Monday, November 19, 2012

E-Book Market/Art Market: Should We Be Thinking More Like Business People?



When I read an article about how the e-book market is different from the art market, I couldn't help but wonder whether or not we should be thinking more like business people. As the owner of a high end art gallery for ten years, and a small business owner all my life, I've spent most of my life buying and re-selling things for profit.

During the time I owned my gallery I represented over 100 artists, most of whom remained with me for the ten year period in which I was in business. I took copyrights very seriously. As the agent who represented these artists I felt it my duty to protect their works as long as their works were under my gallery's roof. I wouldn't even allow customers walking in and out of the showroom to take photos of their art. To me, that's an infringement on copyright and I had no idea whether or not they were going to go home, turn those photos into prints, and then resell them somewhere else. It happens. Of course some customers didn't like that...some were downright snarky about it...but they weren't the art buying crowd and I didn't have any problems asking them to politely leave my gallery. I knew they were just walking through town licking ice cream cones. The serious art buyers would never even think to take a photo of an original work of art in a gallery without getting permission first.

In the article I'm linking to today, I'll post excerpts that talk about resale of books and how that's compared to the resale of art. As a side note, the photo above is part of my own personal collection. It's a Neil Loeb (you can google him) originally dated 1971, and I think I would part with anything but that work of art. I have no intention of ever selling it in my lifetime, however, I am hoping it continues to grow in value. But I'm not sure I can say that about most books I own...or most of the books I've written for that matter.

The United States Supreme Court recently heard oral argument in Wiley vs. Kirtsaeng, a copyright case that deals with first resale principles. The gist of the case is this: Kirtsaeng bought textbooks in developing countries where the books sell for less than in the United States and brought them to the United States for resale.

Wiley sued Kirtsaeng for copyright infringement and won; Kirtsaeng has appealed. Kirtsaeng’s defense was primarily the first-sale doctrine, which allows owners to resell, lend out, or give away copyrighted goods without interference. This doctrine is a prime reason why every ebook comes with terms of sale that state that what you are “buying” is a limited license, unlike with a pbook.

This is where it can get tricky, and I'll admit that I'm still learning more because I have so many e-books out for sale. To take this to very basic level, this is why you don't see used e-books for sale on Amazon like you see used print books. In most cases, unlike art, used print books are sold for less money, not more. But there are cases where I've seen some of my print books being sold on Amazon and Ebay for far more than people originally paid for them. I think this has more to do with adult content...at least that's the only thing I can make out of it. There are people who know and understand that anything with strong adult content usually commands a higher price, especially if they are marketing books with adult content to markets that don't have access to books with adult content. I've posted about this topic before, and how I receive no money whatsoever as the author of these print books when they are sold at higher prices used. And I don't expect to either.

This is what could happen if more cases like this win:

Yet this case could spell the end of such secondary markets except for goods that are outside copyright, which means not in our lifetime for currently produced artwork.

More importantly for artists, publishers, and authors alike, all art — regardless of form — that is still under copyright will plummet in value if capitalism works correctly. Why would anyone pay a handsome price for art that they cannot resell 10 years from now. Copyrighted works will have limited market value because there will be real market.

Isn’t this the fight we are experiencing with ebooks? Publishers cry about how piracy and discounting devalues ebooks, but it is really neither that devalues ebooks; instead it is the licensing scheme that intentionally prevents a secondary market that causes the devaluation.

I have a feeling this isn't going to disappear any time soon. And I tend to agree with the author that Wiley may wind up regretting all this in the future. It's why I've made it a point to start self-publishing on my own so I can call the shots with at least a few of my own e-books, and I will not be subjected to the opinions of Wiley or anyone else. Right now, in this post, I'm talking mainly about the student text book market as it relates to the article I'm linking to, but this is something that could have an impact on all markets.

As one Justice wondered, how would we dispose of an automobile we wanted to replace because automobiles have numerous items that are copyrighted. We couldn’t sell that auto in the absence of permission from all copyright holders, a difficult task in the absence of the first sale doctrine.

And that's about as to the point as this gets. I recommend reading the article in full to get a better grasp on what's happening right now, and what could happen in the future. The e-book market is still small and there are a lot of people who don't fully get it yet. Unfortunately, they always seem to be the loudest people around.

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