Globalization and Internationalization in Publishing1

Rowland Lorimer Eleanor O'Donnell Canadian Centre for Studies in Publishing Simon Fraser University
Abstract: The motive force behind the global production and distribution of media products is to be found in a translation of basic human rights into free flow of information doctrine and a variety of associated legal and policy provisions. The workings of these mechanisms can be seen in the form of evolving publishing activities in Eastern Europe. On the other hand, a subdominant trend towards international exchange of culturally distinctive work can also be defined and found in Eastern Europe. Both trends have implications for Canadian publishers. Rsum: On peut trouver la force motrice derrire la production globale et la distribution des produits mdiatiques dans un traduction des droits fondamentaux de la personne en une doctrine de la libre circulation de l'information et dans une varit de dispositions lgales et de politiques associes. On peut observer l'action de ces mcanismes dans l'volution des activits de l'dition en Europe de l'Est. Par ailleurs, on peut galement dfinir et trouver en Europe de l'Est une tendance sous-dominante vers l'change d'oeuvres culturellement distinctes. Les deux tendances ont des implications pour les diteurs canadiens.

Introduction
The international circulation of information is arguably rooted in the Universal Declaration of Human Rights which states: ``Everyone has the right to freedom of opinion and expression; this right includes freedom to hold opinions without interference and to seek, receive and impart information and ideas through any media and regardless of frontiers'' (Article 19; emphasis added). Three verbs, to seek, receive, and impart, are significant. The logic of the sequence is easy to see. One must be free to seek out information. Having identified its existence and place, one must then be free to receive it. Having gained access one must then to be free to impart it to others. In a human context and logically speaking, the matter appears to be dealt with unambiguously and thoroughly. However, in the context of the publishing and other nationally-based and organized media industries seeking to extend their markets the matter is more complex.

Media industries and specifically publishing industries are undergoing major changes along with other industrial activities. In the main the communications industries are being subjected to globalization. By globalization we mean that the markets for already produced media products -- film, video, television programs, sound recordings, books, magazines, newspapers -- are being extended from certain centres in developed countries to other developed and developing countries. At the same time a subdominant form of international media operations that addresses world audiences which has long existed is continuing. This form of operations is termed internationalization. Internationalization can be defined as trade in media products made for national or interest-community audiences between media producers located in different nations. (See also Canada, 1987.) The purposes of this paper are three. The first is to examine the mechanisms facilitating the dominant trend towards globalization in publishing and to take note of events in Eastern Europe as an illustration of the various ways in which globalization is facilitated and takes place. The second is to examine the mechanisms of and efforts at facilitation of internationalization. The third is to consider the implications of both globalization and internationalization for Canadian publishers.

Globalization
Four major factors can be identified as critical to the global distribution and consumption of centrally produced media products -- here called globalization. They are content; language; entrepreneurship and management; and law, policy, and market organization. This review will touch on all four factors and place major emphasis on the contribution of law, policy, and market organization to globalization. According to one view, based on content the value of many cultural products deteriorates the further they move from their source. As Hoskins & Mirus (1988) have noted, there exists what might be called a cultural discount. By this they mean that the more foreign the content of a cultural product seems, the less appealing it will be to an audience. However, not all categories of content are equally vulnerable to cultural discount. Scientific information travels without extensive deterioration between scientific communities, wherever they might be situated. The beginnings of Robert Maxwell's communication empire are to be found in the lucrative movement of scientific information out of Germany and the circulation of scientific information around the world (Bower, 1989). Shakespeare also travels well as does much of philosophy and a certain amount of other scholarly information. Military information may gain considerable value as it travels. Culturally oriented information is also differentially vulnerable to cultural discount. In the same way that many people love to know the

activities of the royals, the rich, and the powerful, so newspapers around the world are filled with news and commentary about the reigning empire, the United States of America. The average French citizen knows a great deal more about the U.S. than, say, the strivings of Quebec to form a French-language state in North America. In other words, there is a hierarchical order of newsworthiness amongst nations, modified not only by the priorities of the global newsgathering agencies, but also modified somewhat by other dimensions such as a shared language, history or culture. Religious and philosophical ruminations also travel well. Romance, adventure, and spying are fairly immune to cultural discount. Stylistics help to carry literature from its particular setting to far flung audiences. There are also metropolis-hinterland dynamics. In short, certain combinations of elements work well while others do not. A wellwritten novel or short story set in New York sells better than one set in Biggar, Saskatchewan. However, religious revelation seems to combine well with out-of-the-way settings. In short, content is important and the basis of its impact is multidimensional. Even more obvious than content as a facilitator of globalization is the language of the media product. English packs a triple whammy. First, it is the dominant language of the world particularly of business and science. Second, it is the dominant second language for many, and in countries such as India, it is the lingua franca of the upper classes. In contrast, while the numbers of those who speak Chinese may equal English speakers, few others speak or read Chinese as a second language. Third, much more literature of all kinds, e.g., creative, scientific, humanistic or social scientific, is available in English in a timely fashion than in any other language, English having been the dominant language for some time. As a consequence of these language dynamics, media products that begin their careers in English have a significant head start, both in terms of actual numbers of potential consumers and in terms of the likelihood of getting translated. Having achieved the dominance that it has, English has become very difficult to dislodge as an international language. Perhaps the most often cited factor contributing to globalization is entrepreneurship and management. Since World War II, a variety of individuals and corporations have ascended to dominant positions in the global production and distribution of media products. These companies include, Time/Warner, Bertelsmann, Rupert Murdoch, Robert Maxwell, Robert Hersant, the Alex Springer Group, Silvio Berlusconi, the Thomson Corporation, Sony, Itoh, Matsushita, the Newhouse family, and so on. The activities of the late Robert Maxwell and the collapse of his empire following his death is a good case in point. Tom Bower's 1989 biography of Maxwell illustrates how an entrepreneur with a notorious management record could gain access

to immense wealth courtesy of the large and merchant banks, play with it as if it were his own, hide a certain amount of his financial dealings in Liechtenstein where they were immune from the prying eyes of even his own bankers, make unsecured borrowings of hundreds of millions from his employees pensions funds, and create a house of cards the vulnerability of which was always somewhat apparent but began to be revealed after his death. While the building of global corporations takes enormous determination and risk-taking, together with the resources to hire and lead battalions of accountants and lawyers, it is arguable that it takes genius. If Maxwell can be used as an example, it certainly does not take sound management. A more significant distinguishing feature of these companies is that they play nurturant legal, political, banking, and market systems for every inch they will give. These available mechanisms constitute a fourth, most critical, factor to efforts at globalization. Law, policy, and market organization, combine to form a different kind of facilitating framework for globalization. Beginning with a foundation in free speech and through a complexity of mechanisms, the global distribution of manufactured information and cultural products is actively promoted and made possible. Globalization is an outgrowth of free flow of information doctrine which has been put forward as a translation of Article 19 of the Universal Declaration of Human Rights into practice. Free flow doctrine argues for the removal of any impediments to the flow of information (especially information products). Accordingly, impediments to seeking out, receiving, and imparting information to others information should be removed. In theory and taken at face value, the principle of free flow of information seems able to encourage the flow of information about everything from anywhere to everywhere. It also appears that such flow would address the rights to seek, receive, and impart information. In practice, free flow of information has come to stand for the right of information producers to have access to markets everywhere in the world without interference, particularly as information crosses political boundaries. The crux of the problem is that such information (product) competes with the information and perspectives that are necessary to articulate and maintain a community. That competition is played out in terms of newspaper space, media time, the consciousness of individuals and, not insignificantly, the advertising dollars that support such activities. In competing for such information resources, information flow from other countries diminishes the ready availability of community information and threatens the maintenance of the distinctive attributes of community, especially when the community is poor and barely able to produce and distribute the information necessary to run itself. In short, in stressing the individual's right to ``receive'' information from any

source, free flow doctrine puts at risk the ability of a society or culture to communicate with its members (Unesco, 1980, p. 137). The inadequacy of free flow doctrine to encompass fully Article 19 is further exacerbated by at least two other legal practices. One such practice is the treatment of corporations in law as individuals. Like individuals, corporations have the right to seek, receive, and impart information. However, corporations have a great deal more power than do individuals not only in the sense that they enjoy individual rights while maintaining limited liability, but also in the sense that they can accumulate and apply more resources to their interests than can most individuals. They can talk louder. They can also talk longer. Corporations are further aided in asserting their rights by another accepted element of international law. Through law, corporations are allowed to live on, expanding, and growing through many generations: people die. One particular manifestation of free flow doctrine is transborder data flow. Credit card companies, banks, insurance companies, all types of manufacturing and virtually all politics and business could not operate without the ability to transmit information across national boundaries. The difficulty arises when information can be given a value. Thus, if information is collected on the consumer behaviour of Italians in response to a direct mail campaign, that information has obvious value for following campaigns. It is both a record of sales and research for future campaigns. If exported from Italy, say, to a central computer in the U.S., what duties should be paid? If analyzed while out of the country is it legal for foreigners to provide such a service for business operations in Italy? Obviously, the freedom to move information as one likes serves the interests of large corporations engaged in such activities. But what then of the American, Turk, or the Nigerian computer analyst who moves to Italy to perform the same job for a number of small companies and who cannot obtain a work permit? Not only are such situations unfair to him or her, they are also unfair to small as opposed to large business. In overview, the emphasis and interpretation of the free flow doctrine on the right of individuals to receive information has best represented the interests of information producers -- companies and nations alike. The opposite to free flow is balanced flow that would take into account both individuals and collectivities. This doctrine would have information exchanged by societies and individuals in roughly equal measure with equal emphasis placed on ``seeking, imparting and receiving'' (Unesco, 1980, p. 137). National laws dealing with the permitted identity of company owners are also crucial to global operations. At the present time in Canada, trade laws allow U.S. television signals to be beamed into Canada and distributed by Canadian cable companies or to be picked up by individuals on antennae. Also, magazines and newspapers can be

shipped across the border as can records and films. Yet, with some notable exceptions, Section 19 of the Income Tax Act of Canada effectively prevents foreigners from owning more than 25% of a newspaper or magazine publishing enterprise that operates in the Canadian market. In broadcasting, 80% of the stock of broadcasting stations must be held by Canadians yet border stations are free to beam their signals into Canada. In addition, for several years foreigners were unable to purchase book publishing and distributing operations that were currently owned by Canadians. In 1992 that restriction was weakened but foreigners are still only able to purchase such companies if the alternative is that they will otherwise disappear. Foreigners are able to buy companies already owned by non-Canadians and publish exactly the same books they might have after purchasing a Canadian-owned operation. Similarly, they can publish these same books in the U.S. and then freely sell them in Canada. In short, while the existence of restrictions on foreign ownership and foreign-owned operations does not prevent foreign participation in domestic markets, it may limit the flexibility of global companies to manufacture and distribute global products within the control of a single company. Certain monetary factors are significant to globalization. If local currency is not convertible into ``international'' currency, globalization is slowed. The necessity to accept goods as countertrade adds a complication to the transaction that mires the exporter considerably. Another relevant currency-related phenomenon also exists. Commonly, the global giants will simultaneously borrow money from 150 to 200 banks at a time in many countries around the world. Generally speaking, even if those funds are not provided in one currency, the company will wish to have the freedom to deploy the funds wherever it wishes whatever its needs. Unimpeded currency conversion is therefore crucial. Similarly, if the movement of currency is restricted, as it was in the years prior to 1979 in Britain, trade is severely hampered. Foreign investment cannot be made: subsidiary operations cannot be founded to put the necessary people in place to assure export penetration of foreign markets. The abolishing of foreign exchange controls constituted what the Financial Times called one of the greatest turning points in Britain's post-war economic history. By 1990, in terms of net foreign assets, Britain ranked third in the world after Japan and West Germany (Time, May 21, 1990, p. 44). The freeing of capital affects national fiscal policies. For non-dominant nations to attract capital, the value of its currency must be stable and interest rates must offer a premium to encourage capital flows. Communities attempting to attract investment regularly find themselves competing with others by offering outright grants, tax holidays, infrastructural development specific to the firm, anti-union legislation, low-wage guarantees, relaxed health, safety and

environmental standards, and bond issues to raise investment on behalf of the firm. Increasingly, investment incentives are tailored to the specific requirements of the global corporation, which is able to pull up stakes and move to more favourable investment climates, if necessary. Global operations cannot take place without a necessary infrastructure. McDonald's could not sell hamburgers in Moscow without reliable supplies of beef. Newspapers cannot be beamed in via satellite and printed in a country that has no electricity, computers, newsprint, ink, or skilled labour. Print media products cannot be sold if transportation fuel is unavailable or decent roads do not exist. Direct public sector support is also both significant and extensive in the information industries. Looked at historically, the generation of large profits through global communications and publishing activities has been facilitated by the public underwriting of significant costs of both the development and operation of information production and distribution systems. Following massive investment in literacy training, the history of public investment in communication includes roads, postal services, railway investment, telegraph, telephone, radio, television, microwave transmission, and satellites. Outright grants, land grants, tax incentives, and the formation of public companies represent an enormous socialization of costs. In certain places and at certain times these public investments have been followed by bargain basement sales and hence the privatization of profits. Free trade agreements are yet another mechanism that have both legal and psychological effects. Legally they allow a freer flow of goods across borders both directly and through such means as the harmonization of value-added tax rates and collections and the devolution of powers from strong central or federal governments to a multitude of bodies at the local and supranational level. Usually free trade agreements also provide for mechanisms meant to be efficient in preventing or removing trade barriers. Psychologically they lead consumers to believe that they need not support business activities in and products of their own country. They encourage an international mind-set in consumer behaviour. In information products, free trade allows for a more extensive exploitation of intellectual property by extending -- in practice if not in theory -- territorial applicability of copyright. The attempt of one nation to assist production in film, video, sound, or print for cultural reasons can be objected to by a free trade partner for economic reasons: the presence of such products, no matter what their rationale, interferes with maximum exploitation of markets by those claiming humbly enough only to be entertainment producers. Copyright law itself organizes the creation and exploitation of intellectual property within the capitalist system. Copyright law can encourage creativity through economic reward by allowing an author

to benefit from the fruits of his or her intellectual labours. An author is able to claim ownership over the expression of the ideas presented, exploit that ownership by licensing others to print and distribute the created work; and divide that ownership in any way that the creator/owner sees fit; by time, by edition, by territory, and so forth. Recent trends in copyright legislation have been aimed at strengthening the potential benefits to creators. In fact, such changes have been more effective in strengthening the monopoly position of the publisher as the effective exploiter of intellectual property. This strengthened monopoly position encourages producing nations to seek to bolster their already dominant position and ensure that it is not undermined by international behaviour of other nations, e.g., through allowing piracy, insistence on distribution by nationals, or small nations passing copyright laws that enshrine territoriality by insisting on national rights being separated from other nations in their copyright laws. (The EC is attempting to banish territoriality.) Also, in a growing number of countries authors and publishers are permitted to form copyright collectives and to enter into blanket licensing arrangements with institutions such as libraries, schools, businesses, and governments to allow photocopying or even writing a poem on the blackboard. In overview, the following factors combine to facilitate global operations. They are: the acceptance of free flow doctrine, the unimpeded flow of information across borders, laws allowing foreign ownership and control, banking laws facilitating currency conversion and capital movement, infrastructure development, direct public sector support, free trade agreements, and particular copyright laws.

The Impact of Global-Friendly Mechanisms in Eastern Europe

The collapse of communist regimes in Eastern Europe has opened the doors to capitalism, especially global capitalism in all industries including publishing. This unique event has made the dynamics of globalization easily visible. Some significant publishing events in 1990 are detailed below. The conversion of full publishing operations into distribution mechanisms represents pure market extension. When distribution replaces full publishing, the result is massive job losses as well as a loss of voice. Cases: (1) In East Germany, West German publishers Axel Springer, Bauer, Gruner and Jahr, and Burda formed a joint venture to sell advertising on East German radio and television broadcasts and used the profits to bring in West German magazines and newspapers to East Germany (Advertising Age, February 19, 1990, p. 36). (2) Likewise, Bertelsmann has had considerable immediate success in signing up East Germans for their book clubs (35,000 in one week in

Dresden) (Kaufman, 1990). (3) In Poland the unprofitable distribution company, Ruch, that controlled the vast majority of news kiosks, fired half of its 700 employees and has been promoting the organization as a distribution network for Western publishers (The Bookseller, October 12, 1990, p. 1067). (4) In Hungary both Bantam Books and Simon and Shuster have a distribution and translation agreement with the private sector Hungarian company, Novotrade. Former migr publishers are bringing their wares in carloads directly to East German bookstores (Kaufman, 1990, p. 14). Direct acquisitions wrest financial control, profits, and editorial decision-making and jobs from nationals, paving the way for further exploitation of already existing editorial investment made by the parent company. Cases: (1) In Hungary, before his death Maxwell acquired a colour printing plant and interests in the leading morning paper of Budapest Magyar Hirlap, and an evening paper, Esti Hirlap. After taking over the former paper he fired 30 journalists. (2) Also in Hungary, Murdoch purchased 50% control of two newspapers, Mai Nap and Reform, the latter with an estimated circulation of 430,000 and an estimated readership of 1.5 million. Sample front pages resembled Murdoch's other scandal sheets. Mai Nap also announced plans to acquire the country's first national commercial private TV channel (Advertising Age, May 14, 1990, p. 37f.). (3) The Axel Springer group bought seven of Hungary's 19 provincial dailies (World Press Freedom Committee, 1990, p. 5). Advertising serves two roles. It transforms the operation of an information vehicle fundamentally. The enterprise becomes a vehicle for the sale of its audience to advertisers. Secondly, advertising provides advantages to large over small firms in the market. Cases: (1) There is almost a universal trend towards the acceptance of advertising in publications and broadcasting in Eastern Europe including the on-again off-again Pravda. Joint ventures shift financial control and profits out-of-country but may leave some editorial control in the country of publication. Most significantly, they often allow foreign companies to operate in territories whose national or other laws would normally prohibit them to do so. Cases: (1) Business in the USSR, one such joint venture between the Soviet publishing giant, Progress, the Moscow Innovation Bank, and controlling-interest-holder and French-media owner, Robert Hersant, has a print run of 100,000 in Russian and 40,000 in English with U.S. subscriptions running at 10,000. It also has a high cover price of 5 rubles in the Soviet Union and U.S.$8 in the West. (2) A subsidiary of Time/Warner, Lorimar Telepictures, entered into a production project with Berlusconi of Italy, Leo Kirch of Germany, and Maxwell of Britain (Bagdikian, 1989, p. 815). (3) Soviet official reports showed some 30 joint ventures were operating in publishing in 1990 (Publishers Weekly, January 11, 1991). (4) Burda, in a joint venture with German printer,

Ferrostaal, and a Russian company, Vneshtorgizdat translated the West German women's fashion magazine, Burda Moden, into Russian. The initial printing was 125,000. By February 1989 it had reached 1,050,000 (Abramson, 1989, p. 144). In the former Communist world, censorship was aimed at political commentary, however it also encompassed pornography. The Western world is, of course, replete with pornography much of the softer kind published by global publishers. Cases: (1) In Poland since the lifting of state censorship the market has been inundated with pornography of all kinds. (2) ``What sells best in Hungary today? Politics and pornography.'' Penthouse has entered into a joint venture with a Hungarian company: Playboy has its own Hungarian edition (Weyr, 1990, p. 21). Public sector investment socializes costs and immediately paves the way for the purchase and extensive distribution of Western media products sometimes sponsored by Western corporations attempting to gain a foothold in a new market, and later the possible privatization of media enterprises. Case: (1) The European Investment Bank has lent Hungary ECU 80 million for the improvement of its telecommunications network. The same bank has also invested heavily in telecommunications improvements in Western Europe is such countries as Spain, Ireland, Denmark, and France. By 1995 it is expected that East Germany will have the most sophisticated telecommunications system in all of Europe. The shifting of printing operations represents an attempt to lower production and labour costs by moving to regions with lower wage scales and fewer controls. Electronic information transfer across borders (transborder data flow) allows editorial and production headquarters to be separated. Cases: Both Maxwell and Murdoch have been involved in shifting operations to the cheap labour markets of Eastern Europe. In the name of assistance various Western governments have been active in providing expertise, equipment, and products into the disintegrating Eastern European economies. No doubt the final recipients of Western assistance appreciate it. The difficulty is that such ``donations'' are arguably dumping from the point of view of publishers in the recipient country and in some cases contribute to the demise of their operations. The special situation of U.S. publishers is notable. Section 170(e)(3) of the U.S. Internal Revenue Code allows publishers to claim twice the production cost of an unsold book in tax deductions if it is donated to charity instead of being pulped or otherwise sold. Cases: (1) and (2) Training has come from Britain and the U.S. (Zilper, 1991, p. 47); (3) equipment from Canada (CBC, The House, December 7, 1991); (4) and (5) vocational manuals from Germany and France (Lottman, 1991, p. S13); and (6) $10 million of

books and educational materials from the U.S. between 1986 and 1989 (Bejger, 1990, p. 22).

Implications
The implications of these various phenomena are extensive. The space that one paper allows for their discussion is insufficient to the task. The following two interpretations are meant to provide a sense of the co-existence of starkly differing realities and the extent of the social transformation taking place around the world. On the one hand, a letter to a well-known West German writer from an East German publishing company is not atypical and tells a sad tale of social disruption ...since we wrote to you last our financial situation has become calamitous. No orders are coming forth from booksellers, not even for titles that in the past were sure sales. There is no telling how we shall fare in the process of reunification. Therefore we have decided not to enter into any new contracts for the time being....So we are suggesting postponing the contract we offered you for your latest book....We are extremely depressed by the way things have turned out and remain, with all good wishes.... (Kaufmann, 1990) On the other hand the following statement of a Time magazine executive tells a tale of riding a wave of social change and the extension of the transnational business and cultural community into both Eastern and Western Europe: ``International television will help us tremendously. I want CNN to succeed. It means there will be a more common point of view, common tastes in programming and a common European identity. The more international publications the better'' (Kogevinas, 1991).

Internationalization
While the foundation of globalization, free flow doctrine, has been put forward as a translation of Article 19 of the Universal Declaration of Human Rights, the foundations of internationalization appear to encompass Article 19 in its entirety. As noted in the introduction, internationalization can be defined quite simply as a trade in products made for national or community-based audiences between (media) producers of different nations. Internationalization depends on not only the existence of persons who create information products but also on sovereign nations managing their affairs to allow that production and domestic distribution and thus trade in information or cultural products. The contrasting situation would be one in which the country engages solely in importation. The mechanisms of internationalization differ significantly from those of globalization. The major mechanism of internationalization is firstly the existence of a domestic industry, that is, a producing community. This first mechanism is then complemented by the setting up of agency representation and the sale and licensing of rights. The

difficulty with agency representation is that it can lead either to internationalization or globalization. In contrast, the sale of rights, usually territorial copyright, is clearly internationalization. How is this so? The easiest way for a non- global firm to sell into foreign markets is to seek out an agent who is granted sole or exclusive rights to market and sell a firm's list of publications. Commonly Canadian agents purchase material at a deep discount (50 to 70%) and mark it up 20% above its selling price in the originating country. The agent imports books in anticipation of sales or as sales materialize. None of the costs of originating a title are involved. Most costs are in distribution. Agency representation is inherently unstable over the long term. If the agent sees a large market, s/he may attempt to buy the rights to selected titles to capture an increased profit and build the reputation of his or her company. On the other side, if the originating publisher sees substantial potential sales, s/he may set up a branch of his or her own operations to garner the full profit of the origination of titles. Such initiative by the agent may lead to internationalization. If the initiative is taken by the originating publisher, it tends to lead to globalization. In contrast to the many examples of globalization in Eastern Europe there are relatively few examples of what might be termed internationalization. Case: (1) Reed International Books' approach to Eastern Europe has been one of the exceptions. Reed has been selling licences to Czech and Slovak publishers with the view of setting up more substantial joint exchange ventures as those publishers become privatized. Reed has already signed one agreement to market children's books, general illustrated books, English-language teaching materials, and scientific, technical, and medical titles published by the state-owned foreign language publisher and import-export organization. In certain sectors, specifically small presses and scholarly publishing in the humanities and social sciences, this type of exchange activity is more typical. Cases: (1) In Hungary, Mundus Press, jointly owned and controlled by four Hungarian universities, has invited certain heads of Hungarian institutes of higher education to sit on its scholarly council, and is attempting to set itself up as the foreign language publisher (in French, German, and English) of all Hungarian universities and colleges. It is also attempting to become a major supplier of textbooks for all levels of education in Hungary. (2) Also in Hungary, Atlantis Press, growing out of the quarterly social science journal, Medvetnc, is setting up a fund of DM1 million to publish 15 titles a year (IASP Newsletter, February 1991). (3) The International Association of Scholarly Publishing (IASP) also reports (February 1991) that one mechanism that may assist in rights trading may be the new Paris International Book Fair with its concentration on small publishers. (4) The February 1992 IASP Newsletter reports of a meeting in New Delhi where, partly in response to a reading of a condensation of an earlier

version of this paper, motions were passed aimed at using the organization's meetings and newsletter to facilitate sales and exchanges of rights and setting up reciprocal representation agreements. (5) Interesting patterns are also emerging among some journalists. Globe and Mail journalist, Jock Ferguson (1991), has noted that he trades access to approximately 4,500 databases for the in situ expertise of 12 to 15 of his colleagues in Britain and Europe. Another mechanism that facilitates internationalization is reciprocal distribution agreements. Often foreign sales are controlled by marketing. Consumers buy what they or their friends find in bookstores and libraries or what is reviewed in their favourite periodicals. Acquisitions librarians and bookstore buyers acquire largely from known sources with chain bookstores tracking percentage sales, often by publishers and especially of mass paperbacks, within specified time frames. Part of the proposal presented to the IASP was for domestic scholarly publishers to represent small foreign scholarly or cultural presses which have publishing complementary to their own. Such representation, which could be low-cost, would not only make foreign publications more known but also serve as a quality control for the benefit of library and bookstore buyers (Lorimer, IASP Newsletter, February 1992). While in certain countries the Western media groups have moved in and have a major presence, in other countries the lifting of controls has allowed samizdat publications to flower. Such publications may form the basis for a domestic industry able to engaging in trading relations with foreign partners. Cases: (1) In Bulgaria, Literary Forum, and its sister monthly, Dossier, both publications set up to inform Bulgarians of their literary heritage, suppressed by the 43-year rule of Todor Zhivhov, were selling out their 35,000 print runs immediately. (2) In Poland the sudden eruption of street stalls in Warsaw is dramatic especially when one realizes that 50% of them are bookstalls (Headley, 1990, p. 828). In the literature comparing television imports to domestic productions -- usually imported series and domestic special productions -- it is often claimed that audience viewer and satisfaction statistics indicate that domestic productions are preferred to imports (e.g., Unesco, 1990). The claim is debatable but it does hint at the limited appeal of global products and the limited ability of global producers to tap into all markets. Many markets are simply too small to interest global publishers. As a result, considerable room is left in the marketplace for domestic importers. The value of such a position is that selection is in the hands of nationals who may have an interest in building their own culture and country by selecting Western knowledge that will help them in that task. Alternatively, some may only have interest in the importation of entertainment products that will generate revenue. Cases: (1) New versions of foreign edition licences are being tried as

are lifting rights (rights to extract content from Western publications to be inserted elsewhere) (Abramson, 1989). (2) To enhance exchanges of this sort within the European community, in 1988, the European Commission published a Green Paper dealing with the harmonization of copyrights from industrial design to publishing (Investing, Licensing & Trading Conditions Abroad, November 1990, p. 7). Finally, one of the major difficulties of survival of Eastern European and Russian publishing operations is the nature of printing technology that is presently in place. Most Soviet-made presses were designed for press runs in the hundreds of thousands. With increased variety comes smaller press runs. As Kaufman has noted (1990, p. 16), the donated and smuggled desk-top systems of the former samizdat publishers have assisted in the demise of the former state-run publishing giants.

Implications for Canadian Publishing

To oversimplify the situation in order to get to an important point, there are two types of publishers in Canada. The first type is the commercially oriented for whom the financial balance sheet is the metaphorical bottom line. The second type is the culturally oriented for whom cultural contribution -- the cultural balance sheet if you will -- is the metaphorical bottom line. This distinction does not mean that the first type of publisher cannot or does not make a cultural contribution. Nor does it mean that the second type of firm might not be profitable and large. The distinction points to two basic and fundamentally different motivations and orientations to publishing. With the exception of Le Devoir, the newspaper publishers together with the consumer and industry-oriented magazine publishers are obviously commercial in their orientation. They aim for profit, balancing advertising and subscription revenues against editorial costs while carving out and maintaining a market identity that will ensure their long-term survival. In book publishing the commercially oriented are concentrated in the foreign-owned sector which dominates the educational, reference, legal, and mass paperback markets. Within the domestically owned sector there are also those who are commercially oriented. Typically they are the larger firms who have recently been acquiring smaller presses with their fairly valuable backlists. General Publishing and Ron Besse's Canadian Publishing company come to mind. The balancing act in book publishing is not between ad and subscription revenues and editorial costs but between sales and grant revenues and editorial costs. The culturally oriented publishers are to be found amongst the ``little magazines'' and many domestically owned, usually small (below $1 million in annual sales) book publishers. They are single-entry bookkeepers; they launch as many publications as their cash flow will allow (and then some) in their chosen area of emphasis. They are driven by ideas and the contribution they can make through the

dissemination of ideas. They also keep company with larger firms such as Douglas & McIntyre, Key Porter, and McClelland & Stewart. To understand the implications of globalization and internationalization, policy must also be taken into account. Publishing policy in Canada is in turmoil and is internally inconsistent. In the name of cultural sovereignty the federal government has developed an ever-strengthening industrial policy aimed at building a profitable, domestically owned book publishing industry, while at the same time allowing an ever-weakening support for cultural titles through the Canada Council. Such a policy is misconceived on at least five counts. First, industrial priorities mixed with cultural goals have led to the support of domestic (versus foreign) ownership. Yet domestic ownership accounts less for a cultural (versus a commercial) orientation than does size of firm (Lorimer, 1990). Second, industrial priorities alone have led to a continuing emphasis on profitability. Yet profitable firms almost by definition have a commercial rather than a cultural orientation, even if they had one in an earlier stage in their development. Third, because profitability tends to be associated in the minds of policy makers with a large size -- an arguable association -large, profitable, domestically owned firms have been a particular target for support. So much is this the case that under a 1991announced federal government support program, the larger may buy out the majority of smaller firms during the five-year life of the program. Yet, the primary contributors to the publication of domestic fiction and poetry, especially by first-time authors, are the myriad of small to medium-sized, heterogeneously oriented publishing firms scattered all over the country. Fourth, cultural and commercial publishing are worlds apart particularly in their fundamental motivations as outlined above. To assume that as cultural publishers become larger and more stable they can and will become commercial publishers and not lose their cultural commitments is to make an assumption that is open to question and runs against precedent. Finally, and in partial explanation of some of the above points, the publishing of cultural titles, i.e., new authors of poetry and fiction and the addressing of social, political, cultural, and artistic issues in books, is a non-profit, subsidized enterprise in nearly every Western country, most of which have larger populations and reading publics bigger than Canada's (Lorimer, 1993). The esoterics of culture, commerce, and the politics of policy aside, there exist two quite different sets of interests in Canada's publishing community. It would be in the best interests of Canada's commercial publishers, some larger ones being the Thomson Corporation, Conrad Black's Hollinger, Maclean Hunter, Torstar, Qubecor, Tlmdia, and Southam, to be positioning themselves for globalization, arguing for it in entertainment markets, i.e., mass markets favourably disposed to the distribution of ``world'' products. To the degree that they can

protect their home territory with domestic ownership laws they, like domestic publishers of other countries, will likely do so, silently. On the other hand, it would be in the best interests of the hundreds of smaller, culturally oriented firms to be backing internationalization. They should be looking for means to encourage exchanges in creative work on their own and assisted by government. On their own they should be looking for liaisons with their counterparts in other countries. On the part of government they should be arguing for direct assistance and for public entrepreneurship aimed at the capture of economic rents on entertainment products to be applied as cross-subsidies to the production and distribution of creative, cultural work. Some other specific mechanisms that would favour internationalization would be ones that favour or at least do not place small Canadian producers at a competitive disadvantage to either larger foreign producers. These would include tax breaks; keeping postal rates low; decreasing such costs of doing business as access to capital; and not treating discretionary entertainment products in the same manner as cultural products. Probably the most self-deceiving policy is to continue to assume that industrially oriented support aimed at cultural publishers will create commercially successful, culturally oriented publishers with the capability and will to become global giants.

Notes
1 We are grateful for the contribution of Nancy Duxbury to an earlier version of this paper which was published in Canadian Issues, 14 (1991).

References
Abramson, Robert J. (1989, February). Strategic alliances with the East. Folio, pp. 143-147. Bagdikian, Ben. (1989, June 12). The lords of the global village. The Nation, pp. 805-820. Bejger, Peter. (1990, September 7). American books for Eastern Europe. Publishers Weekly, p. 22. Bower, Tom. (1989). Robert Maxwell: The outsider. London: Aurum Books. Canada, Department of Communications. (1987). Vital links: Canada's cultural industries. Ottawa: Department of Supply and Services. Ferguson, Jock. (1991). Interview video. Simon Fraser University. Headley, Gwyn. (1990, September 21). Warsaw tact. The Bookseller, pp. 827-29.

Hoskins, C., & Mirus, R. (1988). Reasons for the U.S. dominance of the international trade in television programs. Media, Culture and Society, 10(4). International Association of Scholarly Publishing. (1991, February). IASP Newsletter. Kaufman, Peter. (1990, September 7). Coming up for air. Publishers Weekly, p. 14f. Kaufmann, Walter. (1990, June 22). Another kind of censorship. The Bookseller, p. 582. Kogevinas, L. (1991, February). Quoted in World Press Journal, 2, 27. Lorimer, Rowland. (1990). The Canadian discourse on ownership of media: Reflections on national politics. ICA conference paper, Dublin. Lorimer, Rowland. (1992, February). International Association of Scholarly Publishing, IASP Newsletter. Lorimer, Rowland. (1993, forthcoming). Mass communication: A comparative perspective. Unesco. (1980). Many voices, one world (MacBride Report). Paris: Unesco. Unesco. (1990). Peter Larsen (Ed.), Import/export: International flow of television fiction (Paper No. 104). Paris: Unesco. Weyr, Thomas. (1990, January 12). Porn, politics and paper. Publishers Weekly, pp. 21-29. World Press Freedom Committee. (1990). Voices of freedom: Report of a coordination conference on news media aid projects in Central and Eastern Europe. Washington, DC: WPFC. Zilper, Nadia. (1991, May 15). The consequences of glasnost. Library Journal, pp. 44-49