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Competition in the eBook Market

There’s been a lot of buzz on forward-looking publisher mailing lists in the past few days about Robert Darnton’s piece in the New York Review of Books, Google and the Future of Books. When it hit techmeme today, I thought it might be appropriate to share more broadly the comments I made on the Reading 2.0 list (links added, minor edits):

Darnton’s piece is eloquent, insightful…and wrong. I loved his history of the idea of reading as a driver for the enlightenment and the dream of America, his evident love for the mission of the librarian, and his worried disdain for profiteers who limit that mission, but on the subject of the Google Book Search settlement stifling competition, he can’t be paying attention to the fact that the electronic book marketplace is finally taking off!

There has never been more competition either in electronic books, or for books, in the broader electronic “republic of letters.”

It is true, perhaps, in the narrow sense, that no other party will be able to do a mass digitization project on the scale of Google’s – but that was already true. The barrier has always been the willingness to spend a lot of money for little return; the settlement doesn’t change that.

Meanwhile, the settlement provides absolutely no barrier to publishers providing their own digital copies, and this is in fact happening. At O’Reilly, we are selling digital copies of all our books through subscription services like Safari Books Online (which also includes thousands of books from other publishers), as direct downloads from our web site in pdf, mobi, and epub formats, and through emerging ebook channels like Amazon’s Kindle, Stanza, and the iPhone app store.

Safari is now O’Reilly’s #2 channel, behind only Amazon. Meanwhile, in its first month of sales, our IPhone: The Missing Manual, released as a standalone iPhone app (really, a bundle with Stanza) reached sales levels that would have made it the #1 computer book, beating all print computer books reported by Bookscan in that same period.)

In short, there’s a strong economic motive for publishers to release digital editions of their books, and to treat Google Books as only one possible channel. If the revenues generated by GBS (via services enabled by the settlement) are significant, new titles will be released to that channel by publishers. But there’s no reason why publishers will release their titles through GBS in despite of other possible channels. Google will have to prove its value, just like any other reseller.

Frankly, I’d be far more worried about Darnton’s wished-for utopia, in which the government had funded the equivalent, mandating that all publishers participate. That might well have nipped the competitive ebook landscape in the bud.

As it is, we see lots of different competing approaches to bootstrapping this market. I’d say it’s opening up very nicely!

Meanwhile, the republic of letters, and the republic of ideas, has moved beyond books in substantial ways, into dialogs such as we have here, into blogs, onto web sites and other information services. It’s alive and well! By the time I’m done, I imagine that my email correspondence and online writings would fill fifty volumes, just as did the physical letter writings of Franklin, Jefferson, Rousseau and Voltaire that Darnton rhapsodizes. If only my writings (and those of hundreds of millions of others) were so worth preserving!

This is not to say that there aren’t serious concerns with the Google Book settlement. James Grimmelman wrote a fantastic piece back in November, Principles and Recommendations for the Google Book Search Settlement, that should be required reading for anyone trying to understand just what the settlement means and how it could be improved upon:

Summary of principles and recommendations (hyperlinks take you back to the section of the document that discusses them)

  • P0: The settlement should be approved
    • R0: Approve the settlement.
  • P1: The Registry poses an antitrust problem
    • R1: Put library and reader representatives on the Registry’s board.
    • R2: Require the Registry to sign an antitrust consent decree.
    • R3: Give future authors and publishers the same deal as current ones.
  • P2 If it didn’t already, Google poses an antitrust problem
    • R4: Strike the most-favored-nations clause.
    • R5: Allow Google’s competitors to offer the same services the settlement allows Google to offer, with the same obligations.
    • R6: Authorize the Registry to negotiate on copyright owners’ behalf with Google’s competitors.
  • P3: Enforce reasonable consumer-protection standards
    • R7: Prohibit Google from price discriminating in individual book sales.
    • R8: Insert strict guarantees of reader privacy.
    • R9: Protect readers from being asked to waive their rights as a condition of access.
  • P4: Make the public goods generated by the project truly public
    • R10: Require that Google’s database of in-print/out-of-print information be made public.
    • R11: Require that the Registry’s database of copyright owner information be made public.
    • R12: Require the use of standard APIs, open data formats, and (for metadata) unrestricted access.
  • P5: Require accountability and transparency
    • R13: Require that Google inform the public when it excludes a book for editorial reasons.
    • R14: Tighten up the definition of “non-editorial reasons” for excluding a book.
    • R15: Allow any institution ready, willing, and able to participate in scanning books to do so.

I’d add to those recommendations one more: book search should work like web search. That is, because of the powers given to Google under this settlement, Google searches should be required to present and rank results from all electronic copies of books that are available online, not giving preference to the copies in their own archives.

I stand by my assertion that Google Book Search is good for publishers, authors, and the reading public. While the settlement does give Google what seems to be unprecedented power over the market for out-of-print but not out-of-copyright books, I’m not sure that market matters all that much to publishers, and it matters a LOT to the public. And in any event:

  1. If there is significant value to be derived from these “under copyright but out of print” books, GBS will bring that value to the surface, and will then get those works on the radar of those who own those rights (if those rightsholders still exist.) Those parties can then start to exploit those rights through other available channels. 
  2. If there is no rights-holder to be found, we’re no worse off than we were before, since there was no way of recognizing that economic value anyway. So the GBS settlement is worse, say, than just reducing the length of copyright, or requiring regular re-registration to keep books in copyright, letting those that are orphaned go more quickly into the public domain, but it’s not worse than the situation before the settlement, in which no one but google was spending the money to digitize these works anyway.

There are no fewer incentives to digitize valuable works than there were before, and one can argue that GBS will bring to light works that will then become available to competing digital channels in ways that wouldn’t have happened without the settlement.

 

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  • http://www.mymeemz.com Alex Tolley

    Tim,
    I’m not clear what the significance of the availability of eBooks has to the argument. I will agree that eBooks should theoretically improve access from a “long tail” perspective. However, they are currently produced for recent works and are relatively expensive. So I don’t see how they provide competition for most of the Google digital works. Even should they be produced for more works, their current pricing (and DRM) reduces their economic availability. If we replace “eBook” with “print on demand”, then it seems clear that unless they are printed at very low prices, they provide little competition for Google.

    In the area of knowledge that interests me, scientific papers or articles are extremely expensive to buy. To purchase a single article in Nature costs $32, while the whole magazine costs a fraction of this. Clearly this is not a price that is being set on economic grounds, nor for knowledge dissemination, but rather what Nature believes the market will bear.

  • http://www.potentreads.com Zachary SPencer

    The ability to search and find information in a piece of literature or a manual is an incredible tool.

    I do agree that Google should not be putting preference on the books in their local archive vs. books on other sites archives.

    The problem I see is that it’s not terribly easy to put together an algorhythm for rating book value.

    It is possible, for instance, to weight it based upon reviews on amazon I suppose, but then the very fact that amazon reviews weight google book search results could result in an increase in fraudulent or otherwise useless ratings.

  • http://cyberlaw.stanford.edu/blog/ryan-calo Ryan Calo

    Tim,

    I want to connect up the privacy angle. Moving book browsing and buying online already creates a digital trail where there was none. If Google emerges as the only player in this space, it’s privacy practices would govern by default. Were there competition, however, another provider might offer something tantamount to anonymous browsing or a cash purchase for those of us who care about such things. Cheers,

    Ryan

  • http://techvideoblog.com Charbax

    I think the solution should be like this:

    - Obama calls Google up and they arrange for a basic subscription fee that gives access to all digitized books, in and out of copyright. With opt-out option for all rights holders. That basic subscription fee may be around $5 per month. Access to all the books would be without DRM, the rights holders can if they insist opt to use DRM, but by default all books should be without.

    - Later Obama and Google should figure out to pay writers though taxes. If everyone pays an average of $5 per month, we would have enough mone not only to pay all writers, bloggers, journalists, there would be enough money right there for paing for all music, movies and TV productions. This would set a whole new opening of the art creation process, removing all the commercial aspects of it. Giving control back to the artist.

    - Artists should get paid by popularity and quality of their works. Measures quite simply using server statistics, file playback logs (voluntary last.fm scrobbler like plugins installed everywhere) and using a ratings system (Love/Block, just like Last.fm).

    What needs to happen as soon as possible. Google needs to release a kind of Android platform for E-Ink devices. We need a $100 pocketable E-Ink ebook reader hardware available worldwide as soon as possible. With built-in HSDPA, WiFi, 700mhz free wireless broadband. With wacom or other touchscreen technology for easy navigation and for note taking. Including collaborative note taking and commenting for all texts.

  • Falafulu Fisi

    Alex said…
    To purchase a single article in Nature costs $32

    Your local university library is always there, should you wish to go there and photocopy the specific article you want for free. Almost all academic research articles are available in bound book at universities/technical institutes.

    The other option, is that you can track down a (co)author’s web contact by Googling his/her (their) name/s, and request directly a free copy of his/her paper.

    I’ve never bought a single published research article from the publisher’s site, but I always track authors via Google and request a free PDF copy. I always get sent a free copy of the requested paper at about 95% of the time. About 5% of the time, my request is being turned down (on the basis that I should buy a copy from the publisher – which is understandable). When a request is being turned down, then my option is to go to my local University library and try to dig for the specific journal that the article I am interested in is being published so I can photocopy.

    The only downside to photocopying from University Library is if the article is new (just recently being published and available online), the library usually gets its own bound copy of the journal after some months later, where it varies from a month to 3 months.

  • http://www.mymeemz.com Alex Tolley

    Falafulu Fisi – Local libraries stack relatively few journals and they are taking fewer journals over time as budgets are restricted. University libraries are increasingly going over to electronic access for their students which means the general public has no access there either. Access to almost any library, scholarly or not is not universal to everyone. Large libraries like the New York public library, or the Library of Congress are not accessible to any but a small fraction of the US population and a vanishingly small fraction of the global population.

    The whole point of electronic documents is to make access universal and instantly on-demand. Why should scientific journal papers be the exception, held within silo, exposed only by begging or high fees?

  • http://www.BenYehudaPress.com Larry Yudelson

    While we’re asking Obama to intervene:

    The Google settlement offers the opportunity to help writers and publishers by modifying the first sale doctrine.

    With Google cataloging the rights owners of all titles, and with a small handful of firms providing the bulk of used book sales (hello, Amazon!), it would be feasible for Congress to require that a $2 copyright fee be added to each used book sale. This fee would go to the publishers, as registered with Google, who are contractually obligated to share it with the writers.

    There’s no reason that used book sales that enrich the post office shouldn’t also enrich the writer. Let’s make this a lobbying priority.

  • http://www.publicdomainreprints.org Yakov Shafranovich

    Tim,

    Google has already started making moves with their public domain material. They just changed the guidelines for the use of PDF downloads to prohibit anyone from rehosting the PDFs and reprinting them:


    “>
    http://books.google.com/support/bin/answer.py?answer=44667

    The Internet Archive is currently hosting copies of over 500,000 of Google Book Search public domain books here:

    http://www.archive.org/details/googlebooks

    More info here:

    http://www.shaftek.org/blog/2009/01/30/change-in-google-book-search-guidelines-for-public-domain-books/

  • tickert

    The ebooks aren’t really meant to match the print book (since they need to “reflow” for different screen sizes – http://www.ebook-search-queen.com/ ), though if you view the PDF version in Adobe Reader it will match the print version.