Women and cyber piracy

According to an article in the London Evening Standard this week, a survey by the law firm Wiggin said that one in eight femail ebook readers over the age of 35 has admitted to downloading pirated version of books. Until now the domain of the male of the species.. the growing popularity of ebooks has shifted the profile of the internet pirate..

Digital sales outstrip hardbacks for first time in US

Amazon US says it has sold 143 digital books for every 100 hardbacks in the last three months.  

Read this article from the Guardian about the growth in ebook sales via the bookselling giant Amazon

This announcement might come as just the sort of bad news that lovers of books (physical objects made of paper with print and a cover) were dreading. Amazon said sales of digital books have outstripped US sales of hardbacks on its website for the first time.

The rate of change is also getting faster: Amazon said that in the most recent four weeks, the rate reached 180 ebooks for every 100 hardbacks sold. Jeff Bezos, founder of Amazon, said sales of the Kindle and ebooks had reached a "tipping point", with five authors including Larsson, author of Girl with a Dragon Tattoo, and Stephenie Meyer, who penned the Twilight series, each selling more than 500,000 digital books. 

Key points and notes of caution:

·         While the volume of sales is impressive and the rate of adoption of ebooks perhaps faster than expected, the value of the books sold in digital format is not equivalent yet to that of their physical format version. Some titles in the Kindle top 10 were selling for as little as 75p.

·         Are ebook sales damaging those of physical sales? Not yet it seems – heardback sales are up 22% this year in the US.  Ebooks now account for 6% of sales in the US consumer book market. 

·         In the UK, the percentage is smaller and the consumer sales (£5m) are still dwarfed by sales of digital content in the academic-professional sector. Total digital sales were c.£150m. There are fewer titles available in the UK.

·         Many people are still waiting for the price of e-readers to come down before making the investment and waiting to see what the impact of the iPad will be on Kindle and book pricing.

E-Book Price Differentials Confusing for Consumers

Here is a link to a Telegraph blog lamenting the pricing structure of ebooks and that there does not appear to be obvious price competition between the formats  and e-readers offered by Kindle and iPad. 

This is something I have blogged on earlier this year and the potential for a captive audience tied to one device being stuck with higher prices than those offered to owners of similar but different devices.  The blog claims that Apple’s iBooks are more expensive – it takes the example of Sebastian Junger’s War. ‘On amazon.co.uk, the hardback is available for £8.49. On iBooks, the ebook costs £9.99...on amazon.com’s Kindle store, it’s available for $11.74, which I make to be about £7.80’.  At least the author takes some solace in the availability of a Kindle app for the iPad allowing access to what he says would be lower priced books but read on the iPad.

Other laments which must be puzzling many potential and actual users of e-readers and ebooks:

·         How could an ebook cost more than the real physical print version of a book?

·         Why should there be such price differentials between Kindle and iBooks?

·         Why can’t it be made easier to share ebooks?

Authors asserting digital rights cause publishers to panic

The growth in sales of ebooks and the devices you need to read them, ebook readers, has taken many people by surprise and it’s affecting all areas of the market: publishers grappling with new technology, business models, marketing strategies, versions and supply chains; tech companies looking for a lead in the eReader space; booksellers looking ways of staying in business, dreaming up new services and products to compete with Amazon and other large etailers; and last but not least, authors. This last group now find themselves negotiating with their publishers over how much they should be paid for ebook sales, and indeed if the publishers of authors' print editions even have any rights to the sales of ebook versions.

At the end of last year Arthur Klebanoff, CEO and founder of ebook business RosettaBooks secured a deal with Amazon whereby the online bookseller acquired the exclusive digital rights to Stephen Covey’s bestselling titles The 7 Habits of Highly Effective People, and Principle-Centered Leadership. This agreement means that Simon & Schuster, the original print publisher of the books, has been left out of the equation, leading to speculation that other publishers may also lose revenue from critical backlist titles in digital formats. The move has lead some publishers to contact literary agents to assert their rights over digital versions of backlist titles. Agents and authors have fired back, referencing a court ruling 2001 finding in favour of the author as owner of the rights (at least of those books published pre-digital).

The Amazon deal gives Covey 50% royalties from ebook download sales – til now a publisher’s standard digital rights deal gave authors 25% or less, so this is a big departure from the norm and is causing some publishers to panic. This development raises questions about authors’ loyalty to publishers, and whether authors and agents believe they’ll be better served by dedicated and expert ebooks channels. This issue seems to be causing more trouble in the US than the UK market where it's said publishers are happy to renegotiate digital rights and authors are prepared to stick with their existing publishers.

The question of branding is also relevant to this argument – how much does a well established author rely on the publisher’s brand to market and sell a book? Answer: probably not very much. But if the publisher has nurtured and developed that author over a period of time, contributing to his or her success in many ways, then should the publisher not share in the continued success of that author’s work – even if in different format? And will lesser known authors stand a better chance of being marketed and achieving sales via a traditional well established publishing brand, whether in print or ebook formats? Quite possibly..

These are some of the thorny questions being asked in an industry going through change...

Warnings against Kindlemania...

Christmas Day ‘09 saw ebooks outstripping sales of print books on Amazon.com as eager recipients of the Kindle went shopping online for content (books..) - John Naughton’s Networker column in The Observer warns that the current exuberance about the Kindle (and eReaders generally) may be irrational - he refers to a study of people's use of paper to understand which uses might conceivably be eliminated by electronics, and which might not - he says the Myth of the Paperless Office should be 'required reading for anyone showing the early symptoms of Kindlemania' ! By the way, it's available in print and, according to Amazon.com, Kindle format.

While Amazon has a head start with its ebook reader and ebooks aplently on offer, Apple is expected to be hot on the Kindle’s heels this year with the Tablet eReader device – aka iPad, iSlate, iTab... Naughton expects Amazon and its Kindle to be the next target for what he calls Apple’s ‘distinctive brand of creative destruction’ and predicts Apple’s superior product development and design to come out on top in the long run.

eBook Survey Findings - The Bookseller's Digital Conference

Some interesting responses below to a survey conducted for the The Bookseller’s Digital Conference Futurebook in December ’09.

These provide some more pointers on where the industry thinks pricing is going - it concluded that cheaper ebooks and an Apple ebook reader / ereader will be the key factors driving digital publishing forward – these two points appear to be mainstream now, never mind that the latter point relies on the supposition that Apple will bring out an e-reader.. even if it does.. improvements to iPhones and iPods might mean that we’re using these devices for reading as much as for music, browsing and communications. An Apple eReader would help capture a market of readers with a dedicated content channel while expecting those readers/consumers eventually to end up using one device for multiple purposes.

Another finding worth commenting on is the expectation that high street bookshops in their current guise have the most to lose, but that they have the opportunity to exploit the shift in the market by changing their role to that of a service provider to owners of eReaders and continuing to promote reading, authors, events..and yes, even selling a few printed books too.

Key findings of the survey:

· More than 88% of respondents thought bookshops would lose out from the growth in digital sales, while 55% said they did not support the revised Google Settlement.
· 44% had read a digital book but only 19% had purchased one. 30%said that e-books should be same price as a paperback book, or cheaper (53.6%).
· Parity pricing of print / ebooks was seen as a hindrance to ebooks sales growth.
· Low priced e-books could devalue other editions (and the work that goes into writing, editing and producing a book).
· The dilemma: consumer expects to pay less for a digital product – like a downloaded album.
· The publishing industry would undergo huge changes with the emergence of new digital products. More than 67% said that book trade professionals should re-skill to take advantage of digital media.
· High street bookshops have most to lose from the increased use of digital content but there are potential gains for all by making reading more accessible and through appeal to younger audiences - ie mobile.
· High street bookshops should provide range of services for readers - technology, some printed books (e.g. children's books, maps, art books), advice, author readings, seminars, learning centres, event hosts, etc
· Quality of content will suffer – more does not mean better.
· Importance of interoperable e-book formats and devices.
· Mobile phones: despite the emergence of mobile phone apps, 42% said that most people would read e-books on a dedicated e-reader in the future.
· Apple would emerge as leader in the e-reader market, with Amazon second, with Sony third.
· Google Settlement still a problem - 55% did not support the revised Settlement, and 58% thought this version would be approved anyway by the US court.
· By 2025 16% said that more than half of sales would be from digital content, and just 5% said the electronic market would be less than 10% of total sales.

More than 50% of the respondents were publishers, the rest booksellers, librarians, agents and authors.

Big Brother’s Little Brother - Doctorow and Digital Dystopia

The year is 1949 and a friend has lent you a copy of the recently published Nineteen Eighty-Four – you’re cautiously pessimistic about this fictional future and its oppressive, omniscient dictator, Big Brother - it’s all such a long way off.... Now, jump aboard your time machine (DeLorean recommended) and bypassing the real 1984, travel back to the future to what some might call the digital dystopia we inhabit in 2009: ubiquitous CCTV, surveillance, identity theft and loss of privacy - all standard features of our brave new world. As, increasingly, are, ever more sophisticated mobile phones, PDAs, ebook readers and ebooks themselves: according to the Association of American Publishers, year to date (August 2009) ebooks sales were up 149.3%, and June 2009 saw the highest ever ebook trade sales, $14,000,000 in total. Internationally more than a dozen new eBook readers have been either released or announced, and more are on the way (Barnes & Noble's Nook was launched last month). We’re already well into the next chapter in the history of the book, and how we buy and read them.

Nothing too sinister in this publishing revolution surely?

No, at least not until earlier this year when e-tailer Amazon assumed the role of Big Brother in the now well documented decision to remotely delete Kindle versions of Orwell’s Nineteen Eighty-Four from customers’ ebook readers, earning them a lot of bad publicity. Amazon took the action after the edition was added to Amazon’s catalogue without the rightsholder’s permission (note: for the uninitiated, the Kindle is Amazon’s ebook reader device which connects readers/book purchasers remotely to the online store.. and, apparently, Amazon back into the customer’s device..). Amazon apologised and acknowledged the error of their ways, but given their Big Brother-style action to remove the Big Brother novel, I was left wondering if it hadn’t all been a most brilliant guerrilla marketing campaign to attract attention to their device and ebooks more broadly. If it wasn’t then we can at least smile smugly at the ironic symmetry of it all.

The episode attracted a lot of media interest and comment, including that of sci-fi novelist, blogger and journalist Cory Doctorow, whose recent novel Little Brother features tales of surveillance and digital intrusion in a near future San Francisco. Publishing industry magazine The Bookseller reported Doctorow saying that publishers who use DRM to tie readers to one ebook device are the ‘real pirates’, contrasting this model with the ownership of a print book and the ability to share it amongst friends and family who in turn recommend it to their friends: word of mouth... the tried and tested approach to get people talking about a book and drive sales.

It’s worth taking a closer look at Doctorow’s unorthodox approach. I interviewed him earlier this year after ‘publishing’ a version of Little Brother in the YUDU format using his Creative Commons License - this also spells out the Doctorow philosophy in more detail. To begin with Doctorow’s view of copyright appears mainstream – it allows him to sell rights to publishers and prevents them taking his stuff and sell it without his permission. But he’s pro the sharing of books and is turned off by the idea that readers have to get involved in the legal end (license agreements etc) which should remain the domain of agents, publishers and authors; a school classroom, for instance, shouldn’t have to talk to a publisher’s lawyer to put on a school play of one of his books. He also draws on the example of the music business in the digital age in which he claims ‘the biggest pirates are also the biggest spenders’ ie the biggest fans are likely to be the biggest downloaders, but they’re also the ones going to concerts, borrowing music from the library, buying bootleg and, yes, legal versions of their favourites bands’ music and other merchandise.

Doctorow’s views on lending of books and ebooks goes something like this: if he could loan out all his books without giving up possession of them, then he would; the fact that he can with digital files he views as an excellent feature rather than a bug. He’s nothing if not passionate – the following verges on preciocity.. but the man is in love with books and wants to spread that love around..‘By making my books available for free pass-along, I make it easy for people who love them to help other people love them.’ I think we get the message.

He does however have a sense of humour about all this: ‘the number of people who wrote to me to tell me about how much they dug the ebook and so bought the paper-book far exceeds the number of people who wrote to me and said, "Ha,ha, you hippie, I read your book for free and now I'm not gonna buy it." ’. He thinks that many publishers are in fact amenable to a different model – his own editor, the leading sci-fi editor Patrick Nielsen Hayden being a good example, and it may surprise some that Harper Collins allowed a free digital version to be shared in parallel with the for-sale print. At this stage in the market he understands some publishers’ scepticism: ‘time spent in ebook meetings compared with ebook sales is a poor return on investment’, but is keen to stress that the free ebook approach is ‘not an ideology thing’ – it just makes sense to use the technology that way – ‘Ebooks are verbs, not nouns. You copy them, it’s in their nature..’ - and in any case, free things, for example software, ‘are often much better’. So rather than pronouncing a clear position in favour of ebooks and ebook readers, he is prepared to voice his scepticism, particularly about the restrictions and limits they impose: ‘imagine a book made to be read under only one kind of light’. He admits that at this stage they are ‘a marketing tool more than anything else’. I assume that this opinion will be revised if ebook sales continue their upward trajectory.


A critical question is this: if everyone shared their ebooks with each other, how would authors and publishers make any money?


Doctorow’s answer is that ebooks help to sell print books. While the experience of reading a book on a screen remains unsatisfactory (on a computer) – with a variety of programs running in the background to distract us – then the print version, he claims, will remain the preferred option and so a sale will result. In this sense he feels the ebook may simply be 'a complementary good’.

What happens though once we’ve moved beyond the early adopter stage of ebook readers, when prices come down and the market matures – would there have to be a stage at which only digital extracts were made available rather than the whole book, or just scrap the whole model and charge for all digital versions but allow sharing? New business models will need to emerge if Doctorow’s dream of a world without DRM is to be realised, especially if he is right about a future where ebooks are not just marketing tools:

'In the final analysis, more people will read more words off more screens and fewer words off fewer pages and when those two lines cross, ebooks are gonna have to be the way that writers earn their keep, not the way that they promote the dead-tree editions’ - http://craphound.com/ebooksneitherenorbooks.txt

Doctorow may think that's a long way off..in the meantime 3 million ebook readers will be sold in 2009 - Forrester Research - so publishers are going to have to start thinking more creatively about this now. They may not need to focus on working with the current ebook reader providers either. The ebook reader critics who complain that the devices are one-trick ponies are not necessarily advocates of the print as remaining the long term solution. They’re simply saying that devices such as the iPhone will end up catering for an increasing range of activities including reading, even if – in the case of the iPhone – Apple had previously not expressed a strong interest in the book market.

When I ‘published’ Cory Doctorow’s last novel Little Brother last year in the YUDU format, I had neither met nor spoken with the celebrated author-blogger-activitst, and I wasn’t and am not particularly a sci-fi fan. My background in book publishing – which includes a period with O’Reilly ( they run the Tools of Change for Publishing TOC events ) – and subsequent work for internet companies , meant I was aware of Doctorow and his unconventional views on copyright. I had just recently read about his anti DRM stance and of the Creative Commons License accompanying the digital version of his novel Little Brother, allowing people to re-use and share digital versions of the work, partly with the aim of promoting the print version (published by TOR and Harper Collins UK). As I was in the middle of helping to launch YUDU’s digital publishing website for creating digital books, magazines, brochures etc., I thought we’d get some marketing mileage by creating a YUDU format ebook of Little Brother and placing in my YUDU Library of content. I also knew it would be instructive as well as interesting to go through the process of making this book available for sharing online via its Creative Commons licence, adding to the now more than twenty formats in which you can find Little Brother – all these of course in addition to the print version you can buy from bookshops.

So what effect did creating a digital version in a new format have?

As an ebook available for anyone to read on the YUDU website, this version Little Brother has been viewed or read 3,213 times at the time of writing (a fair amount of traffic for an ebook – not least for one item in a library of millions of documents). What I can’t measure or track is how many of these people went on to buy the print version – or for that matter how many didn’t buy the print because they read the ebook. On the other hand, what is undeniable is that all these people will have browsed the book – if not actually read it in its entirety – learned something about it and its author, and ultimately helped spread the word and got people talking. Cory Doctorow kindly thanked me for publishing the novel in the new format - by the way, he wasn't paying me – at the time YUDU.com was, and so I like to think there was a quid pro quo in publishing the YUDU format of his book as it helped drive more people to the website, to browse the huge library of digital content and publish some of their own.

As for Big Brother and the UK in 2009.. EU Telecoms Package, speed cameras and government’s handling of sensitive data aside - we're living in interesting times and witnessing the exciting changes in the publishing industry. Celeb authors and heavy discounting of books by big retailers (Wal Mart etc..not just traditional booksellers) are as pressing issues right now as ebook content licensing. For now I’d be quite sympathetic toward publishers and booksellers who restrict consumers' usage of ebooks – at least to start with – but I'm hoping some brave, new models emerge to keep the industry not just afloat, but growing. You can understand why Amazon and the competition want to protect their investments at this early stage - they’re prepared to stick their necks out and take risks and so they deserve some credit, but they shouldn't ignore the trail being blazed by Doctorow and others with radical and disruptive ideas.

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.

Sony Ebook Reader at The London Book Fair

This week I attended some sessions on ebook readers, epublishing standards and digital marketing at the London Book Fair (aka The LBF).

Sony were very optimistic about the prospects for their ebook reader and explained how their ability to enter the market successfully - though it's still early days - was as a result of their collaboration with a number of key players including the retailer Waterstones, the International Digital Publishing Forum (idpf), Penguin and Google. Sony is a pioneer and innovator in consumer electronics - it also knows all about making, owning and selling content in the music and film industries - and the thorny issues of IP and copyright, but the book industry represents a departure from their traditional comfort zones and clever partnering is essential.

If Google is an advocate of the Sony reader then that will surely add a lot of weight to the manufacturer’s campaign to succeed in this space. Google may still be persona non grata for some publishers but it’s the readers and consumers who count here and the recent Google Booksearch settlement agreement reached between the search company and the US book publishing industry should encourage publishers to move on and focus efforts and energy on creating new ebook products and services. That is to say once the settlement has cleared the remaining obstacles: opt outs, objections, and a final hearing the deadlines of which have just been extended several months, in the case of the Final Hearing until the week before the Frankfurt Book Fair.

Sony trod carefully given the august LBF audience, and while not wishing to upset those underwhelmed by the propsect of ebooks, they did a good job of making publishers sit up and take note. Graphs, stats and images illustrating the crisis in the newspaper industry paved the way for a discussion about emerging business models for books and content, the inevitability of ebooks as a medium and the opportunities they present for publishers wanting to develop complementary and new sales channels.

According to Sony’s research, users of their ebook reader are buying a lot of books around the key holiday times and are particularly attracted to the device as a way of travelling light but with all the books you want.

They also discussed ebook formats in particular the EPUB format - I shall post on this soon.

Some brave person from the digital community commented on the size of the seminar theatre in the Digital Zone of the LBF - it was approximately the size of a waiting room at a small dental surgery. Says something about the relative importance of digital at the London Book Fair - it's growing but should that be renamed the London eBook Fear..?