VOL.69/2024.04

 

The Adoption of the Public Lending Right,
Requiring the Agreement of All Parties in the Publishing Industry

 

2022.09.05

 

An amendment of the Copyright Act proposed last April by a national assembly member of the Democratic Party of Korea, Kim Seung-Won, garnered the attention of stakeholders in the publishing industry. The amendment was about introducing the Public Lending Right (PLR) to Korea by amending the Copyright Act. The Public Lending Right is the right to be compensated for the expected loss of copyright by owners caused by book lending from libraries, and it is known as the PLR. Thirty-four EU member states adopted the right.

 

 

Copyright Act amendment gained much attention from the publishing industry’s stakeholders

 

The introduction of the PLR will have a wide range of impacts on the publishing industry, being a hot potato for stakeholders in the sector. Once the right gets recognized, copyright holders and publishers gain monetary benefits, but there are concerns about how the PLR is operated as it can lead public libraries to have a smaller budget for their operation.
In Korea, copyright owners and publishers have argued about the necessity of adopting the PLR for a few years. As a result, the national assembly held hearings in 2019 and 2022, and the relevant department, the Ministry of Culture, Sports and Tourism (MCST), propelled the adoption of the right. Nevertheless, little progress has been made on how the system will be applied since copyright owners and publishers raised the issue. The stagnant progress derives from the active resistance of libraries.
After the amendment was proposed in April, library organizations announced a statement against the PLR. In addition, while putting the Korea Library Association as the leader, relevant organizations presented a joint statement saying, “The Democratic Party of Korea must immediately stop trying to amend the Copyright Act for it harms the people’s rights to use public libraries.”

 

E-book check-out gets activated with the increase of public libraries

 

Parties who insist on introducing the PLR are mainly copyright holders and publishers. They argue that readers do not get to buy books because libraries provide books to the public for free. Especially children’s book writers have strong arguments on the matter. The writers say parents would borrow books from libraries for their children but would not purchase them.
The number of public libraries in Korea has continued to rise. In 2017, there were 1,042 public libraries and 1,208 in 2021. Korea fell behind other countries with advanced library culture, but the number of public libraries in Korea continues to grow. Many local organizations emphasize slogans, such as “the Book-reading City” and “Library 10 Minutes Away from Home.” Even an advertisement for an apartment complex says “Doe Poom A(도·품·아, an apartment complex with a library).” Likewise, the number of libraries is increasing, and citizens are more interested in using libraries, leading copyright holders and publishers to believe that book rental helped reduce book purchases.
For several years, copyright owners and publishers have strongly claimed that the PLR has to be adopted. It is because the industry faces difficulty in running a business with a smaller number of readers. According to the “Survey on the Reading Habits of Koreans” conducted in 2021, the annual reading rate, or the percentage of those who read more than one book in a year (including paper books, e-books, and audiobooks), marked 47.5%. The number was lower than 2019’s 55.7%. However, when limited to paper books, the rate in 2021 was 40.7%.

 

 

To make matters worse for the publishing industry, the COVID-19 pandemic broke out. People had to distance themselves from one another socially, and it was recommended not to go outside. As a result, offline book stores’ revenue decreased. Overall, society’s economic activities shrunk as well. Though there are differences among genres, the environment became more challenging for the publishing industry.
Another reason publishers emphasize the adoption of the PLR is the rise in e-books under the COVID-19 pandemic. Public libraries expanded e-book services to ensure that readers maintain their rights to know during the pandemic. Readers can also easily rent an e-book from libraries with their smartphones at home without visiting. For that matter, publishers are concerned that readers would buy even fewer books when such a convenient e-book rental service becomes more common.

 

Research shows that book rental has a positive impact on book sales

 

Why did Korea not adopt the PLR despite copyright holders and publishers’ concerns over book purchase decrease driven by public book lending? The main reason is that their allegations are not proven. Having no proof is the most actively quoted statement of libraries as they go against the introduction of the PLR. They say that the discussion on the introduction of the right can only start once copyright holders and publishers’ claims are proven right.
The MCST and its subordinate institutes ran two studies to review the adoption of the PLR in 2019 and released the results. The two studies both showed that the more the readers borrow, the more they purchase books, which is directly against the argument made by copyright owners and publishers.
To be specific, Korea Copyright Commission’s “Survey on Library Users’ Library Use and Book Purchase Trend” shows that the total number of borrowed books and book purchases positively correlate. Furthermore, the MCST’s “Study on the Impact of Book Lending on Publishers’ Revenue” also states, “Unlike the common notion that book rental service decreased book purchases, library use has a positive impact on book use (reading attitude) and can help boost book sales.”
However, there are limits in generalizing the impact of book rental on book sales based on only two studies. Analysis of the Korea Copyright Commission’s research on the response regarding the “Study on the Impact of Book Lending on Publishers’ Revenue” shows that books for early childhood and children had the most significant gap between ‘Less likely to buy (42.4%)’ and ‘More likely to buy (14.8%).’ In other words, many readers felt that lending early childhood and children’s books reduce sales. The study shows that the argument of children’s book writers is valid.

 

Possible reduction in libraries’ budget

 

Another reason libraries stand against the adoption of the PLR is out of the concern that it can hurt libraries’ budgets. According to the amendment, libraries become the compensation payer when the right is adopted. It means libraries must secure a certain amount of money to cover the payment in line with the PLR. Public bodies run most public libraries, meaning local governments or Offices of Education allocate the budget. Thus, allocating a separate budget for the PLR payment without affecting libraries’ budgets will be challenging.
Of course, the amendment includes a clause that says, the “Minister of MCST can cover all or part of the cost in paying for libraries.” However, the article is merely a dispositive law. Furthermore, even if the central government allocated a separate budget for libraries, it is questionable why the money must be spent on paying for the PLR. With the same amount of money, libraries can increase the book purchase budget to secure more books for the library, which can benefit the publishing industry in the long run.
Also, the PLR payment can be concentrated on publishers with best-selling authors or books, worsening economic polarization in the industry. In other words, considering how to spend the limited budget is needed before adopting the PLR.

 

 

Though it may take time, a consensus has to be reached

 

Under the current situation, every stakeholder relevant to the adoption of the PLR agrees that all publishing industry members must reach an agreement though it may take some time. The system has to fully reflect the reasons libraries are against the adoption and be meticulously designed to not reduce budgets for libraries. In addition, readers’ opinions, the most valuable view of the industry, must be heard.
Also, even if the PLR is to be adopted, there must be considerations to meet Korea’s social conditions. Countries that introduced the right each customized the system to reflect their environment. Some countries introduced the PLR through legislation or amended Copyright Act; others adopted it as a part of an administrative program. For example, the UK legislated a law on the PLR, and France amended its Copyright Act. Canada regards the right as an artist support policy and executed it as a program operated by Canada Council for the Arts.
The issues mentioned in this article are not all we need to discuss regarding the adoption of the PLR. The subject of compensation, whether the payment should be limited to copyright owners or include publishers, and compensation standards, whether it should be based on the number of borrowed books or the total volume of books in the library, are examples of considerations. In conclusion, all parties in the publishing industry should engage in the discussion and reach an agreement on the issue.

 

References
• “Study on the Impact of Book Lending on Publishers’ Revenue”, the Ministry of Culture, Sports and Tourism, 2019.
• “Survey on the Reading Habits of Koreans”, the Ministry of Culture, Sports and Tourism, 2021.
• “Survey on Library Users’ Library Use and Book Purchase Trend”, Korea Copyright Commission, 2019.
• “Basic Research on the Public Lending Right Payment”, Korea Publication Industry Promotion Agency, 2021.

 

Reference Site
• National Library Statistics System: www.libsta.go.kr/statistics/public/main
• Bill Information: likms.assembly.go.kr/bill/billDetail.do?billId=PRC_A2A2A0C1Y2O4V1B3Q4O2Z4I3S3K4H7

 

 

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Written by Song Hyun-Kyung (Journalist at the Naeil News)