Category Archives: E-book Industry (news)

“With a Heavy Heart,” US Slaps Internet Conference Partners in Face

“It is clear that the world community is a crossroads in its view of the Internet and its relationship to society in the coming century,” said Terry Kramer, leader of the American delegation to a global treaty conference on telecommunications held in Dubai.  Then, after uttering this lofty declaration, Kramer refused to sign the treaty and his delegation boycotted the closing ceremony.  We don’t know what was served at the ceremony but the Americans left the other attendees with generous portions of egg on their faces.

The Americans bolted because they perceived that the conference’s resolutions, approved by 89 of the 144 nations, represented a threat to Internet freedom.  Yet, as the New York Times‘s Eric Pfanner points out, “Anyone reading the treaty… might be puzzled by these assertions. ‘Internet’ does not appear anywhere in the 10-page text, which deals mostly with matters like the fees that telecommunications networks should charge one another for connecting calls across borders. After being excised from the pact at United States insistence, the I-word was consigned to a soft-pedaled resolution that is attached to the treaty.

“The first paragraph of the treaty,” Pfanner writes, states that  “’These regulations do not address the content-related aspects of telecommunications.’ That convoluted phrasing was understood by all parties to refer to the Internet, delegates said, but without referring to it by name so no one could call it an Internet treaty.”  The stated goal of the conference was to “narrow the digital divide” and make the Internet available to “more of the 4.5 billion people around the world who remain offline,” says Pfanner.

With unctuous hypocrisy Kramer delivered this slap in the face “with a heavy heart,” but to some it was more like a heavy hand, and though Pfanner doesn’t say so in so many words, it’s clear that the strings controlling that hand were manipulated by big media companies whose paranoid terror of censorship overrides every consideration of regulation, good will or good faith.

Once again – we’re thinking of our refusal to ratify the Kyoto environmental protocol – the United States has blown a huge opportunity to be a light unto the nations.  Shame!

Details in Message, if Murky, From U.S. to the World by Eric Pfanner

Richard Curtis
This blog post was originally published in Digital World as US Plays TeleTreaty Partners for Suckers

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Print/E-book Bundles on the Horizon?

Michael Clarke, an executive at Silverchair Information Systems and a passionate music lover, is torn between vinyl and digital – squarely split down the middle. Vinyl to him means warm sound, beautiful packaging, tactility and the special rituals of opening record jackets, reading the copy, placing the record on a turntable and lowering the needle on it. Against these advantages he weighs only one for digital music: convenience. But that one completely balances the scales.

But Michael Clarke wonders why he has to choose. Why can’t he have both? Why can’t he buy the record and get the download too – at no extra cost? It’s not unprecedented. Blogging in The Solitary Kitchen, he writes : “What indie rock bands have figured out is that the purchase of music does not have to be an either/or proposition. They don’t make their customers choose between analog or digital. Whenever you buy a record from just about any indie band, it comes with either a CD or with a card that contains a URL and a download code so you can get a digital copy at no additional cost.”

Clarke doesn’t use the word, but what he’s talking about is bundling, and we think it’s the next big step in the evolution of the book business. We also think it’s the next war zone.

Bundling is an age-old merchandising technique in which customers are offered a discount if they purchase two related products. In the case of books, it’s a combo of two formats, print edition and e-book. Though the technical barriers to delivering both in one transaction are coming down, the real issue is how much to charge for the bundle. A little test we gave readers a few years ago will give you a sense of how challenging the concept is:

When you purchase a print book you should be able to get the e-book for…

a) the full combined retail prices of print and e-book editions
b) an additional 50% of the retail price of the print edition
c) an additional 25% of the retail price of the print edition
d) $1.00 more than the retail price of the print edition
e) free

The choices aren’t just economic but philosophical, reflecting just how aggressive a publisher wants to be and the various thresholds at which the publisher believes consumer resistance will melt. A good argument can be made for each, and as the bundling issue warms up you can expect to hear them all endlessly debated.

The time will soon come when publishers will have to choose one of the above strategies and put it into effect. Misjudging consumer attitudes could prove to be a big mistake and possibly a ruinous one. My own view? I strongly believe that the e-book version should be included free of charge with the purchase of the print edition. What do you think – and why?

Details in Bundling: Publishing’s Next Battleground.

Richard Curtis
This blog post was originally published on Digital Book World under the title Why Do We Have to Choose Between Print and Digital?

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Apple Corners Page-Turn Technology

The ticks are at it again

I’m really confused.  On November 16, New York Times blogger Nick Bilton reported that the US Patent Office had approved Apple’s patent on the feature that enables you to virtually turn pages on your e-reader.  But over two years ago, in August 2010, we reported that Microsoft had filed a patent application for the very same touch-screen page-turn! (See Can You Be Sued for Turning a Page?) What happened to Microsoft’s application? Did the Patent Office misplace it?  Did Apple buy Microsoft out?  Did Apple do some sort of end-around on its rival?

In fact, Microsoft’s patent had some special wrinkles such as the ability to flip a lot of pages at once (y0u do it by dragging your finger down the right margin).  Another is pretty mind-blowing. “Sources other than fingers may be used to execute a page-turning gesture,” the filing stated.  Anybody got an idea what else you might use to turn an e-book page? Your nose? Your elbow? Or some other, unmentionable, body part?

Whether or not Apple’s patent provides for flipping pages with organs other than fingers, they now own the exclusive right to the page-turn, and God help you if you infringe it. But, as Bolton points out, you risk a receiving a lawyer letter from Apple for violations that border on the bizarre.  “The company has also been granted patents for an icon for music (which is a just a musical note), the glass staircase used in the company’s stores — yes, stairs, that people walk up — and for the packaging of its iPhone.”

Apple isn’t the only outfit sewing up everything but your right to breathe.  Amazon was sued  by a company claiming violation of its patent on one-click ordering online. And years before rival Barnes & Noble released the Nook, Amazon had patented the same underlying technology but conveniently didn’t reveal it until the Nook came out. (Never heard what happened to that claim.)

Back in 2010 when I reported on Microsoft’s page-turn application I said some pretty unkind things about patent lawyers. I called them “the ticks of the Digital Age. After quietly applying for a patent they set up their nest on a tree branch and patiently wait – sometimes for years – until a fat cat walks underneath their perch. Then they drop on their victim’s neck and drain its blood.”

Nothing I’ve heard since then has altered that opinion.

Richard Curtis
This blog post was originally published by Digital Book World with the title Who Owns Your Right to Turn Pages?

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Still Dotcom? That is So Twentieth Century!

Hey, webmasters, how are those loins?  Hope they’re properly girded for the explosion of domain names set to fulminate in 2013.

If you run a restaurant you can buy .eat;  If you own a store you can bid for .shop; if you run a band there’ll be .music or .song;  writers can claim .author. And even if you’re nobody in particular, just a garden variety human being, you’ll still have a special domain of your own: .you . Just want to have fun?  You can have .fun . Looking for love? You can fall in .love .

What’s going on? Well, it seems  the outfit in charge of creating and managing domain names, the Internet Corporation for Assigned Names and Numbers (ICANN  for short), may be making many more of them available for the next great leap of the Internet.  Nicole Perlroth of the New York Times, reports 1,930 applications for new extensions. Not just predictable ones (.game, .movie, .app) but some exotic ones on the red end of the spectrum – .smile, .joy, and .bot .

“Icann is expected to approve hundreds of these extensions,” writes Perlroth. But don’t expect to pick any of these for a song.  The application fee is almost $200,000.  And don’t expect to pick up .google, .nyc  or .apple at any price. Google, Amazon, and other behemoths are reaching deep into their pockets to buy them up.

But hey, you can dream. (And by the way. dream is taken .)

Details in Google Wants Love and 100 Other Things.

Richard Curtis

This blog post was originally published by Digital Book World as Every Domain But .kitchensink Coming in 2013 .

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Eminem Has a Great Rap for Romance Writers

In March 2011 we blogged about a significant legal ruling supporting a claim brought by the producers of rapper recording artist Eminem. The claim was that what Eminem’s record company called “sales” – which paid a low royalty – should actually have been calculated as license revenues, a far higher number. We predicted that the court’s interpretation would one day be applied to book contracts. That day has come in the form of a class action lawsuit against Harlequin on the very same grounds.

To understand the distinction, which in Harlequin’s case is the difference between 3-4% to authors vs. 50%, read our original posting, When is E-Royalty Not a Royalty? When 9th Circuit Court Says It Isn’t.

On October 23rd Publishers Weekly reported that Harlequin’s attorneys filed a motion to dismiss the lawsuit. The Eminem case may have a definite bearing on this one, so romance writers would be wise to keep an eye on this unfolding courtroom drama.

For a cogent analysis of the case and its implications for the book industry, read Copyright Alert: 9th Circuit Holds Digital Downloads are Licenses Not Sales by copyright authority Lloyd J. Jassin, to whom we’re indebted for bringing the case to our attention.

Richard Curtis
This blog post was originally published by Digital Book World as Fifty Percent, Four Percent, What’s the Difference?

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Can You Sell Print-Only Rights to a Major Publisher? Someone Just Did

At the dawn of the e-book revolution I made a prediction that publishers found so horrifying that one editor told me it made him sick to his stomach.

The prediction was that one day an important author would make a print-only deal with a publisher, and retain the e-book rights. “But that relegates our publishing company to a mere printer!” wailed my friend.

Yes, that’s just what it does, and I wonder if his tummy got queasy when he learned that my prophecy has come to pass. For it was recently reported in Indie Bookspot that author Bella Andre has made exactly such a deal with Mira, a division of Harlequin. And Harlequin will pay seven figures for the privilege.

Andre is creator of “The Sullivans”, which she self-published as e-books. She retains those rights to the first eight books, leaving Mira to do them in paper-only starting next year.

Over the years we’ve reported on authors who’ve been captured by publishers after hitting it big with self-published digital originals. But in those cases the publishers insisted that e-rights be included with print. In fact it is a shibboleth of the book industry that no book will be acquired unless e-rights are part and parcel of the deal.

Part of the resistance is economic common sense: unless you think you can sell a ton of printed books, it’s just not worth while letting an author reap the e-book harvest without sharing it with you.  But there’s a bigger principle at play here: pride. As my friend pointed out, print-only deals marginalize publishers to the status of printers and set a precedent that has Doomsday written all over it.

Obviously Andre is big enough to make Harlequin confident that it can sell a ton of print copies without digital rights. Will other publishers follow Mira’s lead? Maybe, but they’ll do it throwing up every step of the way.

Details in Harlequin MIRA signs up Bella Andre’s Sullivans series

Richard Curtis
This blog post was originally published in Digital Book World as E-Tail Wags P-Dog

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E-Textbooks? Sec’y of Ed Wants ‘Em, But Students Far From Sure

In 2009 California’s then-governor Arnold Schwarzenegger launched an initiative to replace printed textbooks with digital versions. He solicited feedback, and the man known as The Terminator got it in spades. Students flunked the format and wanted their paper books back.(See Not So Fast, Guv)

Since then, similar thumbs-down reactions have come in from schools in many other states, causing administrators to rethink e-book larnin’.  But that didn’t stop Education Secretary Arne Duncan from pronouncing recently that “Over the next few years, textbooks should be obsolete.”

Author Justin Hollander, an assistant professor of urban and environmental policy and planning at Tufts University, countered with an op-ed piece in the New York Times. “Such technologies certainly have their place,” he wrote. “But Secretary Duncan is threatening to light a bonfire to a tried-and-true technology — good old paper — that has been the foundation for one of the great educational systems on the planet. And while e-readers and multimedia may seem appealing, the idea of replacing an effective learning platform with a widely hyped but still unproven one is extremely dangerous.”

Details in Long Live Paper. And for an analysis of the cognitive challenges to reading e-books, see The Medium is the Screen. The Message is Distraction.
Richard Curtis
This blog post was originally published by Digital Book World as Uncle Sam Pushes E-Textbooks, But Students Push Back

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Random/Penguin Merger: Authors Don’t Have to Worry – Yet

If you’re an author or agent wondering if it will be harder or easier to sell your work; if you’re an employee of either company wondering about job security; if you’re a bookstore owner or librarian wondering about the supply of product; or if you’re simply a book lover – you’ll want to know how the merger of Random House and Penguin, announced this morning, impacts on your life. As a veteran of far too many mergers and acquisitions I can give you some sense of what’s going to happen and when.

Over the next few months – and it could be as long as a year – little or nothing will occur that anyone can see. That is because executives will be reviewing the vast and complex structures of their respective firms looking for redundancies that can be eliminated or operated more efficiently. Printers, warehouses, and a host of departments ranging from editorial to marketing, sales, publicity and accounting will be scrutinized for unnecessary duplications. The redundancies will be earmarked for elimination or consolidation.

Though it’s clear that merger discussions have been under way for some time, it’s still a long way from the exchange of stock or cash to the shutdown of an imprint or issuance of a pink slip to a sales rep. Even after redundancies have been pinpointed, the implementation of consolidations will not happen rapidly. Negotiations must take place before departments are closed and people let go. Those decisions will be delegated to middle management executives who will be consulted but who themselves may be candidates for elimination.

Because publishing is still a people business, those negotiations will be arduous and painful. And therefore the only immediate effects of the merger will be anxiety and confusion, and there will be plenty of that. Tons of time will be occupied by speculation and gossip, and there will be a great deal of maneuvering as employees try to position themselves to look indispensable and their bosses strive to save jobs. Decision-making will be hampered in a climate of uncertainty and even paranoia as editors and managers wonder if they will be second-guessed or overruled from on high by superiors privy to some secret plan.

Though those superiors may seem like a monolithic autocracy, in fact top brass at both companies will be jockeying for position and struggling for power and control. No one wants to put out on the street friends, colleagues and employees who have labored loyally for years or even decades; no one wants to serve notice to suppliers, distributors or service providers that, in the terrifyingly bland language of bosses the world over, “We have decided to go in another direction” or “Your services are no longer required” or “Your department is redundant.” So, though it may not be visible, there will be plenty of infighting on a high level, and it will eventually filter down to a human scale. But this will take time.

When it does happen, in my experience the last people to get the ax are authors. That is not necessarily because the management of publishing companies is compassionate (though I believe it is). It’s because management is mindful (thank God) that the whole apparatus of the publishing industry is fed by authors, and there is great reluctance to slaughter the geese that lay the eggs. There is also the question of shelf space. Though the two companies have a number of science fiction and romance imprints between them, for instance, closing one of them could remove critical advantages in shelf space for which publishers fight tooth and nail. When that space is given up, competitive publishers are ready to rush in to fill it, and once lost it cannot easily be regained. So, in the next, say, six months to two years or longer we will see mergers of every process and function except editorial.

In time, however, the grim reaper (old-timers referred to him as The Turk) will aim his scythe at editors, imprints and lists. Authors will then realize that where there were three or four markets there are now two or one. Aside from the human toll, injury to literature itself will be inflicted as the Darwinian struggle rewards the most commercial authors and makes it even harder for newcomers to gain a toehold. And that in turn will fuel the self-publication and alternate-publishing trend that is already well under way. The e-book and print on demand businesses, already prospering from that trend, will continue to thrive.

This is what I believe is in the cards for you. As a scarred veteran of hundreds of mergers and acquisitions I think I can make these predictions with confidence. But I also make them with a heavy heart, for the road to Random/Penguin is littered with victims too numerous to list. For some sense of the relentless march of the consolidation you can read Book Pubs Headed for the Chop-Shop?

Or if you’re from the Grin and Bear It School of Adversity, you might be interested in a bit of doggerel I contributed to the 1986 year-end issue of Publishers Weekly entitled Merger, He Wrote. Here’s an excerpt:

Thus in frenzied syncopation
Proceeds the trade’s consolidation.
Scores of famous names of yore
Have since succumbed to corporate war
Or publish books with but a semblance
Of their former independence:
Coward, Crowell, Playboy, Grosset,
Dutton, Scribner, Morrow, Fawcett,
Prentice-Hall and Dial and Dell,
Random, Bantam, NAL,
Lothrop, John Day, Quick Fox, Jove,
Lippincott, Pop Libe, and Grove,
Bobbs and World and Atheneum . . .
There’s no end to our Te Deum.
Huge conglomerates expanding
Till scarcely anyone’s left standing.

Richard Curtis

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Big Six Shift to E-Originals Places Authors – And Editors – in Jeopardy Part 2

In the first part of this article I described a fundamental shift under way in the book industry from original paperbacks to original e-books – “e-originals” in Publisher Speak – and its depressing effect on author compensation. These deals point to sharp reductions in advances and royalties and acceleration of the flight of authors from traditional to self-publication.

Impact of E-Originals on Publishers

The impact of the shift on publishers themselves is less quantifiable. It is, however, potentially far more devastating.

You can define publishers in many ways but their unique claim and strong attraction for authors is that they distribute printed books in brick and mortar stores. By forsaking the very element that defines and distinguishes them, however, publishers are at risk of becoming unmoored from the comfortable physical terrain of the book business and floating up like a balloon into the unfamiliar and turbulent stratosphere of Cloud publishing.

I say “unfamiliar” terrain. Though legacy publishers have adapted admirably to the challenge of digital publishing, few who work in the industry them have truly grasped the stupendous upheavals that come with full commitment to all-digital publishing, and who can blame them for being in denial? The truth is that a purely digital book industry is nowhere near as dependent on people, places and things as the traditional one.

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Random CEO Assures Agents: “You and Your Clients Will Benefit”

The following email was issued to the literary agent community by Marcus Dohle, CEO of Random House, in connection with the announced merger of Random and Penguin:
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To Our Literary Agents,

As you now know, our parent company Bertelsmann today signed an agreement with Pearson to combine Penguin and Random House’s respective trade-book publishing activities. In this new partnership with Penguin, we will be retaining the distinct identities of both companies’ imprints. You and your clients will benefit from an extraordinary breadth of publishing choices, and editorial talents and experience. Our Random House imprint leadership remains endowed with tremendous autonomy and financial resources to decide which books to publish, and how to publish them. We expect this to continue in our new business.

With our backlist always a priority, Random House expects the new company to offer an even deeper catalogue, alongside our newly published titles. Our investments in enhancing the supply chain and our marketing support for physical retail will be unwavering, as we continue to transition in the digital space—to seek the most diversified retail marketplace for our titles. And we will be even better positioned to support our authors’ intellectual property and copyrights.

The business combination is all ahead for us. Now, it is business as usual. Random House and Penguin remain competitors, and my colleagues and I remain focused on getting the most out of our terrific fall lists, while also working on the plans for our winter and spring title campaigns. We thank you for your many and ongoing contributions to Random House’s success, which has been a primary motivation behind Bertelsmann’s determination to extend and expand its commitment to trade publishing. We look forward to continuing our valued relationship with you at Random House, and post-closing together with Penguin.

Our goal for you and your authors is at the heart of everything we do: to publish the content you entrust us with for everyone, everywhere, in every format, and on every platform.

All my best,
(Signed) Marcus Dohle

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