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London 2011

Twasn't Beauty that Killed the London Fair-It Was the eBook

I cannot think of an odder fair in the thirty years we've been representing books than the 2011 fair in London.

While we were in the halls talking to editors and distributors about printed editions, publishers and CEOs met together elsewhere in Earls Court in multi-day seminars, completely obsessed with the book as digital object.

This obsession produced an almost schizophrenic effect for the entire fair.

Here are some of the reasons for this concern so you can better understand what we were up against with editors.

There is little argument against the fact that U.S. publishers dominate the digital book market and that publishers outside of the U.S. are both envious and frightened by this fact.

President and CEO of HarperCollins Brian Murray noted during the fair that U.S. sales of some front list titles in digital formats have reached 50% of all sales for these titles. Mr. Murray called this fact "a watershed" moment for the book trade.

Moreover, he provided the reason for this landmark: the number of U.S. e-readers grew from 15 million a year ago to 40 million at the time of the London Fair.

This growth, he continued, "was having a disproportionately large effect on the market because they had reached 'core' readers, those buying more than 12 books a year. Some of the heaviest book buyers no longer visit bookstores."

Penguin Group C.E.O. John Makinson also noted this "decline-and in some parts of the world, the collapse-of physical book retailing."-The Bookseller Daily at LBF, 4/13/11.

In response, CEOs and presidents spent considerable time in the seminars learning, among other things, how they can market direct sales of digital books using social networking sites such as Facebook and Twitter. Some of the large houses are already heavily involved in doing so. The fine line that must be learned, of course, is how to insure that your sales content is not dismissed simply as spam. Those publishers now using social networking reported considerable success in avoiding that issue.

Further complicating the digital issue is the fact that Amazon has begun its own publishing program. Word among the major publishing houses is that Amazon already has crime and romance fiction editors and is looking for an editorial director. Once fully operational, this will make the largest bookseller worldwide the largest single publishing house as well, bypassing entirely all current publishers and distributors who will experience a concomitant loss of traditional income sources.

Whatever new areas the e-book seems poised to open, it certainly has worsened some current issues.

Piracy is among them.

At the beginning, we should say that there is a world of difference between piracy of printed books and piracy of e-books.

In the 30 or so years that we have been doing fairs, we do not know of a single book we had that was pirated because it was on our stand. The pirating of print books is far less common now than even a few years ago. Publishers have taken strong stands to stop it and those efforts have been successful.

E-books, however, are a different story.

The European Union has created an agency to combat e-book piracy, though the agency lacks enforcement and current efforts are largely based on voluntary compliance and/or pressure on the offender's Internet service provider to shut down the site.

Last year, there were around 2,000 complaints by European publishers to that agency. The breakdown of this number was surprising to us, not at all what we would have expected. 40% of those cases involved U.S. web sites. No other country was even close to this figure. Germany stood second at around 6% of complaints.

At the fair, publishers in the digital seminars discussed reducing author royalties on e-books as a way to compensate themselves for loss of pirated sales. Authors and agents, naturally, are fighting this vigorously.

The issue also spills into other areas. For example, publishers want to limit sales to public libraries only to expiring e-books. That is, a given e-book can only be "loaned" a few times before its file self-destructs on the library computers. Libraries, of course, are fighting this vigorously as well.

There is also an issue of territoriality for sales of e-books.

Rights contracts most often limit the geographical areas in which a book may be sold.

This is particularly crucial for U.K. publishers. Because of the comparatively small population of the U.K., British publishers must execute individual rights sales for separate Commonwealth areas such as Canada and Australia.

To date, no one has found a way to control the geographical distribution of a digital file.

Crucially, e-book pricing is tearing apart bookselling in the European Union.

On March 1st, inspectors from the European Commission raided the offices of France's largest publishing houses, accusing them of conspiring to drive up the prices of their e-books, both in France and worldwide.

Inspectors seized ledgers and computers from Hachette Livre, Albin Michael, Flammarion, Gallimard and La Matinière/Seuil.

Under French law, book pricing is fixed nation-wide.

The root of the pricing problem goes to the fact that taxes are not uniform on books in the E.U. Amazon and Apple, for example, are based in Luxemburg while Google is based in Ireland. These countries have lower taxes on books, permitting price cuts below those that can be offered elsewhere in the EU where there are higher taxes.

The result is that the price of an e-book in Europe depends entirely on where the source of the sale is located. The E.U. has yet to respond with legislation to address any of these issues.

Now The Newest Elephant in the Room: e-book publishing will finally come of age this year when a new e-book standard is released, e-Pub 3.

e-Pub 3 allows for complete and seamless inclusion of all graphics, audio and video into new e-titles. This also includes all non-Roman alphabet languages. Currently, graphics and non-Roman alphabet languages can be included only as separate (but cumulatively large) individual jpeg files. Audio and video can't be integrated into any of the current formats.

With e-Pub 3, however, there is not a current print book anywhere in the world that can't be accurately reproduced digitally and in comparative small-sized files. Including audio and video, of course, open whole new vistas for the concept of a book.

I'm sure that you're wondering why we've gone on at this length about the e-book and the issues raised by that format.

We've done so because it had an enormous influence on the meetings at this London Fair concerning print editions.

It could not be otherwise, given that the CEOs, presidents and publishers fighting through these digital issues ultimately dictate what the print list will be for their houses. Given the success with sales of e-books reported by their U.S. colleagues, the European directors did not send their representatives into the meeting halls with a strong focus on acquiring new print titles.

We can't emphasize enough this concern on their part with the e-book.

One U.K. director went so far as to predict that, within five years, soft cover books would no longer be published in the U.K. The only editions available will be those in hardback and those in digital format.

The difficulty that print books experienced in London is reflected in the fact that throughout the 3 days of the fair, almost all sales reported in the fair newspaper were the purchase of unpublished manuscripts. Most of the sales were to U.K. publishers, with a small handful by U.S. houses.

We do not believe that a single sale was reported to a non-English language publisher.

Contributing to and perhaps caused by the e-book controversies, the vast majority of non-English language publishers attending the fair were smallish houses either not at previous fairs, or, if at previous fairs, they had kept a very low profile.

We called on as many of these new publishers as we could find at their stands, but it proved impossible to discuss rights with those who were actually there. Many of them did not speak English well enough to do business. In these cases, they were relying on a translator working for so many of them at once that the translator was never available. This also happened in those instances where we called on the most likely buyers on each of the three days of the fair.

Even the usually bustling German Pavilion seemed to have fewer actual representatives at the fair. I'm fairly certain that the International Rights Centre housed far fewer German representatives than in previous years. When we called at their Pavilion to talk with some who were listed as present, many of those had sent their books but had decided after registering for the fair not to actually attend or to send an editor(s) with their titles.

Ironically, the London Fair has decided to drop the word 'International' from its title. As someone 'important' explained: if you use the word 'International' in the name of your fair, you're trying to sell the world on the idea that you've achieved that status. When you drop the word, you're telling the world that you've really arrived.

There were other aberrations to this year's 'international' fair as well as well; most notably the Russians who were this year's guests of honor at the London Fair.

When first announced, this guest designation seemed promising. Russian trade publishers buy a large number of rights and we've sold to them quite successfully for some years now.

What we found, however, was that almost no Russian trade publishers attended the fair. While there were more than 40 Russian publishers taking space in the Russian Pavilion, these were almost all publishing arms of museums, institutes and government agencies-organizations that do not buy any rights.

All of these factors lead to the statement with which we began: we have never seen a book event even approach the oddity of London this year nor the difficulties these aberrations created in approaching contracts in the meeting halls.

While London clearly approached a nadir for rights sales at a fair, the future is actually promising.

The digital flap aside, publishers and CEOs came out of their seminars still realizing that, regardless of format, all houses still need content.

That will come from printed editions as well as manuscripts that go straight to digital once the houses have their e-book programs under control

Penguin Press publishing director Simon Winder summed it up best after the first day of digital seminars: "I am anxious about format but happy about content."


   


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