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April 27 2012

Publishing News: Tor sets content free

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

Tor breaks the stick

Tor-Forge-Logo.JPGJoe Wikert, O'Reilly GM and publisher, asked this week, "What if DRM goes away?" As kismet would have it, publisher Tom Doherty Associates, which publishes popular science fiction/fantasy imprint Tor under Macmillan, stepped up to drop DRM and find out. An announcement post on Tor.com stated that by July, the company's "entire list of e-books will be available DRM-free." President and publisher Tom Doherty said for the announcement:

"Our authors and readers have been asking for this for a long time. They're a technically sophisticated bunch, and DRM is a constant annoyance to them. It prevents them from using legitimately purchased e-books in perfectly legal ways, like moving them from one kind of e-reader to another."

Author Cory Doctorow said the move "might be the watershed for ebook DRM, the turning point that marks the moment at which all ebooks end up DRM-free. It's a good day." Author Charlie Stross took a look at the big picture and what this might mean not only for the future of publishers, but for book retailers, supply chains and ebook reading technology. In part, he said the oligopoly may be in jeopardy:

"Longer term, removing the requirement for DRM will lower the barrier to entry in ebook retail, allowing smaller retailers (such as Powells) to compete effectively with the current major incumbents. This will encourage diversity in the retail sector, force the current incumbents to interoperate with other supply sources (or face an exodus of consumers), and undermine the tendency towards oligopoly. This will, in the long term, undermine the leverage the large vendors currently have in negotiating discount terms with publishers while improving the state of midlist sales."

Jeremy Trevathan, publisher at Tor UK's parent Pan Macmillan, told The Guardian that Macmillan has "no thought of extending [the drop of DRM] beyond science fiction and fantasy publishing. But it's in the air. We've not talked about this to other publishers, but I can't imagine they haven't been thinking about this, too."

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.

Harvard offers up big data and open access research

Harvard University recently made a couple of notable moves to open up access to its data and research. Last week, Harvard's faculty and advisory council sent a memo to faculty members regarding periodical subscriptions. The memo opened: "We write to communicate an untenable situation facing the Harvard Library. Many large journal publishers have made the scholarly communication environment fiscally unsustainable and academically restrictive."

Ian Sample at The Guardian reported:

"According to the Harvard memo, journal subscriptions are now so high that to continue them 'would seriously erode collection efforts in many other areas, already compromised.' The memo asks faculty members to encourage their professional organisations to take control of scholarly publishing, and to consider submitting their work to open access journals and resigning from editorial boards of journals that are not open access."

This week, The New York Times (NYT) reported that "Harvard is making public the information on more than 12 million books, videos, audio recordings, images, manuscripts, maps, and more things inside its 73 libraries." Access to this volume of metadata is likely to fuel innovation for developers. The NYT report stated:

"At a one-day test run with 15 hackers working with information on 600,000 items, [David Weinberger, co-director of Harvard's Library Lab] said, people created things like visual timelines of when ideas became broadly published, maps showing locations of different items, and a 'virtual stack' of related volumes garnered from various locations."

The post noted the "metadata will be available for bulk download both from Harvard and from the Digital Public Library of America, which is an effort to create a national public library online."

News scoops for sale or rent

There also was a dustup in the news space this week. It began with Felix Salmon's post at Reuters suggesting the New York Times could rake in revenue by selling advance access to its feature stories to hedge funds. (This was all brought on by the newspaper's feature piece on a Wal-Mart bribe inquiry on a Saturday and the market response the following Monday.)

Salmon argued:

"The main potential problem I see here is that if such an arrangement were in place, corporate whistleblowers might be risking prosecution as insider traders. But I'm sure the lawyers could work that one out. The church-lady types would I'm sure faint with horror. But if hedge funds are willing to pay the NYT large sums of money to be able to get a glimpse of stories before they're made fully public, what fiduciary could simply turn such hedge funds away?"

GigaOm's Mathew Ingram posted a response from a journalism ethics standpoint:

"One of the things that bothers me about this idea is that I think there is still some kind of public-service or public-policy value in journalism, and especially the news — I don't think it is just another commodity that should be designed to make as much money as possible. And if the New York Times were to take stories that are arguably of social significance and provide them to hedge funds in advance, I think that would make it a very different type of entity than it is now. What if it was a story about a dangerous drug or national security?"

Salmon posted a follow-up argument, in part responding to Ingram:

"The journalism-ethics angle to this hasn't really been fleshed out, though. Mathew Ingram, for instance, says that if news is being put out in the public service, then it shouldn't be 'just another commodity'; if the NYT were to go down this road, then 'that would make it a very different type of entity than it is now.' It's all very vague and hand-wavey."

All three posts in this back-and-forth exchange (here, here and here) as well as the debate on Twitter that Ingram storified here are well worth the read.

Related:

March 30 2012

Publishing News: There's no such thing as degrees of DRM

Here's what caught my eye in publishing news this week.

Social DRM is as bad an idea as traditional DRM

HarryPotter.pngThe most talked-about news this week was the release of the Harry Potter ebooks. The release was interesting on a couple of fronts. First, Amazon and B&N were strong-armed into allowing a portal to a third-party sale on an outside website — and into allowing a third-party download onto their proprietary devices. As a post at The Bookseller notes, "It is believed to be the first time Amazon and Barnes & Noble have allowed an e-book sold on a third-party retail site to be downloaded onto a Kindle or Nook device."

Second, the Potter books are being sold DRM free. Well, that's not entirely accurate — Laura Hazard Owen describes the copyright situation:

"Is there DRM? No, the e-books do not have DRM. Instead, they're watermarked (or, as Pottermore kindly describes it, 'personalized'): 'The Pottermore Shop personalises eBooks with a combination of watermarking techniques that relate to the book, to the purchaser and the purchase time. This allows us to track and respond to possible copyright misuse.'

I reached out to O'Reilly GM and publisher Joe Wikert, who recently called for an end to DRM, to get his thoughts. He says the Harry Potter watermark move is like being "sort of pregnant":

"My first thought is that this form of social DRM provides a similar false sense of security as traditional DRM. Anyone who wants to put this content on the torrent sites is just going to strip the watermarking out, the same as they'd do with the regular DRM. And I find it ironic that so many publishers say they're not concerned about torrents as much as they're trying to prevent customers from sharing the books with friends. Well, watermarking is going to make that much easier (than regular DRM), and I doubt many customers will feel guilty about doing it. They'll probably simply tell their friend, 'it's OK for you to read this too, but please don't pass it along to anyone else since it has my name embedded in it,' for example.

As far as I'm concerned, there aren't degrees of DRM. You either have it or you don't. It's just like being pregnant. You're not 'sort of pregnant.' And social DRM is as bad an idea as traditional DRM. I'd like to think that this Harry Potter situation will cause other publishers to feel they can ease up on their need for DRM, but I'm not sure that will happen."

Mathew Ingram at GigaOm has a nice post on some of the major takeaways from Rowling's diversion from the traditional path, which also includes the agreement with libraries: "... the Potter books can be loaned an unlimited number of times, and the lending license lasts for five years."

Survey says ...

PaywallArt.pngGoogle rolled out a new product this week aimed at helping struggling digital publishers with their revenue streams. A post at Adweek says the new Google Customer Surveys "is being billed as an alternative revenue model for publishers weighing whether to erect paywalls on their sites." The post explains how the surveys work:

"When users visit the Web sites of partners like the New York Daily News and the Texas Tribune, they'll find some articles partially blocked. If they want to continuing reading, they'll have to answer a question, or microsurvey, courtesy of Google.

The multiple-choice questions will be on market research, along the lines of 'Which of these types of candies do you usually buy for your household?' The choices for that question include 'None, Hard candies, Jellies, Licorice, Toffees.' Another question: 'Have you had personal experience with filing lawsuits? Please check all that apply.' ... Advertisers pay Google to run the surveys, and Google pays sites 5 cents per response."

In a post at PaidContent,Laura Hazard Owen explains the advertiser side of the survey:

"The customers create surveys and select the audience who will see the questions. Questions seen by a broad audience representing the general U.S. population are $0.10 per response (with a minimum total cost of $100). If companies want to drill down by demographic or select a custom audience with a screening question, the cost is $0.50 per response."

Owen also highlights a potential issue (and the reason both of us couldn't get a survey to pop up at partner site Lima News): The surveys can be blocked by AdBlock and by pop-up blocking options in browsers.

Personally, I'm willing to pay to avoid my content being interrupted, whether that content is news, books, movies, etc., but as Rob Grimshaw, managing director of FT.com, points out in a post at Wired: "Old models may be broken and the industry's initial approach to the web may have misfired, but where there's demand, there's a business. News publishers should have faith that they still perform a valuable service and go out looking for the right model to support it."

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.


The nature of virtual goods, TBD

Tim Carmody took an in-depth look at the U.S. Department of Justice's investigation into agency pricing this week. He argues that the investigation goes much deeper than issues of price fixing:

"... the DoJ's investigation and a related civil lawsuit touch on issues bigger than rising e-book prices or even collusion between publishers. The cases are also about who has the right to sue e-book publishers, the nature of publishers' bilateral interactions with Apple and other retailers, and whether it's even possible for a true agency model to exist for virtual goods like e-books."

That last point regarding virtual goods is particularly interesting — it looks like the courts will be facing a landmark decision regarding the nature of virtual commodities. Carmody explains:

"There are two legal models that could apply to the publishers' sale of e-books. One is agency; the other is retail price maintenance. In a genuine agency model, the agent doesn't own or bear legal responsibility for the stock; the seller does. Price maintenance simply allows the original seller to set a floor for final customer prices that retailers have to observe as part of their agreement.

According to [Donald Knebel, an IP and antitrust attorney affiliated with the Center for Intellectual Property Research], the usual legal tests for whether a retailer is acting as a publishers' agent hinge on issues of liability that don't apply to virtual goods. There is no physical possession of the stock, there are no storefronts catching fire. Knebel says this issue has never been adequately determined in court, even with software in a virtual app store, let alone e-books in a virtual bookstore.

Carmody's piece is a must-read for this week.

Photo: Beyond the wall by Giuseppe Bognanni, on Flickr

Related:

December 09 2011

Publishing News: Agency pricing, out of the pan and into the fire

Here's a look at the publishing stories that caught my attention this week.

Antitrust investigations focus on Apple and publishers

ibooks2.jpgOn Tuesday, the European Commission opened an antitrust investigation into pricing deals struck between Apple and five international publishers: Hachette Livre, HarperCollins, Simon & Schuster, Penguin and Holtzbrinck (the publishing houses were raided back in March). The Bookseller reports:

The Commission said it would investigate whether publishers and Apple had engaged in illegal agreements or practices that would restrict competition, and would also examine "the character and terms of the agency agreements entered into by the above named five publishers and retailers for the sale of e-books," with "concerns that these practices may breach EU antitrust rules that prohibit cartels and restrictive business practices."

On Wednesday, the U.S. Justice Department confirmed it, too, was investigating.

Reuters provided the background for these investigations:

Publishers adopted the agency model last year when Apple launched the iPad, allowing publishers to set the price of the sale of e-books. In turn, they would share revenue with the retailer. In the past, publishers would sell ebooks on a wholesale model for 50% of the retail price ... In the traditional "wholesale model," publishers set a recommended retail price, but the seller is free to offer deep discounts.

Bloomberg reports that "Publishers' deals with retailers are also under scrutiny."

Publishers need to get a grip on their data and take control of their advertising

Google_logoDavid Soloff at Advertising Age took a look this week at declining advertising revenues for newspapers and magazines and placed the blame squarely on the publishers. Soloff writes:

Publishers have not generated much of the almost infinite supply of channel-choking inventory, but they have also done next to nothing to preserve what is good and proprietary and "premium" about their own inventory. In some cases, they have chosen lowest common denominator ad networks, exchanges and supply side platforms to do the hard work of selling.

He says publishers need to regain control of their advertising inventories and that "big data tools can dig them out of the undifferentiated, over-supplied, machine-driven nightmare of the sell side." His take on how to put the "premium" back in premium content is well worth the read.

Publishers may want to get a grip on their data and take control of their advertising sooner rather than later. Google's retail push against Amazon may very well have consequences for online ad revenues, particularly in the retail space. Ken Doctor over at the Nieman Lab took a look at Google's plans to enter the retail/ shipping business and its possible implications. He points out that "[r]etailers don't want to advertise; they want to sell stuff," and he says there's no loyalty in advertising:

Give [retailers] new routes to sell stuff, and deliver it more cheaply than they could before, and they'll migrate their ad/marketing/lead generation dollars. So, if Google can really make it easier to personalize, routinize and make more efficient the selling process, it will place itself between the seller and the buyer. As it does that, it replaces the newspaper as middleman, further reducing much of the revenue that is keeping newsrooms staffed, even if many of them are now half-staffed at best.

Read it Later identifies the most-read authors on the web

Read it Later recently passed 4 million users. Earlier this year, the service used data gathered from its users to look at online reading behavior and how it's affected by the "time shifting" content afforded by mobile technologies. This week, the company released a new study identifying the most-read authors on the web. The study looked at data gathered between May and October 2011, which was based on 47 million-plus saves, according to the report.

Who came out on top? Have a look:

Read It Later's most-read web authors

The study also looked at longevity and loyalty — the authors with the best return rates, or those with stories readers returned to in some way. The report points out that "[t]he most interesting thing isn't just that we found different authors for the top 'return rate,' but also different categories of content and types of publishers."

Author return rate

The full report can be found here.

TOC NY 2012 — O'Reilly's TOC Conference, being held Feb. 13-15, 2012, in New York City, is where the publishing and tech industries converge. Practitioners and executives from both camps will share what they've learned and join together to navigate publishing's ongoing transformation.

Register to attend TOC 2012

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