Written evidence submitted by the Publishers Association, London and Publishing Scotland, Edinburgh
Publishing Scotland is the lead body for the book industry in Scotland. Established in 1974 by 12 publishers as the Scottish Publishers Association, the organisation restructured in 2007 and is now a network, trade, and development body with over 100 members in two categories – publishers and network members (defined as companies and individuals who are connected to the publishing industry such as freelancers, writers, organisations, printers, data companies, libraries, and universities). Part-funded by Creative Scotland, the organisation focuses on training, bookfair representation, marketing, advice, and funding support such as funding publishers for digital developments and overseas bookfair visits, as well as hosting an international fellowship scheme. Publishing Scotland is also the majority shareholder in a book distribution company, Booksource, based outside Glasgow, which warehouses and distributes print and e-books for over 60 publishers.
The Publishers Association represents the interests of over 100 UK publishers across trade, educational and academic publishing. Our members include global companies such as Elsevier, Wiley, Pearson, Penguin Random House, Hachette and the University presses, as well as many independent publishing houses.
The publishing industry is an under-sold UK success story. It enriches our culture, both through its own works and those it inspires in other creative sectors, like theatre, cinema, television and music. In 2014 the industry contributed £4.3bn to the UK economy, 44% of which came from exports – making the UK one of the largest publishing exporters in the world – while 35% came from digital products and services.
The PA’s objective is to strengthen the trading environment for UK publishers, by providing a strong voice for the industry in government, within society and with other stakeholders in the UK, in Europe and internationally; providing a forum for the exchange of non-competitive information between publishers; and providing support and guidance to the industry through technological and other changes.
We are making this joint submission to the Scottish Affairs inquiry as the two organisations occupy overlapping areas of activity within the UK publishing industry and some relevant issues that affect the whole of the UK, such as taxation and copyright/IP legislation are not devolved matters. The PA takes a lead in the UK and internationally on the latter two areas, and, in addition, UKTI activity is channelled through the PA.
As a general remark, some of the conditions in the trade are endemic to small publishing companies on the whole and are not confined to Scottish-based enterprises. It is important too to distinguish between the devolved nature of some of the levers of the economy and the more UK-wide conditions but on the whole we have not ventured into areas such as the introduction of a living wage, immigration control etc.
The Committee has invited evidence on the following issues:
The book publishing industry in Scotland has a long and illustrious heritage. From the first licence granted in 1508 to Chapman and Myllar, printer/publishers in Edinburgh, to the present day, the art and business of Scotland’s vibrant but small publishing sector has been varied and far-reaching. The typical profile of the sector is one largely composed of micro and small businesses, with a couple of large players – DC Thomson in Dundee and Harper Collins in Glasgow – making up the bulk of the sector turnover. Figures as to the value of the sector vary between £120m and £300m depending on the definition of publishing and the method of collecting the data. Figures for self-publishing, a relatively recent phenomenon, are not counted in these figures.
There are circa 100 active publishers in Scotland, [defined as publishing more than 5 titles per annum]. Barriers to entry are very low and almost every region in Scotland contains at least one publisher with the majority being based in Glasgow and Edinburgh. There are very few publishers in the other cities, apart from DC Thomson in Dundee. A great deal of work – editing, proofreading, design, production, selling rights, etc - is outsourced to freelance companies and individuals.
Most Scottish publishers have embraced digital publishing and some companies export up to 50% of their output. The largest single market, however, for Scottish-based publishers is the UK.
The bulk of the UK publishing industry is concentrated in London, the South-East, and the Oxford area, all of which exercises a ‘pull’ effect on writers, and employment opportunities, the latter particularly in the more lucrative areas of STEM publishing.
There is a significant ‘cluster’ effect to publishing in London, a world capital of publishing of which the UK should be proud, that dictates the way the UK industry behaves in terms of attracting finance, venture capital, authors, agents, rights and licencing activity, review and press coverage and, of course, sales. The size and scale of the industry in Scotland is that of a small country with the added advantage of the English-language. While publishing in the English language is a significant advantage to Scottish-based publishers as the audience can be global, competition in that market is fierce because it is so large and well established. Size matters, as it does in most industries.
The sector in Scotland is composed mainly of small companies publishing a mix of mainly non-fiction and fiction, with a few children’s and educational publishers catering for the distinctive Scottish curriculum. There are a few academic publishers, the largest being the long-standing Edinburgh University Press, founded in 1948. STEM publishing has receded in Scotland in the past 10 years leaving a very small output from a handful of players. This has had an effect on employment opportunities as traditionally this area of publishing is done by large, often global, well-resourced companies. Public sector or institutional publishing, particularly in the heritage sector, makes up a sixth of the total number of companies.
There is not much evidence of partnership working between the governments in our specific field of the creative industries, at least not at a level that would be felt by the vast majority of publishers.
Creative Scotland remains a significant source of support and funding to publishers and writers and there are other agencies in Scotland such as Scottish Enterprise, the British Council, NESTA, Skills Development Scotland, Creative Skillset, Scottish Development International, the Cultural Enterprise Office, and Highlands and Islands Enterprise which all have differing remits to support the creative industries at some level. The level of co-ordination between those agencies in terms of publishing support at least is not strong and the Scottish Creative Industries Partnership (SCIP) has yet to prove itself in terms of usefulness in general. To be clear, it is the lack of joined-up support that is being referred to here. There is a lack of clarity as to whose responsibility it is to ‘pump-prime’ and develop the creative industries and if the responsibility is to be shared, how it is shared and which sub-sectors and interventions are prioritised.
This may be addressed through the new Creative Industries Strategy due to be published by Creative Scotland in the next few weeks and it hoped that partnership working will be identified as one of the key aspects of support. In addition, Creative Scotland have completed a major Review of the Literature and Publishing sector which was published in June 2015 and which identifies areas to develop in the future including more of an emphasis on international promotion.
In terms of the current international promotion, again the level of co-ordinated support and working together between the two governments and at a local level is not manifestly strong but that may be due to the devolved nature of culture, external affairs, skills, and some aspects of enterprise.
What are the barriers to the growth of the creative industries in Scotland, and how can these be overcome?
(a) What, if any, changes need to be made to enable the creative industries to capitalise on their Intellectual Property?
Intellectual Property (IP), copyright especially, underpins creativity and remains a vital component for publishing to thrive. As such, the greatest assistance any government could give the creative industries is to ensure IP across the whole UK is valued, and that a legal framework exists which allows IP to be monetised and the rights which underpin it enforced.
The ability of the author to choose how they present and disseminate their work is paramount and it is therefore essential that the government supports a copyright framework which ensures these choices are respected and upheld.
Authors need and deserve to be recognised and rewarded for their work. And at the same time, publishers who invest in them need to be incentivised and given the means to support new talent. Copyright allows IP and creative endeavour to be turned into financial reward. It ensures that works – of all kinds – are produced and disseminated to their widest possible audience of readers, libraries and many more, and should be resolutely supported.
The review of IP undertaken in the last Parliament led to a number of reforms which has had the result of bringing the UK copyright framework into the digital age. For example, the education exception now, quite rightly, includes provision for teachers to scan limited parts of work for the purpose of illustration and makes these available online.
What is now important is that this framework is supported and enforced.
The publishing industry plays a lead role in supporting copyright, raising awareness of the value of IP and helping tackle infringement. The PA (and, by association, Publishing Scotland) works closely with the Intellectual Property Office and the new City of London Police IP Crime Unit (PIPCU) to combat online infringement.
Publishing is one of the biggest success stories of the digital age and perhaps uniquely within the creative industries has been able to embrace the digital shift swiftly and effectively. As the industry inspires new advances in technology, most notably ebooks, it is crucial that publishers and authors are given a suitable framework which promotes creation and growth while protecting investment and reimbursement. While the development of ebooks has remained relatively unscathed by online infringement (in the most recent (the fifth) IPO Online Copyright Infringement Tracker Report[1], 20% of UK internet users confess to accessing works illegally online but within that figure, only 1% accessed ebooks illegally. For users who access ebooks online, only 6% did so illegally) online piracy remains an ongoing problem. This can been seen by the fact that since March 1st 2015 the Publishers Association Copyright Infringement Portal has sent over 300,000 notices to websites hosting infringing content.
For the creative industries to be able to properly capitalise on, their intellectual property, Publishing Scotland and the Publishers Association believe that the UK Government should continue to:
But more fundamentally, the UK government must, at this critical time, stand up for a strong copyright framework in Europe, and ensure that this is one which looks to licensing solutions and industry initiatives ahead of legislatives or regulatory reform, and that any such reform is backed by robust economic evidence.
Barriers to growth in publishing in Scotland include a variety of external factors such as:
Internal factors include:
How can these be overcome?
Some ideas:
As some of the levers relating to the creative industries (culture, skills, and enterprise) are devolved to the Scottish government, the role of the UK government could include:
As has been seen with the introduction of a series of tax breaks for the film, television and video games sectors, the tax system has the potential to help the creative industries grow while delivering real economic and employment benefits to the country.
We believe that by using similar fiscal levers, the next generation of digital workers can be developed.
It is increasingly clear that the future success of the UK economy depends upon a skilled, vibrant digital workforce. Publishing is one of the creative industry sectors which can foster and develop these talents. A third of the industries revenues are derived from direct sales and licensing of digital products and services. Many companies have programmers in place to attract this new skills audience into the sector but such measures are out of reach to many companies, especially small and medium size enterprises (SME).
The publishing industry has a strong outreach with the higher education sector in recruiting people into publishing and every year accepts thousands of people into the workforce in digital and innovative jobs.
The UK Government holds a legitimate role in helping the sector’s SME bases in reaching out to and nurturing digital talent. It can do this through developing existing skills programmes and linking incentives to develop publishing skills through the taxation system.
Publishing Scotland and the Publishers Association believe that the UK Government, by introducing the tax measures below, could better encourage growth in the creative industries in Scotland:
[1] https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/449592/new_OCI_doc_290715.pdf