sought to provide the Australian book industry with recommendations for improving distribution efficiency across the whole supply chain, and a framework for how the industry can achieve this goal without compromising commercial interests and freedoms. In undertaking this review, the ERG examined the current systems for print and electronic book distribution and identified barriers to efficiency; noting the specific challenges facing Australian businesses. Due to the limited timeframe and lack of specific educational publishing expertise within the ERG, this review focussed solely on the consumer books sector. It is hoped that it will provide a useful template for the educational book sector should it chose to undertake a similar analysis. The ERG review has been supported by research undertaken by PricewaterhouseCoopers (PwC), including a comprehensive stakeholder consultation process. Industry engagement is paramount to understanding the difficulties that each part of the book supply chain encounters in seeking to improve efficiency, and the observations from this consultation are central to the reviews findings. Ultimately, failure to meet consumer expectations will totally compromise overall commercial viability. To be internationally competitive, Australian firms must be able to match offshore retailers across three core criteria: Speed to market access to books at a comparable time to when they are available from offshore providers Availability access to the books consumers want Value access to books at a price that is comparable to the price they can access them from offshore providers
To achieve the change necessary to meet the changing expectations of consumers, the industry must drive both immediate and medium to long-term change. The Distribution ERG proposes a number of actions to address this dual aim. The publisher and bookseller industry associations each play a pivotal role in driving this change, by creating a frame from which individual businesses are able to make better informed commercial decisions. There is also considerable opportunity for book printers to expand their service offering and strengthen their position within the book supply chain. In addition to these sector specific actions, the ERG has proposed several collaborative actions with relate to intersecting interests between the relevant parts of the book supply chain.
Immediate actions include:

The Australian Publishers Association (APA) to: 1. Re-establish a supply chain group working collaboratively with other industry sectors where relevant to improve standards and processes 2. Actively work with international partners to improve global critical paths The Australian Booksellers Association (ABA) to: 1. Establish a forum for collective representation of the bookselling sector, which includes independent booksellers, specialist chains, discount department stores, and online booksellers 2. Establish a standards group to develop benchmarks around operational standards and work with the APA supply chain group on areas of intersecting interests
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3. Provide access to professional development activities which promote the benefits of new technologies and customer service improvements Australian book printing firms to: 1. Actively engage with publishers to improve delivery times 2. Continue to develop and actively promote service improvements for increasing speed to market 3. Communicate excess print capacity to publishers 4. Partner with publishers to assist global partnerships APA and ABA to: 1. Create a delegated industry group to engage with Australian Post, courier companies and the Government on postal costs 2. Engage in continuous and collaborative review of PIRs 3. Address potential barriers to collaboration
Medium to long-term change requires:

1. Adoption of an industry culture that is consumer facing, forward thinking and dynamic 2. Industry cultivating a desire for change 3. Widespread understanding of the implications and opportunities of disruptive trends
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Part One: Gaining perspective

Why distribution efficiency matters
Distribution, perhaps more than any other area of the book industry, needs to be reviewed through a new consumer focussed framework. The distribution process is the key driver in delivering consumers access to books when they want them, in the format they want them and at competitive value. If we cannot meet the needs and expectations of our consumers within Australia, they can easily make a choice to shop elsewhere.
The Distribution Expert Reference Group

Upon being established by the Australian Government in June 2012, the Book Industry Collaborative Council (BICC) identified seven key priority areas for reform, broadly based on the recommendations made by the Book Industry Strategy Group (BISG) in September 2011 (further information on the BICC and the BISG can be found at www.innovation.gov.au/books). To address these priorities, the BICC formed a series of expert reference groups (ERGs), each with responsibility for addressing the challenges being faced by the Australian industry in one of the seven identified areas. In the face of increased global competition and other disruption, distribution efficiency has been identified as being vital to the future of books supplied from within the Australian industry. The challenge in developing an industry-wide solution is the need to recognise commercial decision making by individual firms. However, by understanding the pressures at all points of the supply chain and by recognising opportunities for business improvement through effective communication, partnerships and enhanced infrastructure, the industry has an opportunity to reduce delivery time, minimise cost and improve consumer access to books.
Distribution ERG Deliverable

Agreement of best practice between publishers, distributors and booksellers on how to reduce delivery time, minimise cost and improve access to Australian physical and digital books
Distribution ERG Terms of Reference

1. Engage with industry in order to maximise the likelihood of adoption of reform plans for the book distribution system 2. In consultation with industry operators and associations, develop proposals for increasing the efficiency of distribution networks for physical and digital books in Australia
Distribution ERG Membership

BICC members
Lou Johnson Chair, Distribution ERG Vice-President, Australian Publishers Association Managing Director, Simon & Schuster Australia Bill Concannon Ben Jolly Jon Page
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Mary Ryans Books General Manager, Griffin Press President, Australian Booksellers Association
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General Manager, Pages & Pages Booksellers

Cliff Brigstocke Malcolm Edwards Group Chief Executive Officer, Opus Group Board member, Australian Publishers Association Chairman, Hachette Australia Tony Nash Peter Eichhorn Chief Executive Officer, Booktopia Independent member
Purpose of this report

In formulating its deliverable (an agreement of best practice), the Distribution ERG sought to provide the Australian book industry with recommendations for improving distribution efficiency across the whole supply chain. This report provides a framework for how the industry can achieve this goal without compromising commercial interests and freedoms. The target audience for this report are the individuals, firms and sectoral associations that comprise the Australian book industry. The distribution framework aims to provide a broad, whole-of-industry outlook; however sectoral associations are encouraged to adapt the general principles and actions to suit the specific needs of their sector. In addition, the ERG is very cognisant of the fact that individual businesses can and will only review areas of opportunity according to their own interest, capabilities and timelines. In order to ensure that the distribution framework is based upon accurate information and proper consultation to ensure a broad understanding of industry needs, PricewaterhouseCoopers (PwC) was engaged to undertake an analysis of Australias book distribution system. This body of research incorporated several key components: mapping the current book distribution system to improve understanding identifying barriers to efficiency determining areas for improvement along the supply chain engaging broadly with stakeholders to provide an opportunity for consultation and ensure an accurate interpretation of industry needs
This report from the Distribution ERG is broadly based on the PwC research and should be read in conjunction with PwCs report, which includes an additional overlay of a framework that identifies actions that can propel the industry toward efficiency improvement in terms of speed to market, access and value of books within Australia. The PwC report, Fulfilled consumers: Improving the distribution of books in Australia is available at innovation.gov.au/DistributionERG
Understanding the book distribution system

Systems, stakeholders and processes
The Distribution ERG determined to review the distribution system up to the point that both physical trade/consumer books (pbooks) and electronic books (ebooks) reach the retailer, as this is the component of the supply chain that has most scope for industry collaboration. Although there is some crossover between trade and educational supply chain mechanisms, there are many differences. To be meaningful, an analysis of the educational book sector should have its own terms of reference and stakeholder consultation process. Due to the limited timeframe and lack of specific educational
publishing expertise within the ERG, this review focussed solely on the consumer books sector. It is hoped that this work may provide a template that can be utilised by the educational sector. For the purposes of this exercise, the key participants in the trade/consumer book distribution system are defined as follows: Publishers Distributors Printers Wholesalers Booksellers (print and electronic), including library and school suppliers Freight and logistics Electronic data interchange (EDI) platform providers Data providers Title Page/Title Page Plus The price and availability service developed by the Australian Publishers Association and now licensed to Bowker. The enhanced, Title Page Plus will be launching in 2013.
A detailed explanation of these players can be accessed in the PwC Report.
Efficiency
As illustrated in Figure 1, the distribution system for printed trade books is a complex one, with multiple touch points. In comparison, the electronic distribution system is relatively straightforward and arguably more cost effective, though there is still room for further streamlining. This format is also still in its relative infancy and one of the great challenges for the industry is to straddle different operating models and consumer desires concurrently.
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Figure 1: The distribution system for trade books in Australia61

Publishing Retail
Global publication strategy determined (including rights Arrangements)
International
Determine local publication strategy
Copy-editing and design
Prepare file for printing or eBook distribution
Online Retail eBook
Domestic
International printing
Coordinate printing & distribution
Online Retail Print book Consumption
In-store retail
International suppliers
Printing Transport to distributor
Storage
Inventory management
Transport to bookseller or consumer
Libraries
Printing
Publishing Retail
Distribution
Distribution
Systems
Coordinate printing & distribution
Titlepage Plus
Manage inventory
Pacstream Inventory management
What is different about Australia?

The distribution process is complex in all markets, but Australia has a number of additional challenges: A large proportion of books supplied into this market originate in the United States of America (US) and United Kingdom (UK). Access to titles and subsequent supply is affected by international rights agreements and Australias relative size and geographical isolation from a principal product source. In 2012, 61 per cent of titles sold in Australia originated internationally.62 Australia is a very large country with a relatively small and dispersed population (Australias land mass is 31 times bigger than the United Kingdom with a third of the population). This leads to high internal freight costs and speed to market challenges associated with shipping stock to Australia. To illustrate this further, distribution costs are roughly double those in the UK and US and it takes eight weeks on average for books to arrive by ship. Airfreighting can take up to 15 days and is twice the cost of sea freight. The challenges outlined above, coupled with higher labour costs and penalty rates makes the underlying cost structure in Australia significantly higher than international markets and competitors. A large amount of printing work continues to be produced offshore, which places further pressure on print pricing and capacity within Australia.
61 62
PwC, 2013, Fulfilled consumers: Improving the distribution of books in Australia. Nielson Bookscan, 2012. BOOK INDUSTRY COLLABORATIVE COUNCIL
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Australia is subject to significant offshore competition, which is exacerbated by the strength of the Australian dollar and disproportionate postal charges levied on local businesses due to the treaty arrangements that govern international postal services. GST inequity exists between books purchased by consumers through overseas and Australian based retailers. Current regulations stipulate that to attract GST, imports collected through Customs must be greater than $1000. It is estimated that $3 billion dollars of GST revenue is being lost as an unintended consequence of changes in consumer buying behaviour. Offshore competition is escalating the already shifting dynamic of retail and format types in Australia/New Zealand and other markets that source a high proportion of inventory offshore. Some publishers report that Australia is Amazons biggest customer base outside the US. The current parallel importation restrictions (PIRs) provide a mechanism to support copyright holders, though continue to be a source of some tension within the supply chain.
Current Performance
As outlined in PwCs report, the industry has implemented a number of efficiencies over the last few years. Key developments have included: Printer investment in technology and capacity. Higher level of automation by booksellers, i.e. EDI. Greater automation and consolidation of the major book distributors. Access to ebooks - since 2011 the industry has acted to address the significant frustration expressed by Australian consumers in regard to having access to content which is available in other markets, but not in Australia. Widespread access has come as the overall ebook market has matured and providers have moved their focus to Australia. Ebook sales have escalated rapidly and now account for up to 15 per cent of books sold in Australia and are projected to continue to grow.63 The review of the terms of PIR and the subsequent Book Industry Speed to Market Initiative developed through collaboration between the Australian Publishers Association and Australian Booksellers Association have improved publication and resupply timelines and provided access to a broader range of books in the market.
However, the external environment and subsequent consumer expectations are moving more rapidly than the industrys current rate of change, and there are clear areas where further, immediate improvements need to be developed.
Challenge and opportunity

The world is never going to look the way it did before. The book industry has witnessed unprecedented change as the commercial landscape and consumer behaviour has fundamentally shifted. This has created enormous pressure on local businesses. Whilst this is incredibly challenging when viewed within the framework of current business models and practise, there is still much to be positive about in terms of the future of books and publishing in Australia. Australians are still big book consumers. According to Nielsen Bookscan, 50 million physical books (with a value of $978 million) were sold in Australia during 2012.64 In addition, Australians may have spent as much as a further 15 20 per cent (between $175 million and $225 million) on books with
63
Electronic trade book sales will account for 26 per cent of all trade books purchased in Australian bookstores by 2017 (PwC, Australian Entertainment and Media Outlook 2013 2017). 64 Nielson Bookscan, 2012. FINAL REPORT 102
offshore retailers, and $112 million on ebooks.65 Bowker research estimates that 24 per cent of Australian consumers bought an ebook in the period May October 2012. However in order to benefit from the opportunity presented by this consumer appetite, and prevent further erosion of local sales to offshore competitors, the Australian book industry must be able to offer the following; Speed to market access to books at a comparable time to when they are available from offshore providers Availability access to the books consumers want Value access to books at a price that is comparable to the price they can access them from offshore providers
We are also likely to continue to see consolidation between businesses and disintermediation. The industry needs to be ready for further change, and actively look for opportunities emerging from within this radically changing environment. As PwC has identified, surviving and thriving in the new environment will require change. 66 Ultimately, failure to meet consumer expectations will totally compromise overall commercial viability.67
65 66 67
PwC, Australian Entertainment and Media Outlook 2013 2017. PwC, 2013, Fulfilled consumers: Improving the distribution of books in Australia. See Disintermediation, p.5 for detailed examples. As outlined in PwC, Fulfilled consumers: Improving the distribution of books in Australia, Section 5.1, Future trends and implications. BOOK INDUSTRY COLLABORATIVE COUNCIL
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Part Two: Framing a solution

Book Distribution Efficiency Framework
The Book Distribution Efficiency Framework provides a universal model from which the Australian industry (at the firm, sectoral or whole-of-industry level) can consider how to improve its performance around book distribution. The imperative for the industry is to provide a service which recognises a changed environment and competes effectively with overseas based retailers against the criteria of speed, accessibility and value. While the various elements that comprise the framework may appear fundamental, it is the model as a whole that qualifies what needs to be done in order to influence cultural change and improve overall performance. Of particular relevance are the principles of consumer first, agility and collaboration. Holistic adoption of these values can help facilitate the adaptation needed over the longer-term to make the Australian industry sustainable and increase the potential for the Australian industry to thrive in the face of global competition. However, achieving this in the long-term will require immediate actions that can kick-start the momentum necessary for enduring change. The pathway to industry adjustment requires a mix of actions that alleviate existing barriers to efficiency, overlaid with an understanding of the need for cultural change and adaptation, and an active desire to adopt this. Figure 2: Book Distribution Efficiency Framework
Barriers and potential solutions

The research conducted by PwC uncovered a number of barriers significantly affecting the efficiency of the Australian book supply chain. PwC has proposed potential solutions to these obstacles and the ERG has expanded upon these to identify actions to translate these principles into realistic reforms.
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Figure 3: Barriers and solutions68
Principle 1 Consumer first
Principle 2 Agility
Principle 3 Collaboration
SOLUTIONS
1. Industry to assume ownership of BICC (or a designated collaborative standards group) as a vehicle for improving the distribution system
BARRIERS AND BLOCKAGES
The quality of some metadata provided by publishers is poor
The quality of industry-wide sales data could be improved
Some businesses have yet to adopt EDI for ordering and the returns process remains manual and timeconsuming
Integration between the systems and processes of publishers and printers could be improved
2. Industry to continue to review the PIRs collaboratively
The 14/14 days arrangement has improved the timeliness of distribution, but there is a lack of consensus about how the PIRs can best align with consumer preferences and market conditions
3. Industry to reduce handling and increase economies of scale along the supply chain
While distributors have improved the efficiency of their operations, further improvements are needed
Lack of awareness or appreciation among some publishers about the role printers can play in improving the life cycle management of print titles
4. Publishers and distributors to engage with Australia Post to secure volume-based discount
Current treaty arrangements disadvantage the Australian book industry relative to competitors based in the United Kingdom
5. Australian Government to continue pushing for a terminal dues increase with the UPU
6. Improving global critical paths through needs demonstration
Delays in securing ANZ rights for overseas-originated titles can have significant impacts on the efficiency of distribution in Australia
68
PwC, 2013, Fulfilled consumers: Improving the distribution of books in Australia. BOOK INDUSTRY COLLABORATIVE COUNCIL
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Actions to improve distribution efficiency: addressing barriers to reform

Publishers
Australian Publishers Association (APA) to: 1. Re-establish a supply chain group working collaboratively with other industry sectors where relevant to deliver the following;

The development, maintenance and promotion of standards particularly around identifiers (e.g. ISBN and International Standard Text Code), barcoding, location numbering, file formats, EDI and ecommerce The operation of certification and accreditation schemes Metadata standardisation The most effective adoption and utilisation of the enhanced TitlePage Plus platform, which will be launched this year Effective and timely supply of long tail titles using international supply times to benchmark.69 This may need to be managed by individual businesses due to commercial sensitivities Printer-publisher system integration to improve the standardisation of files provided by publishers to printers, and to facilitate the automation of the print ordering process Improved efficiency of the returns process potentially through the use of EDI Industry education of the benefits that can be realised through new technologies and process improvements through publishing case studies, communicating best practise to association memberships and providing access to skills and professional development70 Access to effective data and encouraging adoption of data management tools71 Engagement with like-bodies overseas (such as the US-based Book Industry Study Group and UK-based Book Industry Communication) to ensure that the Australian book industry and its supply chain are aligned with, and on top of, international developments
2. Actively work with international partners to improve global critical paths; It is critical that local publishers highlight the opportunity and unique challenge of the Australian market to their parent publishers and international counterparts in order to positively influence global publication strategies. Consideration needs to be given to the most effective means to communicate this and effect change. The most obvious vehicle for this is the APA, working with individual businesses. Specific areas to focus on are; - timely supply of files for local printing - reviewing all possible means of stock supply to deliver speed to market, value to consumer and cost efficiency - efficient clearance of rights for distribution into the Australian and New Zealand markets
69 Refer PwC, 2013, Fulfilled consumers: Improving the distribution of books in Australia, analysis of indent/ordered to order (OTO) titles, Figures 5 and 6 (pp. 19 20). 70 NB: This may align with the recommendations of the Skills ERG. 71 NB: This may align with the recommendations of the Data ERG. FINAL REPORT 106
Booksellers
Australian Booksellers Association (ABA) to: 1. Establish a forum for collective representation of the bookselling sector which includes:
independent booksellers specialist chains discount department stores online booksellers
2. Establish a standards group to do the following: develop benchmarks around operational standards, i.e. EDI, customer service work collaboratively with the APA supply chain group on areas of intersecting interests 3. Provide access to professional development activities, which:

educate businesses about the benefits that can be realised through new technologies and customer service improvements develop and communicate best practice in regard to improving distribution efficiency
Printers
Australian book printing firms to: 1. Actively engage with publishers to improve delivery times; through the APA to encourage systemic changes at senior levels within individual firms (chief executive or chief operating officer level) to directly educate at a business-to-business level 2. Continue to develop and actively promote service improvements for increasing speed to market;
develop the engagement model with publishers into one of partnership rather than being purely supplier based. The numerous areas where service and speed to market improvements can be made will require publishers and printers to collaborate, as efficiency improvement opportunities exist in both the publisher and printers businesses 3. Communicate excess print capacity to publishers;
with the reduction in print runs, importation via online channels and offshore production, there is now significant excess capacity at the two largest Australian printers. Printers and publishers need to engage in urgent, active collaboration in order to utilise this opportunity 4. Partner with publishers;

to assist global partnerships by providing technical knowledge on global publication strategies, and highlight the value that local printing can provide Although there are currently some areas where there are clear cost benefits to printing offshore (for instance, colour printing in Asia), this is not the case for all works. A large amount of mono (black and white) printing is still managed offshore. This is due to the fact that cost analysis has traditionally been based on the comparative print unit cost only. However, if the collective costs of supply from offshore, which include freight costs, local storage and warehousing, cost of capital (storing larger runs vs. print to demand on-shore), stock obsolescence and write downs, and lost opportunity cost are analysed, producing in Australia is potentially more attractive.
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Printers and publishers should actively work together to identify these costs, to determine an effective break point to produce onshore with the aim to improve turnaround times at a cost neutral (or better) level.
Intersecting interests
Australian Publishers Association (APA) and Australian Booksellers Association (ABA) to: 1. Create a delegated industry group to; Engage with Australia Post and courier companies to work towards more competitive book parcel pricing By working collaboratively, booksellers and publishers are in a stronger position to negotiate competitive bulk parcel pricing deals with Australia Post and/or commercial courier companies. Continue discussions with Government regarding postal costs The Australian book industry should work together to give a consistent message to the Australian Government around the impacts of the imbalance between Australian and UK postal costs. The need is urgent and may require action beyond the protracted negotiations with the Universal Postal Union (UPU) which, at best, will not produce results for several years. Continue discussions with Government on GST equity for imported books 2. Engage in continuous and collaborative review of PIRs;
Create a mechanism for continuous review of PIRs to ensure they act as a supportive framework and do not create any impediment to effective supply of international books to Australian consumers. Consideration should be given to the recommendations contained in the PwC report as part of this review. 3. Address potential barriers to collaboration;

Develop an anti-collusion code of practice: The need for disintermediation and consolidation is likely to increase as the industry responds to the changing operating environment. It is important that individual businesses do not feel constrained in their ability to work collaboratively with other industry operators.
Cultural change and adaption

Facilitating cultural change requires a long-term view and a commitment from the industry to recognise, understand and accept the steps that are needed to ensure a sustainable future for an independent Australian book industry. By adopting a series of mutually agreed goals for industry wide change, each of the industry sectors can adapt these as appropriate to the needs of participating businesses: 1. Adoption of an industry culture that is consumer facing, forward thinking and dynamic. Change is being driven by competitors who embrace a consumer-centric business model. Establishing a new culture within the Australian industry means improving service delivery to consumers and this means coordinating activities between the different parts of the supply chain. Making cross-sectoral collaboration effective requires identifying and understanding areas of intersecting interest and translating this into activities that have mutual benefit for participating sectors and businesses. 2. Industry must cultivate a desire for change. This means letting go of past thinking and previously accepted business practice in order to embrace and establish a new way of doing business. By providing leadership in driving this
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change, the sectoral associations (particularly the APA and ABA) will be able to focus on the long-term prosperity of the industry. This change is far broader than distribution, but improvements to efficiency and consumer service are vital to the future of the industry and provide a commercial driver for facilitating wholesale adaptation to a new operating environment. 3. Widespread understanding of the implications and opportunities of disruptive trends. System improvements: The internet age has altered the structure of the industry. There are two clear areas where businesses are likely to achieve operational advantage. They will be through; Economies of scale delivered on an international level, either through mergers, consolidation or global supply chain management. Speed and agility opportunity presented to smaller businesses, to enable them to anticipate and stay abreast of ongoing change and continue to offer differentiated service. By establishing cooperative systems which reduce unnecessary handling, duplication and costs across the supply chain, improvements are likely for businesses in each of the participating sectors. Opportunities may include;
Further consolidation amongst Australian distributors Australian printers working across a broader section of the supply chain72 Examination of alternative fulfilment and distribution methods Additional disintermediation Targeted strategies: The internet age has also fundamentally changed the market and opened up significant opportunity to supply individual market segments. However, this demands a detailed understanding of these segments and how best to service them. Therefore, industry must develop the tools to advance its knowledge of consumers and their needs and desires, in order to not only meet them, but to influence them.
The size and nature of the Australian market suggests a real opportunity for cultivating a niche appetite for Australian content. By working together, the industry is far better placed to drive growth for local content than any one firm operating in isolation.
72
PwC, 2013, Fulfilled consumers: Improving the distribution of books in Australia, contains a full summary of this. BOOK INDUSTRY COLLABORATIVE COUNCIL
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The future
There is nothing to suggest that people are going to stop wanting stories or books as we have known them. However, if we do not remove unnecessary barriers and position books as a vehicle for accessing stories, we may unwittingly limit that desire. In the digital age, consumers have unrestricted access to alternative channels for storytelling, through films, games and multimedia objects that are readily available on personal devices as well as publicly accessible forums. Book purveyors need to provide attractive, easy to access and value for money options to ensure that books retain a strong position against these substitute options. The book industry has boundless knowledge and the proven ability to nurture and provide content, and should be best placed to ensure ongoing consumer engagement. The recommendations contained in this report provide some tangible steps toward a viable future; however it is the commitment of the industry to affecting these reforms that is vital to realising a strong and viable future for Australian businesses.
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Export Expert Reference Group
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CONTENTS
Background ................................................................................................................................................. 114 The Export Expert Reference Group 114 Executive summary .................................................................................................................................. 113
Appendix 1 - Rights, co-editions and export income and activity survey .............................. 123 Introduction 123 Survey results 124
Conclusion ................................................................................................................................................... 122
The way forward ....................................................................................................................................... 120
Outcomes ..................................................................................................................................................... 118
Challenges and opportunities ............................................................................................................... 117
Issues ............................................................................................................................................................. 116
Appendix 2 - Rights, co-editions and export case studies ........................................................... 149 Rights 149 Rights author with international agent 167 Co-Edition 169 Export 172 Initiatives 175
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Executive summary
With an Australian population of just over 23 million, the domestic book industry is small with increasing competition for purchasers and readers of books from other forms of media. The longterm success of the Australian book industry depends, partly, on an increasing number of publishers exporting Australian content to other markets. When established, the Export Expert Reference Groups (ERG) goal was to analyse present and future export markets for Australian books. With this in mind, the Export ERG undertook two projects. The first project was a survey of industry to establish the current key markets for the export of Australian books, and included case studies from successful exporters. The second project commissioned PricewaterhouseCoopers (PwC) to undertake an analysis of the emerging markets for Australian books and investment over the next five years. Prior to this work, there was little data available on the export activities of industry. In brief, this research found that the current key markets are North America and the United Kingdom, with industry indicating that they saw Asia as the focus for future export efforts. Interestingly the PwC report whilst highlighting the potential of some Asian markets, particularly for educational books indicated that opportunities for the Australian book industry also lay in South America, with Brazil and Argentina showing promise for trade and educational books as well as investment. Combined, these two projects enabled the ERG to advance an approach for developing a whole-of-industry export strategy. To further this work, the Export ERG makes the following recommendations: That the future Book Industry Council of Australia (BICA) establish an Export Sub-Committee, which has membership from relevant industry associations, authors and trade and educational publishing firms, with Austrade and the Australia Council for the Arts each having an advisory role. That the BICA Export Sub-Committee prepare an export strategy.
The export strategy will be driven by a whole-of-industry perspective, but will provide enough flexibility to accommodate commercial decision-making, and will address: Proposals for strengthening the export of Australian trade and education books in established English-speaking markets. This will include but not be limited to, ways to improve returns to industry of attending international book fairs and access to schools and tertiary education systems within those countries. Proposals for developing the export of Australian trade and educational books in emerging markets. This will include but not be limited to working with the Australian Government to better utilise existing networks and government support programs to provide the book industry with a clear pathway to improving export to these markets.
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Background
The Export Expert Reference Group
Upon being established by the Australian Government in June 2012, the Book Industry Collaborative Council (BICC) identified seven key priority areas for reform, broadly based on the recommendations made by the Book Industry Strategy Group (BISG) in September 2011 (further information on the BICC and the BISG can be found at www.innovation.gov.au/books). To address these priorities, the BICC formed a series of expert reference groups (ERGs), each with responsibility for addressing the challenges being faced by the Australian industry in one of the seven identified areas. The development of an export strategy was identified by the BICC and the BISG as an important resource for responding to the structural changes and increased global competition impacting the Australian book industry. The deliverable and terms of reference adopted by the Export ERG reflect this goal.
Export ERG Deliverable

An implementation strategy for export of Australian books that identifies potential new markets and opportunities for expansion within existing markets, proposes a methodology, and defines the required investment.
Export ERG Terms of Reference

1. Conduct a review of current export activities 2. Determine the context for export with a focus on understanding commercial and business culture issues in potential markets 3. Utilise review of current export activity to identify and assess growth opportunities in existing and new markets
Export ERG Membership

BICC members
Louise Adler Chair, Export ERG President, Australian Publishers Association Sophie Hamley President, Australian Literary Agents Association

James Burnett Sandy Grant Brian Johns Maree McCaskill Rod Martin Matthew Reilly Nerrilee Weir Origo Education Copyright Agency Copyright Agency Cultural Fund Australian Publishers Association Era Publications Author Random House
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Ex-officio members
Collette Brennan John Odgers Australia Council for the Arts Austrade
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Issues
The Australian book industry operates in a regulatory framework that is founded on the recognition of territorial copyright. The global marketplace affords Australian intellectual property holders and purveyors the opportunity to export content to both existing and new markets. However, in this global marketplace, the importation of books originating offshore will inevitably have an increasing impact on the local market. Australian books have historically succeeded primarily in English language markets. The research commissioned by the Department of Industry, Innovation, Climate Change, Science, Research and Tertiary Education (DICCSRTE) and conducted by PricewaterhouseCoopers (PwC) 73 confirms industry experience that the United States of America (US), United Kingdom (UK) and New Zealand are still the dominant markets for Australian content. However, the PwC analysis also identified some significant potential non-English language markets that represent genuine opportunities for export. Additional research conducted by the Export ERG74 provides a snapshot of current activity in both trade and educational publishing. The ERGs report defines export as the sale of territorial rights, the trading of licences and the sale of physical books. The ERG has reached the conclusion that in a shrinking Australian market, with a population of just over 23 million, profitability across the industry is unlikely without an industry-wide commitment and a concentrated effort by individual commercial publishers (trade and educational) to developing a global mindset. To assist the local industry to become global players, investment will be required in the following areas: skills and training showcasing Australian talent to the world developing the industrys presence internationally via book fairs, self-diplomacy and cultural ambassadors educating the local publishers about specific new markets, particularly digital markets and traditionally dominant English-speaking regions developing publishing collaborations with specific partnerships in particular territories and clustering among smaller publishers to increase their market intelligence and reach
This investment requires both a financial and a conceptual commitment to the prospects offered by making world books in Australia and selling those books in the global marketplace. Individual businesses, both independent and multinationals, have for many years been able to export Australian content. That activity has been a title-by-title activity in trade publishing, a matter of individual relationships cultivated over an extensive period. Given the increased pressures on Australias book industry and the potential commercial opportunities, export should become an industry-wide priority. In the context of the short time frame for the BICC work, this report does not intend to focus in detail on the particular issues confronted by either the trade or educational sectors. This report outlines schematically the common challenges and opportunities that exist for the industry within a global book economy.
73 74
A report on this research titled New export markets for Australian books is available at innovation.gov.au/ExportERG See Appendix 1: Rights, Co-Editions and and Export Income and Activity Survey and Appendix 2: Rights, Coedition and Export Case Studies. 116
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Challenges and opportunities

In a shrinking local market, the Australian book industry now has an increased incentive to rise to the challenge and seize the opportunities afforded by engagement in the global market for books. The technological advances in production and dissemination of Australian intellectual property have certainly improved local capacity as exporters. Traditional offshore markets such as the US, UK and New Zealand, now offer increasing opportunities for purveyors of Australian content. The investment over many years of resources and relationship-building by Australian publishers in these territories has been beneficial. With their economies of scale and the efficiencies of digitalisation, these partnerships should continue to grow. More complex opportunities reside in the development of the new potential markets identified in the PWC report75. These markets each offer opportunities for the dissemination of Australia content. Equally, the challenges associated with exporting into these markets constitute very real hazards for the industry, including risks such as piracy, lax copyright regulations, pricing models, translation costs and distribution models. In addition, Australian publishers have had limited exposure to these markets, lack the knowledge to understand them, and lack the required skills and training required to build the necessary relationships. Each potential market will require careful consideration, extensive research and analysis by individual publishers.
75
PwC, 2013, New export markets for Australian books, innovation.gov.au/ExportERG BOOK INDUSTRY COLLABORATIVE COUNCIL
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Outcomes
The ERGs research has identified that the key opportunities and largest current export volumes remain in the major English language markets. In particular New Zealand, the US and the UK emerged as markets where significant volumes are now exported, and which can be further exploited. The ERGs survey of 40 Australian Publishers Association (APA) members showed that 60 per cent of all rights and co-editions derive from the US and UK, and 60 per cent of exported finished copies are made to New Zealand, the US and the UK76. Individual case studies and market research point to the scale of the opportunities in these markets, and suggest that they have historically responded to: author participation local adaptation of the work creating controlled on-the-ground marketing presence licencing to suitable local publishers appointing long-standing distribution partnerships.
In terms of educational exports, successful players have invested in localising content, and partnerships with publishers in the target market are often at the core of successful programs. This also highlights that educational sales are rarely book-by-book and almost always offer a series of structured learning programs. Credibility and relationships with educators, government authorities and educational institutions in the market demand a serious commitment to any educational market. Australian publishers that have taken this approach have won state-acceptance in the US and UK for their programs, and have reaped considerable rewards. Conversely, much of the export of adult and childrens books is undertaken on a title-by-title basis, and can be done without as much activity in the market. However, authors are rewarded if they commit time to promote their titles as they launch in any individual market. A number of Australian authors have featured on the US and UK bestseller lists over the last few years, and the rewards are extremely high for the author and the publisher involved. The incentive to participate in these major English language markets is that they still offer the highest possibility of substantial export income. While there is also a high degree of existing export activity in secondary English language markets, such as South Africa, Canada, South East Asia and the Middle East, and these markets are considered targets for further growth, they simply do not have the number of book-buying English language readers that exist currently in the US and UK (although this is changing rapidly in China). Similarly, while the population of New Zealand is relatively smaller, New Zealand shares media and history with Australia, thereby creating a fairly integrated market. Translation as rights and co-editions in non-English language markets are an ongoing and important activity, and the principal income from these exports currently derives from Europe. North Asia, particularly South Korea, has also been a source of business for these exports, and has been identified by the ERG research as a target for further activity, along with China. In addition, the PwC research and survey of APA members discovered that South America is now being seriously explored for export, and is considered a major opportunity for the future. In particular, the PwC report identified Brazil and Argentina as leading opportunities, and the survey of publishers cited Mexico consistently. The PwC report provides an analysis and ranking of export potential in 17 countries, and further evaluates those countries it subjectively identified as the top 8 countries in detail, including Brazil, South Korea, India, China, Argentina, Singapore, Malaysia/Brunei and Indonesia. The individual characteristics of these markets range from non-English language educational opportunities to English
76
See Appendix 1: Rights, Co-Editions and and Export Income and Activity Survey 118
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language childrens books. The ERG suggests that the industry work together and with Austrade to develop strategies to fulfil the market potential identified. Digital publishing appears to be improving access, cost and speed to market, allowing certain types of books and activities (e.g. educational gaming) to be created in Australia and disseminated widely. To launch a new range of ebooks there are none of the traditional limitations of export shipping, stock etc. Effective campaigns can start here in fact the most famous success of the last few years, 50 Shades of Grey was launched by a micro e-publisher in Sydney. In each case, the commitment of time and skilled staff to exploring these markets remains the principal and best way to build sales. The survey of APA members confirms that the industry believes trade fairs remain an effective means of building exports - the Frankfurt, London and Bologna Book Fairs being the most attended. Specialist events like the International Reading Association Annual Convention are also an important part of the calendar for some publishers. Export Market Development Grants (EMDG) and Austrade support will remain central to the level of speculative commitment publishers will make to consider the development of new export markets. For certain types of Australian book businesses, export is central to their business model (e.g. Mathletics, Hardie Grant, Lonely Planet, and some of the educational publishers at primary level); for others export revenue is simply cream on the cake. The ERG analysis would suggest that there are real and substantial rewards available in a number of sectors for Australian publishers willing to commit the expertise and money to export activity.
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The way forward

The Australian book industry is a complex eco-system of independent and multi-national businesses engaged in a series of markets with a wide range of small and large players in each sector. That makes the application of any unilateral global strategies difficult, impractical and antithetical to the interests of competitive individual businesses. As a result of this diverse structure, an effective export strategy must be shaped toward providing a broad framework that enables individual commercial decisions to be made which benefit Australian authors and the wider industry. The research undertaken by PwC and the Export ERG provides preliminary evidence that can help shape an industry strategy. To be successful in expanding export activity, particularly in new and emerging markets, the industry will also need to continue its close collaboration with government. This report would be remiss if it did not also suggest the industry will need to advocate to government that increased support will be required to ensure the local book industry is genuinely competitive in the changing global marketplace. Entering into new markets carries significant speculative risks and government support mechanisms provide vital support, which hastens and strengthens export activity - especially for small and specialist publishers. The industry recognises the importance of it taking a lead role in driving export activity, however to make best use of government support such as the EMDG, Australia Council grants and the network of Australian Trade Commissioners, export strategies will be most effective if developed in partnership with government. The key issues facing the book industry are: Export Market Development: the industry needs to work to ensure it fully understands and exploits the EMDG program. For publishers, into-market travel is critical but each new market carries significant speculative risks. EMDG support for visits and expenditure on export activity in the identified markets would hasten and strengthen participation, especially for small and specialist publishers. Collaboration (clustering) among small and specialist publishers in their export activity should also be encouraged as it increases the reach by each publisher in a productive manner and maximises the effect of the EMDG. Trade book fairs: fairs are very important and Austrade has recognised this by supporting APA stands, however many publishers need more flexibility or prominence than an industry stand can provide. This should be a matter of discussion with Austrade. Education and Training: in addition to the existing training the industry undertakes on export market development and rights sales, specific market sessions around the eight identified new markets and specific training to support those looking to use digital export marketing strategies should be a priority. Author-as-Industry-Advocate: case studies indicate, and experience shows that the presence of authors to promote a book or to develop their audience through writers festivals is the most effective way to build exports. The Literature Board of the Australia Council has supported some authors international exposure, and we recommend that this support continues. Country delegations: Publisher delegations from Australia to target markets, or inviting key players from target markets to Australia on delegations, will accelerate understanding and begin to establish relationships between individual publishers. Smaller publishers would benefit most from some collective form of approach to these markets, such as clustering. The Government of the Peoples Republic of China continues to send relatively unfocused delegations here, but targeting Brazil and other identified opportunities in sectors where
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there is a credible chance of success would be justified. Working with Austrade to assist in maximising the benefits of such outward and inward delegations is recommended. Building relationships: the APA needs to develop more sustained relationships with potential market sister associations to ensure effective exchange of information. This exchange will enrich the industry as a whole, as well as individual publishers, as they build export activity. Maintenance of Territorial Copyright: territorial copyright is essential if a full export culture is to be developed. The re-export from markets with cheaper or different editions, adapted editions or overstocks pose a serious threat to industry investment if territorial rights diminish to satisfy those requiring cheaper imports to Australia.
The following proposed actions are a response to the diverse structure of the Australian book industry and an acknowledgement of the benefits of ongoing collaboration with relevant government agencies: 1. That the BICA establish an Export Sub-Committee, which has membership from the following groups: Relevant industry associations (Australian Publishers Association, Copyright Agency, Australian Society of Authors, Australian Literary Agents Association etc) A mix of trade and educational publishing firms that are active in book export Authors who have been successful in export markets Austrade and the Australia Council for the Arts could be invited to join the steering committee in an advisory role, in order to encourage collaboration between the industry and government 2. That the BICA Export Sub-Committee prepares an export strategy: This strategy will be based upon the research undertaken by the Export ERG, and provide the Australian publishing industry, and individual businesses, with a framework for making business decisions. It will be driven by a whole-of-industry perspective, but provide enough flexibility to accommodate commercial decision-making, and will address the following: Proposals for strengthening the export of Australian trade and educational books (rights trading, digital and printed books) in established English-speaking markets. This will include, but not be limited to, ways to improve: returns to the industry of attending international book fairs access to schools and tertiary educational systems within those countries
Proposals for developing the export of Australian trade and educational books (rights trading, digital and printed books) in emerging markets. This will include, but not be limited to, working with the government (Austrade, the Office for the Arts, the Australia Council for the Arts amongst others) to better utilise existing networks and government support programs to provide the book industry with a clear pathway to improving export to these markets.
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Conclusion
Historically British publishers who allowed some localisation to meet local demand and educational and cultural expectations, dominated the Australian book industry. This localisation meant that books were primarily targeted to succeed nationally; British publishers did not see the need to set up export apparatus in Australia to take to market what were essentially seen as Australian cultural artefacts. As the industry became professionalised through the 1980s and 1990s, this perspective changed. There is now international recognition that Australia is an excellent source of authors, backed by international quality publishing skill. However, we have not yet built a robust export culture, and too many businesses only look to export as a secondary source of income. The Export ERG has exposed a broad range of successful models and a list of markets that have been undervalued to date. The necessary outcome is for those investing in Australian writing and publishing to build a committed skill set in export for those segments of their publishing with export potential, and to explore the primary English language markets as well as the emerging opportunities identified in this report.
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Appendix 1 - Rights, co-editions and export income and activity survey

Introduction
Publishers and literary agents sell rights in authors works as a means of both generating more income for the author and ensuring their work reaches the widest possible audience. Export strategies work in tandem with this. Where a book or project couldnt be licensed (and publicised and marketed by the publisher in that market), we had options to sell our local editions via export. The growing English language ebook market has worked in tandem with print distribution, but electronic distribution has meant that exporting to these markets should be simpler, allowing us to reach audiences through export sales, not rights sales, with an ease never before known. Its unclear whether this is happening, and perhaps the lift in export sales through ebooks will be seen at the end of 2013. It has long been difficult to find an accurate and up-to-date accounting of rights, co-edition and export activity and income across all sectors of the Australian publishing industry. Anecdotally, we know that we do very well, but there is no central collection point for the data. To address this, the Export ERG devised a survey to try and capture some of this information. This survey was sent out to the Australian Publishers Association database (encompassing trade and educational publishers), and also to the Australian Council for the Arts database, which includes literary agents and rights managers. The ERG had 41 responses to the survey, and the analysis of these responses is presented below. This survey offers no more than a snapshot, and in some ways the associated case studies (see Appendix 2) offer more of an insight into activities and successes. Traditionally, the focus of rights sales has been North America and the United Kingdom, and the survey results show that these two major English speaking markets remain the focus for both rights and export. European markets also continue to be very important to Australia for rights sales (24% of income for rights sales in 2012, compared to 7% of export income). These markets are currently facing their own economic pressures, but we should see this level remain steady for rights sales income, and grow as we see more sales of our English language titles in Europe via ebook sales. Looking at the growth markets for both rights and export, the focus for respondents is clearly on Asia. The Asian markets currently account for 12% of rights income and 18% for export income.
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Survey results
Please Describe your Business
In terms of rights sales and export, is your company actively engaged in

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Rights and Co-editions

How many separate international rights and Co-Edition deals did you finalise in 2012, 2011 and 2010? No of deals 1-20 20-50 50-100 100-200 Over 200 2012 68% 5% 15% 5% 0% 2011 62% 18% 12% 9% 0% 2010 70% 9% 9% 9% 3%
How much gross rights income (advances from new deals and royalty income from previous deals, but not including co-edition income) was generated in the calendar year 2012, 2011 and 2010? $ amount 0-100,000 100,000-500,000 500,000-1,000,000 1,000,000-1,500,000 1,500,000-2,000,000 2,000,000 + 2012 60% 28% 3% 3% 0% 8% 2011 61% 27% 0% 6% 0% 6% 2010 62% 21% 3% 6% 6% 3%
How much gross income from co-edition deals was generated in the calendar year 2012, 2011 and 2010? $ amount 0-100,000 100,000-500,000 500,000-1,000,000 1,000,000-1,500,000 1,500,000-2,000,000 2,000,000-2,500,000 2,500,000-3,000,000 3,000,000 + The top five markets where you have generated the most rights and co-edition income in 2012, 2011 and 2010? Territory North America United Kingdom Europe Asia South America Other 2012 39% 21% 24% 12% 0 3% 2011 37% 23% 27% 10% 0 3% 2010 47% 17% 20% 10% 0 7% 2012 82% 18% 0 0 0 0 0 0 2011 79% 15% 3% 0 0 3% 0 0 2010 79% 12% 6% 3% 0 0 0 0
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During the calendar year 2012, 2011 and 2010, in approximately how many individual territories did you finalise deals? No of territories 1-10 10-20 20-30 30+ 2012 2012 75% 13% 10% 3% 2011 73% 18% 3% 6% 2010 79% 3% 12% 6%
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2011
2010
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Which of the following book fairs do you attend regularly? Book fair Frankfurt Bologna London Taipei BEA Other Other included Sales trips to New York International Reading Association Annual Convention in the US. Exhibition of literacy education resources - print and electronic - is also an international trading floor university, libraries, national (America) Percentage 34% 16% 23% 10% 5% 11%
In your experience, which categories of adult fiction seem most in demand for rights and co-edition sales?
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In your experience, which categories of adult non-fiction seem most in demand for rights and co-edition sales?
In your experience, which categories of childrens titles seem most in demand for rights and co-edition sales?
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In your experience, which curriculum areas are most in demand for rights and co-edition sales: Reading/Language?
In your experience, which academic disciplines are most in demand for rights and co-edition sales?
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For academic publishers, from which territories do you receive most requests for rights use? Only 10 people responded to this question. Of those who responsed, 7 stated North America as the territory from which that received most rights requests, followed by the United Kingdom with 4 responses. For Academic publishers, rank in order the types of requests for rights you receive. Only 10 people responded to this question. There was also a problem with the survey in that it did not allow respondents to choose less than six responses. For this reason the data is only calculated on the number 1 ranking for each response. Of those who responded, 4 stated that their most common request for rights was for low cost print. A further 4 stated that their top market was traditional print. Adaptations print and digital only drew no responses. How many rights staff does your company employ (whole or part)? Academic / Schools / Education It's part of the commissioning role. So 4. Rights is only a small part of the role. 3
Large trade publishing company (total company turnover of over $10 million) 3 - buying not selling 3 4 1.2 2 2 3 Incorporated as part of a persons role (1) 3 4 0.5 1
Small trade publishing company (total company turnover of less than $10 million) 1 1 1 1 1
Literary agency 1 1
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Export
To which of the following territories do you currently export?
How much gross income was generated by sales of physical copies in the calendar year 2012, 2011, 2010? $ amount 0-100,000 100,000-500,000 500,000-1,000,000 1,000,000-1,500,000 1,500,000-2,000,000 2,000,000-2,500,000 2,500,000-3,000,000 3,000,000 + 2012 48% 13% 6% 13% 3% 3% 3% 10% 2011 52% 10% 10% 6% 6% 3% 3% 10% 2010 52 13 6 6 6 3 0 13
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2012
2011
133
2010
The top five markets where you have generated the most export income in 2012, 2011 and 2010. Territory New Zealand North America United Kingdom Europe Asia South America Other Where respondents nominated other, comments included: Papua New Guinea Abu Dhabi Solomon Islands South Africa Oceania 2012 43% 27% 10% 7% 3% 0 10% 2011 41% 37% 4% 11% 0 0 7% 2010 37% 41% 0 15% 0 0 7%
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2012
2011
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2010
Other, 7% Europe, 0%
Asia, 15%
New Zealand, 37%
United Kingdom, 0%
South America, 0% North America, 41%
Only 1st rank displayed; n = 27
In your experience, which categories of adult fiction seem most in demand in export markets?
Science F iction / F antasy, 9%
Other, 2%
Not Applicable, 28%
Commercial f iction, 19%
Crime, 16% Literary F iction, 26%
n = 31
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In your experience, which categories of adult non-fiction seem most in demand in export markets?
Other, 13%
Not Applicable, 15%
Cooking, 13% Narrative, 15%
Memoir, 9%
Popular S cience, 11%
Business, 9%
Self-help, 15%
n = 30
In your experience, which categories of childrens books seem most in demand in export markets?
Other, 3% Young Adult, 14%
Teen, 3%
Not Applicable, 39%
Middle G rade, 8%
Early Years (including picture books), 33%
n = 30
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In your experience, which curriculum areas are most in demand in export markets?
Other, 5%
Physical Education, 8%
Music, 3%
History, 5%
Not Applicable, 45%
Science, 16%
Mathematics, 3%
Reading/Language, 16%
n = 28
In your experience, which academic disciplines are most in demand in export markets?
Vocational e.g. plumbing, cookery, hairdressing, 8% ELT, 3% Other, 3%
Science / Engineering / Maths, 8%
Not Applicable, 50% Arts / law, 8%
Humanities/ S ocial Sciences, 8% Medicine and H ealth, 3% Business, 8%
n = 29
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For Education publishers, in which education segments does your company actively export?
For Education publishers, in which curriculum segments does your company actively export?
Please comment on issues concerning digital publishing that you feel are having an impact, positively and negatively, on your capacity to grow export markets. Academic / Higher Education / Schools Market is adapting to digital products and we are able to move with the change. Digital has overcome the tyranny of distance and made promotion much easier. Expectations that digital should be cheaper or even free (open access) are challenging.
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Completely unsure about business models and how to generate income. Very high developments costs are of concern. our export markets have no digital capacity at this stage so I would say that is the biggest hurdle
Large trade publishing company (total company turnover of over $10 million) Digital Publishing has enabled us to export and compete more in overseas markets Difficult to say, but possible substitution of traditional print books with digital products, ie reduction in demand The digital market does enable Australian publishers to have further reach into overseas markets without being physically present but gaining merchandising presence is challenging in a global marketplace. On a rights basis we may usually sell digital rights along with physical rights but on an export basis we would like to explore those opportunities directly which is still challenging. None
Small trade publishing company (total company turnover of less than $10 million) Cost of retaining world electronic rights is high, especially for illustrated books Digital publishing has not impacted on our export markets We export digital content and e-books the issue of copyright is the major issue. We deal with illegal uploading/downloading of material constantly already. digital rights management is a major issue. also access to information on converting print material to digital - apparently Queensland does not have enough interest for people to come here regularly to train in this subject. we have to travel interstate, which adds to the cost of education. Sales of ebooks in export markets increase the global reach for an independent Australian publisher, creating a small but growing income stream to help counter declining print sales.
Do you undertake specific sales trips to meet with your distributors? where do you travel and how often? Academic / Higher Education / Schools Trips are not specifically to meet with distributors. Travel to the USA at least once a year sometimes twice. Travel occasionally to the UK.
If so,
A sale agent & publishers would travel once a month to PNG and twice a year to New Zealand
Large trade publishing company (total company turnover of over $10 million) Yes, at least 3 times per annum US, once per year if that. PNG/Solomon Islands - several times per year We utilise our intercompany relationships so we don't necessarily need to travel independently regarding export. On a rights basis the bookfairs are the main forum for activity. Yes, 10 trips per annum 4/5 trips a year. Books Fairs are a good central place to meet customers. Also visit some customer in their own markets
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We make occasional trips, but are now more focussed on using the resources of our overseas sister companies to maximise sales of physical books in these other markets. Yes we travel twice a year to meet our North American distributors at their office and we meet all distributors at the book fairs. Yes - quarterly to New Zealand
Small trade publishing company (total company turnover of less than $10 million) How many export staff does your company employ (whole or part)? Academic / Higher Education / Schools Export is part of sales roles. 4 Nil 2 Yes to London, Frankfurt and New York At present to the UK and once a year as I add on to the London Bookfair. An annual trip to the UK, plus meeting with US and UK distributors at book fairs
Large trade publishing company (total company turnover of over $10 million) 4-5 focused on overseas markets including ANZ. All our jobs are globally focused. 4 3 None specifically but our sales managers locally work closely with their counterparts in our sister company offices around the world. 2.5 two people. One [at the moment] We handle most territories within the rights department except Asia which is handled by one of the sales team. one 0.5
Small trade publishing company (total company turnover of less than $10 million) 1 One part 1 1
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Specific questions on growth markets, strategies and international investment

In what ways do you think the Australian government, or the industry, could best encourage greater exports (both physical copy and right sales) of Australian books by Australian publishers? Please comment on the importance of the following to your company. Market intelligence (potential) Academic / Higher Education / Schools More information required about market potential in the Middle East. educating markets in value of paying for digital rights
Large trade publishing company (total company turnover of over $10 million) Yes potentially useful Important Identifying potential opportunities in other markets
Small trade publishing company (total company turnover of less than $10 million) Being able to access distributors with a good marketing ability Helpful (and necessary) particularly for new ventures
Literary Agents Training in export marketing (contracts, marketing, finance, planning, etc) Academic / Higher Education / Schools do not see value in thsi for our particular business Very important VERY important
Large trade publishing company (total company turnover of over $10 million) Valuable provided the training is specific to publishing important Important but same as any other role within our company.
Small trade publishing company (total company turnover of less than $10 million) important There is plenty of training from Austrade but not in the field of books and publishing not relevant to us at this stage Helpful
Literary Agents
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Not important VERY important to share knowledge and create/maintain standards
International trade events Academic / Higher Education / Schools Information about the most important trade events for early years and primary educational resources for English language learning yes, of value
Large trade publishing company (total company turnover of over $10 million) Very important Very important. International trade events are vital for seeing, making and keeping a large number of contacts and also pitching book and discussing markets face-to-face with them. On going subsidisation for APA stands at major Book Fairs
Small trade publishing company (total company turnover of less than $10 million) More finance could be put towards sending delegations most important Very important in assisting publishers to develop and maintain international networks. (It is difficult for a small publisher to attend international book fairs without financial assistance.)
Literary Agents Promoting Australian publishers and publications Academic / Higher Education / Schools would be valuable as we have international students studying her This is already adequately funded VERY important
Large trade publishing company (total company turnover of over $10 million) Yes - through Austrade in overseas markets more proactively. UK and US Industry bodies we think are more proactive. Very important We need to look further at this, and how we can promote titles once available in other territories Low-priority. In this electronic age publishers can accommodate promoting their authors and titles themselves important Not that important they are more interested in the product.
Small trade publishing company (total company turnover of less than $10 million)
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important Only if done in segments eg, scholarly publishers Embassies could organise cultural events as they do in Poland to coincide with the Polish trade fair. I have been fortunate enough to have some interest in our books from that fair. extremely important
Useful
Literary Agents Yes, good idea. important
Financial support (eg, EMDG) Academic / Higher Education / Schools Some financial support for emerging market research of value and if available we would avail ourselves of it
Large trade publishing company (total company turnover of over $10 million) Essential Travel support is vital, particularly given the long distances required by Australian publishers for travel important For exploring new markets Always useful
Small trade publishing company (total company turnover of less than $10 million) important This also makes a difference as different members of staff can get experience in export markets always! very helpful Not relevant to us very important Financial support from Austrade/EMDG is extremely important because export is a risky business, but current scheme is biased against smaller publishers
Literary Agents Other Large trade publishing company (total company turnover of over $10 million) Through Ambassadors of our industry - authors, publishers and agents Supporting Aid Organisation donations for Educational resources, eg AusAID Consolidation of freight More grants for translation. important
Small trade publishing company (total company turnover of less than $10 million) gst relief to bring us into line with other countries. Freight costs.
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Literary Agents Which markets do you feel have potential for growth, and why? Academic / Higher Education / Schools China due to the emphasis on published research outputs there. Possibly the Middle East. Why? Word of mouth chatter. Require more information about possibilities in South America Asian market for English language An Australian literary representative in New York city.
Large trade publishing company (total company turnover of over $10 million) India - wealth and English Asia - lots of wealth and a desire to learn English and be more western South America is still a growth market for us, as is mainland Asia. South America (Brazil is becoming one of our strongest single markets for rights sales) Korea. Pacific Islands - there is such a lack of resources. In most other areas of the world we have sister companies who supply and develop the markets on our behalf. South and Central America and Asia. These are developing markets with a growing number of broad readers Asia - rising middle class US - scale India - large English speaking market. price points an issue Asia because of its massive growing population; ability to speak English is always increasing; and the Internet so sales of E books at relatively low prices have considerable potential. Asia/China. There is a huge market there if only we could access it but shipping costs are too high. Asia, the most populated region
Small trade publishing company (total company turnover of less than $10 million) China and India - we need a lot more intelligence on export of English-language books in these markets. Korea because rights deals have increased recently South America as the population is getting better educated quickly Africa - as above and happening
Asia- Australia is looking towards Asia and vis-versa. As Asia become more affluent, more interest trade fiction not just books on marketing. Europe/Japan These are newer markets for e-books UK, Europe, Asia (Korea and India)
Literary Agents
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The US is crucial to Australia because rights sales there are noticed across Europe and Asia. Central European markets - economies still growing despite difficult financial situation Asian markets - exploiting what we have in common South American - as above
Which markets do you feel the industry should focus on in 2013-2014 and why? Academic / Higher Education / Schools South America. Appears to be great potential however information is scarce. USA active. Australia should be too. Asian market as the desire for English language learning
Large trade publishing company (total company turnover of over $10 million) Digital globally and India/ Asia Brazil, China and India as key growth markets. South America and Korea. South and Central America, particularly Mexico and Brazil. When an Australian author takes off in these markets it means their book/s are likely be read by a vast number of people and sales can be very lucrative. More focus could help more Australian writers reach these territories Asia US Up to individual publisher to identify their own market focus depending on the sort of product they publish. Asia China particularly and Asia in general. I think many exporters are trying to work out how to do business in China but haven't worked out how. Asia, the most populated region

Small trade publishing company (total company turnover of less than $10 million) China and India - economically on the rise. Korea, Taiwan, China South America, Africa and ASIA as always China; Indonesia; Japan, India- there seems to be increasing interest in Western culture, literature etc. Europe. They mostly read English and read a lot of books. UK, Europe, Asia (Korea and India)
Literary Agents The US
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Are you investing in international markets to enhance and develop exports? If so which of the following markets are of interest?
Other, 11%
South America, 2%
United Kingdom, 24%
South East Asia, 27%
North America, 22%
New Z ealand, 13%
n = 18
Is that investment in your own infrastructure, an investment/acquisition in a local business or partnership/JV? (If that varies from country to country please specify) Academic / Higher Education / Schools yes we are investing heavily in the publishing program
Large trade publishing company (total company turnover of over $10 million) Own infrastructure Investment in our own infrastructure through travel and training as well as investment in partnerships via connections with publishers, agents and other publishing contacts from all over the world UK - New company US - JV Our own infrastructure Investment in our own infrastructure. In the UK we have invested in A&U UK which is now exporting some of our titles into the UK and European market. We also acquired Murdoch Books which will help get our illustrated titles into European markets.

Small trade publishing company (total company turnover of less than $10 million)
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Staff and IT systems within our own organisation UK Investment in our own capacity and infrastructure
Literary Agents Why was investment seen as the appropriate means to enhance your export sales? Academic / Higher Education / Schools we need to tailor our products to the market No - investment in travel to the US to pitch.
Large trade publishing company (total company turnover of over $10 million) Death of the gatekeeper ( i.e. reseller) and our ability to be able to deal direct and as closely with our customers as possible. Cost-effective investments because they generate sales Lack of another structure or alternative The Australia market is too small for the investment required on some products. Got to invest to grow and to be able to access these markets. To export successfully you need a warehouse on the ground and as an independent publisher there is no multinational parent company to rely on.
Small trade publishing company (total company turnover of less than $10 million) Investment in IT was required to manage metadata and sales we want to be able to sell our books through Amazon especially in the US so we need to be more visible. English language in Asia is becoming highly sort after and so are English language books It was the only means available to advance our export activities. Government assistance is not available in our circumstances.
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Appendix 2 - Rights, co-editions and export case studies

Rights
Hardie Grant Egmont (Go Girl Series)77
Title: Go Girl Series
Summary
The Go Girl series is a fiction series for 7-10 year old girls, which has sold over 2,250,000 copies in Australia. Launched in 2006, the series gained quick success capturing the imagination of girls who delighted in seeing their lives reflected back at them, in a real girls, real life series. The series is written by a core of four key writers, Meredith Badger, Thalia Kalkipsakis, Chrissie Perry and Rowan McAuley. There are 52 titles in the series, with most being 96 page chapter books, all with black and white illustrations.
Rights Sold
United States Canada UK French speaking Canada Latin America (Spanish) Brazil (Portuguese) Korea Finland Turkey China (simplified Chinese) not yet published
Copies Sold
In the home market we have sold 2,250,000 copies. We do not have complete sales records for overseas sales, however we anticipate them to be in the region of 650,000 copies.
Main Territories
Brazil has been the single biggest market overseas where the publisher has taken all 52 titles with substantial sales success. I would anticipate sales to be in the region of 450,000. Quebec is the second biggest territory where again the publisher has taken nearly the full range of titles. Finally, the series only launched last year in Korea but sales have been strong and we anticipate this will become a valuable market.
77 Content contributed by Hardie Grant Egmont. 149 BOOK INDUSTRY COLLABORATIVE COUNCIL
Awards
As a commercial fiction series, Go Girl wins awards voted for by children e.g. the YABBAs, KOALAs and the BILBYs.
Promotional Activities
This type of series sales does not lend itself to author tours. Promotional activities are centred around sales & marketing support to help overseas publishers launch their series successfully, gift with purchase/merchandising support and sharing website content.
Rights Selling Initiatives

The single biggest factor in selling rights has been attending Bologna and Frankfurt book fairs supported by the Booked grant. This attendance is vital for customer knowledge and relationships and for presentation of series, which work very much on the visual as well as the content. Without grants this would be extremely difficult, given the distance and costs. The VIP programme has tended to attract adult or more literary childrens publishers so has been a less useful tool for Hardie Grant Egmonts area of the market. However, some useful contacts have been made for other parts of our list.
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Allen and Unwin (The Slap by Christos Tsiolkas)78

Title: The Slap Author: Christos Tsiolkas Genre: Literary novel with an urban Australian setting
Summary
Christos Tsiolkas previous books had not sold widely overseas so when we first began submitting the novel our challenge was to breakout a new author. In 2009 English language rights sold to three territories separately: UK, USA and Canada. Audio rights sold in the US. Although the English language rights all sold within a couple of months of each other, translation publishers were quick to make offers for the book. French, Dutch and Lithuanian publishers bought the rights ahead of the UK and US. There were seven translation rights sales in 2009 and 12 in 2010, with five more territories sold in 2011. We have just sold Japanese rights last month bringing the total territories sold to 28.
Rights sold
Language Brazilian Portuguese Bulgarian Chinese Simplified Croatian Czech Danish Dutch English English (American) English (American) French German Greek Hungarian Italian Korean Lithuanian Norwegian Licensee Editora Quatro Edicoes Bard Publishers Anhui Literature & Art Publishing House Profil Host Mller Forlag Ambo Anthos Tuskar Rock Press HarperCollins Canada Penguin USA Viking Editions Belfond Klett Cotta Oceanida Publications Alexandra Konyveshaz Neri Pozza Openhouse Publishing Co Gimtasis Zodis Schibsted Forlagene
78 Content contributed by Allen and Unwin. 151 BOOK INDUSTRY COLLABORATIVE COUNCIL
Language Polish Portuguese (EU) Romanian Russian Serbian Slovenian Spanish Swedish Turkish Japanese
Licensee WYDAWNICTWO REPLIKA Edicoes ASA II, S.A. LITERA Ripol Classic Publishing House Booka MIS zalozba - adult RBA Leopard Pegasus Publishing House TBC
Local and international sales

Total international sales figures for The Slap are around one million copies. The Commonwealth Writers Prize in 2009 would have helped sales in Commonwealth markets including the UK and Canada.
Visiting International Publishers program

One of the first editors to make an offer for The Slap was Wanda Gloude from Ambos/Anthos in The Netherlands. Wanda was part of the 2009 Visiting International Publisher group attending the Sydney Writers Festival. When Wanda attended A&U for a presentation I was able to talk about the buzz that the book was receiving here and gave her a finished copy at our lunch for the VIPs. She made an offer soon after her return to Amsterdam. When HarperCollins Canadas CEO David Kent was visiting our offices as a VIP in 2009, we urged him to consider rushing out their edition of THE SLAP to capitalise on the CWP win, rather than wait for publication in 2010, which they did with stunning results.
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Allen and Unwin (Lovesong and Autumn Laing by Alex Miller)79

Titles: Lovesong and Autumn Laing Author: Alex Miller Genre: Literary novels with both international and Australian settings
Summary
Alex Miller is one of Australias most distinguished literary authors yet at the time we contracted Lovesong he had virtually no international profile. Our challenge was to take a well-established Australian author with a complex publishing history and re-launch him internationally. Frustrated in our attempts to sell his work to UK publishers, we decided to publish Lovesong, Alex's ninth novel, ourselves in the UK, under the Allen & Unwin imprint.
Rights sold Lovesong:

Canada HarperCollins United Kingdom Allen and Unwin France - Editions Phebus Germany Berlin Verlag The Netherlands House of Books Korea Balgunsesang Turkey Pegasus Books Hungary - Libri Konyvkiado China Hachette Phoenix Film Rights sold to Lizzette Atkins Productions Australia.
Autumn Laing:
Canada HarperCollins United Kingdom Allen and Unwin France - Editions Phebus Spain Ediciones B Film Rights sold to Claudia Karvan
The Frankfurt Book Fair and Visiting International Publishers program

The first international rights deal for Lovesong was done in a bar in Frankfurt long after the fair had closed. I was attending a book launch in the suburbs of Frankfurt. Earlier at the fair I had a meeting with David Kent from HarperCollins Canada, whom I had met when he attended the Sydney Writers Festival Visiting International Publisher program. David told me he wanted to acquire more acclaimed Australian authors and perhaps even start an Australian list. I immediately told him about Alex Miller, how he was one of our greatest living literary treasures who was under-appreciated
internationally and had just written a brilliant new novel called Lovesong. I pitched him the book and sent him a pdf from the fair. Later I received an offer for Canadian rights. After the HarperCollins deal was done we got to work on the translation territories with Germany, The Netherlands and France following soon after Frankfurt. None of these were easy, but we persisted by sending reviews, rights sales updates and local sales information at monthly intervals. In 2011 at the Sydney Writers Festival I met Bence Sarkozy from Hungary, who was also a visiting international publisher. He was in the process of starting his own publishing house in Hungary. I used this opportunity not only to give him a copy of Lovesong which he read straight away but also to introduce Alex himself to Bence at a function. Bence made his offer on his return to Budapest. In February 2013 I travelled to Korea as part of an exploratory group funded by the Australia Council and Austrade. I met directly with publishers in a series of one-on-one meetings and from these contacts I was able to sell Lovesong to a Korean publisher, the first deal we had done in this territory for over a year.
International publicity
We noticed that Alex had attracted praise from Irish luminaries including John Banville and Sebastian Barry so, ignoring London initially, we flew Alex to Ireland where he did two extremely successful events, appeared on several radio programs and Lovesong was named one of the Irish Times's books of the year. Following the extremely warm reception in Ireland, Alex came down to London where he featured on key BBC radio slots (including Radio 4's prestigious Open Book program) and Lovesong attracted reviews in The Guardian and The Times Literary Supplement among several other UK newspapers. Alex's tour also took in Scotland, where events in Edinburgh, Melrose and Dundee saw him connect with an entirely new and extremely eager readership. Additionally, an event Alex did for the Norwich Writers' Centre led to a story in the New York Times. The warm response to Lovesong enabled us to reissue Miller's earlier classic Conditions of Faith in the UK and we now have made all of Alex's backlist available to UK readers.
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Allen and Unwin (The Shifting Fog, The Forgotten Garden, The Distant Hours and The Secret Keeper by Kate Moreton)80
Titles: The Shifting Fog, The Forgotten Garden, The Distant Hours and The Secret Keeper Author: Kate Morton Genre: Commercial fiction
Summary
With just four novels published, Kate Morton has sold over 7.5 million copies in 32 languages, across 38 countries. The Shifting Fog, published internationally as The House at Riverton, was a Richard and Judy book club pick in the UK and this helped launch Kates extraordinary career. The momentum for international sales of Kates first novel began with scouts and agents. It was on the back of the agents extraordinary response to The Shifting Fog that we were able to increase our local sell-in and also sign up book two. The Shifting Fog, The Forgotten Garden, The Distant Hours and most recently The Secret Keeper have all been number one bestsellers around the world. In North America alone sales of Kate Mortons titles are now well over 2 million copies. The House at Riverton reached #1 on the Times bestseller list in the UK where is sold over 1,000,000 copies. In the US it reached #24 on the New York Times (NYT) bestseller list and sold half a million copies. It was also #2 in Norway with sales of 90,000 copies. Total sales are nearly 2.5 million copies. The Forgotten Garden reached #1 in the UK, #1 in Spain, #2 in Germany, #3 in Norway, #11 in the US and #20 in Canada. Total sales are 3.5 million copies. Film rights have been sold to Clint Eastwoods production company. The Distant Hours reached #1 in Spain, #2 in the UK, #2 in Norway, #16 in the US, #18 in Germany and #20 in Canada. Total sales are currently nearly 1.5 million copies. Each novel won the Australian Book Industry award for General Fiction Book of the Year. The Secret Keeper won the American Library Association Award, 2013, Womens Fiction Category
The Secret Keeper International bestseller information

US & UK Publication October 2012 Debuted at #8 on NYT list and #8 on The Times bestseller list. US appeared in NYT bestseller list
Australian publication
Australia and NZ publication November 2012 Number 5 on the bestseller list. THE SECRET KEEPER sales have increased by 30% increase on sales of THE DISTANT HOURS.
International Publishers
Kate has toured to the US and UK with each of the last 3 books, visiting book shops in regional as well as major cities in the US and hosting literary events in the UK. She also travels regularly to
Europe and has just returned from her second publicity tour to Spain where she currently has 3 books in the top ten bestseller lists. In 2011 Kate attended the Lillehammer literary festival in Norway and this no doubt helped ensure her novels were near the top of the best-seller lists there. The Secret Keeper has been sold to 25 territories to date: Language Brazil Spanish & Catalan Chinese Complex Chinese Simplified Czech Danish Dutch French German Italian Japanese Latvian Lithuanian Norwegian Polish Romanian Russian Serbian South Korean Swedish Thai Turkish UK/Canada US Licensee Rocco Santillana/SUMA Business Weekly Publishing Dook Publishing Euromedia Cicero de Boekerij Presses de la Cite Random House/Diana Verlag Sperling & Kupfer Editore Tokyo Sogensha Co Zvaigzne ABC Publishers Gimtasis Zodis Schibsted Forlagene Albatros Editura Humanitas Eksmo Imprimatur Daesan Publishing Bokforlaget Forum AB Amarin Alfa/Artemis Macmillan/Mantle Atria
Kates success is truly international and last year we hosted a celebration dinner in Frankfurt attended by more than 50 of her international publishers.
FINAL REPORT
156
Text Publishing (The Rosie Project by Graeme Simsion)81

Titles: The Rosie Project Author: Graeme Simsion Genre: Commercial fiction
Summary
On September 5th 2012, we sent the manuscript [for The Rosie Project] out to our international subagents and the scouts. A number of them read it overnight, in one sitting, and emailed to say theyd be recommending to their clients. The first international offer we received was on September 7th. It was a modest four-figure sum from an Italian publisher. We knew we were onto something big. We worked round the clock on selling this book. Nights were spent monitoring auctions in the northern hemisphere, days were spent emailing acquiring publishers, unsuccessful publishers, scouts, agents and film makers. By the time we arrived in Frankfurt for the Book Fair on Sunday 7th October, we had sold rights in 24 territories. Italian rights ended up being sold at auction for a substantial six figures. US, German and UK rights were also sold at auction in six-figure deals. We spent most of the Fair talking about this manuscript, either meeting with publishers who had acquired it, consoling publishers who had lost out at auction, or handling requests for material and offers from publishers in territories the book had not yet been sold. At this stage, the book was still being edited, so we had no material on hand to give out. All we had was a (now out of date) rights sheet listing the territories sold and a blurb. Word of mouth via the scouts and our agents did the rest. To date, we have sold rights in 34 territories. We published THE ROSIE PROJECT at the end of January 2013. We have already reprinted 4 times. We have had blanket support from the tradebooksellers and reviewers love it as much as international publishers. There are no foreign editions in print yet. They start appearing next month. But Graeme has already been to the UK twice for pre-publication publicity, and is currently in the US, also for pre-publication and pre-BEA (Book Expo America) commitments. He has been or will soon be on tour in other markets including Taiwan. We created special quizzes and a trailer. These are available on our website at http://textpublishing.com.au/books-and-authors/book/the-rosie-project/ A number of the international publishers will be using the content from the quizzes and adding their own text. Some will also use the trailer. Graeme has his own twitter account but has also created a twitter account for his lead character, Professor Don Tillman: @ProfDonTillman. He maintains both accounts regularly and engages with readers, booksellers, journalists and the media. As THE ROSIE PROJECT has not yet been published internationally, I cannot tell you which market is the strongest. If we are to go by the level of the advances, then its US, UK, Canada, Italy, and Germany. But offers we received in a number of other territories were far higher than wed ever received before, and that includes Poland, Slovak Republic and Japan.
81 Content contributed by Text Publishing. 157 BOOK INDUSTRY COLLABORATIVE COUNCIL
We are still selling rights. Just today I received an email from a Bulgarian publisher interested in the work and I have just appointed a Vietnamese agent to handle the book on our behalf. There have been over 50 approaches for film rights. Offers are coming in but this is not being rushed. We want to find the right team to take this project on. This is the biggest international success weve had at Text Publishing, in terms of the number of deals and the total value. Were yet to see if it succeeds internationally, but all signs point to yes!
FINAL REPORT
158
Text Publishing (The Broken Shore by Peter Temple)82

Summary
In late 2004, Text acquired rights in a handful of Peter Temple titlesincluding a new untitled novel. This new untitled novel became THE BROKEN SHORE, and we published it in August 2005. It was quite a departure from Temples previously published works. This was literary fiction with a crime element. We very consciously wanted to publish it as literary fiction, not genre fiction. We submitted the manuscript to THE BROKEN SHORE to our international agents, the scouts and international publishers, making sure we promoted it as literary fiction. This tactic worked. You can see the list of international publishers below. Publishers like Bertelsmann in Germany and Quercus in the UK ended up acquiring rights in all eight Peter Temple titles four x Jack Irish booksBad Debts, Black Tide, Dead Point and White Dog as well as the four x stand alone titlesIn the Evil Day, Shooting Star, The Broken Shore and another untitled stand-alone novel, which became the Miles Franklin Award-winning Truth. In Germany, sales of the German edition of THE BROKEN SHORE (called Kalter August) have topped 80,000 copies. It was a number one bestseller, and was also number one on the KrimiweltBestenliste, a prestigious, monthly crime fiction bestseller list. In the UK, Quercus entered the book into the Duncan Lawrie / CWA (Crime Writers Association) Awards. THE BROKEN SHORE won the Gold Dagger, the worlds most prestigious crime writing prize. Temple was the first Australian to win this prize. A number of the international publishers have acquired rights in other Temple titles and the book has been a bestseller in many countries including Norway, where sales are over 52,000 and still selling well. In Australia, the book was read and loved by readers of literary fiction as well as crime fiction readers. There was extensive review coverage nationwide. We advertised the book as part of a Fathers Day advertisement in major broadsheet newspapers and submitted it for bookseller Fathers Day catalogues. We have sold over 100,000 copies in Australia. When we published the companion book, TRUTH, sales picked up again for THE BROKEN SHORE. When TRUTH won the Miles Franklin award, we saw another spike in sales. When we announced Essential Media had acquired the film rights, we saw another sales spike. Essential Media has finished filming a television adaptation for ABC TV, directed by Rowan Woods, produced by Ian Collie and starring Don Hany (East West 101) and Claudia Carvan. THE BROKEN SHORE will screen on ABC TV in early 2014. This is the third ABC TV adaptation of a Temple title, following on from the 2012 BAD DEBTS and BLACK TIDE, which were critical and commercial successes for Essential Media and the network.
Rights sold
ANZ audioBolinda CanadaRandom House Canada CxANZ & CanadaQuercus CxANZ abridged audio rightsLittle, Brown CxANZ unabridged audio rightsWF Howes
CzechEuromedia DenmarkGyldendal FilmEssential Media FranceGallimard GermanyBertelsmann/Random House Germany GreeceMotibo IsraelModan ItalyBompiani JapanHakurosha KoreaYounglim NetherlandsDe Bezige Bij NorwayForlaget PolandAmber PortugalGotica RussiaAzbooka SlovakiaSlovart SpainPaidos SwedenKaubsa TaiwanMarco Polo Press TurkeyPlato USAFarrar, Straus & Giroux
Awards
Longlisted, Miles Franklin Literary Award, 2006 Winner, Australian General Fiction Book of the Year, Australian Book Industry Awards, 2006 Winner, Best Crime Novel, Ned Kelly Award, 2006 Winner, Colin Roderick Award, 2006 Winner, H. T. Priestley Medal, 2006 Winner, Crime Writers Association Duncan Lawrie Gold Dagger, 2007 Shortlisted, Swedish Crime Writers Academy Martin Beck Award Voted one of the ten greatest crime novels of all time by the Guardian UK
FINAL REPORT
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Text Publishing (Addition by Toni Jordan)83

Summary
Text acquired world rights in ADDITION direct from Toni Jordan in late 2006. We initially published in early 2008. Since then there have been three different editions. We have gone on to publish two further novels by ToniFALL GIRL and most recently, NINE DAYS. All three have been commercial successes. All three have found homes internationally. All three were licensed to Sceptre, an imprint at Hachette in the UK and to Piper Verlag in Germany. Ye-Ren in Taiwan, Editions Heloise dOrmesson in France and Artemis in the Netherlands have all licensed translation rights in two of Tonis titles. Film rights to ADDITION and FALL GIRL have been sold by us. The Australian market is the strongest for Toni. Shes a wonderful public speaker and has regular promotion commitments in bookshops and libraries throughout the year(s). She has been a participant at every major Writers Festival across Australia. Germany has also been a big market for Tonis books. Most recently Piper Verlag released a beautiful, small hardback edition of ADDITION for the Christmas 2012 market, four years after first publishing the book. In the UK, ADDITION was selected as a Richard & Judy Great Summer Read. The Richard & Judy show was an influential TV show in the UK, propelling Sceptres edition into the best seller lists there as soon as the announcement was made. ADDITION was also selected for the prestigious Radio 4 Book at Bedtime show. A number of Tonis publishers have been participants in the Australia Council for the Arts Visiting International Publishers (VIPs) Program, so Tonis had a chance to connect directly with her publishers. Through her work as a lecturer at RMIT in their Creative Writing & Editing Course, Toni has worked with a number of unsigned writers and recommended they submit their manuscripts to Text. Most recently, she taught Graeme Simsion and Darrell Pitt. We have bought three books by Graeme Simsionhis debut, THE ROSIE PROJECT, has sold in nearly 40 territories, and weve bought eight childrens books by Darrell Pittseven of which will be published by us in 2014.
Rights sold
ANZ audioBolinda BrazilEdiouro Comm. excl. ANZ & CanadaSceptre Czech RepublicVikend FilmBuongiorno Productions & Katalyst Films FranceEditions Hloise d'Ormesson GermanyPiper Verlag IsraelKinneret Zmora ItalyRizzoli Large printIsis
NetherlandsArtemis North AmericaMorrow/HarperCollins PolandDamidos PortugalPresena QuebecAlto RussiaRipol SerbiaMono I Manjana SpainMaeva TaiwanYe Ren.
Awards
Longlisted, 2009 Miles Franklin Literary Award Shortlisted, 2009 Barbara Jefferis Award A Womens Weekly Great Read Best Debut Fiction, The 2008 Indie Awards Shortlisted, Best General Fiction Book, 2008 Australian Book Industry Awards Shortlisted, Best Newcomer, 2008 Australian Book Industry Awards Shortlisted, Best Summer Read, State Library of Victoria, 2009 Best Themed Fiction, UK Medical Journalists Association 2008 ANZ sales figures to date: ~20,000 copies across three editions
FINAL REPORT
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Random House Australia (The Rangers Apprentice series by John Flanagan) 84

Titles: Rangers Apprentice series 11 titles published to date, with the final due to be published in late 2013. Author: John Flanagan Genre: Childrens fiction (9+)
Summary
The Rangers Apprentice series has sold over 8,000,000 copies worldwide and rights have been licensed in the following territories: Brazil (Editora Fundamento) Bulgaria (Adelphi) Croatia (Egmont) Czech Republic (Egmont) Denmark (Borgens) France (Hachette Jeu nesse/Livre de Poche Jeunesse) Germany (Random House) Greece (Patakis) Hungary (Konvmolykepzo) Indonesia (Matahati) Italy (Mondadori) Iran (Ofoq) Japan (Iwasaki Shoten) Korea (Wise-I) North America (Penguin/ Philomel) Norway (Front Forlag) Poland (Wydawnictwo Jaguar) Portugal (Asa ) Romania (Corint Junior) Russia (Ripol Classic) Slovakia (Egmont) Spain (Santillana) Sweden (Wahlstroms) Taiwan (Tony Culture) The Netherlands (Gottmer)
84 Content contributed by Random House Australia. 163 BOOK INDUSTRY COLLABORATIVE COUNCIL
Turkey (Beyaz Belina ) United Kingdom (Random House) Vietnam (Le Chi Culture and Communications) In Australia and New Zealand, weve sold over 1.2 million copies. North America has the highest number of sales at over 5 million. The series has been in the bestseller lists in the Netherlands (where it also appeared on the overall adult and childrens bestseller list), Poland and the Czech Republic. Sales are also very strong in France, Germany, Brazil, Denmark, Turkey and Sweden. Publication is still to begin in Russia, Vietnam and Norway. (Its still interesting to note that sales have not been as strong in territories such as Portugal, Spain and Italy.) We published the first title in this series in November 2004, and had our first translation deal early in 2005. (North American rights were licensed in October 2004). Nine years later, were still finalising new deals for new titles in the series, but also finding brand new territories. The deal in Norway was finalised in April 2013.
International Promotion
In the Netherlands, the publisher has twice held a Rangers Apprentice Day. In 2011, the author recorded a video message that was played on the day. In 2012, he was able to travel to the Netherlands and attend. The Day itself and Johns visit was reported on the Evening News (http://nos.nl/video/377610-drukte-op-fandag-grijze-jager.html, in Dutch apart from the author interview). The 2012 Rangers Apprentice Day also celebrated the Dutch release of the first book in the authors spin-off series, Brotherband. Rangers Apprentice Day 2011: http://www.youtube.com/watch?v=sNOiDBWVwy4&feature=youtu.be Rangers Apprentice Day 2012: http://www.youtube.com/watch?v=G1HsUol5fUE In 2010, the author had undertaken an author tour of the Netherlands and Denmark. No Rangers Apprentice Day at that time, but a lot of book signings, library appearance and interviews. The Dutch publisher is hoping to have John return in 2014. We are talking to other territories (including Poland) about possibilities. However, North America is Johns biggest market, and he travels at least once a year to the States for multi-city tours.
FINAL REPORT
164
Curtis Brown Australia (Burial Rites by Hannah Kent)85

Title: Burial Rights Author: Hannah Kent Genre Literary Fiction In northern Iceland, 1829, Agnes Magnusdottir is condemned to death for her part in the brutal murder of two men. Agnes is sent to wait out the time leading to her execution on the farm of District Officer Jon Jonsson, his wife and their two daughters. Horrified to have a convicted murderess in their midst, the family avoids speaking with Agnes. Only Toti, the young assistant reverend appointed as Agnes's spiritual guardian, is compelled to try to understand her, as he attempts to salvage her soul. As the summer months fall away to winter and the hardships of rural life force the household to work side by side, Agnes's ill-fated tale of longing and betrayal begins to emerge. And as the days to her execution draw closer, the question burns: did she or didn't she? Based on a true story, Burial Rites is a deeply moving novel about personal freedom: who we are seen to be versus who we believe ourselves to be, and the ways in which we will risk everything for love.
Rights sales to date English Language:

ANZ, Picador Australia UK, Picador UK (note these are separate deals) US & Canada, Little, Brown
Translation:
Chinese Complex, Taiwan, China Times Publishing Company Chinese Complex, World, China Times Publishing Company Czech, World, Fortuna Dutch, World, Cargo French, World, Presses De La Cite German, World, Droemer Verlag Hebrew, World, The Armchair Publishing House Icelandic, World, Lesbok Publishers Italian, World, Edizioni Piemme Norwegian, World, Schibsted Polish, World, Proszynski I S-Ka Portuguese, Brazil, Editora Globo Russian, World, A-Team
85 Content contributed by Curtis Brown Australia. 165 BOOK INDUSTRY COLLABORATIVE COUNCIL
Serbian, World, Laguna Slovak, World, Fortuna Swedish, World, Damm Forlag Turkish, World, Yapi Kredi Yayinlari As the book is only just published in ANZ were not sure which market is the strongest time will tell! Hannah hasnt won any awards eitheryet. All of Hannahs English language publishers are undertaking significant PR and marketing plans for Burial Rites which will involve Hannahs presence in all the markets. The Visiting International Publishers program was particularly important to this book as we pitched it to Judy Clain from Little, Brown when she was here for the 2012 VIP program that face to face contact really helped. However the simultaneous submission which I coordinated with sub-agents in the UK and the US was the thing that really got the ball rolling for the auction we then held for the book. Our continued contact with international agents and publishers is a HUGE part of it all having worked so well as we have such great relationships with various people in other markets. Although I cant disclose exact figures, the rights and export income generated for this book has already been significant and our hope is that will only continue!
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Rights author with international agent

Matthew Reilly86
For his first three books, Matthew Reillys Australian publisher Pan Macmillan looked after his foreign rights. They gave a first look to their sister companies, St Martins Press and Macmillan UK. ICE STATION and TEMPLE were published overseas. Matthew was then approached by the William Morris Agency, which has offices in New York City and Los Angeles, which appealed to Matthew as he was interested in screen possibilities for his novels. He has subsequently had screen rights optioned to Paramount, and Disney has bought outright the screen rights to HOVERCAR RACER. William Morris international division sells translation rights in the novels. Matthew writes screenplays as well selling SCARECROW and LITERARY SUPERSTARS in Hollywood. William Morris looks after his screenwriting. He says that screenwriting and novel writing are two very different arts just because someone can write a novel does not mean they will be able to write screenplays successfully. He happens to enjoy doing both. Until recently William Morriss London office managed UK and ANZ rights. Matthews agent there, Eugenie Furniss, left to set up her own agency, Furniss Lawton, and she now represents him in those territories. The New York office of William Morris manages USA and rest of the world. Matthew sees Australia as his home market and he is published just as well in the US and the UK as in Australia. His American agents and attorney have asked him to live in NYC because he can do more media, and he says that the place an author lives in is probably where they should be selling more books. He likes to live in Australia, and the US and UK publishers will fly him over for promotional campaigns. Matthews books are published in almost every country in Europe except France France was made the villain in about four of the books, so he humorously suspects this is the reason. Translation territories where his books are published include: Germany Holland Italy Bulgaria Spain Portugal Norway Denmark Brazil Thailand Japan graphic novel versions China one book in China All these territories take new books as he writes them.
86 Content contributed by Matthew Reilly. 167 BOOK INDUSTRY COLLABORATIVE COUNCIL
In terms of authors being published internationally, Matthew says: You have to write a book which is world class. Whatever your genre is, you cant sell whatever it is without it being world class. He believes that Australia is a great place to be discovered in the English language. It is our blessing and our curse to write in the English language, he says. Australian authors can be discovered by the rest of the world from Australia, just as Australian actors and other creative talents can and have been. Finally, when asked whether he would consider digital first publication for any of his writing, he said probably for a novella.
FINAL REPORT
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Co-Edition
Hinkler Books (My Big Book of Perfectly Pink Stickers)87
Title: My Big Book of Perfectly Pink Stickers Short description: A childrens sticker book aimed at girls of 6-8 years, with bright art style and photographic stickers to place on pages. Format: 96pp text printed 4/4 + 6pp stickers + C1S cover Author: no author specified English language editions sold worldwide. The title is distributed through third parties in the USA and South Africa, and sold via Hinkler directly in Australia, New Zealand, Asia & the UK. Total English language sales to date: 114,251 copies, of which roughly 25% were sold in North America. Languages sold in co-edition to date: 1. 2. 3. 4. 5. 6. 7. 8. 9. Bulgarian Croatian Czech Danish Dutch Finnish French (Europe) French (Canada) Hebrew
10. Hungarian 11. Icelandic 12. Italian 13. Latvian 14. Lithuanian 15. Norwegian 16. Polish 17. Portuguese (Brazil) 18. Romanian 19. Russian 20. Serbian 21. Slovak 22. Slovene 23. Spanish (Americas)
87 Content contributed by Hinkler Books. 169 BOOK INDUSTRY COLLABORATIVE COUNCIL
24. Swedish Number of copies sold in foreign language to date: 154,500 copies In terms of popularity, this book has been especially popular in our home market and in Europe. Sales into Asia and South America for sticker product are difficult as we are competing against strong local product that is printed locally. No third-party licensed manufacturing deals agreed. International sales in both foreign language and English language export were achieved through participation in Bologna, London, BEA & Frankfurt Book fairs, where our sales people meet all our many partners. The sales were also achieved through regular email and phone contact with customers over and above attendance of the book fairs. International English language editions are sold directly to retail outlets, wholesalers and other sales operations. Foreign language sales are made to publishers, who then on-sell their edition into retail. Thus, international English language sales are often based on a percentage discount from RRP, whereas foreign language sales are calculated on manufacturing costs + gross margin. An emailable information sheet with cover image, format details and pricing is also invaluable in achieving sales. This is often enough to get sales in English language export, though for foreign language sales are rarely achieved before the publisher has seen and reviewed finished copes of the book.
FINAL REPORT
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Hinkler Books (My Baby Record Book)88

Title: My Baby Record Book Three editions exist of the same title: Pink, Blue & Yellow. Separate covers and inside content. Short description: A full colour baby album, in which one can stick photographs and keepsakes of ones child. Format: 48pp + 8pp ends + hardback square backed padded case cover Author: No author specified Not entered for any awards. English language editions sold worldwide. The title is distributed through third parties in the USA and South Africa, and sold via Hinkler directly in Australia, New Zealand, Asia & the UK. Total English language sales to date: 217,877 copies, of which roughly 15% were sold in North America. Languages sold in co-edition to date: 1. Bulgarian 2. Croatian 3. Czech 4. Finish 5. Greek 6. Lithuanian 7. Macedonian 8. Polish 9. Portuguese (EU) 10. Portuguese (Brazil) 11. Romanian 12. Russian 13. Serbian 14. Slovak 15. Spanish (EU) 16. Turkish Number of copies sold in foreign language to date: 222,000 copies These titles have been very successful in Australia in terms of English language sales. In terms of foreign language, as you can see above they have proved most successful in Eastern Europe. No third-party licensed manufacturing deals agreed. Sales methods as per other case study for My Big Book of Perfectly Pink Stickers.
88 Content contributed by Hinkler Books. 171 BOOK INDUSTRY COLLABORATIVE COUNCIL
Export
Eleanor Curtain Publishing: an exporter of literacy products89
Eleanor Curtain Publishing is an independent, family-owned Australian specialist educational publishing company whose main business is the development and sale of early literacy programs. Our key export market is the USA, closely followed by Canada, Asia and the Middle East, as well as our home markets of Australia and New Zealand.
Our publications
Our major product lines consist of series of readers for children in the very beginning stages of literacy development - books that introduce children to the earliest skills and concepts needed for developing literacy and by careful stages, take them through to being fluent readers. The materials are based on research findings and support literacy pedagogy common to all the major Englishspeaking markets. We currently have three major literacy programs being sold in multiple international markets and have recently successfully launched a Comprehension Program in the US as well as Australasia. Each literacy program can consist of anything up to 200 titles. The childrens books are accompanied by an extensive range of resources to support teachers in all aspects of literacy development including classroom management, assessment of individual students and establishing home-school connections. Each individual project is a serious investment of time and money. More than $1 million typically needs to be spent to develop a project and this does not include the significant costs of selling the products to these export markets. Investment on this scale cannot be supported by local markets alone.
More recently, digital products are being added to the range, although as we focus on very beginning readers, aged from 5-8 years, and the books are used for instructional rather than individual reading, the need for digital editions of the reading books is not really appropriate. Ancillary digital product which supports the teacher (materials for use with the whole class and are used on an Interactive White Board) or offer students activities which support them after they have had a literacy lesson with their teacher is what we are currently producing. This requires more funding.
Export activity
We launched our first literacy program in 1997 in the USA and Australia/New Zealand simultaneously. Since then we have continued to expand our overseas markets with a mixture of licensing deals or partnering with a specific publisher for the exclusive distribution of stock which we supply. A minimum of 60% of our revenues have always come from export. The revenues and percentages vary upwards from year to year. Some large deals have been one-off and opportunistic. Not only is it a serious investment for us as the originating publisher, it is also a major investment for the publishers we partner with in international markets. So much care is taken in choosing partners and the partnering publishers act with equivalent caution. The projects have a long life, so the partnerships must endure. In this brief over view, the best way to communicate the nature of the business is by making some general points and also by noting some highlights of 16 years of activity in this area.
89 Content contributed by Eleanor Curtain Publishing. FINAL REPORT 172
International markets The US

The US is and always has been our biggest market. All books and support material have to be adapted for the US market. Alphakids, which was a licencing deal and our first program launched in the US market. It is still selling and now has a selling life of more than 16 years. In 2008, we established our own company in the US in partnership with a small company that we had been working with, who had effective distribution, sales and marketing resources. This was in direct response to the effect the GFC had on many US publishers who previously had been actively licencing Australian produced product. This left us without a channel to our most important market. We control the company through a majority shareholding, and are active in its management as Board members. The management of this company it is now a major focus for us, and we are regular visitors to the US to attend sales meetings and conferences.
Canada
We have a long term relationship with Scholastic Canada who are the exclusive distributors for several of our programs. We supply them with finished books which have been versioned for their market.
Asia
We have long standing dealings with South Korea. In 2006, we finalised a six-figure licensing agreement with Yoons English Academy, one of Koreas largest and most successful English language school chains, for print distribution rights to our Alphakids literacy programs. In 2012, we signed licencing agreements for our flagship literacy program Flying Start - with AgaWorld and digital rights for Alphakids with Compass Media. We are currently working our way towards a relationship with a Chinese company and have made an initial stock sale. Hong Kong is a long term and solid customer. Revenues vary according to whether there are any government tenders. For the last three years we have made significant sales to Abu Dhabi. This relies on personal contact and frequent visits. We have an exclusive agreement with a distributor who works with us in a number of other Middle East markets.

Middle East
Southern Africa
We have an exclusive distributor in Southern Africa (comprising the Republic of South Africa, Namibia, Madagascar, Botswana, Swaziland, Mozambique, Lesotho and Zimbabwe). Revenues vary. Last year revenues were very solid as the result of several titles being selected in a government tender.
Ireland
We have just signed an exclusive deal with an Irish distributor and sent our first stock shipment.
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The UK
We have had an exclusive distribution arrangement in the UK since the late 1990s. Initially a flourishing market, economic conditions in the UK have reduced the value of this revenue stream to us.
Critical factors in export growth and success

None of this work could have been done by agents acting on our behalf. Developing knowledge of each market and establishing relationships with potential partners could only be achieved by personal visits. The EMDG grants provided valuable and timely support during this critical phase in the development of our business. Significant investment of private capital is essential to the establishment and maintenance of these export markets. This is a long term investment, where returns on capital take many years.

The long term benefits to Australia over this period of time have been two-fold: the sustained, profitable export growth of our business ; and enhancement of Australias reputation internationally as a source of high-quality early literacy materials.
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Initiatives
Visiting International Publishers Program Australia Council for the Arts90
The Australia Council for the Arts Market Development section invests in three initiatives that support international rights sales of Australian literature. Based on sector evaluation, all programs are viewed positively and feature high sector engagement. The three programs include:
The Visiting International Publishers Program (VIPs)

VIPs is an industry program designed to promote rights sales of Australian titles into international markets and to strengthen the links between Australian and international publishers. Since the programs commencement in 1998, over 200 prominent publishers, scouts and agents have been hosted in Sydney, Melbourne and Adelaide. VIPs has increased the rights sales of Australian titles and strengthened the links between Australian and international publishing houses and literary agencies. Invitations to the program are highly sought after by international peers who regularly ask how they can be invited to participate. The VIPs guests are nominated by the Australian publishing sector and the final list is selected by our VIPs committee to ensure the best possible outcomes for relationships and sales. Survey results from the 2011 and 2012 VIPs programs indicate 94 Australian book titles have been sold internationally, generating sales of over $2 million, as a result of the VIPs program (from an Australia Council investment of $100,000 per year). Anecdotally publishers report ongoing deals and relationships with VIP alumni that were sparked by an initial sale. The program hosts international guests each year, alternating between at Adelaide Writers Week and Sydney Writers Festival, to meet and network with Australian publishers through a series of events. The latest event featured: one on one, half hour meetings over 4 days (over 400 meetings) publishers high tea industry forum reception and networking drinks featuring Australian authors Sydney Writers Festival panels featuring the VIP guests plus one Australian Publishers Association panel.
Together these events offer multiple opportunities for publishers and agents to meet and network with key VIPs.
Booked
The Australia Council for the Arts Market Development sections Booked program provides travel support for Australian publishers and agents to promote Australian literary works and authors internationally and develop international demand at key book fairs. The aim is to sell international rights to Australian titles and consolidate existing, and build new relationships with, international markets. Over the last three years Australia Council has invested $360,000 to support publishers and agents international presence at book fairs which has generated a reported aggregate rights sales of $7.3 million.
90 Content contributed by Australia Council for the Arts. 175 BOOK INDUSTRY COLLABORATIVE COUNCIL
Fairs attended: Frankfurt Book Fair (50% of successful applicants), Bologna Book Fair, London Book Fair, Taipei International Book Exhibition, Ghana International Book Fair, and Australian Writers Week in Beijing. The Australian Publishers Association was supported by Australia Council to attend Frankfurt, Bologna and London Book Fairs to support the Australian delegation and create the unified Australian Brand for the Australian booth with branding from Austrade Brand Australia.
Highlights of the Program: Text Publishing

For a very small investment the return to publishers and subsequent flow onto Australian writers can be enormous: Without a doubt, The Rosie Project by Graeme Simsion was a major success. We have never sold a book for more money and in so many territories so quickly, and even now we continue to receive offers from smaller territories. Anne Beilby, Rights Manager The Rosie Project sold in 34 territories, bringing the total amount of advances to close to $2million AUD http://artery.australiacouncil.gov.au/2012/11/text-publishing-frankfurt-book-fair/ Booked is highly valued by the industry and ensures Australia has a key presence at these important international markets. Publishers continue to struggle in the current economic climate and rapidly changing sector however Australian literature is highly regarded as a result of its small but continued presence at these significant events.
APA partnership and collective Australian representation at international book fairs

The Australia Council partners with the Australian Publishers Association (APA) and Austrade to represent the Australian publishing sector at key international book fairs under the brand Australia Unlimited. In 2012/13, the APA coordinated collective stands at Frankfurt Book Fair October 2012, Taipei Book Expo with a special Korean exploratory trip, February 2013 and the Bologna Book Fair, March 2013. Total Invested 2012/13: $120,000
Highlights of the Program

At Frankfurt Book Fair there was a 50% increase in exhibitors and an expansion of the area from 44 sq metres in 2011 to 72 sq metres in 2012. The major change in exhibitors was the addition of Penguin Australia, Allen & Unwin, Hardie Grant Egmont, Rockpool Publishing, Macmillan Education and RIC Publications four trade publishers and 2 education publishers. Publishers attending Frankfurt Book Fair each averaged: 60 meetings during the fair which resulted in 145 connections, collaborations, commissions and partnerships worth $187,101 and a further 52 deals and opportunities created in addition to the sales already mentioned. (Results of the Australia Council survey for APA stand holders as at 11 December 2012). It was estimated that 6,300 people visited the Australian Collective stand an average of 450 per stand holder.
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Frankfurt Book Fair Guest of Honour NZ Campaign Oct 2011 - Oct 201291
82 New Zealand writers were presented in over 300 events across 42 towns and cities in 7 European nations (Germany, Switzerland, Austria, Belgium, UK, France and Italy). Our original target was to have 100 books translated in German between October 2011 and October 2013. We know we have reached that target already and will exceed it with the translations currently in progress. This is an increase of 800% on annual figures for the last 10 years. We know that our publishers have experienced more rights sales both from Germany and also from other markets as a result of our raised profile. The Books and Writers Programme presented a balanced picture of New Zealand literary, commercial and educational publishing. It provided the core of New Zealands overall Guest of Honour programme for the Frankfurt Book Fair in 2012. It reached new audiences directly via hundreds of live performances and indirectly through a highly effective media and PR campaign. Over 13,500 clippings were generated (Total AD equivalent value of print clippings: Euro 8,367,892,00). The total live audience reach of the author events is estimated to be in excess of 110,000 people. Eight festival/event invitations have been reported by New Zealand writers as result of GoH and interest in NZ writers and publishing remains high. Thirty-five New Zealand publishing companies exhibited on the collective New Zealand Trade Stand in Hall 8 (the English language rights hall) at Frankfurt 2012. The collective stand had a prime location and a footprint of 180 m. The Ministry for Culture and Heritage (MCH) had the ultimate responsibility for delivering the programme, and reported widespread satisfaction with the event and the outcomes. Other economic activity added to the success including Weta Workshop, a leading film and television special effects company, who report that in Frankfurt doors opened for them that they had been knocking on for years. Stand out commercial success stories from 2012 include: Nalini Singh reached No.7 on the Spiegel Bestseller List in March 2012, during the Leipzig Book Fair. Carl Nixon best German newcomer from zero to No.2 on the Brsenblatt List for best crime literature. Anthony McCarten undertook a 32-venue tour with publisher Diogenes across Germany. Colin Wilson toured 20-venues with publisher Panini Press across Germany, Italy, France and Belgium. Alan Duff delivered an 8-venue tour with publisher Unions Verlag across Germany and Switzerland. Lloyd Jones undertook a 6-venue tour with publisher Rowohlt across Germany and Switzerland. Kate de Goldi delivered a 7-event tour with publisher Carlson across Germany.
Taipei International Book Exhibition (Focus on an individual market)92
91 Content contributed by Publishers Association of New Zealand. 92 Content contributed by Nerrilee Weir. 177 BOOK INDUSTRY COLLABORATIVE COUNCIL
In an Australia Council initiative delivered in partnership with Austrade and the Australian Publishers Association (APA), a delegation of eight Australian publishers and rights managers attended the Taipei International Book Exhibition 2013. As we know, the Australian branding and collective stands at Frankfurt and Bologna Book Fairs are very successful. The collective stand at TIBE has also been vital for building that recognition of our publishing industry. The delegation in 2013 was the seventh time that there has been an Australian presence at TIBE. In 2007, a delegation of three people attended the Fair. Since then, weve increased our presence each year and built upon the branding of the stand. Importantly, we are also selling rights in this territory. TIBE offers the unparalleled opportunity to focus on a single market and to establish and strengthen relationships with individual Taiwanese editors. Meeting schedules in Frankfurt, London and Bologna tend to fill with publishers from larger markets (as they must) allowing few slots left for meetings with key publishers from the smaller markets (both Asian and smaller European territories). Attendance at TIBE, however, can mean individual meetings with up to 25 different publishers from the one market. Taiwan is not a market where big deals can be made. Advances are modest and print runs are on a par with Australia. It is, however, a market actively acquiring international titles and we need to ensure that Australian titles are considered in that acquisition process. The continued Australian presence at TIBE provides the opportunity to: Consolidate our presence in this market. Ensure that Taiwanese publishers have an awareness of the Australian Stand as a brand, and of the different Australian publishing houses (multinational and independent trade houses, niche publishers and education publishers) and their lists. A growing awareness from Taiwanese publishers of key Australian authors and bestsellers and also of the new and emerging literary talents. A growing awareness that Australia also publishes in niche areas of mind body spirit, and more product-based titles. A desire from the Fair organisers to include more Australian authors in the official program. The opportunity for Australian attendees to develop a more in-depth knowledge of a market and to build relationships with Taiwanese publishers. To develop a further income stream for our authors and creators.

Our attendance also allows us to meet more regularly with publishers who have licensed our titles, and to discuss with them any marketing or promotion for our titles and authors, and also any problems that might have arisen. Our focus can never be simply securing a rights deal, but must include the support we can offer to that publisher to make their publication a success, to see the initial advance earn out and hopefully earn royalty income. The success of our efforts in Taiwan has led to the expansion of the initiative. Following TIBE earlier this year, a smaller group travelled to Seoul, Korea. The purpose of this trip was again to learn more about the market and specific trends, to meet with individual editors and to understand more fully what we need to do as rights sellers to secure rights deals. This means not only knowing which of our titles might work in this market, but also cultural and business etiquette. Another important outcome from this visit was a Market Report which is to be shared with the wider Australian publishing community through the Australian Publishers Association.
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(Reports of rights sales and income are provided regularly to both the Australia Council for the Arts and Austrade.)
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Lending Rights Expert Reference Group
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Part Two: Current models for ebook supply to libraries ............................................................. 186 Part Four: Next steps ................................................................................................................................ 196
Part One: Defining the issue .................................................................................................................. 183 Ebooks in libraries 183 About the Lending Rights Expert Reference Group 184 Purpose of this paper 185
CONTENTS
Executive summary .................................................................................................................................. 182
Part Three: Finding solutions ............................................................................................................... 187 Principles for consistent models for supply of ebooks to libraries 187 Framework for a digital lending right 191
Appendix A: Stakeholder consultation .............................................................................................. 200 Appendix B: Current models for supply of ebooks to Australian libraries ........................... 201
References ................................................................................................................................................... 199
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Executive summary
The Lending Rights Expert Reference Group (ERG) was established by the Book Industry Collaborative Council (BICC) to progress the reform agenda outlined in a Government-supported recommendation on lending rights made by the Book Industry Strategy Group (BISG), in its report of September 2011. This was that: a. Australian publishers work to clarify the business model for the use of ebooks in libraries b. Following that, the Government establish a framework and guidelines for how ebooks may become a part of the [Educational Lending Right and Public Lending Right] schemes. This paper presents the outcomes of the ERGs work in implementing this recommendation, to ensure that systems for ebook supply to libraries enable timely access to content, provide fair remuneration for authors, and guarantee the viability and sustainability of publisher and distributor business models. Early in its deliberations, the ERG agreed that while ebooks are an important part of the library landscape and should be included in current lending rights schemes, it would not be possible to develop a single consistent model for supply, as proposed by the BISG. The ERG's response was to develop a set of principles to inform more consistent models for the supply of ebooks to libraries. These principles, supported by research on models currently being used by publishers in Australia to supply ebooks to libraries, have been agreed to by the industry representatives on the ERG authors, agents, publishers, libraries, and distributors and have been submitted to wide industry consultation across the supply chain. The feedback received through this process has been incorporated into the Principles for Consistent Models for the Supply of Ebooks to Libraries (Principles), which are presented in this paper. These Principles have the potential to inform the future of ebook supply to libraries, and represent an important step forward for the Australian industry. In response to the second part of the BISG recommendation, the ERG has developed a Framework for a Digital Lending Right (Framework), which provides a summary of elements to be considered when extending lending rights into the digital environment, and a set of governing principles for the operation of a digital lending rights scheme. This Framework is intended to inform the Australian Governments modernisation review process. While the ERG has progressed this reform agenda to a very developed stage, further work will be needed at the industry level to implement these strategies. In the final section of this paper, the ERG outlines a series of recommended actions that need to be undertaken in order for the benefits of elending to be realised by all parties.
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Part One: Defining the issue

Ebooks in libraries
The emergence of ebooks can be traced back to the 1970s with the development of Project Gutenberg, a volunteer project aimed at digitising cultural works to encourage the creation and dissemination of ebooks. While the number and availability of ebooks increased, access was limited to desktop and laptop computers. Ebooks did not gain mass-market popularity until around 2006, when a significant change in technology saw the release of specific ereader devices such as the Sony Reader (2006), Amazons Kindle (2007) and Barnes and Nobles Nook (2009). Concurrently, tablet computing devices such as the Apple iPad also emerged. The success of the tablet computer and the surge in the growth and availability of ebook readers has resulted in a rapidly growing demand for digital content. Not surprisingly, this has extended to pressure on libraries by patrons for ebooks to be made available for borrowing. However, publishers, distributors and authors are concerned about the potential of ebook lending to undermine the value of their work, their income and their rights to their work, and many of them are still grappling with business models and licensing practices for supplying ebooks to libraries. Supply models continue to evolve, and currently vary between publishers (as illustrated in Part 2 of this paper). In some cases, publishers also limit the content which they allow libraries to access. While supply models vary, ebooks are most commonly made available to libraries through distributors, who supply copies of ebooks and access to ebook titles. Libraries are struggling with the variety of supply models, and the constantly changing scenarios, licences and contracts, compounded by increases in pressure on library budgets. This is often further complicated by the fact that major suppliers are overseas, and the terms and conditions of supply relationships are often dictated by corporations operating in the United States (US) and United Kingdom (UK). Recent reports, reviews and briefing papers from the US, UK and Canada93, reveal that there is currently no easy solution for the development of agreed norms for ebook lending by public libraries. Creators and publishers are currently compensated for their printed works which are held in public libraries and educational libraries under the Australian Governments Public Lending Right (PLR) and Educational Lending Right (ELR) Schemes. These schemes seek to compensate creators and publishers and enrich Australian culture by making payments to eligible creators and publishers for the availability of their printed works in libraries, and encouraging the growth and development of Australian writing and publishing. While the operation of the schemes is straightforward for printed books, ebooks held in libraries have added new layers of complexity that have made it difficult to directly translate the existing PLR/ELR schemes for printed books to ebooks. Uncertainties in the commercial arrangements for the sale and licensing of digital material, and how this material will be used in libraries have further complicated this issue, and consequently there has been considerable caution about extending the schemes to include ebooks. In its report to the Australian Government in September 2011, the Book Industry Strategy Group (BISG) recommended that publishers work to clarify the business model for the use of ebooks in libraries, following which the Government should establish a framework and guidelines for how lending rights may be applied to ebooks. The Government supported both recommendations relating to lending rights, noting the importance of the book industry addressing the issue of consistency in supply models prior to Governments consideration of an extension to the PLR/ELR schemes.
93
See References. BOOK INDUSTRY COLLABORATIVE COUNCIL
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The Government established the Book Industry Collaborative Council in June 2012, to assist the industry to implement the recommendations from the BISG.
About the Lending Rights Expert Reference Group

The Lending Rights Expert Reference Group (ERG) is one of several expert reference groups established by the Book Industry Collaborative Council (BICC) to address the challenges being faced by the industry in one of seven priority areas for reform, broadly based on recommendations made by the BISG (further information on the BICC and the BISG can be found at www.innovation.gov.au/books). For the Lending Rights ERG, these challenges relate to the supply of ebooks to libraries and the potential for developing a digital lending right. Early in its deliberations, the ERG determined that while ebooks are an important part of the library landscape and should be included in current lending rights schemes, it would not be possible to develop a single consistent model for supply (as proposed by the BISG). The supply of ebooks to libraries is contingent on individual commercial decisions between authors, publishers, distributors and libraries. Establishing a harmonious system for supply must not interfere with this commercial freedom, particularly as these decisions are often made by multinational companies and cannot be controlled by Australian subsidiaries. The ERG's terms of reference and deliverable reflect this limitation, shifting the focus towards developing high level guidelines to encourage more consistency in supply models, in an attempt to manage this commercial flexibility so that is does not impact on government schemes, the supply chain and the reader experience.
Lending Rights ERG Deliverable

A position paper which can inform industry and government on industrys collective view regarding: a) the principles for a consistent model for supply of ebooks to libraries b) a framework for digital lending rights as a possible extension of existing lending rights schemes
Lending Rights ERG Terms of Reference

i. ii. Identify models currently being used by publishers in Australia for supply of ebooks to libraries. Engage with relevant parties (including publishers, authors, agents, libraries and government) to compile recommendations of principles for a more consistent model for supply of ebooks to libraries in Australia, which would help to facilitate the potential extension of existing lending rights schemes to include ebooks.
Lending Rights ERG Membership

BICC members
Sophie Masson Co-Chair, Lending Rights ERG Chair, Australian Society of Authors Evelyn Woodberry Co-Chair, Lending Rights ERG Chair, Public Lending Right Committee Margaret Allen Australian Library and Information Association

Margaret Connolly Peter Haasz
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Margaret Connolly and Associates OverDrive, Inc.

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Michael Heyward James Kellow Angelo Loukakis Marian Morgan-Bindon Mark O'Neil
Text Publishing HarperCollins Publishers Australia Australian Society of Authors Library Services; Gold Coast City Council Cambridge University Press
Observer
Office for the Arts, Department of Regional Australia, Local Government, Arts and Sports
Purpose of this paper

This paper presents the strategies developed by the Lending Rights ERG to ensure that systems for ebook supply to libraries enable timely access to content, provide fair remuneration for authors and guarantee the viability and sustainability of publisher and distributor business models. The Principles for Consistent Models for Supply of Ebooks to Libraries (Principles), supported by research on current models for supply, attempt to provide high level guidelines on a number of contentious issues in the e-lending arena. They have been agreed to by the industry representatives on the ERG, and have been submitted to wide industry consultation across the supply chain, with the feedback received through this process incorporated into the version included herein. The Principles have the potential to be used by industry to inform the development of more consistent models of ebook supply to libraries. The Framework for a Digital Lending Right (Framework) provides a summary of elements to be considered when extending lending rights into the digital environment, and a set of governing principles for the operation of a digital lending rights scheme. This has been developed on the understanding that work is being conducted by the Office for the Arts, Department of Regional Australia, Local Government, Arts and Sports, on the modernisation of the PLR and ELR schemes, commencing with a wide-ranging assessment of the Lending Rights schemes. This Framework is intended to inform this process and the future development of a digital lending right. This work is predicated on the belief that by encouraging the creation of content and inspiring new ways of doing business, a fully functioning and efficient supply system can stimulate further activity which benefits all parties across the industry. By not acting to address ebook supply to libraries, industry risks the continued creation of barriers to efficient supply, curtailing the dissemination of Australian content. In progressing this reform agenda, the ERG has had extensive discussion within the group as well as wider consultation across the supply chain, including industry associations such as the Australian Society of Authors, Australian Literary Agents Association, Australian Publishers Association, Australian Library and Information Association, National and State Libraries Australasia and Council of Australian University Librarians, as well as many individual libraries, distributors and aggregators (for a list of organisations consulted by the ERG, see Appendix A). For the momentum gained through this consultation process to be capitalised on, the ERG recommends that further actions be taken to continue to progress this important work. These next steps are outlined in Part Four of this paper.
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Part Two: Current models for ebook supply to libraries

In accordance with its terms of reference, the ERG undertook research on the conditions for the supply of ebooks to Australian libraries, in order to inform the development of its deliverable. As a starting point, the State Library of Western Australias (SLWA) ebook supply and licensing arrangements were analysed to identify points of commonality and difference, and describe existing models of supply. SLWAs collections include both educational and trade publications and SLWA also procures on behalf of the Western Australian public library network, thus providing a reasonably broad range of products, suppliers and examples of contractual terms for content licensing and use. This initial analysis identified extensive variations in the methods and terms of supply, and the conditions of end user access. By identifying common features across different products, a number of models were identified. These models became the basis for a survey of other libraries, to determine whether the models defined were consistent with other libraries experiences, and collect details of any other supply arrangements which were not captured in the initial models. This survey was sent to a number of universities, TAFE, public and special/corporate libraries across Australia in October/November 2012. Several school libraries were also contacted, however due to the timing and the relatively low level of adoption of ebooks in schools at that time, no responses were received from this sector. The analysed and consolidated results of this survey are represented in a table that can be found in Appendix B: Current models for supply of ebooks to Australian libraries. This table does not attempt to represent a comprehensive list of all supply models. The environment in which elending is occurring is evolving rapidly, and the terms and conditions of supply are subject to wide variation and frequent change. The results of this research merely demonstrate a snapshot of the situation at a particular point in time94. However, this does serve as a useful example of the current lack of consistency in the terms and conditions for ebook supply to Australian libraries.
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By way of example, since this research was conducted, another model has been developed which involves the loading of a licensed version of an ebook onto a physical reading device (such as a tablet), with the user being lent the physical reader loaded with the ebook. 186
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Part Three: Finding solutions

Principles for consistent models for supply of ebooks to libraries
In addressing its deliverable, the Lending Rights ERG has reached agreement amongst its industry members on a set of principles for developing more consistent models for the supply of ebooks to libraries. This is an exciting development, and an important step forward for the Australian industry. It is intended that the Principles will go on to influence the actions of individuals and enterprises throughout the Australian book supply chain. In order to achieve this, the ERG asked key Australian book industry associations and enterprises for comments on the Principles, as the first step in gaining agreement from all sectors on their intent and application, and for their consideration in future developments in the industry (for a list of participants, see Appendix A). The ERG received a strong response to this request, and a vast amount of useful feedback has been incorporated into the Principles presented below. The ERGs reconciling of stakeholders different points of view was a vital stage in the Principles development. The ERG recommends the following Principles to the Australian industry: Principle 1 Libraries role in promoting a reading culture Books and reading are integral to the dissemination of ideas and information, and are a vital part of Australias culture. The availability of books through libraries, in all formats, ensures equity of access, encourages reading and promotes awareness of authors and their works. The Australian book industry should remain committed to enhancing readers access to Australian books through libraries and encouraging reading, in all formats.
Principle 2 Models for the supply of ebooks to libraries There is currently a great deal of uncertainty and complexity in the commercial arrangements for the sale and licensing of ebooks to libraries. The potential for digital supply and lending models to facilitate the collection and storage of aggregated information, including on library purchasing and lending patterns, and users browsing, borrowing and reading habits, has not yet been fully realised. Models for the supply of ebooks to libraries should be as consistent and transparent as possible, simplifying access for readers whilst providing measurable data for authors, publishers and libraries, and enough flexibility to be commercially sustainable for all parties.
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Principle 3 Availability of ebooks through libraries Ebooks are provided by publishers and distributors to libraries under licences which contain terms and conditions limiting their purchase and use, for example setting an embargo period, minimum number of copies to be purchased, or placing strict limits on the number of circulations before a further purchase is required. Not all titles available for sale to the public are as yet made available to libraries to purchase. The industry aims to improve the availability of content, providing libraries with a variety of terms for acquisition and re-use, at a minimum consistent with the Australian Copyright Act. Finding viable and sustainable models that support concurrency of market release and the interests of publishers and libraries is a priority.
Principle 4 Continuity of access Many models for supply involve libraries paying for access to ebooks which are hosted on a distributors website. Ongoing access to digital titles, in the event of business failure of distributors/publishers, should be managed through commercial contracts. The industry will undertake its best endeavours to provide access to purchased or licensed titles even if the distributor/publisher ceases business.
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Principle 5 Fair remuneration for authors and publishers Authors and publishers rely on the sale of ebooks as an integral part of their income, and are concerned about the impact of electronic lending on fair remuneration for their work. While the Public Lending Rights and Educational Lending Rights Schemes compensate creators and publishers for the availability of their printed works in libraries, these schemes do not currently include ebooks. Publishers have the right to develop, negotiate and implement business models for elending that ensure fair remuneration and which create a sustainable publishing business. Authors and publishers should receive fair remuneration, including a lending right through an extension of the Lending Rights schemes, for each ebook title licensed or sold to libraries.
Principle 6 Fair pricing Ebook prices for libraries vary considerably. Prices are determined by various factors including use, circulation and loan limits. Libraries also pay for the services offered to them by distributors. Libraries should expect to pay fair and reasonable prices for ebook titles and distribution services.
Principle 7 Rights protection Authors and publishers expect that their work will be protected from illegal digital copying, in accordance with copyright law. Digital Rights Management (DRM) technologies are commonly employed to provide this protection by enforcing conditions for access to and use of digital works by users and licensees. These conditions often extend beyond the protections afforded by copyright legislation. All digital models should uphold Australian copyright law and strike a balance between ensuring adequate and proper rights protection for authors and publishers against illegal use of their work, and allowing libraries and their patrons to enjoy reasonable use of purchased titles.
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Principle 8 Device neutral ebooks There is a diverse range of ebook platforms and models in the market which are often not compatible with each other or with the various devices used for access, and are not easily accessible or user friendly. Some titles are only available on one device, limiting access by users. Libraries are generally unable to use discovery layers across distributors services to assist users in finding available ebooks. Hence, the seamless presentation of available titles, in all formats, is currently a major challenge. The industry should aim to give all library users access to ebooks on a range of devices from across all platforms, in such a way as to facilitate discovery and maximise choice.
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Framework for a digital lending right

Failure to incorporate some form of PLR compensation for eBooks in library collections will lead to the gradual erosion of author and publisher payments and a diminishing of the overall relevance of PLR. Paul Whitney, Public Lending Right Committee Annual Report 2011-12, p. 11 Australias Lending Rights schemes compensate authors, compilers, translators, editors, illustrators and publishers for royalties and sales income lost due to the free availability of printed books in public and educational libraries. In making annual payments to eligible creators and publishers, the schemes also aim to enrich Australian culture by encouraging the growth and development of Australian writing and publishing. In recent years, an increasing proportion of materials lent by libraries has been in digital forms, to which existing Lending Rights schemes do not apply. For example, digital distributor OverDrive reports that patrons used OverDrive systems to borrow 70 million titles from public and school libraries around the world in 2012, up from just 15 million titles in 2010. Compounding this demandside trend is a supply-side trend; an increasing proportion of works is now produced only in digital form, and in the last couple of years digital only publisher imprints have emerged. Authors and publishers are concerned that the increasing volume of works lent in digital form will put the objectives of the lending rights schemes at risk unless similar rights are extended to digital formats. There are two bases for this concern: Firstly, without a digital lending right, works that see a high proportion of lending in digital form will not receive any share of the pool of funds available for compensation. Secondly, the emergence of ebooks has the potential to increase library holdings and overall lending activity without a corresponding increase in overall compensation. On this basis, the ERG believes that the current Lending Rights schemes should be extended to include ebooks. While 29 countries currently have functioning Lending Rights schemes in place, there has been considerable caution about extending the schemes to ebooks due to uncertainties in the commercial arrangements for the sale and licensing of digital material, and how this material will be used in and via libraries. The inclusion of ebooks in Lending Rights schemes is recognised as the next big challenge for the public lending right worldwide. Based around the ERGs investigation of models for the supply of ebooks to Australian libraries, and drawing on the Principles developed in response to this information, the ERG has developed (a) a summary of elements to be considered when extending lending rights into the digital environment, and (b) a set of governing principles for the operation of a digital lending rights scheme.
Elements to be considered when establishing a digital lending right

Todays ELR and PLR schemes compensate creators and publishers on the basis of availability of book stocks for borrowing. Libraries purchase and avail print books for lending on a copy-by-copy basis, until they go missing, wear out, or are retired from circulation. It is thus straightforward at least conceptually to measure availability by counting physical stocks. For logistical and cost reasons, however, stocks are not counted in their entirety, but are estimated by selective survey of a given number of libraries. Ebooks are not physical objects held in stock. The commercial arrangements under which a library may acquire a title in ebook format, and the modes in which that library may then avail that title for borrowing differ greatly on a publisher-by-publisher basis, and are subject to ongoing change as industry norms and business models develop over time. A lending rights compensation method for ebooks must account for these differences; a simple stocktake seems neither straightforward nor necessarily meaningful.
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In the context of digital lending rights, some of the more notable ways in which the supply model for ebooks differs from print books includes: Payment and packaging. While a single up-front payment for ebooks is common, some ebook suppliers have opted to charge libraries a fee each time a title is borrowed, or on the basis of access to the content for a defined service period. Even where libraries pay an upfront amount per title, it is common for continuing access to be contingent on libraries maintaining a relationship with the publisher/distributor who hosts the titles, and on the continued operation of that publisher/distributor. Libraries are often charged substantially more than consumers for equivalent products, and in some cases libraries can access works only via bulk purchases (e.g. purchasing multiple copies of a title or purchasing access to a defined collection of titles). Concurrency of access. Whereas a one copy, one user scheme that reflects the constraints of physical works is still the most common model, there is now significant investment in competing lending models. Examples of this include concurrent access subscriptions under which a defined population of patrons can access a title at the same time, more often found in academic libraries, and a catalogue service that grants patrons access to a defined collection of titles. Time and location of access. Ebooks also differ from physical works in that they can be accessed at a time and location which suits the user, and there is therefore no requirement for patrons to visit the physical library. Duration of access. Unlike print works, ebooks do not naturally wear or go missing. Whereas some publishers elect to avail works on a perpetual basis, other supply models dictate that ebooks should expire after a defined number of lending circulations or period of availability requiring the library to relicense the work.
The Lending Rights ERGs Principles for Consistent Models for Supply of Ebooks to Libraries seek to inform the development of more consistent models for ebook supply to libraries. Notwithstanding this goal, the Principles note the need for a variety of terms for acquisition and reuse with an overarching objective to enhance timely and complete availability of works for lending in digital form.
Recommendations for a digital lending right

A digital lending rights scheme must take into account the needs of all parties, with particular emphasis on potential beneficiaries. The objectives of both the PLR and ELR schemes to compensate Australian creators and publishers on the basis of lost income and enrich Australian culture by encouraging the growth and development of Australian writing and publishing remain relevant to ebooks. Achieving these policy objectives and the principles which underpin the current Lending Rights schemes may require the development of a new framework for digital lending rights that is fit for purpose. This framework should, take into account libraries current digital dissemination constraints and practices, while also providing flexibility to deal with further change and innovation among the ebook supply and library sectors. The ERG recommends the following principles to provide a philosophical and practical foundation for the further development of a digital lending right and its timely incorporation into Australias Lending Rights schemes:
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1. New eligibility criteria for works and creators The diversity in content and form of digital publications, and the additional creators not traditionally associated with books who may be involved with producing an ebook, may require a broad definition of eligible creator for digital lending right payment purposes. The proliferation of self-published ebooks available for sale through authors websites or through distributors such as the Australian Society of Authors Authors Unlimited platform also means that the definition of eligible publishers will need consideration. Eligibility criteria for works, creators and publishers should be set in light of the wide diversity and likely ongoing change in the content types, formats, technologies, skills and roles involved in the creation and distribution of ebooks. In defining such criteria, care must be taken to avoid terms that may constrain useful innovation in any given sector.
2. Equitable, method
practical
and
meaningful
compensation
Library holdings of print books are the foundation of the present PLR and ELR schemes. These are surveyed to establish the potential for free use by patrons. Compensation is paid to authors and publishers in having their titles available for borrowing, via public and educational libraries. Given the wide variety of supply models in place for ebooks, a permanent holdings-based approach for this format is impractical. A model which could accommodate the dynamic nature of the supply of ebooks to libraries may be a better approach. The principle of an equitable, practical and meaningful compensation method will have its best expression in a digital lending rights scheme that compensates the greatest number of creators and publishers to the greatest extent possible for the availability of their books in libraries. The Lending Rights ERG has debated two distinct approaches, each of which may, depending on the final detail, satisfy this desired outcome. These two approaches are: a) Potential Access, broadly equivalent to the holdings/available for borrowing model underpinning the current lending rights schemes, rather than an aggregation of actual loans.
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As all supply models imply the provision of access to content, an accessbased approach which seeks to determine either potential or actual access to digital works is worthy of consideration. In line with the current compensation process of providing payment for potential rather than actual use, this model may be formulated in various ways: for example, on the basis of library access points (or specific digital library reader entry points), and further relevant factors as needed, eg, libraries digital license catalogues, and/or the number of registered library users (or potential digital accessors), and/or a digital stocktake count day. b) Actual Access, based on measurement of individual digital title borrowing. Advances in technology that afford measurement of actual lending activity rather than holdings may be a practical means to achieve a meaningful snapshot of digital lending. The objective of an equitable spread of compensation may be achieved by making payments non-linear. For example, a per-title floor payment to all Australian creators who avail their works for library lending, a sliding scale of per-loan payments as lending activity increases, and/or a ceiling on overall payments. Notwithstanding that digital format works may not yet see significant volumes of lending activity, it is desirable that the new iterations of lending rights continue to provide material support to creators and publishers of works available for loan, and to meet the social, cultural and remunerative goals of the schemes. Furthermore, the compensation method for digital works should not depend on the specific methods used by libraries to acquire ebooks or avail books for lending. The method should seek to be as intuitive and practical as the holdings based scheme used for printed materials.
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3. Measurement and payment mechanisms should not limit the compensation pool Demand for library services continues to grow along with Australias population. The demand for print works relative to the growth in demand for digital collections and access is still unclear and therefore it is desirable that funds be available to compensate for free digital use and that these be additional to the present allocations for print works. The lending rights schemes mechanisms, including for digital formats, ought to be structured to allow for the possibility of an increase over time in access to books via public and educational libraries, and thus the possibility of greater rather than lesser payments to creators and publishers.
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Part Four: Next steps

Globally, libraries and the industry are grappling with the rapid emergence of ebooks and the associated proprietary devices in an effort to identify supply models which satisfy the needs of all parties in the supply chain, from authors to end users. While there has been considerable concern about ensuring that revenue streams are not compromised by these new models, ebooks provide exciting opportunities for all parties to explore new systems for elending and promoting ebooks. The challenge is to develop systems which meet the intersecting needs of all participating parts of the book supply chain. Many of these opportunities are specific to particular parties for publishers, elending can provide access to the book-buying public; for libraries, it provides new and better ways to communicate with their patrons; and for authors, lending digital content will help to reach new readers. However by encouraging the creation of content and inspiring new ways of doing business, a fully functioning and efficient supply system can stimulate further activity which benefits all parties across the industry. Conversely, not acting will continue to create barriers to efficient supply and therefore, curtail the dissemination of Australian content. Furthermore, these barriers complicate the industrys discussion with Government about the timely extension of existing Lending Rights schemes to include ebooks. The work undertaken by the Lending Rights ERG is an important step toward addressing this issue in Australia, by initiating a process to establish systems for ebook supply through libraries which will benefit all stakeholders. However, further work will be needed at the industry level to implement the strategies that have been proposed in this paper. As the supply of ebooks to libraries is contingent on individual commercial decisions and negotiations between authors and publishers, distributors and libraries, the Principles for Consistent Models for Supply of Ebooks to Libraries can only be successful if they are broadly accepted by those firms and organisations involved in these transactions. For the Principles to result in tangible outcomes for the industry, they must a) have the endorsement of each of the relevant sectors, and b) be translatable to the decisions made by individual firms and organisations. The ERG has consulted with relevant industry associations and enterprises in the process of developing the Principles; however to be effective in influencing ebook supply systems, formal endorsement from each participating sector is needed. Similarly, the Framework for a Digital Lending Right, which outlines industrys needs in relation to a digital lending right, will require promotion and advocacy if it is to influence policy making. The reform agenda for ebook supply and use in Australian libraries, including the strategies progressed by the ERG and the ensuing next steps are illustrated in the diagram below:
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Figure 1: Reform agenda for ebook supply and use in Australian libraries
Recommended actions
The Lending Rights ERG supports the establishment of an industry-wide body such as the proposed Book Industry Council of Australia (BICA) to assist in progressing the outcomes of its work. However, the likely delay in establishing to BICA risks losing the momentum gained through the ERGs consultation and negotiation processes and therefore immediate actions need to be undertaken. Hence, the ERG recommends that the following actions be taken to continue to progress these important reforms:
Working with industry

A one-off industry roundtable, hosted jointly by the Australian Library and Information Association and the Australian Publishers Association or by the BICA, be held as soon as practicable to progress the endorsement and implementation of the Principles for Consistent Models for Supply of Ebooks to Libraries. Participants at this roundtable should include representatives from the Boards of the:
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Australian Library and Information Association Australian Literary Agents Association Australian Publishers Association Australian Society of Authors

Council of Australian University Librarians National and State Libraries Australasia
In addition, representation from each of the Big Six publishers should be sought. This roundtable should deliver the following: a) The formal endorsement of the Principles for Consistent Models for Supply of Ebooks to Libraries by all relevant industry associations and key enterprises b) A strategy for promoting the adoption of the Principles for Consistent Models for Supply of Ebooks to Libraries by individual firms and organisations in the industry. Consideration will need to be given to the most effective means to communicate and effect change in this area, the most obvious of which would involve industry associations working with their members and other stakeholders
Working with Government

The Framework for a Digital Lending Right be presented to Government as a proposal to inform the potential inclusion of ebooks in existing lending rights schemes and/or the development of separate a framework for a digital lending right. This will require: a) A letter co-signed by all participating associations be sent to the Minister for the Arts, requesting that the Framework for a Digital Lending Right be considered in the context of the modernisation review process b) Ongoing advocacy on behalf of the industry and continued discussion with Government to ensure that industrys needs are reflected in any changes to the lending rights schemes The Australian Society of Authors may be best placed to lead these efforts, and should work with the Australian Publishers Association and the Australian Library and Information Association to ensure that creators, publishers and librarys views on this issue continue to be represented to Government.
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References
American Library Association Ebook Business Models for Public Libraries. ALA, 2012 http://www.ala.org/transforminglibraries/ebook-business-models-public-libraries
OBrien, David R, Urs Grasser and John Palfrey E-books in Libraries: a briefing document developed in preparation for a workshop on e-lending in libraries. Harvard University, Berkman Centre for Internet and Society, 2012. http://cyber.law.harvard.edu/publications/2012/ebooks_in_libraries
Sieghart, William An independent review of e-lending in Public Libraries in England. London; Dept of Culture, Media and Sort, 2013. https://www.gov.uk/government/publications/an-independent-review-of-e-lending-in-public-librariesin-england
Zickuhr, Kathryn; Lee Rainie, Kristen Purcell, Mary Madden and Joanna Brenner Libraries, patrons, and e-books. Washington, D.C., Pew Research Centers Internet and American Life Project; 2012. http://libraries.pewinternet.org/2012/06/22/libraries-patrons-and-e-books/
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Appendix A: Stakeholder consultation

The following organisations provided feedback on the Lending Right ERGs Principles for Consistent Models for Supply of Ebooks to Libraries: Australian Library and Information Association Australian Literary Agents Association Australian Publishers Association Australian Society of Authors Council of Australian University Librarians National and State Libraries Australasia ALS Library Services Bolinda Digital Digital Education Services James Bennett Pty Limited Warner Books
A number of libraries also completed the ERGs survey on current models for ebook supply. The ERG is grateful to these organisations for their considered contributions to this process.
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Appendix B: Current models for supply of ebooks to Australian libraries

Content Education content Trade content Distributor Ownership Cost Library selects individual titles Cost scaled by population Title selection Publisher selected bundled content Library selected bundled content Substitute titles within bundle Use Concurrent use Read Online Loan/circulation Inter-library loan possible No No No No No No No Renewal of loan possible Printing copy & paste allowed No No No Yes Yes Yes Yes Download to devices Yes Yes Yes Yes Yes Some No Yes
Aggregator
Variables
A. Price scaled by population B. Single user Model 1: Aggregated Service C. Concurrent user D. Purchased titles E. Publisher bundled content F. Licenced, library selects content G. Library selected and purchased, single user
No
Yes
Yes
No
Yes
No
Yes
Yes
No
No
No
No
Yes
Single user
Purchased
Publisher
Licensed
No
Yes
No
Yes
Yes
No
Yes
No
No
Yes
No
No
No
No
Yes
No
Yes
No
Yes
Yes
No
Yes
No
No
Yes
No
No
No
Yes
No
No
Yes
Yes
No
Yes
No
No
Yes
No
Yes
No
No
No
Yes
No
Yes
No
Yes
Yes
Yes
No
Yes
No
No
Yes
No
No
Yes
No
Yes
No
Yes
No
Yes
No
Yes
No
No
Yes
No
Yes
No
Yes
No
Yes
Yes
No
Yes
Yes
No
No
Yes
No Users
Yes
No
No
No
No
Yes
Yes
Yes
Content Education content Trade content
Distributor
Ownership
Cost Library selects individual titles Cost scaled by population
Title selection Publisher selected bundled content Library selected bundled content Substitute titles within bundle
Use Concurrent use Read Online
Loan/circulation Inter-library loan possible No No No No No No Renewal of loan possible Printing copy & paste allowed Yes Yes Yes Yes Yes Yes Download to devices Yes Yes Yes Yes Yes Owned Yes
Aggregator
Variables
A. Perpetual access
Yes
No
Yes
No
No
Yes
No
No
No
No
No
Yes
No
Single user
Purchased
Publisher
Licensed
Yes
No
Model 2: Patron Driven Acquisition
B. Single user C. Concurrent use D. Concurrent use, purchased content E. Concurrent use, library selected content F. Concurrent use, publisher selected content
Yes
No
Yes
No
Yes
No
No
No
No
No
No
No
Yes
Yes
No
Yes
No
Yes
No
Yes
No
No
No
No
No
No
Yes
No
Yes
No
Yes
No
Yes
No
No
Yes
No
No
No
No
Yes
No
Yes
No
Yes
Yes
Yes
No
Yes
Yes
No
Yes
No
No
No
Yes
No
No
No
Yes
No
Yes
No
Yes
No
No
No
Yes
No
No
Yes
No
Yes
No

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Content Education content Trade content
Distributor
Ownership
Cost Library selects individual titles Cost scaled by population
Title selection Publisher selected bundled content Library selected bundled content Substitute titles within bundle
Use Concurrent use Read Online
Loan/circulation Inter-library loan possible Yes Sometimes No No No No No Renewal of loan possible Printing copy & paste allowed Yes Yes Yes Limited Yes Yes Yes Yes Download to devices Yes Sometimes ? No No No No
Aggregator
Variables
Model 3: Perpetual Unlimited Access
A. Bundled yearly collection B. Bundled yearly collection, no ILL C. Library selected content, concurrent users D. Titles from publisher A. Aggregated service, single use B. Aggregated service, concurrent use C. Publisher service, concurrent use
Yes
No
No
Yes
No
Yes
No
Yes
Yes
No
No
Yes
No
Single user
Purchased
Publisher
Licensed
Yes
No
Yes
Yes
No
Yes
No
Yes
No
Yes
Yes
No
No
Yes
No
Yes
No
No
Yes
No
Yes
No
Yes
Yes Concurrent users
Yes
No
No
No
Yes
No
Yes
No
Yes
No
No
Yes
No
Yes
No
Yes
No
No
No
Yes
No
Yes
No
Model 4: Annual Subscription
Yes
No
Yes
No
Yes
No
No
Yes
No
Yes
Yes
No
Yes
Yes
No
Yes
No
Yes
No
Yes
No
No
No
No
Yes
Yes
Yes
No
Yes
No
Yes
No
No
Yes
Yes
No
No
No
Yes
No
No
Yes
No
Yes
No
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Scholarly Book Publishing Expert Reference Group
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CONTENTS
Introduction ................................................................................................................................................ 207 1.1. About the Scholarly Book Publishing Expert Reference Group 207 1.2. Purpose of this position paper 208 1.3. What is scholarly book publishing? 208 1.4. The role and benefits of scholarly book publishing 209 Executive Summary .................................................................................................................................. 206
Appendix B: Definitions from the Higher Education Data Collection 2013 Specifications 227 1.3.10. Research 227 1.3.12. Research publications 227 9.3.1. Books 227 1.3.4. Commercial publisher 228 1.3.9. Peer review 228 9.6. Peer review 228 Appendix C: Disciplines represented by the Learned Academies ........................................ 230 The Australian Academy of the Humanities 230 The Academy of Social Sciences in Australia 230
Appendix A: Submissions in response to the SBP ERG survey ............................................... 226
Acknowledgements .................................................................................................................................. 225
References ................................................................................................................................................... 224
Conclusion ................................................................................................................................................... 223
A way forward ............................................................................................................................................ 220
The state of play ......................................................................................................................................... 212 2.1. Key stakeholders 212 2.2. Current business models 214 2.3. Funding sources 215 2.4. Challenges and opportunities 216 2.5. Emerging business models 218
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Executive Summary
The Scholarly Book Publishing Expert Reference Group (ERG) was formed to help the publishing industry and the research sector to gain a more holistic understanding of the role of scholarly book publishing in the Australian humanities and social sciences, and the challenges confronting it now and in the near future. This position paper presents the ERGs understanding of these issues, and outlines the following strategies to preserve the public benefit of scholarly book publishing in Australia, ensure its financial viability and sustainability, and meet the needs of researchers, funding bodies and institutions: 1. Forum for ongoing policy engagement: Government agencies, book industry groups and research sector bodies should maintain productive stakeholder dialogue to favour timely responses to emerging challenges and opportunities, through regular meetings of a roundtable of similar constitution to the Scholarly Book Publishing Expert Reference Group. 2. Infrastructure collaboration: Through the roundtable, universities, scholarly book publishers and the Australian Government should continue to explore the development of a shared platform, which could be used by all Australian scholarly book publishers for the production, marketing and dissemination of Australian scholarship. 3. Recognition of the importance and cost of publication and dissemination: Scholarly book publishers and university research leaders should engage with Australian Government agencies and the Australian Research Committee (ARCom) to ensure both the role of and cost involved in publication and dissemination are recognised, and to work towards building these costs into funding programs as a legitimate research expense. 4. Format neutrality: Policy-makers, funders, regulators, universities and researchers should ensure that all procedures, approaches, funding and regulatory arrangements regarding scholarly publishing are neutral with respect to format of publication, to the extent possible. This includes considerations such as academic attitudes towards the value of the work, recognition by research assessment processes and formulae, and funding support for publication. The Scholarly Book Publishing ERG recommends these strategies to government, publishers, the research community and universities, as ways to pursue their collective and intersecting objectives.
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Introduction
1.1. About the Scholarly Book Publishing Expert Reference Group
When established by the Australian Government in July 2012, the Book Industry Collaborative Council (BICC) identified seven key areas of reform. These were broadly based on recommendations made by the Book Industry Strategy Group (BISG) in September 2011 (further information on the BICC and the BISG can be found at www.innovation.gov.au/books). To address these priorities, the BICC formed a series of expert reference groups, each with responsibility for addressing the challenges facing the Australian industry in these areas. The distribution of scholarly writing in the humanities and social sciences is one of these priorities. It has been the subject of much recent debate on various aspects such as: copyright models; the role of subsidies; the effects of technological change; finding the best balance of commercial with not-forprofit enterprises; the capacity of research assessment regimes to properly gauge the reach and influence of scholarly books; the place of peer review, editorial and marketing support; and the importance of links between open access and innovation. Identifying strategies to ensure the financial viability, and to improve the reach and effectiveness of scholarly book publishing in the humanities and social sciences is vital for both the publishing industry and the Australian research sector. The Scholarly Book Publishing Expert Reference Group (ERG) was formed to help the publishing industry and the research sector to gain a more holistic understanding of the challenges across the board.
Scholarly Book Publishing ERG Deliverable

A position paper on scholarly book publishing in the humanities and social sciences, outlining: the role and benefits of scholarly book publishing the challenges scholarly book publishing faces today and in the near future, both in Australia and abroad means by which key actors can best collaborate to maximise exposure of Australian scholarship to the global research community in a financially sustainable way recommendations to governments, the publishing industry and the research sector that will give effect to the above
Scholarly Book Publishing ERG Terms of reference

The Scholarly Book Publishing Expert Reference Group will engage with universities, publishers, the learned academies, government agencies and other key stakeholders to ascertain: 1. current and foreseeable approaches to scholarly book publishing, particularly within the humanities and social sciences 2. a scholarly book publishing ecosystem that best enables maximum reach, influence and commercial success for publishers and their works 3. implications of this ecosystem for participants in the sector 4. possible avenues by which participants in the sector might profitably collaborate beyond the life and scope of the Book Industry Collaborative Council
Scholarly Book Publishing ERG Membership

BICC members
Associate Professor John Byron
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Chair, Scholarly Book Publishing ERG

Faculty of Humanities, Curtin University Ms Louise Adler Australian Publishers Association Melbourne University Publishing Dr Nathan Hollier Monash University Publishing
External members
Ms Kathy Bail Ms Rhonda Black Professor Tom Cochrane Professor Stuart Macintyre Mr Colin Steele Professor Elizabeth Webby University of NSW Press Australian Institute of Aboriginal and Torres Strait Islander Studies Universities Australia Academy of the Social Sciences in Australia National Scholarly Communication Forum Australian Academy of the Humanities
Ex-officio members
Dr Robert OConnor Science and Research Division, Department of Industry, Innovation, Climate Change, Science, Research and Tertiary Education Australian Research Council
Ms Leanne Harvey
Stakeholder Submissions
The ERG requested submissions from key stakeholders in relevant sectors through a survey, inviting strategies and ideas that could benefit Australian scholarly book publishing. Thirteen submissions were received from the organisations listed in Appendix A. These submissions have informed the ERGs deliberations, although it was noted that the sample was limited in size and scope, and a full range of stakeholders views is not represented. The vast majority of submissions came from academic bodies representing various aspects of the research community. No submissions were received from commercial publishers.
1.2. Purpose of this position paper

This position paper aims to help interested participants and policymakers to understand the role of scholarly book publishing in the Australian humanities and social sciences, and the challenges confronting it now and in the near future. Further, the paper outlines the ERGs recommended strategies to address these challenges in a practical and cost-effective way; strategies that will help preserve the public benefit of scholarly book publishing in Australia, ensure its financial viability and sustainability, and meet the needs of researchers, funding bodies and institutions. These strategies should be considered by government, publishers, the research community and universities, as ways to pursue their collective and intersecting objectives.
1.3. What is scholarly book publishing?

For the purposes of this paper, scholarly book publishing refers to the publication of book-length works of research and scholarship including sole-authored, joint-authored and edited collaborations, in the Humanities, Arts and Social Sciences (HASS) disciplines. Scholarly book publishing includes books that are produced for both the specialist academic reader and the trade market (that is,
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directed towards retail bookstores, both bricks-and-mortar and online), which may be offered for sale, rent, subscription, free download or open access, or any combination of these. To meet this definition, scholarly books must be edited, published and distributed by an independent commercial publisher or a scholarly research entity (such as a university or a research institute) to a recognised, verifiable standard of publication and scholarship. Self-publication and vanity publication are excluded. While journals, journal articles and conference papers are all important forms of scholarly communication (which face issues and challenges of their own) they are not the concern of this paper or the work of the BICC. The BICC, on the unanimous recommendation of the ERG, has endorsed the principle of format neutrality; that is, that scholarly publications should be treated the same way in every respect, regardless of the format in which they are published. Whether a book is published as a printed volume, an electronic document, a formatted ebook, for print on demand, or any combination or hybrid of these makes no difference to the books importance, the validity of its scholarship or the credibility of its publication. The intellectual value and publishing integrity of a book are functions of its content and the processes around its creation, not the format of production or delivery. A number of terms used here are closely defined in the specifications for the Australian Governments Higher Education Research Data Collection (HERDC): the relevant definitions from the 2013 Higher Education Research Data Collection Specifications for the collection of 2012 data (HERCD 2013) are included in Appendix B. For the most part our usage aligns reasonably closely to the HERDC definitions, but in some instances this paper follows the wider meaning of these terms as commonly understood in the HASS research and publishing sectors. For instance, HERDCs definition of research (HERDC 2013, section 1.3.10) follows the internationally accepted definition set out in The Proposed Standard Practice for Surveys of Research and Experimental Development (known as the Frascati Manual), published by the Organisation for Economic Co-operation and Development (OECD). Both definitions were developed primarily to apply to work in the empirical and analytic sciences a point acknowledged by the Frascati Manual and therefore do not completely take into account the methods of scholarship in the humanities, arts and social sciences, which also include interpretation and critique. What all research and scholarship have in common, however regardless of the field is adherence to the systematic practices and conventions, and to well-understood standards of methodological rigour that have been developed over many years within these disciplinary communities of scholars. HERDC also tightly defines Research publications (HERDC 2013, section 1.3.12) and books (HERDC 2013, section 9.3.1); our interpretation is somewhat wider, and includes edited books, revisions and new editions. Some of the issues raised may affect the creation of textbooks, although they fall outside the HERDC definition. Critical scholarly texts and scholarly translations (which may satisfy HERDC) are also included in our discussion. Our discussion is limited to the humanities, arts and social sciences, defined as those established scholarly disciplines represented by the Australian Academy of the Humanities and the Academy of Social Sciences in Australia respectively (listed in Appendix C), as well as scholarly work within the academic creative arts. We include work in emerging disciplines within that broad spectrum, as well as collaborations with other fields including the professions, public policy and the Sciences, Technology, Engineering and Mathematics (STEM) disciplines.
1.4. The role and benefits of scholarly book publishing

Scholarly book publishing is one important means of communicating the outcomes of research and scholarship in the humanities and social sciences: in many of those disciplines, it is the most important means. In several different ways, this meets a number of public policy objectives by acting as a powerful multiplier of the benefits obtained from investment in research.
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Broadly speaking, there are two strands of scholarly book publishing, each seeking to connect with a different audience. The first is targeted specifically to a specialist scholarly audience, and the second to a broader audience through the trade market. Transmission of research outcomes to a researchers peers is a crucial step in the advancement of knowledge. Research is complete only when it has been considered, tested, contested and refined by and with the collaboration of that community. The production of new knowledge is therefore an iterative and collaborative enterprise, and scholarly publication is not the end of this process. Rather, it is an intermediate step in a chain of refutation, refinement, development and improvement. This applies to all research fields, of course: however, as mentioned above, research and scholarship in the HASS disciplines typically involve discursive practices of interpretation, critique and explication that make scholarly writing in these fields fundamentally different to empirical reports in the physical and natural sciences. In a very real way, the monograph, extended essay and other long form writing modes correspond to the actual experiments of the physical and natural sciences, not to their reports. To a very significant degree, the writing is the research, where the scientific paper is more typically the reporting on the research. Scholarly books are the form in which HASS researchers show their working: they are both investigation and report. This is why the scholarly book remains the gold standard research output for humanities, arts and social science researchers, and why these fields account for the very significant majority of all scholarly books. The book is regarded as a crucial indicator of scholarly productivity, quality and influence, and is essential for appointment, promotion and tenure around the world. This remains the case even while journal publication rates continue to expand (including in HASS disciplines) and as new forms of research communication become conceivable (such as technological platforms supporting mass scholarly collaboration and interaction). The scholarly book, in one form or another, is expected to continue playing a prominent role in the humanities and social sciences into the foreseeable future. While technological developments will influence this, it seems clear that the mode of developing a detailed nuanced argument over a sustained body of writing will prevail, even as its form of production changes. Scholarly books published into the trade market, as opposed to the research sector and its libraries, bring new social, artistic and cultural research to a broad global audience of interested readers. These books often feature less of the scholarly apparatus and technical vocabulary than specialist academic works, and place more emphasis on a readily understandable communicative style, while still keeping faith with the methodological rigour of the field. While few non-specialists have access to expert academic journals, most people have ready access to physical bookshops and online outlets, making scholarly books a vital and effective means of communicating research to the wider public. Both kinds of scholarly book publishing advance public policy objectives. In an environment of significant publicly funded research, the broadest possible communication of research outcomes greatly increases the benefit obtained from the initial research funding. Research that primarily influences individual scholars produces a public benefit when the wider research community is able to share in the results. The benefits are multiplied when the public that pays for most of the research is able to access the scholarship. Direct public access to sustained expert thinking brings research out of the academy, beyond the lecture hall, to the citizens who sustain it. The attention generated by such publications through coverage in non-specialist reviews or the mainstream media, for example, or author appearances at writers festivals further facilitates valuable cross-disciplinary fertilisation. Scholarly books therefore perform an important public, democratic function within society, by advancing social development through improved specialist knowledge of cultural and social issues, and also by promoting public knowledge, thinking and discussion. Both specialist and trade books can improve the processes by which fundamental decisions about the direction of society are made and the quality of those decisions, either directly or indirectly. It is important to note that the processes associated with scholarly book publication are integral to the production of high quality research in the HASS disciplines. The publication process is not a (dispensable) luxury extra following on from the scholarship; rather, it is a critical part of the
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scholarship. High quality editorial, production, distribution and marketing processes strengthen and guarantee the quality of work published. Together, these academic processes (such as peer review) and publishing activities (such as editing and design) add substantial value to the final publication. Arguably, this value added by publishers plays a more prominent role in HASS book publishing than it might in STEM journal publishing. In technical scientific literature, peer review plays a crucial role in the certification of individual research outputs, while it is perhaps not seen to be central to scientific book publication, which is primarily oriented towards the trade market. Since STEM methodologies tend to drive research policy detail, this may explain why the rigorous definition of peer review in the 2012 HERDC specifications was applied only to journal articles and conference publications, and not to books, where production through a commercial publisher was seen as an adequate substitute (HERDC 2012, sections 1.3.9 and 9.6). In contrast, the humanities and social sciences utilise the full suite of peer assessment, editorial and production functions more integrally and extensively. Since writing in HASS is much more intimately interwoven with the research itself than it is in STEM particularly long-form writing the role of the publisher is correspondingly more critical to the scholarship. The publishers contribution is an essential and integral part of HASS research, not merely a conduit for that work to reach its audiences. Rigorous, independent peer review is essential to HASS book publishing in just the same way it is critical to STEM journal publication. In recognition of the importance of this role, including for scholarly books not published by a commercial publisher, the definition of peer review has been extended to books in the 2013 HERDC specifications (HERDC 2013, sections 1.3.9 and 9.6).
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The state of play

2.1. Key stakeholders
Scholarly book publishing sits at the intersection of two spheres of activity: the book publishing industry and the research sector. It involves a large number of stakeholders who have complex and often multiple relationships with the activity of scholarly book publishing and each another. Some of these stakeholders are significant funders and end-users of research; others engage as both producers and consumers of research. Broadly speaking, the key stakeholder groups are: Governments Governments (particularly the Australian Government) are major funders of research; conduct research evaluation; are significant consumers of contract research; and represent the interests of the public (both as taxpayers and the ultimate beneficiaries of research). They seek the efficient production of high-quality research; the promotion of innovation; a good return on public investment; prestige and influence as places where high-quality research takes place; the attraction of private investment; sociocultural development; and competitive advantage. Universities and research institutes Universities seek to create a high performance research culture; promote innovation; engage in collaborations with industry; attract undergraduate and postgraduate students; contribute community and social benefit; attract funding; and build their reputations. Researchers Researchers engage as both authors and readers. They seek to expand their own knowledge, through economical and timely access to high-quality research; make a contribution to disciplinary advancement of knowledge through the efficient production of high-quality research and its presentation to relevant audiences; promote innovation; and establish their bona fides for appointment, promotion and recognition. Scholarly publishers A range of companies and organisations engaging in scholarly publishing seek a blend of objectives, depending on their specific missions. These include: profit; prestige and influence; sustainable financial operation; the presentation to relevant audiences of high-quality research (whether targeted at scholars or aimed at a broader readership); and the promotion of innovation. Libraries University, state, national and municipal libraries aim to present high-quality research to relevant audiences (including scholars and the broader readership), in a financially sustainable way. Libraries also preserve for the very long term, Australias published works so they can be used for education, research and the creation of new works. Many also contribute to broader university or government objectives. Students and the public Students and members of the public access scholarly books in order to expand their own knowledge and aid innovation, through economical and timely access to interesting, high quality research. Book retailers University, online, specialist and general bookshops seek a blend of objectives, depending on their specific missions. These include: profit; sustainable financial operation; the presentation
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to relevant audiences of high-quality research; prestige and influence; and (for campus-based stores) a contribution to broader university objectives. Non-government end users and funders Industry, philanthropic foundations, learned societies, community organisations and special interest groups seek the efficient production of high-quality research, in pursuit of one or more of social benefit, prestige and influence, the promotion of innovation; and competitive advantage. Book distributors Book distributors seek profit, economies of scale, competitive advantage, and prestige and influence, through the timely and efficient presentation high-quality research to relevant audiences. Book aggregators and indexers Book aggregators and indexers primarily seek profit, prestige and influence. It is clear that all categories of stakeholders include participants with quite distinct objectives. It is impossible to say that publishers want this or researchers want that, as interests diverge considerably within each stakeholder category, and overlap across categories. Indeed, many individual players must internally balance competing and at times conflicting objectives. However, while there is a wide array of stakeholders in scholarly book publishing, they each share common interests: Public value efficient production of high quality research reputation (for individual authors, presses, institutions or jurisdictions) prestige and influence return on investment.
Advancement of knowledge and understanding the presentation to relevant audiences of high quality research (whether targeted at scholars or aimed at a broader readership) contribution to disciplinary advancement of knowledge contribution to public understanding of matters of cultural, social and civic importance.
Personal or professional development expanding own knowledge, through economical and timely access to interesting, high quality research establishment of bona fides for appointment, promotion and recognition.
Financial sustainable financial operation profit attraction of private investment competitive advantage.
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2.2. Current business models

Most Australian publishers involved in disseminating scholarship from within the academy are focused on content about Australia and the region. Scholars working on European or American themes, for example, appropriately seek publishers in those territories. As a consequence Australian scholarly publishers have an important mandate to support the dissemination of specialised research about Australia (in either scholarly or more general forms) both within the academy and beyond. As a past President of the Australian Academy of the Humanities, Professor Malcolm Gillies, asks, if we do not prioritise our own culture and heritage, I wonder, who will? (Gillies, 10). Given these highly delineated fields of inquiry, the very limited readership and the costs of production and distribution in Australia, the business model for both print and e-publication is at best fragile. That said, supporting Australian scholars working on Australian issues is vital, as they are the only realistic source of thoughtful, expert knowledge about our culture and our society; about our history and our future. If Australian publishers and their parent organisations relinquish this responsibility, the prospects are bleak for future generations of scholars and the civil society their research contributes to building. Between them, Australian publishers of scholarly books employ a range of business models, technologies and practices that best serve their particular missions. Each publishing house has a distinct and dynamic identity, targeting a range of markets from the specialist academic reader to the trade market aimed at a wider readership. All publishers use digital technologies in the production, distribution and marketing of their titles, regardless of whether the final product is print or digital (or both). Similarly, all aim to minimise overheads and attain financial sustainability, whether they are purely commercial operations or have some form of institutional subsidy. Broadly speaking, there are three modes of operation for scholarly book publishers in Australia: 1. Commercial publication operates in the scholarly domain on the basis of commercial considerations, and requires a financial return to justify any investment. This mode of publication seeks to maximise profit by optimising the balance between unit cost and market size. Individual titles may be produced at a loss or for marginal profit in order to build brand prestige, but overall the scholarly list has to be profitable. 2. Not-for-profit publication targets the works of scholarship primarily for students, academics, other specialist readers and libraries. Works are selected for publication on the basis of academic considerations. Like commercial publications, they require significant investments in editorial expertise and high production values. Financial sustainability is important here too, but the publisher may benefit from various forms of subsidy. This mode of production demonstrates value to the host university or the research community through the quality and influence of its output, rather than the return of a profit. 3. Open-access digital book publication tends to focus on works of scholarship selected on the basis of academic considerations alone, in pursuit of one or more of the non-financial objectives identified above. This model can be distinguished from both the commercial and not-for-profit models because the publications are usually available to the reader for free (or significantly below cost); while there are many of the same costs of production involved their recovery is not a core part of the business model. For this reason, this model tends to be highly subsidised, and to seek economies in production where possible. At present, this mode of publishing is geared significantly towards the specialist market, as well as producing some work for a non-academic audience. The not-for-profit and open-access electronic scholarly book publication business models tend to be found within universities and research institutes, as institutional objectives can justify the funding required to cover shortfalls of sales revenues. For example, some university presses favour or exclusively publish works produced by their host institutions own researchers. Each institution places its own value on the non-monetary benefits of publication, which (together with the needs of the press and the institutions overall budget position) helps determine the appropriate level of
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cross-subsidisation its publishing operation receives. Even without a profit requirement, presses are still expected to maintain financial viability within agreed budgetary parameters. It is important to recognise that there are few publishers of scholarly books that operate exclusively on one or another of these models. Many publishers seek to straddle these commercial and subsidised models, either by remaining focused on scholarly publishing for a trade and library market, to pursue both financial and non-financial objectives with each title, or by publishing a mixture of popular and specialist scholarly titles in the pursuit of a basket of objectives, such as financial success, cross-subsidisation, prestige and exposure. As a result, most scholarly publishing in Australia is conducted on a hybrid model. Some scholarly publishers may combine open-access electronic publishing with commercial publication of trade and specialist books. They select works from their host institution on a scholarly basis and from outside that institution on a commercial basis, committing a proportion of their resources to adding value to these commercial titles. There is some marketing benefit for the host institutions, as well as the block grant dividend from research publications by their academic authors (as research publications contribute one input to the formulae of some Australian Government block grants provided to universities).
2.3. Funding sources

The four main direct and indirect funding sources for scholarly book publishing are: government and other public research funding bodies researchers and research organisations commercial entities not-for-profit organisations
Some research grants explicitly allocate a portion of funding for publication (certain Australian Research Council (ARC) grants, for example). One rationale for this practice, particularly compelling in the case of publicly funded research, is that the reach and benefit of the research can be expanded significantly with a relatively small additional investment to aid in its dissemination including as a scholarly book. Some not-for-profit organisations, scholarly societies and philanthropic foundations operate competitive publication subsidy schemes that offer subventions to assist with publication costs (such as the scheme operated by the Australian Academy of the Humanities). Other funding to assist scholarly book publishing may come directly or indirectly from: state and local governments; libraries; licensing consortia; and arts bodies. Universities may provide subsidies for their own presses or to help their authors achieve publication through other presses. In some cases, university administrators may take into account the anticipated block-grant revenue notionally attributable to the HERDC publication output, although block grants are not tied to publishing activities. Similarly, researchers, schools and faculties may allocate research support funds to assist with publication costs when this is of strategic advantage.
Many people in universities and in scholarly publishing are keen to gain a more reliable estimate of the dollar value that is contributed to a universitys block grant through the publication of books by the institutions scholars. Current estimates are less well-informed than they need to be. They believe that this would assist with the university-based presses business planning and reporting, and would provide greater clarity about the effective contribution Australian book publishers make to the nations universities. One supporting argument is that the policy intent behind the inclusion of the publication variable in the block grant calculations was to help offset the emphasis on research income which heavily
favours the STEM disciplines over the HASS fields. Much commentary asserts that the block-grant value attributable to a books publication has declined over the years, which exposes HASS fields to an undervaluing of their contribution within their universities. However, without solid data, these effects are hard to trace. A related point is that many universities have chosen over time to emulate the block-grant formula in rewarding research performance internally. This is despite warnings that the national distributive formulae have not been designed for, nor are suited for use as, indicators of individual or intra-mural performance; not even as activity measures, let alone as proxies for quality. Clarity about the value attached to a book through HERDC would provide a basis for levelling out the subsequent considerable variation which takes little account of the underlying actual contribution. However, as much as the sector wishes for a more reliable figure, the exercise must be approached with caution. Several policy caveats must be taken into account, and the context behind the block grant methodology needs to be understood. Most critically, the policy link between the block grant and the costs specifically associated with publishing a book is slender: the link is to the overall costs of conducting research, of which the costs of publication is only a part. Additionally, the block grant is not meant to correlate down to the level of individual activity. Rather, it is designed to use the sum of those activities to arrive at an estimate of the institutions call on Commonwealth resources to continue conducting publicly funded research. Some argue that it is debatable whether it is even possible to arrive at a reliable calculation. Expert advice points to the difficulty in calculating a nationally consistent figure, even one based on historical data, in the light of the many variables. The concern is that the end result may be so fuzzy that it hampers rather than assists decisions about resource allocation. It is clear that individual publications have a small and diminishing role in determining research block grant funding, because the number of publications across all categories is increasing at a greater rate than the current growth of funding in the block grant schemes. This growth, in turn, is a function of policy the Australian Governments indexation arrangements not of the behaviour of the research sector, and it can change at any time. The result is that the notional dollar value of a single publication is currently decreasing (whatever that value may be).
2.4. Challenges and opportunities

There are several factors that present both challenges and opportunities to scholarly book publishing in the humanities, arts and social sciences. The various business models have different challenges and pressures, based on their types of production and dissemination. These can be grouped into several main themes.
Electronic platforms and the increasing demand for open access

Digital methods of production have been adopted rapidly in virtually every part of the publication chain, across the full range of publishers. At the same time, a sharp increase in the use of electronic distribution platforms has taken place. Accompanying this has been a rising expectation among many consumers, including those in the specialist academic market, that these electronically distributed books should be accessible for free or for a reduced price relative to a traditional printed copy. Frequently, these expectations fail to take into account the costs involved in bringing these titles to the consumer, which can be the same (and sometimes greater than) the cost of putting a bound volume in the readers hands. Editing, peer review, design and marketing are essential for both formats, and investment in new technology is expensive. Consumer pressure on retail prices is not necessarily calibrated to the cost of production and distribution, although the interests of readers, authors and publishers are not served by addressing this gap by compromising on quality. Furthermore the value placed on the authors intellectual property and the investment by their publishers has economic consequences. Both the knowledge produced by scholars and the rigour and production values added by the publishers involve costs that must be recognised. In some circumstances those costs have been covered elsewhere or have been taken into account in the
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publishing process. In most cases, however, there is an important commercial aspect to scholarly book publishing that is crucial to underwriting the diversity, depth and longevity of this valued activity. All publishers in the scholarly domain, whether not-for-profit or commercial recognise the basic principle of the legitimacy of intellectual property. Equally, consumers need to be educated that knowledge is never free, and that much of it still needs to be supported financially at the point of access.
Escalating business pressures facing commercial academic publishing

A mutually reinforcing cycle of decreasing sales and increasing prices has, over the last few decades placed university and scholarly presses in a quandary. On the one hand, their foundation briefs are to publish original and often esoteric scholarship. On the other hand, they need to maintain financial viability. Achieving one of these goals seems to entail abandoning the other: often, neither seems attainable. Many university presses have been compelled to move into trade publishing areas in order to gain a wider readership and greater revenue. Some have been successful, but others have failed; either financially or by losing academic support on campus, as they were forced to select titles based primarily upon sales potential, rather than scholarly worth. Many institutions have chosen to sustain their publishing arms through subsidies, but pressures elsewhere on their budgets make this a fraught proposition, subject to revision from year to year.
Contributing to the disciplinary conversation by being read and cited

In recent years the simple imperative for researchers to achieve publication volumes has become more nuanced, as researchers are expected to appear in more prestigious outlets and to achieve verifiable notability, measured through citations. Prestige in the research community is acquired through influence; in turn, this is achieved by having ones work circulated widely, by provoking discussion and analysis, by moving the field on in new and interesting ways, and by gaining credit for it. That reach is facilitated by being published through a prestigious publisher, in a well-regarded series edited by a leading academic, in a well-designed volume that is professionally and proficiently marketed, and which is reviewed preferably favourably. Once a book has registered with the wider scholarly community, the long-term determinants of a works influence are the quality of the scholarship, supported by the integrity of the intellectual apparatus behind the books production, which is a collaboration between the author and the publisher. Without the initial exposure, however, even very high-quality work will struggle to achieve more than local or sporadic influence. Equally, raw sales volumes, downloads, views or borrowings by themselves do not necessarily correlate closely to actual readership, let alone to scholarly influence.
Academic library acquisitions budgets for monographs compared to serials

In the 1980s, universities and other research institutions started systematically to report worrying failures in their capacity to buy the scholarly literature deemed necessary to support scholarship at their institutions. A trend had already developed in which monographic intake was sacrificed in favour of the maintenance of journal subscriptions. Those responsible were motivated to minimise the cancellation of subscriptions because of the disruption of seeking to restore them later when, if ever, budgets became more favourable. For others, it was a more passive decision, which required no consultation with powerful research groups in scientific and technological academic communities about their journals, but rather the easier route of simply saying that money was now exhausted for this year's purchase of books. By the 1990s this trend was thoroughly established, with some university libraries reporting a complete inability to purchase monographs of any kind in some years. In many cases remedial action was attempted, or at least protective thresholds, but the economics of purchasing serials meant that pricing trends escalated dramatically ahead of all other indicators of inflation. A further factor to affect university library acquisitions has been fluctuations in the value of the Australia dollar. Since it was floated in the 1980s there have been periods of volatility that have made it difficult for libraries to maintain consistency in monograph acquisition.
In more recent years the trend to ebook purchase and use has accelerated. As with the early ejournals, a number of business models made shaky starts, but the trend in university libraries is now well established. Some university libraries in Australia now report spending more on ebook acquisitions than they do on print monographs.
The dominance of research quality metrics largely based on scientific journals

The importance of reaching ones disciplinary peers is expressed in the STEM disciplines and some parts of the social sciences by an interest in the various citation metrics and impact factors for authors, papers and journals. For a range of reasons, the available metrics are of marginal or even negative utility as guides of research quality or influence in the humanities, arts and much of the social sciences. These reasons include the near-invisibility of books and many HASS journals to citation indices, and the fact that HASS disciplines have a much longer viable citation period than is common in STEM publishing. Nonetheless, as the research policy environment is geared predominantly towards the conditions prevailing in STEM research, many governments and institutions continue to attempt to measure HASS achievement with poor, worthless or even destructively misleading instruments. Australias Excellence in Research for Australia (ERA) initiative is a notable exception: the ARC identifies those disciplines that do not lend themselves to citation assessment, and conduct supplementary peer review assessments. However, even here, potentially misleading metrics of dubious statistical reliability could influence the outcomes, with some universities persisting with the use of citation-based metrics in fields where they are unreliable.
The broader issues confronting the publishing industry

As the wider agenda of the BICC affirms, the book publishing industry is itself undergoing a rapid and tumultuous transformation. Scholarly book publishing is fully exposed to the effects of this flux, which is described in detail in the wider Book Industry Collaborative Council final report.
The complex array of revenue sources for scholarly book publishing

With the exception of private philanthropic aid and direct corporate sponsorship, practically all of the funding that supports scholarly book publishing in this country derives ultimately from the Australian public, either as taxpayer (funding block grants, research grants, acquisition grants, publication subsidies, departments, statutory bodies, schools, universities, research funding bodies, libraries, and learned academies); or as the consumer market for scholarly books. The public is also the ultimate beneficiary of scholarly book publication, which circulates the fruits of publicly funded research and adds to the stock of knowledge, particularly about Australian society and culture. Given the overwhelming public stake in scholarly book publishing, it is appropriate to consider how this range of direct and indirect funding sources and the blend of commercial and subsidised publishers might be optimised, to produce the most effective and efficient way to see high-quality Australian HASS scholarship achieve publication. The complexity and opacity of the current arrangements result in clear disadvantages. Conflicting strategic imperatives often see resources diverted to other purposes. Uncertainties in the funding environment drive more conservative, risk-averse decisions; and arbitrary factors, such as closing dates for subsidy schemes, can mean similar books receive different levels of support. Taken together, sometimes very worthwhile, high-quality books are not published, which is a negative outcome for everybody authors, their institutions, their disciplinary colleagues, their potential readers, and the public.
2.5. Emerging business models

It is very likely that the current blended ecosystem described previously will continue to evolve, with an array of wholly and partly commercial and open-access publishers. This expectation is based on an analysis of the empirical state of play, and an extrapolation, given likely trends. Whether this diversity adds or detracts from the stability of the scholarly book publishing sector is still contested, but its endurance is widely anticipated.
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Within the research sector there is strong support for developments in open access, as a way of providing better access, wider dissemination, and a possible reduction in the cost of production. On the other hand, academic values prize the bound hard-copy book with high production values above all other forms of scholarly communication, and much of this high-end publication is undertaken on a commercial basis. Some of the sectors enthusiasm is also tempered by an acknowledgement of the challenges of fully funding the rigorous publishing processes that academic standards require, within existing open-access models. New experiments in electronic provision are being launched which seek to address some of these challenges. These include new kinds of licensing models, consortium-based investment, title bundling, patron-driven selection, and back-catalogue digitisation. Some of these experiments will likely not prevail, but it is clear that electronic-only production and distribution, in one form or another, will continue to feature prominently in the scholarly publishing market. An example of an emerging model gaining traction in Australia and several other countries is Knowledge Unlatched (KU). KU is based on a new publisher-initiated business model through which an international consortium of libraries will aggregate their collections budgets to unlatch selected titles, releasing them into the public domain under a Creative Commons license. KU will pay participating publishers a lump sum up front just at the point of publication that covers their fixed costs (including an operating margin). Publishers will retain the right to sell print and digital versions alongside the open version in which the participating libraries will have invested. This model is predicated on a sufficient number of libraries sharing the fixed costs. If a threshold number of libraries around the world contribute, then the contribution level will be lower than the amount the participants would otherwise have spent to buy the same titles individually on the traditional closed basis. If more libraries join then the cost to each library reduces even further. Although the business is still in development, informed commentators are of the view that it is likely to reach the required threshold relatively easily.
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A way forward
It is clear that continuing collaboration among diverse participants including government, universities and scholarly publishers is essential for any new business models to emerge and for the existing blended business models to evolve to their full potential. To succeed, this collaboration needs to be characterised by openness, respect for different objectives and interests, and a willingness to act in the interest of the broad, heterogeneous ecosystem. Done well, this could free up resources to help improve quality, reach and financial sustainability. It will also be necessary to learn from and participate in the best of the developments abroad, as the issues confronting us in Australia are global. The practical challenge is to identify ways that scholarly book publishing can be made more efficient and effective through an enlightened, guided evolution of the current system. The ERG has developed four strategies that it recommends to the primary stakeholders in the sector. Together, these strategies are designed to achieve several inter-connected aims: to foster collaboration amongst key stakeholders; to ensure the viability of high-quality Australian research and (especially on Australian social, artistic and cultural topics); to maximise the exposure of Australian scholarship to a broad national and international audience; and to promote the financial sustainability of Australian scholarly book publishing. 1. Forum for ongoing policy engagement Government agencies, book industry groups and research sector bodies should maintain productive stakeholder dialogue around areas of shared interest through regular meetings of a roundtable of similar constitution to the Scholarly Book Publishing Expert Reference Group
Based on the experience of the ERG, the utility of sharing perspectives on common issues, interests and strategies has been significant. Continued dialogue will help favour policy optimisation, avoid the development of unintentional impediments and keep scholarly book publishing on the national agenda. This strategy does not require the establishment of a new entity, a dedicated budget, an office or staff: it requires only a common set of goals, a sense of shared purpose, identified leadership or organisational responsibility, and the motivation on all sides to meet at agreed intervals and devote some of their own time and resources towards the pursuit of agreed activities. The key groups responsible for advancing this agenda would be those which contributed nominees to the ERG, namely: the main Australian scholarly publishers, Universities Australia, the Academy of Social Sciences in Australia, the Australian Academy of the Humanities, the Australian Research Council, the Science and Research Division of the Department of Industry, Innovation, Climate Change, Science, Research and Tertiary Education, and the Australian Institute of Aboriginal and Torres Strait Islander Studies. The ERG suggests two options for this roundtable: 1. National Scholarly Communication Forum The existing National Scholarly Communication Forum (NSCF) brings together a similar membership and is concerned with a similar array of issues as the proposed new roundtable. With a renewal of its objectives, membership and operational practices, the NSCF could focus its purposes and build a common cause for all stakeholders.
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If this option is explored, the NSCFs legal guardian, the Australian Academy of the Humanities, would play a vital role in refreshing the NSCF, although responsibility for advancing this agenda would be shared by all of the concerned organisations. 2. Informal scholarly book publishing roundtable Should option 1 not be pursued by the NSCF, the ERG recommends that an informal interest group continue to meet at least six-monthly to advance this agenda. In the first instance it should comprise the organisations named above, and should co-opt individuals and open membership to representatives of other organisations and constituencies as required. 2. Infrastructure collaboration Through the roundtable, universities, scholarly book publishers and the Australian Government should continue to explore the development of a shared platform, which could be used by all Australian scholarly book publishers for the production, marketing and dissemination of Australian scholarship.
While all scholarly publishing is funded in different ways, there is considerable overlap. By using these funds more collaboratively and working together towards a common platform for production, marketing and dissemination, cost efficiencies and quality improvements could be achieved that would benefit all Australian publishers. This platform would support activity across the diversity of Australian scholarly publishing, including open access, print on demand, and commercial publishing, in order to deliver value to all stakeholders and a return on the public investment in research. This proposal should be conceptualised as a scalable model which can be built up over time, using existing funding to generate value from efficiencies gained through the pooling of resources. The nongovernment members of the roundtable described above should work together to devise a structure, funding model and implementation plan for a common platform. They should be assisted with the provision of data and advice to the extent possible by the government members. 3. Recognition of the importance and cost of publication and dissemination Scholarly book publishers and university research leaders should engage with Australian Government agencies and the Australian Research Committee (ARCom) to ensure both the role of and cost involved in publication and dissemination are recognised, and to work towards building these costs into funding programs as a legitimate research expense.
A small premium can deliver research outcomes to a much larger audience than might otherwise have been possible, including specialist peers and the public. It often takes little additional funding to pursue opportunities for increasing the exposure and the uptake of research, both through open access and commercial modes. This is particularly crucial in relation to Australian research into Australian topics, which the rest of the world cannot be expected to make a priority.
This strategy would be enabled by the achievement of clarity on the financial value to universities of scholarly books published by their staff (and other research outputs, for that matter), including through the HERDC-driven block-grant formula. The current lack of clarity may distort scholarly
publishing decisions at the university level. Importantly, however, any work along these lines must take account of the complexities and policy correlation of the exercise, and any figure must be based on reliable data and rigorous methodology. To advance this strategy, the roundtable should submit a recommendation to the Chief Scientist for ARCom to conduct or commission a study to accurately quantify the full costs of scholarly book publishing (including indirect and informal costs, such as those often borne personally by authors); and to develop a framework for the explicit provision for those costs in research funding. 4. Format neutrality Policy-makers, funders, regulators, universities and researchers should ensure that all procedures, approaches, funding and regulatory arrangements regarding scholarly publishing are neutral with respect to format of publication, to the extent possible. This includes considerations such as academic attitudes towards the value of the work, recognition by research assessment processes and formulae, and funding support for publication.
To progress this issue, the roundtable should publicise and seek to further entrench the agreed position of format neutrality, which have been adopted by the BICC and incorporated into the 2013 HERC specifications. The roundtables non-government member organisations should seek to ratify the principle formally, and its government members should seek to endorse it as appropriate within their own governance and policy-making processes. This decision should be communicated widely to the publishing sector, the academic community, the Australian public, and peer organisations and entities internationally.
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Conclusion
Both the book publishing industry and the academic research sector are currently undergoing radical change, significantly but not only due to rapid technological change. Opportunities abound, along with risks; business models are under pressure to adapt quickly; and funding regimes are experiencing increasing budgetary constraints. At the same time, in a world of easy opinion and high exposure, reliability, authenticity and rigour are more valued than ever. The scholarly book publishing business exists at one intersection of these various lines of force. The challenge for all involved is to adapt for the sake of efficiency, financial viability, and maximum exposure (to markets of consumers or to communities of scholars), while preserving the integrity of the scholarly publication that sets it apart in the first place: those scholarly and publishing values that distinguish well-produced evidence-based scholarship from other forms of writing. It is clear that every participant in this field is reliant upon the others, even though they may at times be competitors. This paper explores some of the main issues and challenges, and outlines the ERGs understanding of some of the work remaining to be done. The key to a thriving Australian scholarly book publishing enterprise, however, is the continuing collaboration of the groups represented on the ERG, and others in the field. An open, respectful and practical engagement will facilitate the identification of problems and strategies, and will provide the basis for common action. The ERG commends this report to researchers in the humanities, arts and social sciences, and to the scholarly book publishers producing high-quality works of Australian scholarship on a variety of platforms. We hope that this report is of some assistance: moreover, we hope that you will find value in coming together to work on these challenges, for your common benefit and in the public interest.
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References
2012 Higher Education Research Data Collection Specifications for the Collection of 2011 Data. Canberra: Department of Industry, Innovation, Science, Research and Tertiary Education, 2012. 2013 Higher Education Research Data Collection Specifications for the Collection of 2012 Data. Canberra: Department of Industry, Innovation, Climate Change, Science, Research and Tertiary Education, 2013. Gillies, Malcolm. Introduction. Making Culture Bloom: The National Press Club Telstra Address by Iain McCalman. Canberra: CHASS, 2004. pp.9-10.
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Acknowledgements
I am very grateful to the ERG members all volunteers who generously contributed their time, expertise, patience and energy to make this possible. Their collective experience in this area is formidable, and their willingness to work through difficulty and complex issues to help clarify the issues and plot a way forward was essential. Their nominating organisations facilitated the members travel to meetings, made time for their participation, solicited the views of their members and, in some instances, provided additional support for research. We are grateful for the contributions of the organisations and individuals who made submissions and shared their views. The ERG is deeply indebted to the Book Council Secretariat within the Department of Innovation, especially those assigned to our ERG. Their guidance, counsel, diplomacy and persistence were invaluable at every step. The publishing industry and the research sector alike are fortunate indeed to have the support of dedicated, smart, hard-working and creative public servants. Much of their work is done behind the scenes, in policy development and implementation, program design and management, and the provision of advice to Ministers, industry and the public. Often this contribution is overlooked, but anyone who experiences it at first hand is impressed by the quality of the people and their work, and the outstanding value they offer the community they serve. This exercise has only reinforced that impression, and on behalf of the non-government members of the ERG, I thank them all.
John Byron June 2013
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Appendix A: Submissions in response to the SBP ERG survey

Submissions were received from: ANU E Press Australasian Council of Deans of Arts, Social Sciences and Humanities Australian Academy of the Humanities Australian Business Deans Council Australian Institute of Aboriginal and Torres Strait Islander Studies Australian Political Studies Association Australian Research Council Co-op Bookshop Council of Australian Law Deans Council of Australian University Librarians UNSW Press Sydney University Press/University of Sydney Library Professor of Art History & Film, University of Sydney
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Appendix B: Definitions from the Higher Education Data Collection 2013 Specifications
1.3.10. Research
Research is defined as the creation of new knowledge and/or the use of existing knowledge in a new and creative way so as to generate new concepts, methodologies and understandings. This could include synthesis and analysis of previous research to the extent that it leads to new and creative outcomes. This definition of research is consistent with a broad notion of research and experimental development (R&D) as comprising of creative work undertaken on a systematic basis in order to increase the stock of knowledge, including knowledge of humanity, culture and society, and the use of this stock of knowledge to devise new applications. This definition of research encompasses pure and strategic basic research, applied research and experimental development. Applied research is original investigation undertaken to acquire new knowledge but directed towards a specific, practical aim or objective (including a client-driven purpose).
1.3.12. Research publications

Research publications are books, book chapters, journal articles and/or conference publications which comply with the definition of research and are characterised by: substantial scholarly activity, as evidenced by discussion of the relevant literature, an awareness of the history and antecedents of work described, and provided in a format which allows a reader to trace sources of the work, including through citations and footnotes; originality (i.e. not a compilation of existing works); veracity/validity through a peer review process (see section 1.3.9) or the quality control processes of a commercial publisher (see section 1.3.4); increasing the stock of knowledge; and being in a form that enables the dissemination of knowledge.

Research publications may be produced in any appropriate format, such as print, publication online, or publication in digital form on separate media such as a CD. Publication is more than the release of a work. It implies quality control (such as peer review or inhouse quality control) and enhancement through processes such as assessment or review, editing, copy-editing, design, and conversion of the work to an appropriate format.
9.3.1. Books
To be included in this category the publication must meet the definition of research as amplified in the general requirements for research publications (see section 9.1 of Part C) and must meet all of the following: must be a major work of scholarship must have an International Standard Book Number (ISBN) must be written entirely by a single author, or by joint authors who share responsibility for the whole book
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must have been published by a commercial publisher, as defined at section 1.3.4 or if not published by a commercial publisher, must have been peer reviewed, as defined at sections 1.3.9 and 9.6 the author must be affiliated with the claiming HEP as set out in section 9.4 of Part C.
The types of books that may meet the criteria include: critical scholarly texts (e.g. music, medieval or classical texts) new interpretations of historical events new ideas or perspectives based on established research findings.
1.3.4. Commercial publisher

A commercial publisher is an entity for which the core business is publishing books and distributing them for sale. Important note: Publication is more than the production of a book. It includes quality control such as peer review or equivalent in-house quality control through processes such as expert assessment or review, as well as editing, copy-editing, design, and conversion of the work to an appropriate format. If publishing is not the core business of an organisation but there is a distinct organisational entity devoted to commercial publication and its publications are not completely paid for or subsidised by the parent organisation or a third party, the publisher is acceptable as a commercial publisher. HEP and other self-supporting HEP presses are also regarded as commercial publishers, provided that they have responsibility for distribution in addition to publication.
1.3.9. Peer review

An acceptable peer review process is one that involves impartial and independent assessment or review of the research publication in its entirety before publication, conducted by independent, qualified experts. Independent in this context means independent of the author.
9.6. Peer review

For the purposes of the HERDC, an acceptable peer review process is one that involves impartial and independent assessment or review of the research publication in its entirety before publication, conducted by independent, qualified experts. Independent in this context means independent of the author. Peer review is required for journal articles and conference publications. It is also required for books and book chapters that are not published by a commercial publisher (see section 9.3) being counted in the Research Publications Return - Return 2. . For books and book chapters that are not published by a commercial publisher any of the following are acceptable as evidence of peer review: there is a statement in the book which shows that contributions are peer reviewed and in the case of book chapters, which indicates which chapters are peer reviewed, if this does not apply to all content there is a statement or acknowledgement from the publisher or editor which shows that contributions are peer reviewed a copy of a reviewers assessment relating to the book or book chapter.
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Important note: A statement from an author that a publication was peer reviewed is not acceptable. The existence of a national or international advisory board is also not sufficient evidence that all relevant publications were assessed by members of it.
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Appendix C: Disciplines represented by the Learned Academies

The Australian Academy of the Humanities
Archaeology Asian Studies Classical Studies Cultural and Communication Studies English European Languages and Cultures History Linguistics Philosophy, Religion and the History of Ideas The Arts
The Academy of Social Sciences in Australia

Anthropology Demography Geography Linguistics Management Sociology Accounting Economic History Economics Marketing Statistics History Law Philosophy Political Science Education Psychology Social Medicine
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Skills Expert Reference Group
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Part One: Gaining perspective .............................................................................................................. 234 Why skills development is a priority 234 The Skills Expert Reference Group 235 Current status 236 Challenges and opportunities 236 Part Three: Realising the benefits ....................................................................................................... 243 Engaging stakeholders 243 Next steps 244 Part Two: Framing a solution ................................................................................................................ 238 Industry Development Framework 238
CONTENTS
Executive Summary .................................................................................................................................. 233
Appendix 1: Current training and development activities ......................................................... 245
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Executive Summary
The nature of book creation and production has fundamentally changed with the emergence of digital technologies. While we still talk about the craft of writing and the printers craft, in an environment of rapid technological change it is entrepreneurship, IT expertise and world-class operational and management practices that are vital to meeting consumer expectations and increasing productivity and output. An audit of industry skills and training needs conducted by the ERG revealed that while some industry sectors are well served, the majority of sectors would benefit significantly from a more strategic approach to skills development. Of particular note is the need to provide a mix of technical and executive training to ensure that Australian firms are able to meet the changing conditions of the global market. The ultimate goal of the skills development agenda is to improve industry performance within a global setting. The Skills ERG has articulated this as Empowering the Australian book industry to be globally and locally competitive and to adapt in an environment of radical change whilst maintaining a strong cultural identity. Achieving this requires a mix of training and professional development activities that are provided within an environment which encourages collaboration and sharing of resources between sectors. These principles have been incorporated into a framework for industry development which recognises the benefits of a holistic approach to reform in this area. The ERGs plan provides a setting for the industry to build a program of activities which balance formal training solutions with forums that expand the industrys knowledge and understanding of the changing market for books. The industrys biggest challenge in realising the potential within the framework is to achieve cross-industry participation. To address this, the Skills ERG has proposed the establishment of a steering committee with membership from each sector within the supply chain. The ERGs recommendations provide the committee with a forward agenda that addresses the core components of the industry development framework - vocational education and training, higher education and professional development.
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Part One: Gaining perspective

Why skills development is a priority
The parameters which have guided the creation, production, lending and sale of books have changed exponentially over the last decade, particularly so in more recent years as the influence and momentum of production technologies, internet commerce, online communication and social media have accelerated. While we still talk about the craft of writing and the printers craft, in an environment of rapid technological change it is clear that entrepreneurship, IT expertise and worldclass operational and management practices are vital to meeting consumer expectations and increasing productivity and output. In its report to Government in September 2011, the Book Industry Strategy Group (BISG) identified the development of a comprehensive skills strategy as a priority matter for the industry. In making this recommendation, the BISG stated that transition to a digital environment must address not only skills development but also new business models and operating practices. On the commercial front, as the Australian book industry adjusts to a digital and increasingly global operating environment, it must ensure that it has both the management and technical skills to respond with agility to opportunities and threats as they transpire. The advent of large multinational corporations, such as Amazon and Apple, into the global book market has fundamentally changed the way that the supply chain operates, especially in English-language territories such as Australia. The balance between consumers and suppliers is shifting and the influence of the traditional large players is diminishing or, at least, changing as new rules of global engagement emerge. The challenge for Australian business is to be ahead of the game in terms of understanding the operating environment and possessing the skills required to respond. Australia has is an almost unique position in the global publishing environment comparable only to Canada in terms of size of market and position relative to larger markets and territories. Accordingly, we have unique challenges to deal with and also some unique opportunities. We need to develop the skills to manage both. A study of Australian businesses conducted in 2009 identified a number of key determinants for commercial performance and productivity improvements. While this research relates specifically to manufacturing, the findings are equally relevant to the services sector and provide a useful overview of the context for Australian firms:95 The level of education and skills among both management and non-management personnel has an impact on management performance High management scores are positively correlated with various measures of success including: sales, productivity, employee numbers and market valuation Flexible people management is shown to be a key element of successful management, and well-managed firms tend also to exhibit superior innovation capabilities Size is an important factor in management performance, with larger firms scoring better than smaller firms Ownership is a factor and multinationals clearly outperform domestic firms in management performance Australian publicly listed companies are more likely to adopt modern management practices than other types of company ownerships Family-run businesses tend to exhibit inferior management performance
95
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Green, R 2009, Management Matters in Australia: Just how productive are we? Findings from the Australian Management Practices and Productivity global benchmarking project.
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International exposure is important, as there is a significant positive correlation between the management score and share of exports Organisational hierarchy is positively correlated to the management scores, a finding possibly indicating limitations in flatter structures Just as in other countries, Australian management tends to overrate its own performance against the benchmarks
Furthermore, this study ascertains that many Australian firms are stronger in operations management than in people management. This includes the ability to attract, develop and retain talented staff as well as the adoption of innovative practices to improve employee performance. Organisations that apply recognised management practices perform significantly better than those that do not. While the various segments that comprise the Australian book industry all actively address skills needs within their sector, to date this has largely been undertaken in a fragmented approach which focuses on sector-specific needs and targets technical, rather than executive management, skills. Targeting skills development through a coordinated and strategic approach can better prepare the Australian book industry to be innovative and competitive in a high-pressure commercial setting, better prepare writers and illustrators to market themselves on the world stage, and better prepare library staff to support creators and publishers by delivering excellent services and promoting Australian content for Australian readers.
The Skills Expert Reference Group

Upon being established by the Australian Government in June 2012, the Book Industry Collaborative Council (BICC) identified seven key priority areas for reform, broadly based on the recommendations made by the Book Industry Strategy Group (BISG) in September 2011 (further information on the BICC and the BISG can be found at www.innovation.gov.au/books). To address these priorities, the BICC formed a series of expert reference groups (ERGs), each with responsibility for addressing the challenges being faced by the Australian industry in one of the seven identified areas. The development of a whole-of-industry digital skills strategy was identified by the BICC and the BISG as an important resource for responding to the structural changes currently having an impact on the book industry. The terms of reference adopted by the Skills ERG reflected this goal and emphasised vocational training pathways which targeted the skills needed to produce and disseminate products within a digital arena. However, as the work of the ERG progressed the limitations of this approach became apparent and the ERGs emphasis shifted to encompass a more holistic approach to industry development.
Skills ERG Deliverable

Development of an agreed strategy for addressing digital skills needs across the book supply chain.
Skills ERG Terms of Reference

1. In consultation with the relevant book industry associations, identify the digital training needs for each sector of the book supply chain 2. Work with the Industry Skills Councils to enable the relevant councils to develop vocational skills training packages for each participating book industry sector to meet the identified needs 3. Work with relevant book industry associations to establish an implementation plan which encourages adoption of the training packages
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Skills ERG Membership

BICC members
Sophie Hamley Chair, Skills ERG President, Australian Literary Agents Association Lorraine Cassin Bill Concannon Ben Jolly Sophie Masson Australian Manufacturing Workers Union Mary Ryan Books Griffin Press Australian Society of Authors

Joel Becker Dee Read Emmett Stinson Janice Taylor Sue McKerracher Australian Booksellers Association Australian Publishers Association Melbourne University Australian Libraries and Information Association (to 13 May 2013) Australian Libraries and Information Association (from 13 May 2013)
Observer
Skills Connect Division, Department of Industry, Innovation, Climate Change, Science, Research and Tertiary Education
Current status
Each sector of the book industry supply chain has a different approach to skills development, ranging from informal, peer-to-peer exchanges through to formal apprenticeships and higher qualifications. Appendix 1 explains the current situation for creators, agents, publishers, printers, booksellers and libraries, and gives insight into career paths, qualifications, training providers, skills needs and skills gaps. It should not be seen as comprehensive there are other elements within the book industry, for example book wholesalers and distributors, library vendors and aggregators, book editors and proofreaders but this table has helped inform the development of the ERG skills framework. In every sector there are existing mechanisms to support basic craft and operational skills, but common areas requiring further skills development are: Management Marketing and communication Use of digital technologies
Challenges and opportunities

Responding to change
There is much written about the scale of change that is affecting not only the book industry but all content and retail industries. Clearly defining what this means specifically for the Australian book business is essential to establishing a meaningful strategy for skills development. While this may sound obvious, accurately defining the cause, rather than the symptoms, can be challenging. Skills are widely accepted as a key driver of productivity, but using skills development to drive productivity improvements will only be effective if training is effectively addressing a skills deficit.
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Issues such as technology advancement, changing consumer attitudes and expectations, and global competition are external influences that may appear to be outside the control of individual organisations. However, if these concerns represent the root cause of pressures on the system, there is benefit in providing training and professional development solutions which improve the understanding and capacity of organisations to counter these environmental challenges at a strategic, rather than a technical, level.
Redefining the book business

We know that there are now many jobs most pertinently in the IT industry that did not exist a quarter-century ago. Because so little has changed in the modern book industry for most of its existence, it is tempting to believe that the jobs and skills we have now will see us through. However, the book industry must be prepared to adapt in order to thrive in an increasingly digital environment: bookshops have no choice but to compete with global online retailers; printers have to define their position in relation to print-on-demand businesses; authors need to leverage the opportunities of digital media; publishers must adapt their business models to encompass ebooks, and libraries provide access to print and electronic resources.
The need for innovation

Process and product innovation from within the Australian book industry is required if that industry is to continue thriving into the future. Participants must develop innovative business and lateralthinking skills which can work in tandem with the technical skills that enable them to maximise opportunities presented through new technologies. Through e-commerce, social media and file sharing, the internet is fundamentally changing the nature of the relationship between consumers (readers) and content. Traditional business models for book creation, production, distribution, sale and lending have relied heavily upon the industrys capacity to control and monetise content. Digital delivery and the internet have given consumers an unprecedented level of influence on the market largely due to their ability to quickly, sometimes instantly, communicate their demands to suppliers and understanding the needs of readers is a vital element of the industrys future development.
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Part Two: Framing a solution

Industry Development Framework
The engagement of industry stakeholders is critical to the development of a full industry strategy which identifies specific actions and resourcing. Paramount to this is the involvement of the sectoral industry associations. The following chapter provides a framework to facilitate this engagement process. Figure 1 (below) provides an overview of the framework and each of the key components are further explained. Figure 1: Industry Development Strategy Framework
Strategic goal
The parameters within which the global book industry has been established over the last century have fundamentally shifted and every book producing country is grappling with what this means for the future security of its national industry. Over the last five years, technology has advanced at a rapid pace and the commercial, not-for-profit and regulatory environments are struggling to keep pace. Facilitated by the internet, global communications have vastly increased the pressure of competition, challenging the survival of domestic industries around the world. The emergence of very large multinational operators, such as Amazon and Apple, which have established new business models based around internet commerce, have broken down the traditional territorial protections that have previously enabled domestic markets to thrive. Authors find themselves competing with peers worldwide for readers attention; publishers struggle to maintain their margins; Australian booksellers find it hard to compete on price, and libraries have to work harder to provide users with Australian content. Survival in this new paradigm means adaptation and adaptation means having the skills and knowledge to understand the rules of the new game.
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To fully capture the implications of this transformed operating environment, a strategy for industry adaptation must be broader than a mere focus on skills development through training. The core challenge for the Australian book industry is to facilitate wholesale cultural change which embraces each of the sectors that comprise the supply chain, and then positions the whole industry to understand and respond to the changes being wrought. A strategy which encompasses this broad agenda cannot be limited to skills development alone in order to capture everything that is required in order to adapt to challenge and change, it should be a comprehensive Industry Development Strategy.
Book Industry Development Strategy: Strategic Goal

Empowering the Australian book industry to be globally and locally competitive and to adapt in an environment of radical change whilst maintaining a strong cultural identity.
Benefits of collaboration and open communication
The nature of the supply chain is changing, and identification of new skills and jobs will be most effective if decisions are made with full understanding of how the supply chain will work in the future. Understanding the operational needs of the each interconnected component of the book value chain will provide efficiencies around the supply of both physical and digital books and encourage process innovations and adoption of new technologies. Furthermore, there are efficiencies to be gained by removing duplication of training programs, which can be achieved by collaboration on program development between sectoral associations. This requires cross-sectoral communication and planning. Without compromising the distinct needs of individual sectors, a new culture of collaboration and innovation is crucial to strengthening the future for Australian books. Skills and professional development have an important role in this evolution.
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Implementation pathways
Training Professional training streams:

The distinction between executive and technical training pathways provides a useful mechanism for categorising specific skills gaps and corresponding education and training needs. However, the two are intrinsically interdependent and strategies for stimulating industry development must include both streams. For example, effective executive training aims to facilitate the management skills necessary to determine the technical skills that are needed to implement innovative process or product solutions. Executive training targets participants at the management level and includes courses which provide the advanced business and leadership skills needed to think critically about the challenges facing the industry. This could incorporate short courses and certificates as well as postgraduate qualifications. These can be formally recognised, such as through the attainment of a university degree or nationally recognised vocational education and training qualification, or not formally recognised, such as industry-based training delivered through associations. Flexibility and accessibility is vital to encouraging adoption by existing as well as aspiring industry leaders. Technical training targets participants engaged in product, process and service delivery areas. It involves a range of nationally recognised vocational education and training options provided through Registered Training Organisations, such as TAFEs, which may lead to Certificate through to Advanced Diplomalevel qualifications, as well as industry-based training delivered through associations or equipment providers which is not formally recognised.
Training delivery streams:

Higher Education: publishing courses are provided by around ten or so accredited institutions across Australia. The vast majority of publishing programs only offer postgraduate coursework programs and are primarily aimed either at those who wish to enter the industry or those who are new to the industry and are seeking to learn new skills. University programs offer courses that combine what has been defined here as both executive training and professional development, with the idea that students develop a latent knowledge base that can be further refined through their work experience in the industry. Increasingly, the Australian Higher Education sector is moving into the sphere of executive education through short courses, which may offer another private-sector avenue for delivering targeted professional development to the publishing industry. In addition, many universities around Australia provide library and information science degrees and a Masters in the subject area.
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Vocational Education and Training: is part of Australias tertiary education and training system. It provides nationally recognised training, through Registered Training Organisations (which run courses for library technicians), in the job-related and technical skills necessary to support the roles performed in Australian industries. Nationally recognised training ensures that the training meets the standards required by industry and that the qualifications attained are recognised and valued across Australia. Qualifications available range from Certificate II to Certificate IV, and Diploma and Advanced Diploma levels. Individuals can also be trained in part qualifications or 'Skills Sets'. Non Accredited Training (industry delivered): includes all training and professional development activities provided by industry associations and service or equipment suppliers. Several of the sectoral associations run or sponsor a suite of activities which include training, seminars and conferences.
Professional Development
Professional Development (PD) in the book industry describes ongoing learning opportunities helping to keep knowledge, skills and industry insights up to date for both businesses and the individuals within them. PD opportunities encourage engagement and communication within and across sectors, thus enabling industry professionals to learn from one another in a time of transition. The separation of PD implementation pathways into Program Streams and Forums is made to distinguish between those initiatives intended for an individual and those intended for groups/businesses and the individuals within them. However, all pathways support businesses to respond with agility to deficits in knowledge and understanding as they occur, in a time of rapid change, and provide pathways for specific staff recruitment and retention opportunities.
Program streams:
Fellowships, Internships and Mentoring Programs: A culture of ongoing learning in an organisation creates a workforce that is forward thinking, embraces change and is better placed to tackle future challenges confidently. The role of these program streams is vital in building this culture. Fellowships: Schemes exist to award Fellowships to outstanding members of the industry in recognition of their contributions and to use their skills to complete a research project, often overseas, and bring this knowledge back to the Australian industry. Two examples of international Fellowships are the Unwin Trust, which sends a fellow biennially to the United Kingdom to undertake a piece of book industry research; and the Beatrice Davis Editorial Fellowship, which sends a fellow biennially to the United States of America to spend time in a publishing house and agency. However, national and international Fellowship opportunities need to be mapped and the case for building capacity in this area more fully explored. Internships: Industry internship programs create unique opportunities for companies to engage talented and qualified graduates, and to attract the best and brightest candidates into key positions. For entry-level candidates they provide a unique bridge between learning and the industry. There is already a wide array of well-developed internship programs across Australia run by businesses, universities and non-governmental organisations. Many publishers have internally developed internships programs that are highly competitive, run for varying lengths of time and which may or may not be paid. Many tertiary programs in publishing also offer internships which are undertaken for course credit, and usually involve between 80 to 120 hours of on-the-job experience as well as the production of a research report. A variety of non-governmental bodies offer competitive paid internships, or else support paid internships at other organisations. Internships remain a key mechanism by which those outside the publishing industry are able to gain entry-level experience. Although there is already a great deal of industry activity in
internships, we currently do not have a good understanding of what opportunities currently exist, and there is a great diversity of approaches to managing internships. The industry in close consultation with the tertiary sector and relevant non-governmental organisations might benefit from collecting data on such opportunities and trying to suggest best-practice guidelines for internships. Mentoring programs: Mentoring is growing in popularity in the industry as the most efficient and cost-effective way of supporting the workforce in specific roles. The great benefit of mentoring programs is that businesses can access the relevant experienced and qualified personnel to deliver support through a variety of delivery channels: online, face-toface, in groups and by phone, and at differing time intervals. In the area of new technologies, these personnel may be few and far between, so this method of delivery is particularly beneficial to the industry. Mentoring programs can provide long-term support for growth (or be more responsive to productivity, innovation demands or regulatory changes) and thereby deliver what is needed when it is needed, by those with the knowledge.
Forums:
Conferences, Networking, Industry Awards: A high level of understanding of the trends taking place in the landscape in which businesses make their trading decisions is crucial to effective commercial performance. Quick access to new information, from both national and international sources, is key to assisting Australian businesses to benchmark their practices and to forward plan for process and product innovation. These critical judgements and challenging thinking are what is required for the industry to remain globally and nationally competitive. Responsive ways to provide such rapidly updated information and a forum in which to discuss and debate cross-sectoral issues include face-to-face activities such as conferences, industry seminars, meet and greet functions, short talks, and roundtables with overseas visitors. Direct access to information or personnel through online chatrooms, blogs, video conferencing and webinars is also an option. Through industry associations and writers centres PD activities, there is already a high level of service in this area to libraries, publishers and authors. There is much potential, however, to map this activity and accordingly assess the potential for collaboration across the supply chain. Appropriate and timely networking and conference opportunities are vital for enabling an organisation to better understand its deficits and strengths in knowledge and understanding, as it operates in a time of rapid change. Industry awards provide standards and levels of excellence for the industry and the individuals within it to aspire to, achieve and be congratulated for. Inspiration, models of creativity and a marking of the highest skills levels are some of the benefits that flow from a colleague who is publicly awarded a medal for long service and excellence, or a books author and publisher, along with the production team, being recognised for high achievement. Currently the industry runs the Australian Book Industry Awards, managed by the Australian Publishers Association, with sectoral awards for Education Publishing and the Book Design Awards for designers and their publishers.
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Part Three: Realising the benefits

Engaging stakeholders
The Industry Development Framework is predicated upon the principle that benefits can be accrued by each participating sector as a result of working in collaboration with the other parts of the book supply chain. Examples include: The Digital Publishing Training Group, facilitated by Copyright Agency|Viscopy, which includes the Australian Publishers Association, Australian Society of Authors, Australian Booksellers Association, Literature Board of the Australia Council for the Arts (Australia Council) and Walkley Foundation. One outcome from this group was the joint Copyright Agency, Australian Publishers Association and Australian Society of Authors Education Information Seminar in February 2013. Each partner provided sector-specific segments, scheduled appropriately for ease of attendance, which covered common areas of interest. The Creative Content Producers and Publishers Forum, facilitated by Copyright Agency|Viscopy, which includes Screen Producers Association of Australia (SPAA), Interactive Games and Entertainment Association (iGEA), All Music Publishing and Distribution (AMPD), Australasian Performing Rights Association (APRA), Australasian Mechanical Copyright Owners Society (AMCOS) and Australasian Music Publishers Association (AMPAL). Key collaborations with the Australia Council in areas supporting authors and publishers and in promoting export opportunities, e.g. the Visiting International Publishers program. Key meetings with Austrade in support of our book industry in overseas markets and trade fairs.

It is important to note that this principle of collaboration should only apply where there are tangible benefits from working together. It should not prevent individual sectors from pursuing specific development pathways. For the framework to result in tangible outcomes for the industry, it must have the endorsement of each of the sectors that will partake in collective activities. Formal endorsement for the framework has already been received from the boards of the: Australian Booksellers Association Australian Library and Information Association Australian Publishers Association Australian Society of Authors
Support and liaison with other key partners such as the Australia Council and Copyright Agency|Viscopy is ongoing. Opportunity will continue to be open to other industry associations, should they wish to engage in a shared agenda for industry development.
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Next steps
In order to continue the work and collaboration undertaken in the Skills ERG, some practical steps are required to move the industry towards comprehensive professional development. To that end, we propose that the industry: 1. Establish a steering committee to oversee implementation of the Professional Development Framework/Strategy. Ideally this committee will be formed under the auspices of the proposed Book Industry Council of Australia; however in order to maintain the momentum gained through the ERG, it is suggested that an interim committee be established immediately. Facilitating this will require ongoing discussion between the sectoral associations and a lead agency should be nominated. All industry sectors in the form of sectoral associations (where appropriate) should form membership of this committee.
2. The steering committees agenda will progress activities in accordance with the framework developed by the ERG. This will include the following: i. Vocational education and training: engage with Innovation & Business Skills Australia (IBSA) to form a workforce development plan which captures the needs of each participating sector of the book industry. Higher education: actively engage with higher education providers to encourage (1) an integrated approached which marries the needs of industry and educators; and (2) collaboration between higher education service providers. Professional Development: Undertake a comprehensive audit to determine what programs currently exist (internships, mentoring, fellowships, etc.), how well they are working and any gaps or ways to improve the system that need to be addressed. For the forum streams (Professional Development): the steering committee will undertake an audit to identify what, if any, opportunities exist to integrate activities in order to reduce duplication and improve efficiencies across the supply chain.
ii.
iii.
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Appendix 1: Current training and development activities

Creators Career path and qualifications No formal qualifications are required to be a writer or an illustrator and there is no recognised career path. Very few can make a living from their craft; most have other jobs to provide day-to-day income. Training providers Bodies such as the Australian Society of Authors, Society of Childrens Book Writers and Illustrators, and state-based Writers Centres run courses and provide opportunities for informal professional development. There are national and international conferences for writers and illustrators. Skills needs Many authors and illustrators supplement their income with personal appearances, requiring them to have good public speaking, performance and presentation skills. Successful creators are often entrepreneurs, managing their output as a small business, promoting their work and themselves. The digital environment provides opportunities for works that enable reader interaction and link to other resources. It provides options for self-publishing, as well as working with established publishers. It enables writers and illustrators to promote their output to a worldwide audience. Skills gaps Managing a small business; sales and marketing; self-publishing; digital media. Agents Career path and qualifications Many agents have had some previous involvement in the trade or educational/professional publishing industries. Accordingly, agents may have a background in bookselling, editing, educational publishing, consulting etc, or other arts management/agenting. Some have qualifications in other disciplines (e.g. Law). Training providers None Skills needs Small business management Knowledge of digital developments affecting the industry Rights management Being able to advise authors on how to self-publish Updated contractual definitions (legal advice) Knowledge of changes in digital production and publishing Knowledge of the work of most of the rest of the supply chain Change management Leadership
Skills gaps
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Publishers
Career path and qualifications There are many different occupations within a publishing house, including editor, designer and sales representative. For some of these, defined qualification paths are available e.g. design diplomas, editing diplomas. For others, the role is learnt on the job e.g. sales representative. For the roles of publisher/commissioning editor, there is no qualification. Apart from on-the-job training, people working in publishing companies can gain experience and qualifications via: Internship or work experience within the book industry Tertiary qualification from either University or TAFE University qualification (e.g. from RMIT) Training from professional associations Training providers Many universities provide postgraduate qualifications in publishing, editing and communications and feature many subjects which are sessionally taught by industry practitioners. There is considerable variation across these programs in terms of the specific skills and principles that are taught, but virtually all include instruction in editing, production, basic design principles, essential software programs (Word, InDesign), and some aspects of digital publishing and distribution. There are also several undergraduate and vocational tertiary programs that offer such instruction. There are certainly opportunities to increase the dialogue between tertiary programs and the industry in a productive fashion that acknowledges both the needs of the industry and the particular demands of the tertiary sector. The Australian Publishers Associations (ASA) Professional Development and Training program operates nationally and covers a variety of topics, developed responsively according to the immediate needs of the industry. Industry seminars, International Digital Chats, industry specific workshops and management workshops are included. Opportunities are given to industry colleagues to become course developers and presenters with the help and mentoring of the APA PD Manager. This results in skills building and provides a revenue stream for presenters. Opportunities exist for volunteers to contribute advice and development ideas to various groups and committees ranging across editorial, digital, human resources and marketing. APA PD manages The Beatrice Davis Editorial Fellowship and is responsible to the Literature Board of the Australia Council for the Arts. The Unwin Trust Fellowship is administered by the APA and managed by the Unwin Trust. The APA presents awards ceremonies: The Australian Book Industry Awards, the Educational Publishing Awards and the Book Design Awards. Networking opportunities are built in to most of the APAs activities across the board.
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Skills needs The three most desirable skills and knowledge areas in the publishing industry, according to respondents of the recent audit, were: o o o Other needs: Marketing in online environments Digital technologies (learning support and maintenance of) Social media marketing
Effective communication; project management; critical, reflective, and creative thinking; problem-solving; business acumen; ability to build partnerships and alliances; effective team relationship; self-management; relevant technology application skills. Skills gaps Leadership More specific and technical skills training More knowledge and awareness of digital developments affecting the industry Keeping up to date with new business models and digital technologies
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Printers
Career path and qualifications The Print industry has numerous highly specialised and book-specific skill sets that fall under the broader classification of print. Career paths in print start from manual labour type roles in the manufacturing plant, to skilled trades in areas including print, binding, digital printing, prepress and digital file management, and design. Typically, other career paths within a print shop include customer service, logistics, supply-chain management and purchasing, and admin both complex and simple. It is not unusual in the book manufacturing sector, given its speciality skill set within the print industry, for employees to be long serving and to have progressive careers through the business, with many managers and skilled employees commencing their time on the factory floor. Training providers There are a number of print-specific training providers offering pathways to recognised qualifications, including TAFE colleges, independent privately owned certified trainers and the Printing Industries Association of Australia itself. Much of the training is focused on traditional print production methods, as well as efficient manufacturing techniques, and more recently some broader, low-level digital printing skill sets. Much of the accessible training is focused on the actual manufacturing process. Skills needs There is a significant technology platform transition occurring within the print sector, as digital printing is growing its presence in line with publishers opting for shorter and more frequent print runs. Printers are adopting world-first manufacturing processes that require specialised skill development frequently requiring training to be sourced from offshore training facilities. These technologies are also seeing the traditional recognised and separate pillars of print design, prepress, print, and bind being merged into an ideal skill set where an operator would have knowledge across all four. This cross-exposure or merging of skill sets is critical to the success of digital print production moving forward. Outside of the actual book manufacturing streams, printers are now being exposed to increasingly complex logistical and delivery fulfilment services, as publishers seek to reduce the complex supply chains and have printers produce and deliver products direct. This will no doubt be a growing part of the printers role in the supply chain and requires new skills. As with the increasing automation of business-to-business transaction models, printers need to develop and adopt as transactions continue to increase in frequency and reduce in size. IT development will have a critical role. Skills gaps Keeping abreast of digital technologies; developing logistics skill sets; developing business-to-business (B2B) transactions platforms; logistics; cross training and multiskilling individuals across all four traditional industry trades: design, prepress, print, bindery.
Booksellers Career path and qualifications Many booksellers begin their careers as part-time workers or students whose careers develop into full-time booksellers. No formal qualifications are required. Starting wages tend to be at, or marginally above, award. The booksellers who decide to make it a career can move into management or ownership of bookshops, becoming a buyer, or in a larger organisation middle-level operational management. Some booksellers also move laterally into publishing. As distinct from many European countries, there are no formal degrees or certificates in bookselling. Training providers
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There are no formalised training providers at this stage. Some of the larger groups provide in-house training and the Australian Booksellers Association has ad hoc information sessions, seminars and workshops appropriate to the needs of the day. Skills needs The key skills needs at this stage are basic retail and business skills. Often booksellers get into the industry because of their love of books and the culture surrounding books, rather than innate or learned business acumen. Changes in the digital environment and the way people make buying decisions has required skills improvements in areas like database management, online commerce and social media. Improved marketing and merchandising skills are also key to contemporary bookselling. These are now all essential tools for a bookseller. Skills gaps Managing a small business and understanding of cash flows require additional training. The changes in the digital environment has left many existing booksellers without the tools to deliver in areas like database management, online commerce and social media; as well as an understanding of the ebook market.
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Libraries
Career path and qualifications There are clearly defined career paths for library and information professionals. New entrants can work in a library and receive on-the-job training, but to become a library and information professional, people must complete a library technician course with a registered training organisation or gain a degree or higher qualification. Formal certificates and degree qualifications provide eligibility to become an associate of the Australian Library and Information Association (ALIA), with post-nominals, and there will soon be certified professional status for members who engage in ongoing learning. Training providers Many universities around Australia provide library and information science degrees and a Masters in the subject area. TAFEs and private providers run courses for library technicians. These courses are accredited by ALIA. ALIA professional members can join the Associations PD Scheme, promoting ongoing learning. ALIA Training runs training courses for people who work in libraries, covering a variety of topics, such as cataloguing, advocacy and disaster planning. ALIA Groups operating at a state and territory level provide professional development and training opportunities for people with special interests, for example health librarians or school librarians. ALIA presents awards, fellowships and other distinctions. There are PD opportunities for volunteers on editorial panels, event committees, advisory committees and the ALIA Board of Directors. The Association presents research grants to library technician and associate members. There are a number of other sector-based associations that also provide informal learning opportunities, for example, the state-based public library associations. There are many industry conferences and networking opportunities. Skills needs Working with educators, ALIA has established a set of core skills, knowledge and attributes for library and information professionals, which help drive course content. These are summarised as: Knowledge of the broad context of the information environment Information seeking Information infrastructure Information organisation Information access Information services, sources and products Information literacy education Generation of knowledge.
In addition, generic skills and attributes include: effective communication; professional ethical standards and social responsibility; project management; critical, reflective, and creative thinking; problem-solving; business acumen; ability to build partnerships and alliances; effective team relationship; self-management; commitment to life-long learning; relevant ICT and technology application skills; appropriate pedagogical information literacy. Skills gaps Keeping up to date with digital technologies.
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Book Industry Collaborative Council - Final Report 2013

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FINAL REPORT

BOOK INDUSTRY COLLABORATIVE COUNCIL

A way forward Conclusion References

220 223 226 224 225

Acknowledgements Appendix A: Submissions in response to the SBP ERG survey

230 230 230 231 233

BOOK INDUSTRY COLLABORATIVE COUNCIL

Membership of the Book Industry Collaborative Council

BICC dates of operation: 1 July 2012 to 30 June 2013

BOOK INDUSTRY COLLABORATIVE COUNCIL

BOOK INDUSTRY COLLABORATIVE COUNCIL

BOOK INDUSTRY COLLABORATIVE COUNCIL

Introduction: Adapting to change

Priority issues: Areas where reform is needed

BOOK INDUSTRY COLLABORATIVE COUNCIL

BOOK INDUSTRY COLLABORATIVE COUNCIL

Scholarly book publishing

Future skills strategy

BOOK INDUSTRY COLLABORATIVE COUNCIL

Strategies to improve capability

Data: Models for industry data collection

Principles for consistent models for supply of ebooks to libraries

Framework for a digital lending right

Scholarly book publishing

BOOK INDUSTRY COLLABORATIVE COUNCIL

Future skills strategy

Revenue and units, classified by:

The Australian Publishers Association (APA)

Australian Booksellers Association (ABA)

Australian book printing firms

BOOK INDUSTRY COLLABORATIVE COUNCIL

Scholarly book publishing

Future skills strategy

BOOK INDUSTRY COLLABORATIVE COUNCIL

The book industry and Australian culture

BOOK INDUSTRY COLLABORATIVE COUNCIL

Towards a sustainable industry leadership body

Role and functions

Progress towards establishment

BOOK INDUSTRY COLLABORATIVE COUNCIL

BOOK INDUSTRY COLLABORATIVE COUNCIL

Copyright Expert Reference Group

BOOK INDUSTRY COLLABORATIVE COUNCIL

BOOK INDUSTRY COLLABORATIVE COUNCIL

Copyright ERG Deliverable:

Copyright ERG Terms of Reference:

Copyright ERG Membership

External industry members

Purpose and structure of this paper

BOOK INDUSTRY COLLABORATIVE COUNCIL

Part One: Copyright and the book industry

Copyright regulation in Australia

Dealing in copyright rights

DRM and metadata

International system of copyright

More information on copyright

Understanding the regulatory framework and its impact on copyright content

http://arts.gov.au/literature/lending_rights www.nla.gov.au/legal-deposit www.copyright.org.au/admin/cms-acc1/_images/7303569334ffcdc868f9a4.pdf http://www.alrc.gov.au/inquiries/copyright-and-digital-economy/submissions-received-alrc 64

Innovation and access

The impact of infringement on the book industry

http://jade.barnet.com.au/Jade.html#article=66531; http://www.austlii.edu.au/au/cases/cth/HCA/1975/26.html http://jade.barnet.com.au/Jade.html#article=263754; http://www.austlii.edu.au/au/cases/cth/HCA/2012/16.html BOOK INDUSTRY COLLABORATIVE COUNCIL

Possible future regulatory changes