Publishing in the Knowledge Economy - DTI Home Page

Publishing in the knowledge economy
Issues for competitiveness
undoubtedly have a role to play. They make it
easier for new entrants into the UK media
market from abroad to establish a presence
here than for UK companies to build a strong
home base. The definition of markets needs to
be carefully considered as the number of
channels through which end customers can
obtain information increases, so does the
potential for plurality and diversity. If the
Government is serious about creating the
conditions for a global UK-owned media player
to be established, competition law and media
ownership needs to be looked at afresh. This
is taking place, although the outcome is
unknown at the time of writing. What is evident
is that the UK has a relatively restrictive
competition regime in a small market, leading to
fragmentation, while international competitors
build scale and cross-platform capabilities.
Indeed, looking at markets such as ELT, STM
and professional publishing, where competition
and ownership rules are much more relaxed,
UK companies can compete on a global scale.
Specifically, cross-media ownership
constraints currently prevent local papers from
becoming cross-platform local information
providers. The argument for maintaining plurality
and diversity of opinion in these markets is open
to question as most local markets already have
access to more than one local radio station,
plus the BBC local radio stations. Furthermore,
the competition rules on newspaper mergers,
which require automatic referral to the
Competition Commission, lead to uncertainty
and unwarranted cost. Of 500 cases referred to
the Competition Commission only three have
resulted in a competitive issue being found.
The head of a regional newspaper company
said: “A level playing field in local markets must
be created, so that we can start to experiment
with extending our brand.”
Another said: “Newspapers could bring more
professionalism to local broadcasting.”
Action point
1 If the Government wants to encourage globally
powerful UK-based publishing and media
companies it must consider relaxing competition
law in how it treats the UK publishing sector and
re-examine its definition of the relevant publishing
sector market.
US competition and territorial rights
Just as penetrating the US market successfully
is the great prize for media companies in
general, so its products represent the greatest
potential challenge to British book publishers in
their home and third markets. It remains more
potential than actual, largely due to the
historically insular outlook of the American
publishing industry.
As one publisher put it: “The US industry
thinks American, whereas the UK industry
thinks international.”
And another said: “If the Americans got their
act in gear, they’d wipe the floor with us.”
Historically, territorial copyright has defined
the market areas where particular publishers’
book editions shall be sold. Authors and their
agents have made deals with publishers to sell
their books in particular geographical markets.
Booksellers in these markets and publishers of
other editions were not permitted to sell or
supply other editions into those markets.
The growth of Internet bookselling, where
consumers purchased US editions of books
directly from Amazon.com, for example, was
one challenge to this system, although the
volume impact was small. Since Amazon began
supplying from its own offshoots based inside
the UK and other countries, and since rights
information has been attached to book
descriptions, this has largely subsided.
The influx of US-owned super-retailers such
as Borders were also felt to place the system at
risk, but now the US publishers have
acknowledged that they should not supply
US editions to them.
A separate issue has been the decision of
some markets covered by UK publishers to
declare themselves open, or to impose time
limits within which UK publishers must publish a
local edition or face competition from a US one.
Many commentators (especially Americans)
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