Rustat Conference on The Economic Crisis - Jesus College, Cambridge 9 May '09

Yesterday I attended the inaugural Rustat Conferences meeting on the Economic Crisis at Jesus College, Cambridge. I sit on the advisory board and helped produce the event. The Rustat Conferences are a new initiative of Jesus College, Cambridge, bringing together academics with leaders from politics, business and media for a round table discussion on the key topics of the day. The meeting was subject to the Chatham House Rule, and respecting this, the academic and author John Naughton who attended the meeting has blogged about it giving an overview of some of the main themes covered and his reflection on the day's discussions. The original conference brochure with the topics covered and speakers invovled you can read on here.

It was a very successful meeting in terms of stimulating debate and understanding the approach and priorities people from different professions have vis a vis the crisis. It was also a really good example of the type of event and intellectual activity a university can initiate beyond their work of teaching and research. Frustratingly though perhaps not unexpectedly, we didn't really get to the bottom of precisely what Keynes would do had he been around today! But several topics - such as the environment,the future of capitalism, the importance of China and the prospects for democracy - emerged as important for future discussions and will help shape the programme for the next meeting in October 2009.

A publisher did ask me on the way into lunch about the economics of ebooks but we didn't have the time to get stuck in to this subject but once I have, I'll revisit that here..

Rumours of Apple entering the eBook Reader market

There appears to be some excitement at the prospect of Apple entering the ebook reader market proper… 'proper' because although they’re already in the market – a lot of people are using their iphones for this purpose - the iphone could be improved on as an ebook reader. And do we expect Apple to bypass the opportunity to take some of market share from Sony, Kindle and Plastic Logic?

The rumours are discussed in an article on www.thestandard.com

Some say if you've got an iphone you don't need a Sony or a Kindle reader. Actually, this discussion is not so new:
Is the iphone the ultimate ebook reader.. from way back in 2008..

but it's fair to say a bigger screen, easier on the eye and comfortable size for holding like a book would be better than the iphone.

A user's decision to buy a reader in addition to their iphone may also depend on the type of content they're reading.. if it's work, professional, travel and reference related stuff with a lot of links then iphone is more convenient.. if it's novels and e.g. biography then a 'proper' reader would be good and Apple can probably be relied on to create something good..web browsing capability should be part of the offer.

Google Book Search Settlement Agreement

Google reached agreement with American authors and publishers last October in their dispute over the Google Book Search project in which millions of books were made available online. The settlement reached between the parties will allow Google to sell digital versions of copyrighted works that are out of print. The deal is at this stage restricted to the USA and there are some more hoops to jump through yet, but this is a significant move forward for Google. It should be for the publishers too if they manage to put the dispute behind them and, with the flexibility the agreement gives them, start exploring creative ways to develop new products and revenue streams, harnessing the reach and power of Google’s technology.

The settlement with the Author’s Guild is worth US $125 million, US $34.4 million of which will help fund the Book Rights Registry, a copyright collective that will pay authors, their heirs or publishers a share of the profits made by Google. Authors and other owners of copyrighted but out of print books can submit claims to Google before beginning of next year in return for a payment. Google will be able to index the books and display text samples in search results and up to 20% of each book as a preview. Authors and copyright holders will share 63% of advertising and e-commerce revenues associated with their works. The US$125 million is hardly going to break Google’s bank and critics of the project and the settlement may still think that Google have achieved this position by stealth, but publishers are not forced to participate but those which do will help shape an important new marketplace for books.

The agreement broadly covers usage of three types of groups of books:

1 In-copyright and in-print books
By turning on the "preview" and "purchase" models that make their titles more easily available through Book Search, authors and publishers have the potential to grow the online marketplace for their in-print books.

2 In-copyright but out-of-print books
Out-of-print books aren’t actively being published or sold, so the only way to procure one is to track it down in a library or secondhand. This agreement would see every out-of-print book digitized in Google Book Search become available online for preview and purchase, unless the author or publisher chooses to "turn off" that title. Advantage: to enable authors and publishers to earn money from titles considered to be commercially defunct.

3 Out-of-copyright books
Google will continue to allow Book Search users to read, download and print these titles, just as they already do now.

Book publishers aren’t alone in facing up to the challenges of digital. The Google Book Search project is symptomatic of the massive change creative industries are going through, best example of which is the threat to music industry publishers from file sharing sites and digital piracy. We can’t turn back the clock – ebooks are here to stay and we have to learn to how to work with them and tease out the best business models. We can wrap them up in security but that hasn’t helped the music industry particularly; the reality is that hackers will sooner or later break any DRM (security system protecting digital content) – however sophisticated. Some say that the illegal sharing of music online can have the net (forgive the pun) effect of increasing sales of an artist’s albums and other revenues e.g. concert tickets – in other words it’s a type of online marketing for for an artist and if carefully managed it can work. It’s an approach not without risk but the music industry isn’t dead yet and people are still paying to go the cinema, to watch films online and to own DVDs.

For the book industry, the loss of revenue from piracy is not something new. All around the world photocopy shops line the backstreets near universities, busily ‘publishing’ rip-off versions of popular textbooks; in some markets this has lead publishers to price local editions to compete with pirated photocopies. Here though it’s the illegal sharing or selling of digital books that the publishing industry is trying to deal with. Producing a pirated digital copy is a relatively easy task; consider the low cost of scanning from the print (or the procurement of an illegal digital copy from an unscrupulous printer or freelance production person..), not forgetting the close to zero marginal cost of production and distribution.

Publishers can either try to stamp out pirated versions of their copyright (exercise in futility?) while promoting official print titles, or make their own ebooks available in multiple formats for PCs, MACs, the best ebook readers, priced fairly and with a range of options, for example print and ebook combinations, individual chapter sales, subscriptions, sample chapters for free, author interviews, updates. No model has emerged as a winner yet – it’s still early days but ebook sales are growing fast and publishers need to respond to this demand. At the London Book Fair representatives from Sony discussed the prospect of ebook sales overtaking print in terms of when, rather than if.

A final thought on publishers’ uncertainty about the Google Book Search: consider Tim O’Reilly’s comment about the biggest problem facing writers – and by extension their publishers: obscurity – not piracy. Now Mr O’Reilly sells a lot of books and he’s not advocating just giving them all away, but by using the internet and ebooks to make more titles always available (never Out of Print), easier to find and sample, and for sale in multiple formats, projects like Google Book Search should give publishers more options when considering new ways to reach readers with new (and old) books and authors.