British Book Publishers Fear Brexit Will Bring a U.S. Invasion
Much of the worry stems from a looming fight with American publishers over sales in Continental Europe. For decades, the British have had this market to themselves, selling English-language editions of books in France, Italy and every other country in the European Union.
That helped turn Britain into the largest book exporter in the world, with total sales equivalent to $6.8 billion per year, according to the Publishers Association, a British trade group. Just over half of that revenue came from exports, and the biggest export market is Europe.
Access to this market, without tariffs or the serious competition that comes with being part of European Union, has been a financial boon. Were British publishers to lose a substantial chunk of sales or face added costs on the Continent, the fallout could be dire.
“Our domestic market is tiny compared to the U.S.,” said Clare Alexander, a literary agent with Aitken Alexander Associates. “So given our reliance on exports, what we’re talking about with Europe is a fight for the survival of British publishing.”
United States publishers have long coveted the European market, and with Britain scheduled to formally part ways with the union by March 2019, some are gearing up for an invasion. A warning flare of sorts was fired last fall at the Frankfurt Book Festival, when Simon & Schuster’s chief executive, Carolyn Reidy, told an audience that, after Brexit, “the argument the British have used to grab Europe as an exclusive market will then be over.”
That’s about as close to a public declaration of hostilities as you can expect. The battle for Europe’s book market is already being fought quietly wherever author contracts are drafted. These contracts always include a list of territories where publishers want exclusive rights of distribution. More and more often, the list now drafted by American publishers includes the European continent.
Patrick Walsh, a literary agent based in London, has seen Europe included in early drafts of two deals with United States publishers. In both cases, the publishers argued that by the time the book was in stores, Britain and the European Union will have parted company. In both cases, Mr. Walsh pushed back, suggesting that it was too early to know how Brexit would play out, and the codicil was removed.
“It was a relatively friendly opening gambit,” he said. “But I’m absolutely certain we’re going to see more of this.”
Much of the talk here about the terms of Britain’s divorce from Europe has centered on banks, real estate and blue-collar industries like fishing and mining. But the creative sector is also bracing for change and fretting about life after Brexit. Few are as worried as the roughly 30,000 people employed by the British book business.
Part of it is a concern that Britain will cease to serve as one of the world’s great cultural hubs. London in particular has been a huge attraction for foreign artists in fields like contemporary dance and theater.
“Those people are based here because they can come and go,” said Andrew Franklin, co-founder of Profile Books, a London publishing house. “The same is true of literary culture. It’s hugely dependent on new voices coming in from other places, and I worry that as this place puts up walls, the literary culture will become more isolated, with a consequent effect on publishing.”
Mr. Franklin thinks the biggest threat posed by Brexit is the harm it may cause to the British economy, which could reduce disposable income, hurt book sales and result in the closing of both libraries and book shops. There are smaller and more practical worries, too, like the impact on British writers who lose access to Europe’s grants and literary prizes. Plus, the United Kingdom has a robust intellectual property regime that publishers are eager to sustain.
The Association of Authors’ Agents has had several engagements with politicians to convey these and other concerns. For the past two years, the group has visited Parliament with authors in tow, including Cressida Cowell, the woman behind the “How to Train Your Dragon” series, and Misha Glenny, the reporter whose book “McMafia” led to the hit TV mini-series by the same name.
Lobbyists for British publishers have conferred with key political players in Europe as well, but the future of the English-language book market there is unknown. British domination has been rooted in a combination of informal agreement (American and British publishers long ago divvied up countries, based largely on proximity and history) and trade law (as a European Union member, publishers in the United Kingdom have frictionless access to any country in what is known as the Single Market).
Many British publishers and agents believe they will continue to outperform on the Continent simply because they are physically closer to it than their rivals.
“Why would a British author want their books supplied from America to Europe, which is Britain’s nearest market, Brexit or no Brexit?” said Gordon Wise, former president of the Association of Authors’ Agents, in an email. “And why would even a U.S. author want to wait for stock to ship trans-Atlantically when it could be swiftly supplied from within the European geographical continent by their British publisher?”
In addition to speed and ease of distribution, publishers in Britain have offered a higher royalty rate to authors they sell in Europe. In return for exclusive sales rights, British houses have paid what are known as “home royalty rates” — essentially, the amount of money they pay authors distributed within Britain — as opposed to “export royalty rates.”
The difference is huge. Lorella Belli, a literary agent, said that the figures vary from publisher to publisher, but that roughly speaking authors earn one British pound (about $1.40) per hardback, when paid a home royalty. The export rate, by contrast, will yield the equivalent of about 7 cents per book.
Executives in United States publishing say they are ready to pay home royalty rates for exclusivity in Europe, too. And they doubt that Britain’s proximity argument for ascendancy in Europe has much force these days, given how swiftly products now move around the world.
“That big body of water between America and Europe is not an issue, thanks to much improved supply chain logistics,” said Carolyn Savarese of Kneerim & Williams, a literary agency with offices in Boston and New York. “The world has indeed gotten smaller. Or rather, the markets have gotten more accessible.”
If Europe becomes a place where American and British publishers compete, the losers might be authors, Ms. Alexander said. While best-selling authors — the Grishams and Rowlings — may well command even larger advances in possible bidding wars, new writers and ones with middling sales records might wind up earning less.
“The book industry in Europe is going to look more like Hollywood,” she said. “It’s going to push further the idea that a book needs to be a blockbuster. That will mean smaller advances for excellent books that are more niche.”
Still up in the air is whether Britain will ultimately face new hurdles in Europe, like tariffs. The full implications of Brexit will come into focus in the coming months, as the basic terms of the departure are negotiated. But among publishers, the jostling for Europe has already begun.
“Everyone wants an advantage,” Mr. Walsh said. “If they can grab it, they will.”
News credit : Nytimes