[Xenophon]

@Blue Tyson's various posts just above:

Please make an effort to remain polite!

That said, the issue just isn't as simple as it appears. Consider hypothetical PublisherX, just now entering the eBook market. They have a body of pre-existing contracts, many of which have geographic restrictions; some other contracts might not have geographic restrictions. Sure, the restrictions are left-over from the world of dead tree format sales... but they are nevertheless legally binding on the publisher!

So, what is PublisherX to do? Here are a few of their available options:

1. Ignore their contracts, and sell world-wide anyway.
   • Pros: Make many ebook purchasers happy, and might even net some additional sales for PublisherX.
   • Cons: This approach is certain to get them into multiple lawsuits. And at least a few of those lawsuits would be expensive ones. Further, it will tend to give them a reputation for violating their publishing contracts. And that negative reputation would really interfere with their ability to do business generally, acquire new books to sell, negotiate with authors and agents, etc.
2. Stay out of the eBook market while they attempt to re-negotiate contracts to have world-wide electronic rights.
   • Pros: Avoids legal hassles. Lets them keep their heads in the sand a while longer in the area of electronic sales.
   • Cons: eBook purchasers chew them out for being "oldfashioned and clueless." They lose out on possible sales in the electronic world while they renegotiate. And when they finally do enter the electronic marketplace they're playing catch-up compared to their competitors who have gained experience while the market is still small.
3. Enter the eBook market now, with geographic restrictions that match the existing contracts. Simultaneously either re-negotiate old contracts, simply insist on world-wide electronic rights in all new contracts, or both.
   • Pros: Get their feet wet with electronic sales now. Make sense of the contractual issues over time. Avoid sullying business reputation.
   • Cons: Tick off a subset of eBook purchasers. Look (to the technorati) like they are "semi-clueless" -- at least until the geographic thing is sorted out.
4. Enter the eBook market now, with geographic restrictions that match the existing contracts. Do nothing about making those restrictions go away in the future.
   • Pros: Get their feet wet with electronic sales now, while the market is still small. Avoid sullying business reputation.
   • Cons: Tick off a subset of eBook purchasers. Look (to the technorati) like they are "semi-clueless." Risk a big problem down the road... if geographic restrictions turn out to interfere with sales. And neither we nor they yet know whether these restrictions will really hurt their electronic sales or not.

I note that option #3 and #4 are indistinguishable from outside the publishing community. And might even be indistinguishable from outside PublisherX!

It seems to me that option #1 is a complete non-starter. The legal risk is too large and the sales benefit is too small (in part because the eBook market is too small). And even if the sales benefit was bigger, the possible loss of reputation as a trustworthy business partner is a real killer.

Option #2 may or may not be in use by some publishers -- we can't tell for sure because (when viewed from the outside) it looks the same as Option #0 (just ignore eBooks completely). But if any publisher is actually making that choice by actively trying to fix their contracts... good for them!

For a publisher which, like our hypothetical PublisherX, has existing geographically restricted rights to some of its catalog, options #3 and #4 are probably the most attractive. Choosing #3 over #4 requires paying enough attention to the customer community to realize that we care and also looking far enough down the road to guess whether or not geographic restrictions will turn out to be a problem and deciding that the possible future problem is big enough and likely enough to be worth spending time and money on today (by renegotiating contracts, etc.). If I had to guess from the outside I would expect that most publishers would go with #4, even though I would greatly prefer them to choose option #3.

So I think that Blue Tyson's overheated language is out of touch with reality. It's great fun to think of faceless corporate types as being "scumsuckers" or whatever. Heck, some of them probably even are <fill-in-the-epithet>s! But it's probably much more accurate to look at it as a straight-forward business problem that they are attempting to solve as best they can. Understanding the legal and business issues shows that we need not assume the presence of any bad-guys to explain the presence of these exceedingly annoying restrictions.

Xenophon