June 29, 2016

I eat cataclysmic currency fluctuations and uncertainties over international copyright law like you for Brexit!


8dbc0a7c-3c88-4b8a-8ec9-bb254a372e21-ukeuflagIt’s been nearly a week since the United Kingdom decisively voted to leave the European Union. The immediate aftermath has seen a plunging pound, political chaos in the UK, and general bafflement around the world. Forecasting the post-Brexit future for the UK and Europe is necessarily uncertain, but the general consensus seems to be that it’s going to be rough going, and the only real question is how bad things will ultimately get. Markets have plummeted in the last week and, if nothing else, anxiety about the departure and political disarray will threaten to slide the UK into recession.

“But what about books?!” I hear you say. What about books indeed! The good news is that they will almost certainly continue to be written, read, and published. The bad news is that, beyond the persistence of the written word, not much else about publishing in the UK is clear.

Over at Publishers Weekly, Niell Denny, editor of the London-based BookBrunch, writes that, while the book trade is of course vulnerable to the general economic fallout which will plague Britain in the months to come, it remains “a reasonably calm backwater.” Sadly, he gives little evidence for this placid state of affairs, claiming that Brexit  “will cost jobs in the book trade as it will in the wider economy… hit consumer confidence and spending, and may immediately trigger a recession.”

One supposes that this might seem calm in relation to the troubles facing Britain’s heavy industry and financial markets, but it is nonetheless true that publishing in the UK faces a unique set of challenges in addition to the general economic confusion affecting the British economy. At The Bookseller, Philip Jones voiced concerns that “the entire infrastructure of the book business could be put under scrutiny, from how our copyright laws and the rules around VAT may differ from Europe, through to what type of regulatory framework we impose on the tech giants such as Amazon, Google and Facebook.”

Industry veterans in the UK are worried about the impact that leaving the common market will have on subsidiary rights sales and English language exports. Domestic sales can certainly be expected to fall as consumers rein in spending and hunker down for what might well be a tumultuous year or two. But the larger and more systemic challenge will be to publishers’ ability to buy and sell works in translation and to export English-language titles into Europe. Juliet Mabney of Oneworld Publishing clearly expressed those fears to The Bookseller last week:

The 10% reduction in the value of the pound will be a huge blow to the industry, in terms of export income. Whether publishers sell rights — and that income is consequently devalued — or like Oneworld publish a large portion of their list in the English-language market themselves, the depressed exchange rate will be hugely significant. A large part of our fiction list is translated, and if the pound stays at this low level it will have obviously further increase the costs involved in publishing fiction in translation, just at the time when it is having something of a revival here as well as in the US and Australia.

Beyond the obvious pains inflicted by a devalued currency, the UK’s departure will reignite the debate over the European open market. Since 2006, British publishers have enjoyed a certain level of competitive protection, on account of exclusivity agreements negotiated that year. These agreements secured continental Europe as a restricted, exclusive market for the purposes of English-language exports, ensuring that UK publishers would not face competition from more cheaply produced US editions of the same work.

All those protections are now in jeopardy, as the UK leaves the protective embrace of the EU. Michael Cader, writing for Publisher’s Lunch, explains:

A hot-button issue a decade ago, UK publishers had mostly prevailed in claiming the EU as their exclusive market — rather than leaving it as an open-market territory in which UK and US editions competed. At the time, UK publishers based their arguments on EU law, saying that in order to protect their exclusive rights within the UK, they had to have exclusivity throughout the EU. But when the UK leaves the EU, that argument will no longer apply.

It is certainly possible that the UK will succeed in negotiating a  Norwegian-style entente, and that some portion of the trade protections that the UK currently enjoys will remain a part of their “special relationship.” But it is just as likely at this point that everything is going to change… in two years.

And this is a crucial thing to remember about this process. While the fluctuations in currency and equities are painful and immediate, the more complicated and potentially disruptive complications are yet to come, and their shape is not yet fully known. Fittingly, the giants of British publishing are above all calling for patience and restraint in uncertain times.



Simon Reichley is the Director of Operations and Rights Manager at Melville House.