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Quill & Quire: Why the loss of Access Copyright royalties could be devastating for educational publishers

May 29th, 2014

This article originally appeared in Q&Q‘s May 2014 print issue. The e-version is available here.

Earlier this year, Oxford University Press Canada ceased publishing in its schools division after yet another year of double-digit sales declines. As with other publishers active in the K–12 market, OUP Canada faced shrinking provincial budgets, changing curricula, and a weakened post-recession economy. But it was another factor – the loss of royalties distributed on behalf of schools by Access Copyright, Canada’s copyright licencing agency – that perhaps dealt the final blow.

Those royalties, which typically amounted to around $10 million for the K–12 sector, were “a significant factor in making school publishing viable here, even in the wake of declining sales of the materials themselves,” OUP Canada president David Stover told Q&Q at the time. “The more we looked at [the disappearance of copyright royalties], the bleaker the view seemed to be.”

As royalties continue to shrink, the situation is having a profound impact on the bottom line of publishers catering to both the K–12 and postsecondary sectors. OUP Canada eliminated three jobs as a result of the closure of its schools division. At Winnipeg-based scholarly press Fernwood Publishing (which focuses on the higher-education sector), Access Copyright royalties usually amount to the salary of one of its seven staffers. And at Broadview Press, Access Copyright payments total $50,000 per year. It’s clear that these royalties have a significant impact on publishers’ abilities to break even, pay their staff, and create new works.

Royalties from the schools market dried up when Access Copyright’s K–12 customers (which include provincial ministries and, in Ontario, individual school boards) walked away from their licences, a move that was prompted in part by the 2012 passing of the Copyright Modernization Act (Bill C-11). The postsecondary sector is also distancing itself from Access Copyright, with many of the country’s biggest universities opting out of collective licences. A year ago, the agency launched a lawsuit against York University to challenge its interpretation of Bill C-11’s “fair ­dealing” provision.

Some publishers have also begun to see declines in sales. “The loss of income is not limited to the loss of the Access Copyright fees,” says Broadview Press president Leslie Dema. “There are now many professors turning to coursepacks instead of anthologies for the first time – simply because the coursepacks are so much cheaper when there is no charge for copyright.”

Dema says she has been tracking sales on titles “identified as being especially sensitive in this regard, and there has been a significant downturn in unit sales on these titles in the past two years.” Sales of the second edition of The Broadview Anthology of Poetry, for example, declined by 70 per cent between 2011 and 2013.

In recent years, there has been a “spectre of change” hanging over Canada’s educational and scholarly publishers, says David Swail, president and CEO of McGraw-Hill Ryerson, where sales in the K–12 market declined by 27 per cent in 2013. “It’s not simply the short-term pain of Access Copyright payments being gone, it’s the longer term prospects of a significant decline in sales of original works that I think concerns all of us.”

For its part, the Association of Universities and Colleges of Canada has encouraged members to set up internal copyright offices, but publishers interviewed for this story say they have rarely been contacted by individual institutions in this regard. (The AUCC declined to comment.)

Wilfrid Laurier University Press publisher Brian Henderson says, “I think universities in all honesty have done their best to do due diligence. I know ours has. Many of them have created their own copyright clearance protocols.”

But he adds that there hasn’t been an increase in royalty payments directly from institutions. “The most surprising thing is that, when institutions started to cancel their contracts with Access Copyright, at that point the [AUCC] said the individual institutions would be contacting the publishers separately. Well, we don’t see any kind of increase in requests. We found that a bit strange.”

“We haven’t seen a big change yet,” says Henderson, who points out that retroactive K–12 payouts in 2012 and 2013 have helped buoy declining annual royalties. But if Access Copyright revenues crash in two years, he says, “there’s going to be serious fallout in the creator community.”