Black Friday looms…

As of the week before American Thanksgiving—the biggest shopping weekend of the year and the official start of the XMas shopping season—e-reader prices seem to have dropped to $79. Amazon has yet to announce any specials for the season.

The push this Christmas season seems to have two pieces:

1. The cheap e-ink readers (as gifts or otherwise), now under $100, to drive ebook sales over the Christmas holidays. This is a replay of last Christmas.
2. The new colour tablets from Amazon, Kobo, B&N as a push forward. These devices priced at roughly half what an iPad or Galaxy Tab costs, still seem aimed at “early adopters.” Reviews so far portray these devices as somewhat underwhelming, much like the first generation of e-ink readers. But the price psychology will no doubt result in lots of these selling this winter, priming the market in 2012 for a big movement forward, as the second generation of these devices are released.

As Amazon, Apple, and co. drive to expand this market, they move to increasingly more powerful, feature-rich devices. Does this threaten book reading?

Libraries threatened?

Penguin has pulled its new books from Overdrive and e-libraries, making it the 5th of the “big 6″ to hobble library ebooks. There is considerable confusion and controversy around the whether borrowing books takes away from sales—perhaps not on a one-to-one basis, but over time, over the long haul.

Important to keep in mind there are at least four parties involved: libraries, publishers, Overdrive/Amazon — and the readers themselves. As negotiations between any two play out, we see side-effects for the others. Few participants see the whole picture.

Speaking of which, Peter Brantley writes (http://www.slideshare.net/naypinya/what-if-the-future-of-libraries) of Amazon’s “loss-leader” strategy in the lending program:

For Amazon, the loss of revenue from lending (versus selling) is more than compensated for by increased traffic to the Amazon web site.

That’s the value of a platform.

Brantley suggests that what is needed is an (open) alternative to Amazon, one that a wide variety of stakeholders can buy in to. He also suggests that this problem is a problem of this moment in time; as content moves to digital, it will also migrate to the web. Libraries maybe shouldn’t lose too much sleep over ebooks per se.

Plummeting prices, overabundance of choices, the need for filters

More books are for sale than ever before, and it’s not slowing down. On Teleread, Rich Adlin says “I doubt there really is a single, good solution to the gatekeeping problem, except, perhaps, to not pay more than 99¢ for any ebook from an unknown author.” But really… this is just a re-statement of the problem.

The more substantial challenge is to get beyond the mass market mentality. Adlin struggles to find a workable price/quality balancing point, but I think that’s 20th-century “commodity” mentality. It isn’t going to be straightforwardly about price; it has to become about provenance, and reputation. Books are not commodities.

The move to the Web

Hugh McGuire’s PressBooks launched yesterday. This is a hosted web service (actually built on top of Wordpress) that provides an online writing and editing environment leading to pushbutton production of both ebooks and prepress-ready print books (for POD or whatever). PressBooks has existed as a hypothetical system for a couple of years (and I’ve been part of that discussion), posing the question: what happens when books are born on the web? But this week, it went live as a practical production strategy.

http://pressbooks.com/about

The Promise of Social Reading

At the recent Books in Browsers conference (Oct 26–28, San Francisco), “social reading” was a key theme. This isn’t a complicated concept, but it often takes some explanation.

Social reading is not an add-on. It’s not like an optional topping on a pizza. Social reading is a foundational cornerstone of the new media ecology which the Internet is enabling. It is not a choice, it is at the core of where we are going. – Bob Stein, BiB11

And even deeper:

Books have always been networked; it is us who are becoming networked now.
– James Bridle, BookTwo.org &  at BiB11 (see 8:40–10:00)

We like to think of reading as a solitary experience of deep concentration and focus.

More seriously:

This is a common, romantic notion of what reading is. But scratch the surface of this idea, and you find that this is only a small slice of what reading is about. Think about some common reading practices:

• studying from a textbook
• looking things up in a reference book
• researching for a paper (following references)
• reading to a child
• reading a poem
• reading the newspaper
• looking through a new magazine
• cracking open Harry Potter #7
• reading through the last part of Harry Potter #7

Many of these reading practices involve major engagement with things other than the text itself: focusing on “paratextual” elements, locating things, navigating, searching, scanning, and so on. Many of these are explicitly social, too, or at least have closely tied social bahaviours.

We don’t just read books; we talk about them too. We share them, and trade them, and recommend them. We give them as gifts, collect them, show them off. Bookshelves are important furniture in many homes; magazines displayed on the coffee table serve a similar communicative purpose.

…the thread started out asking about the ethics of going through other people’s stuff. But it moved on to the subject of snooping on others’ bookshelves. The question then became: if you were left alone in someone else’s house the morning after a date, would you make a judgement about their suitability for future dates from their book collection? The answer was an overwhelming yes. (from if:book)

There is growing awareness that most of the dominant ebook platforms today are pretty poor on the social side; they are in some cases worse than their paper counterparts in terms of facilitating the universe of social behaviours around reading. Much of the movement toward Social Reading is an attempt to fix this.

James Bridle’s Open Bookmarks

http://www.openbookmarks.org/social-reading/

http://booktwo.org/notebook/open-bookmarks-2/

Bridle’s Open Bookmarks project is more a manifesto than a development effort, but he’s done a better job than most of scoping out the kinds of things that are needed.

A nice bit of James Bridle, from BiB11:

http://www.youtube.com/watch?v=uTprAVmG204&t=12m25s

The core piece of functionality seems to be bookmarks and annotations, and the ability to do this in a standard way, and share them among readers, devices, platforms. Most e-reading platforms allow you to mark a place in the text; some allow annotations, but there is very little ability to share or move these contributions beyond the e-text itself. Why can’t an e-reader work more like the kind of functionality we’re used to on our computers?

Part of this is about ownership of ebooks and the freedoms that come with true ownership. A trend among e-retailers has been to construct this more like an extended loan: you don’t own it, you just have access to it. This works very well in the interests of rightsholders’ continued control (as in DRM), but it is detrimental to the reader’s freedom.

Bridle has also noted the idea of being “selfishly social.” That is, social reading doesn’t necessarily mean sharing with other people. Many of the key social reading functions are personal: how we manage our own reading experiences. Bridle points to the social (web) bookmarking tool Delicious (or PinBoard) as a good example: it is a platform that facilitates sharing, but the key use is people’s personal management of links and notes.

E-Reading Data

Kobo’s “Reading Life” platform has gone further than most in making the data about reading patterns visible.

http://www.kobobooks.com/readinglife

Kobo makes this visible, but you can be certain that Amazon and other e-reader platforms gather this data as well. Why should your reading patterns be corporate property? Shouldn’t you have access to this, and to be able to use it as you see fit?

Social writing

Part of the trouble with the “Social Reading” idea is our long-held notion that reading is an activity unto itself: the experience of a reader with a pre-existing text. If we deconstruct that a bit—as literary scholars have done for decades—we begin to see the practices of reading and writing as “deeply intertwingled.”

The Internet is nothing if not a platform for writing and reading, and it brings these two practices closer together than they ever have been before.

Richard Nash’s Red Lemonade is an attempt to build a publisher around a writing community: crowd-sourcing the reading and review among a whole group. (Poets have done this forever).

http://redlemona.de/

Local company protagonize is a writing social network, a massive, ongoing writing workshop.

http://www.protagonize.com/

The idea of “social writing” can’t help being influenced by software development, which has become massively collaborative in the past decade or two, originally as a way of cope with scale but more recently as a way of writing better code.

This messes violently with romantic modernist notions of the author, the author seen as the semi-divine conduit of creative inspiration, or creative genius.

Crowdsourcing is not necessarily something that one needs to defend, in this particular room; but if you go to the conference of the Associated Writing Programs, which is the conference of all the MFA Writing programs in the United States, you damn well need to defend it. It is a highly toxic term.. a euphemism effectively for the end of Western civilization. – Richard Nash, BiB11

That said, post-structuralist theory in the 1960s has seriously undermined this idea of the author: Roland Barthes spoke of the “Death of the Author,” survived by the living text. Michel Foucault analyzed the “author function,” historically situating authorship amid social and legal ideas about property and accountability. So if digital media begins to challenge the idea of the solitary author, working away in their garret, we shouldn’t be too surprised.

Wikipedia

The ultimate contemporary example of “social writing” is Wikipedia. Written by hundreds of thousands of contributors and largely unattributed, it has destroyed an entire publishing category, simply because it works so well. Wikipedia demolishes the idea of the author, succeeds despite it and indeed pretty much because it leaves it behind. It is, perhaps, a prototype for a new era of deeply collaborative media.

The Hardware of Reading Devices

E-Ink

“Electrophoretic ink” was originally prototyped in the 1970s at Xerox PARC, but wasnt’ brought to market until the mid-2000s as a high-quality reading display. E-ink use reflective light (like ink on paper), as opposed to the projected light of mosst computer screens (either old-style CRT or backlit LCD).

An e-ink display is a matrix of particles, each of which can turn black or white (or some point in between when charged. The display requires no electricity to maintain an image, only to draw a new image (e.g., when a ‘page’ is ‘turned’).

Modern e-ink displays are fairly high-resolution (upwards of 200 pixels per inch or PPI), have contrast ratios comparable to printed paper, and use very little battery power. The refresh rate, however, is very slow compared to conventional displays, making e-ink unsuitable to video, motion graphics, or even the kind of interactive interfaces we now take for granted.

E-ink was widely reported as the future of e-book devices when the Sony Reader and Kindle arrived (circa 2007), but general-purpose devices like the iPad seem to have put an end to e-ink idealism.

LCD and OLED Displays

LCD (liquid crystal display) is a very mature technology, having been the mainstay of computer screens for well over a decade. LCD screens are in all modern tablet devices as well. They are fairly high-resolution (upwards of 300 PPI in the iPhone4, but more commonly in the range of 125-150 PPI), have very high contrast ratios, and are extemely fast, making them very good for motion graphics. Most of these advantages are the result of years of engineering development. LCD displays use a lot of power, however, largely because a backlight is used continually to shine through the LCD pixels.

AMOLED (active-matrix organic light-emitting diode) is a newer variation that is easier to produce and uses less power because each individual pixel is a light source—therefore, black images are truly black and use no electricity. AMOLED screens are relatively new and haven’t penetrated the market fully yet. Many Android cell phones use these displays, especially Samsung, who have invested heavily in this technology.

Screen resolution, quality

The earliest modern computer displays (1980s-era Macintosh) were 72PPI, corresponding to the old printers’ measure of 72 “points” to the inch. While this was a handy reference, 72PPI is pretty crude for reading, and displays have been getting denser (higher resolution) ever since. Most modern laptop diplays are well over 00 PPI.

The first generation of laser printers (1980s) were 300DPI (dots per inch), which was judged “acceptable” but not great by printers and typographers. Most modern laser printers run at 600DPI (4x the original resolution), which is high enough to fool the eye into thinking there are no discrete dots at all. High-end professional output devices like printers “imagesetters” run at 1200 DPI or more, but the additiona resolution is in the aid of halftoning images rather than typographic quality.

Note that the practical difference between pixels and dots per inch is that a dot is a dot—that is, it is either black or white—whereas pixels can display shades of grey or colour. So a 300 PPI display has a far higher effective resolution than a 300 DPI printer.

Anti-aliasing is a method of shading the edges of a line to trick the eye into thinking that a jagged edge is actually smooth:

At last month’s Books in Browsers conference, Mary Lou Jepson claimed that doubling screen resolution increases reading speed by 50%!

http://www.youtube.com/watch?v=ikvwj54koLk (9:15 – 19:19)

Dedicated v. General-purpose Devices: A Generational Split?

Some better demographics data:

http://blog.nielsen.com/nielsenwire/online_mobile/changing-demographics-of-tablet-and-ereader-owners-in-the-us/

How do we make an electronic book?

Step 1: text

ASCII alphabet, defined in 1963.

Step 2: structure

Markup languages, prototyped in 1970s, standardized in 1980s

Step 3: rendering

Typesetting software, DeskTop Publishing software, developed in 1970s

PostScript page description language, early 1980s

Step 4: portability

World-Wide Web, circa 1990

Adobe Portable Document Format, 1993

Step 5: putting that all together

EPub standard: 2007

Inside EPub: a website in an envelope

An EPub file is essentially a .zip archive. Inside is:

• a MIMETYPE file that declares the file format
• a Manifest that lists the contents of the package
• a Table of Contents for navigation
• a folder full of content
• HTML files (one per chapter?)
• image files
• a CSS stylesheet

Producing EPub files

Most common method is to start with final print layouts in Adobe InDesign, and attempt to export cleanly.

For backlist titles, manual conversion via cheap labour in South Asia is most common method.

It is also entirely feasible to create EPub files natively, as if they were web pages.

Amazon’s Kindle does not read EPub

But, the Kindle format is structurally very simply to EPub. It too is basically a website in a wrapper.

Publishers can deliver EPub files and Amazon will convert.

Future Developments

EPub3 standard incorporates HTML5/CSS3/Javascript, bringing it directly in line with contemporary web development standards.

“Kindle8″ format just announced will also be based on HTML5.

App Development – An Alternative

Apps (for iPhone, iPad, or Android, etc) are software applications. Generally speaking, they are developed as unique pieces, and as such they can be more expensive to produce, especially if they contain multimedia elements.

Getting EBooks to Market

Part of Amazon’s success is making it easy to get ebooks into the Kindle store.

A general trend toward the adoption of EPubs in all other channels; standards are not quite standard, however.

Apple has been pushing “fixed-layout” EPubs for layout-intense iPad books. Targeted toward a single device.

Amazon pays wholesale price, but generally sells for a flat $9.99. Has also encouraged publishers (and especially self-publishing authors) to price ebooks lower… down to $1.99.

Apple launched a new “agency model” when the iPad and iBookstore were launched: publisher sets selling price; retailer takes a 30% cut. Terms of trade are that every retailer must sell at the same price; this covers publications from the “big 6.”

In summer 2011, Apple began rejecting apps (like Kindle and Kobo, as well as many magazines) that sold content by linking out to a retailer’s website. Apple’s policy is that all content for iOS apps should be sold through the iStore, at a 30% cut.

Bryan Young: A Look Inside Pottermore: http://www.huffingtonpost.com/bryan-young/inside-pottermore_b_927673.html

http://www.fanfiction.net/

http://www.livejournal.com/

http://www.harrypotterfanfiction.com/viewstory.php?psid=307529

http://fanlore.org/wiki/Main_Page

http://girlgenius.wikia.com/wiki/Category:Fan_Communities

http://girlamatic.com/madbun/

Two to start:

Mary Meeker’s 2011 Internet Trends slideshow is out: http://www.kpcb.com/insights/internet-trends-2011

Denis G. Pelli & Charles Bigelow. 2009. “A Writing Revolution” Seed Magazine. http://seedmagazine.com/content/article/a_writing_revolution/

In his two-part Transforming American Newspapers, Vin Crosbie holds that newspapers went from being the primary provider of information in an information-scarce world (a position they held for hundreds of years) to being one voice among many, without the newspaper industry ever being apparently conscious of this shift. Our fundamental relationship to information — and particularly the kind of information we read has shifted radically.

…the majority of Web users visit newspaper sites only a few times per month but visit a search engine multiple times per day. (Crosbie)

The kind of information paradigm made possible by mass production presupposes a mass audience. And mass communications was the paradigm of the 20th century. But, Crosbie argues, this is over. We are no longer members of a mass audience.

Will books suffer the same crisis of abundance over scarcity? This past summer, R.R.Bowker reported three times as many new self-published titles as traditionally published titles beginning in 2009. See Hugh McGuire’s article, Sifting Through All These Books.

Enhanced Ebooks – A fad?

http://www.youtube.com/watch?v=LGUqe9u56Xo

http://www.youtube.com/watch?v=rlhosnfP-Jw

Much is made of the so-called “enhanced” ebook these days. the capabilities of tablet devices driving much of the hype and imaginative possibilities.

But do we want enhancements? A recent BookTwo post by James Bridle suggests we don’t want extra stuff in our reading experience.

It occurs to me that there are at least a couple of creative sensibilities at work: one is what we call “literary,” exemplified in things like novels and essays. Another mode is what we might call “cinematic”–think documentary film.

Most “enhanced” ebooks and apps are a blend of the two. It appears to be simpler to elegantly add literary elements to basically cinematic productions than the other way around–but who knows?

What is a graphic novel?

Origins of Copyright

Three foundational ideas make up our modern conception of copyright:

1. Regulating the printing trade
2. The Right of the Author
3. ‘Intellectual Property’

1. Regulating the printing trade

Originally, certain printers would be granted royal monopoly to print certain works in exchange for royal censorship and control. This became the underpinnings of a printer’s business within a territory. In 1710 in England, in response to a quarrel between London and Edinburgh printers, the Statute of Anne gave London printers a limited-term exclusive right to print books, with a balance sought between private commercial interest and the public good.

Copyright was a regulation of industrial activity: who had to the legal right to manufacture and sell within a particular jurisdiction. “Pirates” would print and distribute outside of this law, or more commonly, in another country, and then smuggle the books over the border—this was common with British Books entering the USA through Canada.

2. The Right of the Author

Authorship begins to have legal implications around the same time. In the 1660s in Britain, the fist scholarly journal is published: Philosophical Transactions of the Royal Society. “Phil Trans” kept a formal record of the public communications of early scientists and served as a kind of registry of ideas, establishing the “paternity” of innovation and experimentation.

In France, around the time of the Revolution (1790s), ideals of a “free press” were tempered by the need to hold authors accountable for what they wrote and published. The idea of an inalienable connection between author and work began to be recognized in law.

In countries with cultural ties to continental Europe, the right of the author (or Droit d’auteur) are encoded in law. In Canada, for instance, there is a “moral right” which parallels the economic right to make copies—the connection between author and the work is formally recognized, which not only maintains the creator’s credit, but also gives the creator some degree of control going forward. In the UK and USA, there is no such moral right in copyright law.

3. ‘Intellectual Property’

By the late 1800s, copyright, patent, and trademark laws began to be recognized as fundamental pillars of capitalist economies, and the widespread notion of “intellectual property” began to be articulated. The idea that intellectual and creative work could and should be treated the same way as physical property has clear benefits in terms of industrial regulation, and the concept of intellectual property proved to be a popular one in the 20th century. It also raises considerable conceptual problems, which are well understood by lawyers and legal scholars.

Copyright terms and exceptions

In its original formulation in Britain, France, and the USA, copyright was rationalized as a limited monopoly which was tolerable (where monopolies in general are to be avoided) in order to create an incentive to bring creative and intellectual activity to market. Because monopolies were seen as bad things, the grant of monopoly from copyright was to have a limited term: originally in the USA, it was 14 years.

Over time, and often in response to the lobbying by copyright holders, the term of copyright has been extended several times. Currently, in the USA, copyright lasts for the lifetime of the author PLUS 70 years (50 years in Canada). The last round of copyright-term extension legislation in the USA (in 1998) coincided with the original Mickey Mouse films passing out of copyright—and was therefore popularly called the “Mickey Mouse Protection Act”. Critics worry that, given lobbying and the record of extensions, major works from the 20th century may never pass out of copyright.

When the copyright term has expired, a work falls into the “public domain”—that is, no longer protected by copyright. Anyone can do anything they like with the work. This is variously seen as a legal black hole, or an important public good.

For works still under copyright, exceptions are made for particular uses such as scholarlship, review, criticism, private study, and so on, In Canada, this is called the “fair dealing” exception; in the USA, it is a broader exception called “fair use.”

Globalization of copyright law

In 1886, the Berne Convention was established, which sought to rationalize copyright law across international boundaries, ensuring that works protected in one country would have the same protections in another country—this was to curb international piracy. Although the USA didn’t sign on until the 1970s, this international agreement has done the most to shape international copyright. IN particular, the Berne Convention’s rules say that copyright automatically accrues to the creator, with no need for formal registration (as had previously been the case in the USA, for example). Automatic copyright, in conjunction with long copyright terms, has created a global situation where almost all creative works from the 20th century will remain under copyright for a long time  to come.

Currently, there is a WTO copyright treaty, called the World Intellectual Property Organization (WIPO) which seeks to globally establish new copyright regulations based on the USA’s 1998 Digital Millennium Copyright Act. It has been accepted by many countries (including Canada), but not formally ratified not realized in national legislation. A series of Canadian copyright reform acts, including the current C-11 (2011, now before the house) have sought to reconcile the WIPO treaties with Canadian law. None have survived long enough to become law, yet.

The Problem posed by Digital Media

Since the 1970s, technological innovation has been making copyright a more complicated thing. The invention and spread of the photocopier made mechanical reproduction a personal matter rather than an industrial one. Copyright then begins to govern individual people’s practices, as opposed to regulating industry. The rise of the the Internet has made this problem much, much worse, as copying is not something we do hundreds of times a day, without even thinking of it. This creates problems both for traditional rights-oriented businesses, as well as for the law itself. As Wired Magazine founder Kevin Kelly put it, “the Internet is a copy machine” — the most efficient one ever invented.

In a sense, the Internet itself is an enormous challenge to the very idea of copyright. Ever act on the Internet is an act of copying. If we were to take copyright literally online, the Internet and WorldWide Web would instantly grind to a halt. This has posed major problems for legislators, often with ham-fisted results.

The American Digital Millenium Copyright Act (DMCA, 1998) added a number of new measures to US law. Notable is the criminalization of the breaking (circumvention) of technological protection measures—also known as “copy protection” or “digital locks” (this has appeared in the current proposal for Canadian law, in 2010’s bill C-32 and 2011’s C-11). This means that it is illegal to circumvent the copy protection in a device like a DVD, regardless of a person’s intent.

Digital Rights Management

Digital Rights Management (DRM) is a term referring to a variety of strategies for making software and digital media uncopyable (at least without permission). Much commercially-available digital media today has a DRM layer, including DVD movies, digital music (especially the older AAC music out of iTunes), TV and movies online, ebooks.

DRM has been almost universally panned as a pain in the butt. It is a hassle to deal with, limits convenience and often limits the kind of thing you might expect to be able to do with digital media (move it from device to device, make backups, lend to a friend, etc.). DRM has been more substantially critiqued as an ad-hoc restriction of previously available “fair dealing” and “fair use” exceptions and rights, since the software limits on what you may do with digital files may be considerable more restrictive than what copyright law allows you to do.

Protection of DRM (or “technological protection measures” or “digital locks”) in copyright law—by banning “circumvention measures” has been critiqued as an abdication of the law’s responsibility to seek a balance between the rights of creators (or, more accurately, corporate rights-holders) and the rights of larger society) by letting publishers and developers encode what rights are possible in the function of the software/media, and then criminalizing any attempt to get around it.

More importantly, DRM has been shown to not work. No copy-protection system is uncrackable, and it only takes one breach to make a work available on BitTorrent. In the meantime, DRM causes havoc for legitimate customers and fans, by treating them with suspicion and micro-managing their use of the work.

Canadian Copyright Reform

A series of copyright reform bills have been introduced into parliament since 2005. So far, every one has failed to pass into law because minority federal governments (Liberal and then Conservative) have failed each time. In 2010, the Conservative government introduced Bill C-32, which promised a balance between creators’ and users’ rights. The bill was received with mixed reviews. On one hand, it promised a whole new educational exception for fair dealing; on the other hand, it criminalized the circumvention of “digital locks,” even when the circumvention is for personal use already allowable under fair dealing exceptions. Canadian copyright analyst Michael Geist called C-32 “flawed but fixable,” with his main criticism the blanket digital lock provisions.

In late September 2011, the Conservative government (now with a majority) has reintroduced the bill, essentially unchanged, under the new label C-11. The educational exemption is still there; so is the criminalization of circumvention of TPMs.

We begin with Douglas Rushkoff’s talk from SXSW2010:

http://www.youtube.com/watch?v=imV3pPIUy1k

Mary Meeker, of Morgan Stanley Research, does an annual report on Internet trends. This is the 2010 edition:

http://assets.en.oreilly.com/1/event/39/Internet%20Trends%20Presentation.pdf (PDF)

Update: 2011 numbers/presentation here:

http://www.kpcb.com/internettrends2011

Apple’s play: to define personal computing

“…book business a cork bobbing on the larger digital device stream…”

Shatzkin’s essay from July 2011, “Publishing is living in a world not of its own making” documents how Apple’s iStore terms of service deny other e-vendors’ Apps from selling content outside of the iStore itself. All sales through the iStore pay a 30% cut to Apple.

Apple’s (long-anticipated) move is not seen primarily as a competitive effort to promote Apple’s iBooks app, though it may have that effect for some. Rather, the situation seems to be about Apple capitalizing on the popularity and centrality of its own distribution channel on its iOS devices (iPad, iPhone, iPod). The terms of service affect books, music, video, and apps themselves.

And yet Shatzkin points out that Apple is the main reason Amazon’s ebook monopoly isn’t even bigger than it is, because Apple offered publishers a more palatable service agreement than Amazon when Apple and the “big 5″ publishers (HarperCollins, Pearson/Penguin, Simon&Schuster, Hachette, Macmillan) started doing business under the so-called “Agency Model” in 2010. This new model created a more publisher-friendly pricing scheme than Amazon’s blanket $9.99 ebooks. It is currently being challenged in a number of lawsuits on the grounds that it is “price-fixing.”

This week: the iCloud—watch Apple match Amazon’s new e-retailing moves.

Amazon’s consolidation moves

We talked a bit about Amazon a couple of weeks ago, about its growth to be the world’s largest book retailer, and its commanding presence in the book industry, having expanded into all adjacent areas, from ebooks to used books, with acquisitions of IMDB, Alexa,  Audible, BookSurge, AbeBooks, Zappos, Mobipocket, Lexcycle, and more.

Amazon has led ebook markets since 2007, when its Kindle device (and platform) was launched, the first major offering the combined an ebook reader with a major retail source. Since then, Kindle has been launched as an app on other platforms (iOS, Android, Blackberry), but has declined to participate in industry standards efforts. The Kindle book format is a proprietary format that keeps books and readers within the larger Kindle ecosystem by not allowing any interoperability with other systems. Shatzkin reports that Amazon has possibly 60% of ebook sales overall.

Since 2008 Amazon have pushed a flat $9.99 pricepoint for all ebooks, regardless of the price of the printed counterparts—or even of the price Amazon pays to the publisher for the ebooks. Indeed, Amazon has been prepared to lose money on ebook sales in order to grow its own market and market dominance. Publishers have expressed worry that a $10 retail price for books is unsustainable, given traditional industry structure. Amazon does not seem to care what the publishers think about this—instead, they are evidently intent on moving in publishers’ traditional turf.

In 2010, the large, New York-based Andrew Wylie literary agency announced the formation of an ebook publishing company called Odyssey that would work directly with Amazon, cutting traditional publishers out entirely. Amazon also reached out directly to self-publishing authors, offering a straight 70/30 cut (authors take 70%).

Building on long-standing infrastructure pieces (Amazon’s bookstore, MP3 store, social media pieces, cloud computing services, and the Kindle platform), 2011 is a major moment of consolidation. At once, they have lowered the price of basic ereaders to less than$100 and extended the upper end of their range (with the Fire device) beyond books, to music, movies, and the web itself, all channeled through a single customer-relations model.

Google’s latent strength

To get a sense of the size and complexity of Google’s database, consider the following list of data sources, which Google collects passively as you use the Internet every day:

• the content of most web pages online
• the network of links that connect all those web pages
• the popularity of different search terms (what people type in)
• the popularity of particular search results (what people click on)
• what searches result in which ads clicked on
• all of the above, indexed to individual people (as searchers)

But that’s just the beginning of Google’s empire. Add to the above dataset:

• Google Analytics, the most popular traffic statistics system for websites
• GMail, with something like 150 million users
• Google Reader, the most popular RSS reader application
• Google Maps & Earth, the post popular online mapping
• Google Docs (word processing and spreadsheets online)
• Picasa, Google’s photo-sharing system (with facial recognition technology since 2006)
• Blogger (yourblog.blogspot.com), which Google owns
• YouTube, which Google acquired in 2006
• Chrome browser
• Android…
• Books…

In 2004 Google announced that it would expand its web search program into printed books. The holdings of major research libraries in the USA would be scanned and indexed, giving them a corpus of about 15 million books. Almost immediately, the project was attacked as a violation of copyright, a dispute which is still before the courts today, even after two major out-of-court settlement agreements between Google and the American Association of Publishers (AAP) and the Authors Guild (AG). As of late 2011, most commentators seem to think the current settlement agreements will be scrapped, which could bring the legal challenge back into open litigation again. All the while, Google has continued to grow the collection.

While the legal challenge primarily has to do with the scanning of library collections, a parallel project called the “partner program” allows publishers to voluntarily add their books to Google’s index.

In winter 2010, Google launched (in the USA only) its much anticipated ebook service, called Google Editions, which made parts of the corpus available as ebooks. The program was not a major initiative on Google’s part, and met with a rather lukewarm reception. It’s hard to say what effect the Settlement’s legal status has had on Google Editions.

Whatever Google may do specifically in the marketplace, the sheer size of both their collection and their regular customer base (that is, all of us) means they are a major part of the future of books. The Settlement with the AAP and AG had much to do with defining how e-book royalty splits would work in the new world, as Peter Brantley’s “Eye to Eye” article illuminates.

Question: Why do we want ebooks?

What problem do they solve?

Where is the demand coming from?

Are they inevitable?

Instrumentalism and Technological Determinism

If you build it, they will come.

At the intersection of technological development and popular media, we entertain two dominant views: one is instrumentalist and the other determinist.

Instrumentalism, simply put, is the sense that technologies are simply tools: they are the means to achieve particular ends or to solve particular problems. The assumption here is that these ends of problems are clearly defined in advance, such that technological solutions can straightforwardly be specified and developed.

Technological determinism, on the other hand, suggests that technological development has a logic of its own. In its simplest form, this is see n in the modern assumption that progress is inevitable, that technology gets better over time (as in more better faster cheaper). There are also significant negative or dystopian varieties of the determinist viewpoint.

The ghost of ebooks past…

Alan Kay’s review article in Library Quarterly 70(3), “Dynabooks: Past, Present, and Future” takes aim at the first wave of e-reader devices in the late 1990s. These devices may be somewhat laughable by today’s standards—in terms of size, weight, screen quality, and number of titles available—but they are not conceptually all that different from the current crop of e-readers.

The e-readers are a far cry from what Kay had in mind in the late 1960s, when he set out to define a “Dynabook” which would revolutionize both reading AND writing. His early sketches and mockups (which look surprisingly like an iPad) are of a device which would be the centerpiece of 21st century literacy. His early designs called for both handwriting interface AND a keyboard, in order to handle different kinds of interaction. They also featured wireless networking and software which allowed the user—he intended the device for kids—to create their own media tools. Anticipating that forms of media and expression would shift radically in the age of digital media, he led his research team at Xerox to work out what “personal dynamic media” would be:

“[Dynabook] paid tribute to what the book (especially the printed book) had meant to our world and implied that we should not make anything worse than what books could already do.”

Kay was well ahead of his time. His research was directly instrumental in the development of the graphical user interfaces we use today, of laptop computers, and object-oriented programming. But his insights have been ignored by the ebook world. He noted that “there is no current interest in making use of what is special about the computer for representing content.”

Rather, Kay notes two key things the e-readers allow:

1. buy a book online, on impulse
2. carry many many books with you

Are we impressed?

Kay’s Dynabook

Kay’s “Dynabook” project (circa 1972) aimed at re-inventing the medium of expression and education in a dynamic, interactive mode, where the invention and development of simulations and dynamic models was the key modality. As such, it not only made “writing” at least as important as “reading.” It actually sought to revolutionize what “writing” might mean.

Kay’s work led directly to the development of the personal computers and laptops we use today—as well as the object-oriented paradigm in programming. His colleagues and contemporaries in the 1970s were the inventors of the Internet, multimedia production, and peer-to-peer systems.

In a sense, Kay’s contributions had already vastly outclassed the “electronic books” of the late 1990s. His ambition was far grander; he wanted to redefine literacy itself. His vision rested on a set of far-reaching ideas:

• in the near future, computers would be the commonplace devices of millions of non-professional users;
• this kind of mass techological/cultural shift would require a new literacy, on the scale of the print revolution of the 16th and 17th centuries;
• children would be the key actors in this cultural revolution;
• the cardinal virtues would be simplicity and malleability, such that these “millions of users” could be empowered to shape their own technological tools in accordance with the needs that they encountered—not merely the consumers of pre-existing tools and media.

Kay’s project is ongoing; we can see parts of it already realized, and other parts still seem like science fiction or Utopia.

Since 1971: Project Gutenberg: http://www.gutenberg.org

IDPF Stats on Ebook Sales: http://www.idpf.org/doc_library/industrystats.htm

Publishers’ Consolidation

Since the 1980s, big American publishers have been increasingly playing in the world of big corporate capitalism: mergers, acquisitions, big investment, and big pressure on quarterly growth.

See André Schiffrin. 2010. Words and Money. Verso Press.

Since the late 1990s, the biggest publishers have become part of massive multinational media corporations.

Bertelsmann AG acquired Random House (itself already a conglomerate of smaller publishers) in 1998. Bertelsmann folded leading paperback publisher Doubleday into Random House and it became a mega-publishing company, owned by one of the largest media companies in the world.

Its biggest competitor, HarperCollins, became the flagship company of a publisher conglomerate owned by Rupert Murdoch’s News Corp.

Simon & Schuster, along with Prentice-Hall, was acquired by Paramount Communictions in 1989; Paramount was acquired by Viacom in 1994, at which time it acquired Macmillan USA. In 2005, Viacom rebranded as its former subsidiary (and prior to that, parent company), CBS Communications.

Penguin, Dorling-Kindersley and the educational division of Simon & Schuster were acquired by Pearson PLC in 1998, the world’s largest educational publisher.

The Rise of Chapters

Chapters was the result of a merger of leading Canadian chain stores Smithbooks and Coles in 1994. The Chapters brand went public with launch of superstores in 1995. Within a few years, there were over 75 superstores, and 280 small stores (Coles, Smithbooks, etc.)

The merger was approved by federal Competition Bureau because it promised to expand the book market in Canada.

Soon Chapters had over 60% of the book market — both to customers and to publishers. This allowed them to drive increasingly hard terms: discounts (48%), >120-day payment terms, <90-day returns, and an often huge returns rate.

In 1999, Chapters attempted to launch a book wholesaler called Pegasus, demanding a 50% discount; there was a government inquiry into whether this was allowable, but Chapters found itself in dire financial straits by 1999. an American buyer (Borders?) seemed likely, but not allowable under foreign ownership laws. Heather Reisman’s Indigo (which had opened superstores in 1997 in Ontario) brought about a takeover bid and merged the two companies in 2001.

The “Superstore” model (think “big box” stores like Costco, Wal-Mart)

• big (20,000 sq ft rather than 2000; 100,000 books instead of 20,000),
• an in-store cafe (Starbucks),
• bestsellers discounted 40%.

In the USA, two big chains provide a comparable model to Chapters/Indigo: Barnes & Noble, an old American Bookstore chain, began the “book superstore” model in the late 1980s. Until recently it was the largest bookseller in the world.

Borders, the #2 chain in USA, with International stores as well, went to bankruptcy proceedings in February of 2011.

All 3 chains also opened online stores by around 2000.

The fundamental problem with superstores: they flood the market, beyond actual demand, which cheapens retail market, making it difficult for anyone to compete. See Karl Seigler’s “The Emperor’s New Clothes: A Submission to the Standing Committee of the Department of Canadian Heritage on the Recent Past and the Near Future of the Book Trade in Canada.” [March 2, 2000]  http://www.canadiancontent.ca/interviews/080103siegler3.pdf

The motivation is growth, which is always great for investment. But the growth is short-lived, as superstores “saturated the limited locations where books can be sold and faced the same limits to future growth that their predecessors in the malls had faced when available locations became increasingly marginal.” (Epstein 2002, p161)

As a result, the big chain stores eventually start to collapse (Borders) or contract (Chapters), and flesh out their stock with things more profitable than books (lifestyle, homewares, etc.)

Chapters’ volatility led in part to the bankruptcy of General Distribution Service—a leading book distribution agency in Canada—in 2001, and much damage to publishers. The Department of Canadian Heritage advanced grants to help ease the cashflow problem. Reasons were partly Chapters’ high rate of returns (of unsold books) and very late payment terms, but also partly GDS’ own growth and indebtedness.

Amazon

Amazon.com was founded in Seattle in 1995 on the idea that inventory (and therefore selection) could be far greater in an online store than even the largest superstore.

Amazon’s Initial Public Offering in 1997 (at the beginning of the dot-com boom) raised $1.8Billion in market capitalization, and became one of the “poster children” of the dot.com era. But the company wasn’t profitable at all in the early years, as it gradually amassed a world-beating database of customer profile information, and pioneered many Internet retail techniques:

• automated recommendations based on your purchasing profile
• wish-lists and other curation opportunities
• book reviews online
• expanding and consolidating market position by acquiring neighbouring businesses (IMDB, Alexa,  Audible, BookSurge, AbeBooks, Zappos, Mobipocket, Lexcycle)

Still branded primarily as a bookstore, Amazon is an e-retailing giant, almost single-handedly re-defining how retail, warehousing, fulfillment, and web-services are offered). It operates in a dozen countries worldwide.

A few milestones:

• Search Inside the Book – 2003
• Kindle Reader – 2007
• World’s largest book retailer – 2008
• Announced that ebook sales exceeded hardcover sales – 2010

Chris Anderson’s groundbreaking article, The Long Tail (Wired 12.10, 2004) dealt largely with how Amazon had defined a new era of retail based on very low-cost inventory and near-infinite availability.

If Amazon could become the world’s most successful bookseller while still warehousing and shipping physical books, think how successful they could be if they could convert a significant portion of that business to zero-cost inventory (i.e., ebooks).

Other major players released competitive ebook platforms:

Chapters/Indigo launched Kobo, originally as a subsidiary, but quickly spun off into a separate company in 2009. Chapters/Indigo owns more than 50% of the company, Borders in the USA owns (owned?) a significant piece as well. At first an app-based system, a dedicated e-reader appeared in 2010.

Barnes & Noble released the Nook reader in 2009, and a colour version in 2010. The Nook remains the #1 competitor to Kindle.

Amazon’s market dominance (no one knows exactly what their share is, as the company is notoriously cagey with details) means they are driving innovation at all levels of the book industry, something they have done ruthlessly in recent years.

Print on Demand and Self-Publishing

Self-publishing used to be called “Vanity Publishing”—here, an author would put up a substantial amount of money to see his or her manuscript produced as an actual book. It was expensive because offset printing and binding are expensive to do unless you’re prepared to print thousands of copies. So apparently, only the vain would do this.

In the late 1990s, digital printing technology emerged as a market force. Essentially a big photocopier with a binding machine attached, a digital printer can produce a book cheaply, even only one copy at a time. The result is that it becomes economical to produce very short print runs, or even single copies “on demand” as orders come in.

Digital printing has been used to make it possible to publish niche books or books with limited sales (such as poetry); it also provides an opportunity to keep books in print longer.

More dramatically, digital printing has caused an enormous boom in self-publishing. It is now cheap—very cheap—to produce a book, and so agencies and service providers abound, and the total number of titles in circulation has skyrocketed. Numbers from “Global Books in Print” publisher R.R. Bowker show the number of “traditionally published” titles per year to be about 225,000 in the USA. In 2009, self-published titles equalled that number, and in 2010, they vastly outnumbered traditionally published books. The result is that the market for books is even more saturated than it ever was before, with more and more titles competing for our attention.

The biggest obstacle facing self-publishers is visibility and access to a market. With its enormous audience, Amazon is in a position to make self-publishers into a market force. This is a business they seem to be pursuing aggressively today.

And what is a book? Most of us think of books as physical objects: words and sometimes images written or printed on a thin, flexible surface which has ususally been folded, cut, and bound. But if books were merely that, then a telephone directory or mail-order catalogue would qualify as much as Don Quixote or the Canterbury Tales. To those who know and love them, books are recognizable, as forests are, and cities, by their structure (branching and rebranching), their complexity (huge), and their size (big enough to get lost in). A book is usually something we can carry in one hand, yet if it is a real book it is larger than we are: a city or forest of words that can feed us and swallow us up and transform us. A book is not a catalogue or list; it has to make more sense than that. it is not a stack of cordwood but a tree: a branching, leafing, flowering structure, unfolding in the mind, where it can find the space it needs.
– Robert Bringhurst, The Surface of Meaning: Books and Book Design in Canada.

Book Publishing and the Industrial Revolution

There is an essential tension between the idea of the book as literature vs. the book as manufactured object.

Book publishing has been a manufacturing business since Gutenberg in the mid-15th century. Printing was the prototype for the industrial revolution, where capital investment in machine-assisted mass production leads to low marginal costs—where commercial success is achieved by pursuing “economies of scale.” If you can produce 100 of a thing, they might cost $10 each. But if you can produce 1000 of them, the price per unit drops to, say, $7. At 10,000, they might be only $3 each. If you can manage to sell your stock , the way to profit is to maximize production. This is the fundamental logic of industrial manufacturing, and it has governed book publishing for 500 years.

Gutenberg’s innovation in the 1450s was a method of producing inexpensive hard metal matrixes from which an unlimited supply of soft metal type could be cast for use on a printing press. Once the press forme was set up, any number of pages could be printed from it.

http://en.wikipedia.org/wiki/File:PrintMus_038.jpg

http://en.wikipedia.org/wiki/Image:Metal_movable_type.jpg

http://en.wikipedia.org/wiki/Image:Fi_garamond_sort_001.png

Printing technology and businesses quickly spread across Europe. The combination of printing technology and the flowering Italian renaissance in Venice in the late 15th century cemented the form of the book and basic structure of the book industry for centuries to come. The convergence of manufacturing technology, literacy, a fledgling consumer middle class take shape around 1500 and set the tone for the next 500 years.

The modern book publishing landscape took shape over the last 150 years or so, with the mechanization of various parts of the manufacturing process (particularly typesetting and printing), and the emergence of modern consumer, educational, and scholarly markets for books.

See “Making Books” on YouTube:

http://www.youtube.com/watch?v=hBztGX-2i1M&feature=related

Publishers, traditionally, have largely been those who financed the mass production and distribution of content and looked to make a profit on economies of scale. But publishers are are also the people or agencies who bring content and audiences together. This alternate definition is not a shift of function so much as a shift of emphasis; it may make more sense as we go forward into the digital era.

The Physical Book

The modern form and convention of the book was settled as of about 1500, especially by Aldus Manutius in Venice, who pioneered printing octavo editions (meaning the paper signature is folded 3 times, to make 8 sheets (16 printed pages), thereby developing a market for portable books. His press was responsible for several other  printing innovations, and his line of reprinted classics, aimed at a university market, is entirely recognizable as a modern publishing model today.

The modern “hardcover” book, with sewn signatures and cloth-covered cardboard cover, dates to about the mid-19th century. In the 1930s, Penguin Books popularized the paperback, (repeating Aldus’ formula of reprinting classics in a small format and selling them relatively cheaply). The 4½” x 7″ mass-market paperback, printed on cheap pulp paper, pushed publishing to enormous scale, with print runs in the hundreds of thousands of copies.

Our contemporary trade paperback (usually larger at 6″ x 9″) format—often the hardcover version in a soft cover—has risen in prominence in recent decades. The term “trade” refers to the mainstreaming of this format in bookstores; the more expensive hardcovers have been in decline this past decade; mass-market paperbacks are more commonly found in supermarkets, airports, drugstores.

The Publishing Process:

Here is the typical model of the process that produces a book for market. This typically culminates in two publishing seasons each year, spring and fall, though the process for any given book may take years to complete.

• Author writes a manuscript
• Author’s agent shops manuscript to appropriate publishers, for a percentage of future royalties
• Publisher acquires the book via a contract offering revenue split and usually an advance on royalties
• Developmental editing, multiple revisions, editor working with author
• Copyediting, or line-level editing; possibly multiple revisions.
• Publisher assigns the book an ISBN
• Interior Design development (what used to be called “typesetting”)
• Proofreading the text in ‘final’ form
• Cover design, revisions, often in consultation with sales reps
• Advance marketing (ABI)
• Sales conference, where editors meet sales reps and negotiate orders and estimates
• Foreign rights sales and other “subsidiary rights” trading, often happening at Book Fairs
• Production: – printing: paper, ink, film, plates, presses; binding: sewing, gluing; covers
• Packing: standard-sized cartons to make shipping more efficient
• Sales reps visit retail buyers and generate orders
• Publicity (launch, ads, reviews, placement, tie-ins, word-of-mouth)
• Distribution and/or wholesaling: warehousing, shipping
• Retail order fulfillment
• Managing demand and availability (e.g., Christmas sales spikes)
• Reprinting, “backlist” life
• Returns from bookstores: unsold stock goes back for a refund
• Royalty payments to author, if the original advance is “earned out“

A typical trade publisher will release between 6 and 60 books per season (i.e., twice per year). The majority of these will fail to “earn out” the advance paid to the author, so the economics of publishing is focused on an entire season’s list—the bestsellers are expected to subsidize the slower sellers. Further, strong backlist titles (which are much more profitable, because there are few ongoing costs) subsidize the (risky) frontlist.

As with all industrial manufacturing, there is an economic incentive to print more copies at once, because the unit cost will be lower. The publisher then must balance the risk of printing too many with the risk of printing at high cost. As a result, warehousing costs can be a killer for slow-selling titles. What makes it much worse is the book industry’s long-term practice of returns: allowing the retailer to ship back unsold copies for a full refund.

Until the recent advent of timely sales data, publishers would often not know how well a title has been selling until the returns start arriving some months later. In the past 5 years (in Canada), publishers now have access to weekly sales data, so there is a better chance at managing inventory.

In Canada, because the size of our market is smaller (roughly 1/10th) that of the United States, and yet US-originated book still are available for sale in Canada, the federal government has variety of protectionist regulations in place to support the domestic industry:

• There are strict copyright laws governing who can import foreign books (typically an exclusive Canadian agent)
• There are strict regulations governing foreign ownership of publishers and importing agents.
• The Canada Council for the Arts (CCA) offers subsidies (grants) on a per-title basis for high-risk by culturally valuable genres: fiction, poetry, drama, literary nonfiction.
• The Department of Canadian Heritage (DCH) offers an operating subsidy to independent Canadian publishers based on a sophisticated economic formula.

Despite these measures, the majority of bestselling titles in Canada are published by the Canadian “branch plants” of large multinational companies (Random House, HarperCollins, Penguin, Simon & Shuster, etc.). The relationship between these multinationals and independents has shaped nearly 40 years of government policy.