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.

tags: , , ,