Brand owners looking to break in to the literary world, whether by producing their own work for publication, commissioning the content from writers, illustrators or photographers or by licensing the entire project from creation and production through to distribution, will need to acclimatize to an industry sector which is highly evolved, but is also experiencing its fair share of challenges and changes arising out of the digital age.
Conventionally the literary print-publishing sector has a history of categorising and dividing its marketing rights based on a plethora of factors and fine detail.
This is particularly the case for books, where revenue streams are unlikely to be confined simply to ‘hardback’ or ‘softback’ sales, but will be generated from a far more detailed division of sales-rights. These are likely to distinguish between the home or export markets and whether for trade customers or the mass market. Further categorisation may be made in terms of pricing; categories referred to as ‘special-discount’ or ‘cheap’ will each be treated as separate rights of exploitation. Similarly, rights to market or use items dispatched by mail order or to book clubs are also often treated separately. Further sub-divisions again are likely for a multitude of subsidiary rights, ranging from simple rights to use quotations through to the publishing of digests, periodicals or serialisations.
The degree of rights-division within the book trade can be illustrated by the example of book-reading on television. If a book is read out by a single voice, it’s likely to be categorised as TV Reading Rights, but if read by more than one voice then it may be categorised as a performance which then brings it under ‘Dramatisation Rights’.
In the character merchandising sector in particular, with an apparently incessant demand for merchandise themed on the most popular characters, the degree of sub-division can be hard to follow.
Taking superhero characters as an example, these often started life in comics, were then developed for TV before finally being licensed for cinematic films. In each case the same characters change in appearance, providing distinct licensing opportunities. This can produce a convoluted licensing trail; the literary trade not only grants character-licences to the film and TV industries, but then proceeds to take licences back in order to produce ranges of comic and picture books based on the TV or film representations of the comic book characters.
The end product can prove confusing, not only for adults trying to purchase the book with character representations from the ‘right’ genre for the much better informed children for whom the purchase is being made, but also for merchandisers. I witnessed this confusion by a character merchandiser I was representing, who failed to realise until commercial arrangements had passed the point of no return, that the licence it had obtained would only permit use of TV representations of brand characters and not those from the related film.
The immediate visible impact of the electronic age on the rights division exercise, has been the need for the publishing industry to accommodate within its traditional breakdown of rights those covering the digital sector, (usually classified as ‘Mechanical Reproduction Rights’ covering, for example, audio books) and the internet (typically termed ‘Electronic Publishing Rights’ and covering websites). Included within that rights division must be analysis as to whether digital literary products are to be distributed in tangible format such as CDs or electronically as data files attached to electronic transmissions.
Even if the present day preference of the buying public is still to consume literature in tangible form, technological advances are changing this; always-on internet and high-storage handheld devices which can be ‘loaded’ with entire series of novels and read like a book by ‘turning’ the pages on a touch-screen, are but two examples of why the steady march away from print towards digital is likely to continue.
And that march has already had more of an impact on the print industry than one might realise.
For a start, it has normally been practicable for publishers of print-magazines and books to allocate clearly defined geographical markets to distributors and retailers. Publishers can then use contracts to limit cannibalisation of each other’s sales between those markets, albeit only up to the point permitted by competition law.
The lack of widespread availability, relative expense and expertise required to operate mass-printing equipment, together with the practical difficulties of importation, storage and circulation, have helped keep counterfeiting problems of print products in check and assisted with tracing and policing with intellectual property any counterfeiting which does arise.
Conversely for digital literary works, particularly those to be disseminated via the internet, publishers are unable to enjoy the same segregation and security for a number of reasons.
Firstly, the internet is no respecter of national boundaries. And without the same natural constraints as for tangible print items, it can be unrealistic for publishers to look to identify and control markets based on geographic territories. Consumers are able to shop around beyond their national frontiers to pick out the best deals form authorised sellers from other markets or, worse, from unauthorised sources. Instead, although there may be fewer revenue streams, publishers may have to draw the line in the sand by dividing markets based on language and by making translation Rights the key determinant for the division of markets.
Secondly, as counterfeiting of audio books and similar items no longer needs sophisticated equipment, expense or special expertise, it is proving to be a widely available cottage industry. This was demonstrated by Andrew Sloper, at least until he was successfully prosecuted last November after action by Trading Standards officers for counterfeiting of popular audio books. Sloper apparently conducted his counterfeiting activities from a room in his house by copying popular titles including the Harry Potter series before selling the counterfeit versions on eBay, reportedly costing the publishing industry over a million pounds in lost trade as a result.
Thirdly, the immediacy, convenience of the internet both in terms of report-updating and consumption, as well as the lack of overheads, make it hard for publishers of print products to compete with equivalent online services. Newspapers and magazines may try to keep costly, high maintenance print versions circulating, but it is rare for the digital versions not to be increasing their circulation whilst corresponding print versions decline.
Finally, the demand for a literary publishing sector is shrinking, due to a sea-change in the nation’s reading habits. Those in times past who would have purchased print newspapers, magazines and journals to get their daily or weekly quota of news, current affairs and interests, simply aren’t doing so any more. For some, this is because they prefer to obtain their news fix from the numerous, usually free, online resources available. For others, the passive pastime of being ‘fed’ news and interests from conventional sources is spurned in favour of DIY updates achieved via reading and contributing to online forums, blogs and user generated or posted content sites such as You Tube. And for any who are yet to be convinced that this can provide an alternative source of news, one only has to witness how the news reporting industry has been increasingly ‘scooped’ by content on You Tube, brought to the fore and ‘made news’ by sheer weight of public reaction.
Those concerned with the conventional print-publishing industry are unlikely to feel that their well-ordered world is about to be swept away. In comparison, for example, they will feel less anxious than those in the music publishing industry; You Tube’s withdrawal of all premium music videos in response to the PRS’ attempt to extract a higher fee-rate for its members, shows just how far the balance of power has swung away from music publishers in that industry as a result of the internet. Nonetheless, the literary publishing industry will no doubt still feel a degree of apprehension as to where the electronic age is taking it.
Ian Down is a partner in the entertainment, marketing and intellectual property department at Hamlins LLP, solicitors, in Regent Street, London and specialises in marketing and media law. Readers are advised that lawyers are like licensors – before you get a licence to rely on their advice you have to engage and pay them first. So please note that this article does not represent advice which may be relied upon or for which any responsibility is accepted by www.licensing.biz, the author or his firm.