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June 15 2012

Publishing News: Google's win may be Amazon's loss

Here are a few stories that caught my attention this week in the publishing space.

Google's "win-win solution" in France may leave Amazon the odd man out

GoogleLogo.pngBoth the French Publishers Association and the French Author's Association withdrew their book-scanning lawsuits against Google this week, ending six years of litigation. In an announcement, Philippe Colombet, strategic partner development manager of Google Books France, described the agreement as a "win-win solution" and explained that "publishers and authors [will] retain control over the commercial use of their books."

The "win" for Google might warrant a capital "W," however. In a post at PaidContent, Jeff John Roberts writes that the deal not only could help advance the digital publishing industry in Europe, but it also could "shape which companies gain control of the continent's fledgling e-book market." Roberts elaborates:

"According to reports in Le Figaro and publishing site ActuaLitté, the agreement does not allow the publishers to distribute the digital books through Google’s direct competitors — read: Amazon.

"What this means in practice is that Amazon may be excluded from a significant volume of content at a time when it is expanding its push into Europe with the Kindle and app store ... If the Google e-books take off, Amazon will be the odd one out as the e-books can be read directly on devices made by Sony or Barnes & Noble or through the Google Play app on Apple devices."

Roberts also has more on the details of the agreement in a separate post here.

The future of publishing has a busy schedule.
Stay up to date with Tools of Change for Publishing events, publications, research and resources. Visit us at oreilly.com/toc.

Espresso Book Machine offers solutions for retailers, authors

Stacy A. Anderson of the Associated Press took a look this week at On Demand's Espresso Book Machine. Her post not only points toward a bright future for print-on-demand (POD) publishing, but also highlights the benefits for brick-and-mortar bookstores and self-publishing authors. On Demand's chief technology officer Thor Sigvaldason commented for the story:

"[The Espresso Book Machine] can, potentially, give [book retailers] a huge virtual inventory so they can have as many books as Amazon, all in a little bookstore. It turns independent bookstores into places to get books published. It's a new thing for the bookstore to do: not just sell books, but actually create books."

Anderson notes that the Northshire Bookstore in Vermont produces about 5,500 books per year on the machine, and the Politics and Prose bookstore in Washington has produced nearly 5,000 since installing the machine last November. Self-publishing accounted for about 85% of books produced at Northshire Bookstore and about 90% at Politics and Prose. Also notable, Debbi Wrage, the Espresso Book Machine coordinator at Northsire Bookstore, told Anderson that "the book machine accounted for nearly 4% of the bookstore's 2011 revenue."

PricewaterhouseCoopers releases ebook data and predictions

Laura Hazard Owen got an inside look this week at new data released by PricewaterhouseCoopers. She reports that data from the company's Global Entertainment and Media Outlook predicts by 2016, the U.S. trade book market will be 50% ebooks. Owen also dug through the global data to uncover some interesting predictions and to chart ebook spending by region. According to Owen's charts, ebook spending faces the biggest obstacles in the Central/Eastern Europe, Middle East/Africa, and Latin America regions.

You can view Owen's findings and charts here. The full report from PricewaterhouseCoopers, including segments on books, consumer magazines, and newspapers, as well as the music, Internet and TV industries, can be found (and subscribed to) here.

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April 20 2012

Publishing News: Dropping DRM may be too little, too late

Here are a few stories that caught my eye in the publishing space this week.

Giving up the DRM

ChainsLocks.pngIn the aftermath of the DOJ lawsuit, much has been written about what publishers need to do next if they're going to survive in the face of Amazon's increasingly powerful position, and the issue of dropping DRM is a recurring theme. Mathew Ingram at GigaOm argues that publishers first need to realize they're partially responsible for the locked-in position in which they're finding themselves and then realize they hold the key to breaking free: drop DRM. Ingram says that not only is it unlikely that DRM is fulfilling its intended purpose of preventing piracy, but that it's having an unintended consequence of hindering sales:

"What these chains and locks do, more than anything else, is to make the simple act of buying and reading a digital book horrendously complicated. Does that make more people want to buy and read e-books? It's hard to see how. In a very real sense, those locks are hobbling the industry."

Author Charlie Strauss also addresses the issue of DRM in a post about how and why Amazon has been able to establish itself so well in the marketplace. Strauss goes into a lot of interesting background and in-depth detail (his post is a must-read for this week), but he succinctly sums up Amazon's strategy: "Amazon seems to be trying to simultaneously establish a wholesale monopsony and a retail monopoly in the ebook sector." And, he explains, publishers' death grip on DRM played right into Amazon's best possible scenario: "By foolishly insisting on DRM, and then selling to Amazon on a wholesale basis, the publishers handed Amazon a monopoly on their customers — and thereby empowered a predatory monopsony."

Adrian Kingsley-Hughes over at ZDNet writes that "frightened publishers" will certainly bring an end to DRM in a desperate attempt to survive, but that it's "too little, too late" and that it won't make a dent in Amazon's position — or Apple's, for that matter:

"[Amazon and Apple] are far too popular (and, by the majority of customers, well loved) for the removal of DRM to make a difference ... On the whole, consumers don't care about DRM, and removing DRM from e-books won't open up the market in the way that publishers hope it will. What Amazon and Apple have done with Kindle and iBooks respectively was not invent e-books, but refine how the content was consumed."

Kingsley-Hughes argues that the only way for publishers to have a shot now is to band together: "Unless the publishers can come up with their own one-stop shop for e-books, make this as easy to use as Amazon or Apple's offering, get this outlet onto devices that people use, and then come up with compelling reasons why people should choose to use it over other outlets (the hard part), nothing will change."

That may be true, but I have to agree with Ingram's argument that "at least [dropping DRM] would give publishers a chance to be more flexible and adaptable, instead of trying to prop up their failing business model with price-fixing."

The future of publishing has a busy schedule.
Stay up to date with Tools of Change for Publishing events, publications, research and resources. Visit us at oreilly.com/toc.

A textbook case to settle first doctrine questions

The U.S. Supreme Court has agreed to weigh in on a first sale doctrine case, Kirtsaeng d/b/a Bluechristine99 v. John Wiley & Sons Inc., involving textbooks that were purchased in Thailand and resold in the U.S. A post at The Wall Street Journal (WSJ) describes the case:

"At issue are lower court rulings that found an entrepreneurial college student liable for copyright infringement for reselling foreign-edition textbooks on eBay. Supap Kirtsaeng asked friends and family in Thailand to buy copies of the textbooks, where they were cheaper. He says he resold them in the U.S. and used the profits to help pay for his U.S. education.

Textbook publisher John Wiley & Sons Inc. sued Kirtsaeng and won a $600,000 copyright infringement judgment against him."

The question before the Supreme Court boils down to whether or not the first sale doctrine applies to goods produced outside the U.S. As a post at Bloomberg BNA notes, "the goods in the Kirtsaeng case were not originally made in the United States." Implications of the decision will likely affect most categories of resale goods, including books, music, and software, but according to the WSJ post, retailers warn that the decision "could threaten companies that resell foreign-made goods and lead to higher prices for consumers. Retailers noted that many products they sell are first produced and procured from abroad."

The issues in this case reach back to unresolved questions from a Supreme Court case in 2010 involving Costco Wholesale Corp. that ended in a 4-4 tie — Bloomberg BNA has extensive background detail on both cases here. Reports indicate the Supreme Court will hear arguments in the fall.

Apple will seek validation in court

gavel.pngOn the heels of sending "possible commitments" to settle the antitrust lawsuit with the European Commission, Apple decided that versus the U.S. Department of Justice (DOJ), it wants its day in court. Reuters reports:

"'Our basic view is that we would like the case to be decided on the merits,' Apple lawyer, Daniel Floyd, told U.S. District Judge Denise Cote. 'We believe that this is not an appropriate case against us and we would like to validate that.'"

Sara Forden at The Washington Post writes that Apple's best defense may hinge on whether or not it was present during the publisher meetings in Manhattan where the alleged collusion is said to have taken place. Forden reports: "The maker of the iPad will need to show it negotiated pricing arrangements separately with each of the five publishers named in the Justice Department’s lawsuit, avoiding group gatherings such as those in The Chef's Wine Cellar at Picholine described in the government's complaint, antitrust lawyers said." An antitrust specialist also told Forden that Apple could "argue it was providing an alternative to the near monopoly Amazon won with low margins and deep discounts."

The next hearing is scheduled for June 22.

In other antitrust lawsuit news, litigation border hopped again, this time into Canada. According to a report at The Globe and Mail, the Vancouver firm Camp Fiorante Matthews Mogerman filed a class-action lawsuit in B.C. Supreme Court against Apple, Hachette Book Group Inc., HarperCollins Publishers Inc., Holtzbrinck Publishers LLC, conducting business as Macmillan Publishers Inc., Penguin Group, Simon & Schuster, and their Canadian subsidiaries. The lawsuit alleges a"'conspiracy' to lessen competition and 'fix, maintain, increase or control the prices of e-books," according to the report. Reidar Mogerman, the lawyer who filed the lawsuit, told The Globe and Mail, "The U.S. case isn't going to cover Canadian consumers. So it's the same underlying facts, it's the same consumer protection agenda, but it is for different consumers in a different country."

For a comprehensive roundup of post-DOJ-lawsuit coverage, check out Porter Anderson's (@porter_anderson) latest Writing on the Ether column. For an overview of the publishing chaos in general, including industry issues with the DOJ lawsuit, Google and libraries, check out this story from The Atlantic.

Photo (top): chained by Colin-47, on Flickr

Photo (bottom): English: Gavel, on Wikimedia Commons

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Reposted bydatenwolf datenwolf

April 17 2012

The anchor on ebook prices is gone. Now we'll see where they float

The publishing space remains abuzz in the aftermath of the Department of Justice (DOJ) lawsuit filing last week against Apple and publishers Hachette, HarperCollins, Macmillan, Simon & Schuster and Penguin. Much remains to be seen on how the suit will play out with Apple, Macmillan and Penguin (as the others have settled), and how the Big Six will now respond in relation to Amazon.

For a wider view and some insight into what needs to happen next for publishers to survive the tumult, I reached out to Don Linn, president at Firebrand Associates. Our interview follows.

What is the big-picture view of the DOJ lawsuit?

Don_Linn_Headshot.jpgDon Linn: The combination of the lawsuit, circumstantial evidence that's been revealed, and settlements by several of the parties, is a very big event. The point I think has been missed in much of the discussion is the perception that the agency model — and the alleged collusion that had led to it — affected consumers negatively via higher prices. The price umbrella agency effectively created benefitted only the alleged co-conspirators. That's something that never makes anti-trust enforcers happy.

The circumstantial evidence certainly suggests the DOJ had grounds for pursuing an action. "Double deleting" emails is pretty damning, among other things. The fact that three parties have settled, while legally having no effect on the others, clearly weakens the case of the remaining defendants, at least in public, that something happened. We will look back on this as an important date; the date that ebook prices once again were allowed to float. And things seldom float upward.

I'm not an attorney, but I believe that Macmillan, Penguin and Apple have a very difficult legal battle ahead. One I doubt they can win.

Does this strengthen Amazon's position in the marketplace?

Don Linn: Amazon's already dominant position has been further strengthened as their ability to set low prices locked into the Kindle ecosystem should only grow their share of the market. Whether this is a good thing for publishers over time remains to be seen, but most readers will cheer short-term price declines and Amazon's superior customer experience.

Cory Doctorow and others have argued that the DOJ has missed the point with this suit, saying that the DRM lock-in is the bigger anti-competitive threat. Over time this may prove to be true. However, when consumers benefit, regulators can claim a victory.

What do publishers need to do now?

Don Linn: Clearly, the most important thing for those who have settled is to get into — and stay in — compliance with the agreement. Additional legal battles are in no one's interest, which is why I was surprised that two publishers chose to fight.

Separately, the Big Six and others have to determine whether low prices are their enemy and by extension whether Amazon's low pricing is sustainable for them. The choices are pretty stark: either withhold content from Amazon until acceptable terms can be agreed upon, or further adapt business models to adjust to lower pricing. I would expect to see major pushback from the Big Six on Amazon, and some may take IPG's approach of trying to hold out.

Whether that strategy can be successful is questionable, but it may be the only viable approach if they don't believe lower prices can work. If the publishers yield to Amazon, consumers should hope they could — as Mike Cane has argued — extract something in return ... perhaps Amazon's willingness to adopt EPUB as a way to loosen the lock-in.

What do you think readers will get out of this?

Don Linn: As I mentioned before, consumers get the immediate benefit of lower prices, though there are those who argue that Amazon, once it controls the market, will ultimately raise prices for their locked-in consumers. The DOJ may have inadvertently created a less competitive marketplace with this action, though I feel sure they will be back if Amazon or any other party misbehaves to the detriment of consumers.

This interview was edited for clarity.

The future of publishing has a busy schedule.
Stay up to date with Tools of Change for Publishing events, publications, research and resources. Visit us at oreilly.com/toc.

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April 13 2012

Publishing News: DoJ lawsuit is great news for Amazon

Here are a few stories from the publishing space that caught my eye this week.

Amazon does a little Snoopy dance

DoJSeal.pngThe biggest story this week was the U.S. Department of Justice (DoJ) filing a lawsuit against Apple and publishers Hachette, HarperCollins, Macmillan, Simon & Schuster and Penguin, accusing them of colluding over ebook prices. If you unplugged or dropped off-grid for the past several days, solid roundups and analyses can be found with Tim Carmody at Wired and Laura Hazard Owen at PaidContent, and you can read the complaint itself here (PDF).

Right off the bat, three publishers — Hachette, HarperCollins and Simon & Schuster — settled, and Macmillan and Penguin stood their ground. Amazon responded to the situation almost immediately as well:

"This is a big win for Kindle owners, and we look forward to being allowed to lower prices on more Kindle books."

Book publishing analyst Michael Norris told the New York Times: "Amazon must be unbelievably happy today. Had they been puppeteering this whole play, it could not have worked out better for them."

Apple finally responded yesterday. As reported by Peter Kafka at All Things Digital, Apple spokesman Tom Neumayr said:

"The DOJ's accusation of collusion against Apple is simply not true. The launch of the iBookstore in 2010 fostered innovation and competition, breaking Amazon's monopolistic grip on the publishing industry. Since then customers have benefited from eBooks that are more interactive and engaging. Just as we've allowed developers to set prices on the App Store, publishers set prices on the iBookstore."

Much discussion and analysis has ensued in the aftermath — and I'm sure it will continue in the coming days and weeks.

Some are purporting that even if the collusion between the publishers proves to be true, Apple might walk away squeaky clean. A report at CNET noted why this may be the case:

"One reason lies in the Justice Department's 36-page complaint, which recounts how publishers met over breakfast in a London hotel and dinners at Manhattan's posh Picholine restaurant, which boasts a "Best of Award of Excellence" from Wine Spectator magazine. The key point is that Apple wasn't present."

Bryan Chaffin at the Mac Observer argued that yes, collusion most probably occurred but that it will be a mistake to undo it: "Doing so will clear the way for Amazon to dump books below price, taking ever more share (and power) in the book industry — that is the greater anticompetitive threat."

On the flipside, Mike Cane argued on his xBlog that the suit didn't go far enough and that the DoJ needs to sue Apple again. In a letter sent to all of the Department of Justice attorneys listed in the antitrust suit papers filed, he said:

"The advantage iPhone and iPad owners have in using the iBooks app is that they can browse and purchase eBooks from within that app. It's a seamless customer experience.

By contrast, all eBook apps from competing eBook stores — such as those from Amazon, Kobo, Barnes & Noble, and others — cannot offer an identical shopping experience. They are disallowed by Apple. Apple has demanded from each of its iBookstore competitors a 30% cut of any purchases made using Apple APIs for what is called 'in-app purchasing.'

To me, this is every bit as much restraint of trade as the collusive price-fixing that made the Department bring Apple and its co-conspirators before the court for remedy."

Individual U.S. states have thrown in as well: 16 State Attorneys have filed suit, alleging that agency pricing cost consumers $100 million.

Earlier this week before any suits were filed, at least two of the Big Six publishers refused to sign new contracts with Amazon. It will be interesting to see how this all plays out and whether or not publishers are spurred into action to do more to prevent Amazon from totally monopolizing the market, such as dropping DRM.

The future of publishing has a busy schedule.
Stay up to date with Tools of Change for Publishing events, publications, research and resources. Visit us at oreilly.com/toc.

This chapter brought to you by ...

Just about a year ago, Amazon introduced an ad-supported Kindle at a reduced cost in exchange for the consumer enduring ads on the home and screen saver pages. Now, Yahoo has filed patent applications that indicate a plan to bring those ads directly into ebook content. A report at the BBC explained:

"The filings suggest that users could be offered titles at a variety of prices depending on the ads' prominence. They add that the products shown could be determined by the type of book being read, or even the contents of a specific chapter, phrase or word ... It suggests users could be offered ads as hyperlinks based within the book's text, in-laid text or even 'dynamic content' such as video. Another idea suggests boxes at the bottom of a page could trail later chapters or quotes saying 'brought to you by Company A.'"

From a revenue perspective, ads in ebook content makes all kinds of sense. From a reader perspective, I just hope there's always a price point for those of us who prefer to do our reading sans corporate sponsorship.

B&N one-ups Amazon

A close friend recently told me a story highlighting an issue with his Kindle: While reading in the car on a road trip, he had to give up his Kindle and resort to the Kindle app on his iPad to keep reading when it got dark. Maybe he should have waited and bought a Nook.

B&N introduced the Nook Simple Touch with GlowLight this week — the first e-ink device to employ light. Alexandra Chang described the device in a post for Wired:

"The GlowLight resembles B&N's flagship Nook Simple Touch — same 6-inch touchscreen display, same size and includes the same internal parts. The Nook Simple Touch with GlowLight, however, is slightly lighter at just 6.95 ounces, compared to the Nook Simple Touch's 7.48 ounces ... The GlowLight technology consists of LED lights located at the top of the Nook's screen and an anti-glare screen protector. The light is evenly scattered across the screen and is adjustable via the menu."

The timing of the release is interesting, as rumors surfaced last week that Amazon was readying a front-lit display for its Kindle device.

Seal: US-DeptOfJustice-Seal, on Wikimedia Commons

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April 06 2012

Developer Week in Review: When giant corporations collide

The days of the April Fools' web joke are over, or should be. It's gotten too old, to institutionalized, and it's so widespread these days that serious news can slip through the cracks because everyone assumes it's a joke. If people want to pull hoaxes, pick a random day in the middle of the summer and do it then; you'll get much more bang for the buck because no one will be expecting it. I used to like a good fake article as much as the rest, back in the days when they would be buried somewhere in the pages of a magazine's April edition, but now it's just lame. Be assured, all the items in this edition of Developer Week in Review are 100% prank-free and were supervised by the American Humane Association.

Gentlemen, start your lawyers!

Like a large radioactive reptile, the lawsuit between Oracle and Google over the improper use of Java has been sleeping quietly in a courtroom in San Jose. But now, the slumbering monster is about to awake, potentially leaving a trail of broken companies scattered from California to Asia. After all attempts to broker a settlement between Larry's House of Java and the People's Autonomous Car and Search Engine Company failed, the judge involved has ordered the two parties to start sharpening their long-knives, in an unusually candid opinion.

It's hard to overestimate the potential impact that a ruling against Google could have on the smartphone industry. If Google was required to remove Java from Android phones, Android would essentially become useless because the entire stack that Android apps use is built on top of Java. More likely, Google would be required to shell out a significant license fee to Oracle, which added to the ones it already pays to Microsoft and (potentially) Apple, could make Android phones less and less profitable to the handset makers who actually end up paying the fees. Of course, given the glacial pace at which these proceedings move, Android may have already moved on by the time any such judgement actually comes down ...

Linux has a friend in ... Redmond?

In the past few weeks, we've made several references to Microsoft's increasing support of the open source model, and this week brought even more evidence of the sea change out of Washington state. For a technology that Steve Ballmer once described as akin to cancer, Linux is certainly getting a lot of love from Microsoft these days. The software behemoth is now in the top 20 corporate contributors to the Linux Kernel, committing more than 1% of all new lines of code last year.

It is worth bearing in mind that most of that code is in support of Microsoft technologies, such as Hyper-V, but even still, it's clear that Microsoft doesn't treat Linux like an ill-behaved street urchin anymore.

The art of game cheats

I'm not much (if anything) of a game programmer; I've always gravitated more to the web side of the force. But I certainly play my share of games. I'm currently racing my 17 year old to level 80 on "Call of Duty MW3" on the Wii (I'm [MLP]TwilightSparkle if you want to ally with a mediocre player who likes Akimbo FMG9 a bit too much for his own good ...). If you play enough multiplayer, you'll eventually come to recognize the players who have an almost psychic knowledge of where everyone is. They're the ones who always seem to come around the corner already sighted in on you. You know, the cheaters ...

Now, one game developer has stepped forward to explain some of the hacks that cheats use to become Chuck Norris clones and how they are implemented. Even if you are never going to get within 1,000 yards of a z-buffer, it's worth reading to see just how easily games can be tweaked to give unethical players an unbeatable edge.

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June 23 2011

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