[DMCA-Activists] Publishers want to invalidate first-sale doctrine

[Seth Johnson]

-------- Original Message --------
Subject: Publishers want to invalidate first-sale doctrine
Date: Sat, 01 Oct 2005 12:26:44 -0500
From: Stephen Compall <address@hidden>
To: Seth Johnson <address@hidden>

Background: First-sale doctrine essentially says that when you
sell a book, you lose control over *that copy*.  The owner of the
copy is free to lend to others, sell to others, read to his or
her children, etc. First-sale doctrine is not merely a court
precedent; it is codified in U.S. law (17 USC 109).  Having
failed to circumvent the first-sale doctrine through DRM on
ebooks, publishers want to take a more direct approach, by
imposing on used-book marketplaces such as Amazon.com
Marketplace.

"The online transaction providers should pay a fee," says Richard
Pine, a partner in New York literary agency InkWell Management
LLC. "The commission should be paid directly to the publisher,
who should pass through 100% of that income to the author."

Full article follows:

The Growing Market For Slightly Used Books

In Latest Threat to Publishers, Readers Flock to Web to Buy
Best-Sellers at Big Discounts

By JEFFREY A. TRACHTENBERG

Staff Reporter of THE WALL STREET JOURNAL

September 29, 2005; Page D1


Readers seeking E.L. Doctorow's new novel "The March," one of the
best-reviewed books of the fall season, can buy the new novel at
their neighborhood bookstore for $25.95 or on the Web for a few
dollars less.

Or they can seek out an even better bargain, like the $13.99
(plus shipping) deal offered earlier this week for a "read once
gently" copy on Amazon.com Inc.'s Web site.

The Internet is creating a new and fast-growing category in the
book-selling market -- the barely-used book. An increasing number
of consumers are snapping up used volumes online at invitingly
cheap prices. These aren't yellowing copies of out-of-print
titles but often unblemished copies of newly published books --
sometimes available just a few days after a book's official
publication date.

Today, any consumer armed with a title or an ISBN number can
search the Internet for the lowest price and get one within
minutes. At the same time, the Web sites that offer such books,
such as Amazon, Abebooks Inc. and Alibris Inc., have made it
painless for readers to resell them. A reader who owns "The
March," for example, can sell it via Amazon just by clicking on
the "Sell Yours Here" button to the right of the new-book
listing. The process is so simple that even the most
technologically befuddled person can follow it. Once the book
sells, Amazon collects a commission of $0.99 plus 15% of the sale
price from the seller. It then deposits the remainder in the
seller's account and provides the address of the customer. The
seller ships the book directly to the customer. Amazon's payment
to the seller includes a pre-calculated credit toward shipping
costs.

In effect, Amazon and other online used-book sites, including
eBay Inc., are creating a nation of amateur booksellers at a time
when consumer book unit sales are flat or declining.

"This is the new Internet reality, which is the cheaper the
better," says Laurence Kirshbaum, chief executive of Time Warner
Inc.'s book group. With Web sites displaying new and used titles
together, he says, "you can see two prices side by side, and the
discrepancy is enormous."

Mr. Kirshbaum has reason to be concerned. There are currently 70
"new and used" copies of "The Widow of the South" -- one of Time
Warner's biggest books of the fall -- for sale on Amazon.
Although the novel carries a retail price of $24.95, there are
several copies on Amazon described as "new" being offered for $16
or less.

The issue is so contentious that several literary agents are
calling for authors and publishers to find some way to share in
the revenue created by the used-book market. "The online
transaction providers should pay a fee," says Richard Pine, a
partner in New York literary agency InkWell Management LLC. "The
commission should be paid directly to the publisher, who should
pass through 100% of that income to the author."

Adds Ann Rittenberg, president of Ann Rittenberg Literary Agency
Inc.: "I'd like to see the author getting 10% of a used book
sale. I wouldn't have asked for this years ago, but it's so
organized now that there should be a payment." A spokeswoman for
Amazon says the company doesn't offer a commission and won't
comment on what it may or may not do in the future.

Until recently, publishers barely noticed used-book sales. Nobody
knew how large the market was for used volumes, or whether it was
growing or not.

Certainly, there has always been a significant demand for used
textbooks. But a new study conducted by InfoTrends Research Group
Inc., a market-research firm in Weymouth, Mass., on behalf of the
Book Industry Study Group, a trade association, has gone a long
way towards quantifying demand for used titles.

While the market's size is still modest -- about $600 million, or
2.8% of the $21 billion that readers spent on consumer books in
2004 -- it is growing at 25% annually. Jeff Hayes, group director
for InfoTrends Research Group, suggests that it could reach $2.25
billion in U.S. sales by 2010, or 9.4% of a projected $23.9
billion in consumer book sales.

Many in publishing worry that every sale of a used book in "new"
condition will act as a substitute for an actual sale of a new
book. Others are concerned that writers are losing out. "We want
to make sure that authors receive the royalties they deserve,"
says Jane Friedman, CEO of News Corp.'s HarperCollins Publishers
Inc., one of the country's largest publishers. "We'd also like
Amazon to give some breathing room between the on-sale date of a
new book and the sale of used copies."

All these barely used books come from a variety of sources. Some
are offered up by everyday readers. Some are undoubtedly review
copies that publishers provide to critics. Professional
booksellers also offer copies. "Booksellers acquire used books
from consumers and pay as much as 30% to 40% off the retail price
and then resell it for as much as 60% of the retail price,
depending on condition," says Mr. Hayes.

The new report doesn't make it clear how many newly published
books are being sold as used books. Nor does anyone know how many
dollars spent on used books would instead have been spent
purchasing new books.

One reason the used-book market is growing is that the experience
of buying and selling such books has improved, according to Mr.
Hayes. "In the past, you didn't hesitate to buy a new book," he
says. "But if you only have to wait a week or two, you may decide
to hold off and buy a used copy."

Last week, Bethanne Patrick, who writes the Book Maven blog for
Time Warner's America Online unit, says she bought a used copy of
Zadie Smith's new novel "On Beauty" (dust-jacket price: $25.95)
in very good condition for $14.50 on Amazon. "Why pay full price
if I can get a hardly opened hardback copy online?" she says.