The politics of domination

Peter Kilborn | 03/12/2010

Increasingly the future of digital publishing is being dictated by three or four organisations – Google, Amazon, Apple and maybe Microsoft - with a clear wish to secure market domination. It is not necessarily the same market they want to dominate, but the tactics employed are similar. The quandary for publishers here, as elsewhere, is how to deal with these so-called ‘frenemies’.

Publishers have something all these organisations want or need - access to content – and this makes friends of them. What they do with content and the terms on which it is licensed is liable to make them enemies.

Amazon and Google, in particular, are two companies with very different objectives and strategic visions. Amazon has chosen to force the market to its will: setting proprietary standards for Kindle, trying to impose pricing on the market, creating barriers to print-on-demand sales with BookSurge, developing an acquisition strategy which eliminates competition rather than produces gain in market share. Its ‘defeat’ by Macmillan US in the last couple of weeks in the matter of pricing of e-books still leaves it with higher per unit revenues than before.

Google has repeatedly denied any wish to be a bookseller. As we noted last time its altruistic-sounding mission is to ‘organise the world’s knowledge and make it available’. But despite its famously hippyish origins and working philosophy, Google exists to make money. It may not intend to make it out of selling books (not too much, at any rate), but it certainly intends to make it from dominating the market for search and the related advertising revenues; and that’s why it believes it can justify the cost of digitising all those books.

Amazon uses acquisition, Google its confessedly illegal digitisation of out of print but in copyright library books, as landgrabs to better their negotiating position when securing the flow of crucial content in the future. No wonder publishers are afraid.

This is the last in this series of blogs. In the six months or so since it began, though most of the digital action has been in America rather than in Europe, we have seen some critical changes in the landscape: the emphasis moving away from Kindle and other e-reading devices, now it seems largely commoditised, and a growing acceptance that multifunctional devices such as smartphones or the iPad are the way digital consumption is moving; seismic upheavals in the UK retail sector; the arrival of Apple as a potentially significant player in the future. What we have not seen here is spectacular growth in e-reading as an alternative to book-reading. We have not seen any sign of payback for publishers; nor have we seen much in the way of dramatic publishing initiatives. With hard times still here and still ahead, one wonders whether the industry is beginning to tire of its new toy.

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WATCH OUT FOR GOOGLE

Peter Kilborn | 02/16/2010

Nowhere is the iconic status of books more obvious - and more abused - than in the hands of the proselytisers for the Google settlement. An article appeared in a recent edition of the Guardian newspaper (though no doubt syndicated elsewhere) by David Drummond, Google’s senior vice president for corporate development and chief legal officer at Google, which began ‘If you love books and care about the knowledge they contain, there is a problem that needs to be solved.’

The problem is that of ‘orphan works’, those numerous published titles which occupy the limbo between in-print and out-of copyright status. It comprises the substantial majority of titles published in the last hundred years that Google needs to digitise if it is to achieve its stated objective of ‘organising the world’s knowledge and making it available’. Much effort of various kinds is currently being directed towards this issue: technologically through growing numbers of publishers’ print on demand programmes, and more practically through the efforts of the Book Rights Registry in the US and the European ARROW project, which hopes to identify rights holders by linking the databases of various EU authority file sources. The potential offer of money from Google for the right to digitise will also of course flush out a number of authors whose works have become orphaned.

However, Drummond’s bland use of the words ‘love’ and ‘care about’ are a sneaky way of drawing the reader into Google’s great conspiracy. Surely the chief reason why there are so many orphan works is that many of them are worthless: worthless to their authors and publishers as commercial opportunities; but also worthless in an absolute sense.

For twenty years between 1970 and 1990 I worked for one of the leading London trade publishers as production director and was responsible for producing many thousands of titles. Yet how many of those titles are remembered now and how many deserve to be? Just a handful: probably fifty at a stretch. The idea that the rest should be brought back from the dead and discovered by a new generation of readers is risible.

Yet the book as icon continues to exercise a powerful influence. In a later incarnation I became involved in a scheme which would have bookshop returns sent to a prison where it would be part of the prisoners’ work to make them unsaleable by drilling a hole through them. The uproar that this proposal provoked focussed almost entirely on the drilling of the hole, invoking parallels with Hitler’s book-burning activities. Prisoners were already destroying CDs by the million and no one turned a hair.

So when you read David Drummond’s closing sentence - ‘Imagine if that information could be made available to everyone, ¬everywhere, at the click of a mouse. Imagine if long-forgotten books could be enjoyed again and could earn new ¬revenues for their authors.’ - remember these are Google’s weasel words and beware.

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A Funny Old World

Peter Kilborn | 02/16/2010

The intervention of Apple in the e-book market – though in all the hullaballoo you need to be quite sharp-sighted to see that that is what the iPad represents – has set the cat among the pigeons in more ways than one.

There is of course no iPad in the UK yet. Reports are that it will be here in March, but without the iBook store and probably without wireless connectivity, so it may be some time before it becomes a serious competitor to the existing e-readers. But at long last we know for sure that it exists and is a plausible and powerful alternative platform to Amazon; and that is enough to stir up excitement among publishers. It would be naive, though, to suppose that Apple will be content to do the publishers’ bidding in a way that Amazon has so conspicuously failed to do in the matter of pricing, at least until this week’s spat with Macmillan in the US.

What is interesting about the events of the last few days is how the thinking in the publishing world of the last decade has been overturned. Suddenly the talk is all of ‘regaining control’ of content, by pricing or by delaying e-book publication. Yet for the past ten years or so, publishers have been obsessed with the volume of books they have sold, regardless of the cost and the discount levels and with a complete disregard for the well-being of independent bookstores.

The book trade here is still overshadowed by the Net Book Agreement, which until 1995 gave publishers the legal right to set the minimum price for their books. Though by modern standards a restrictive practice it maintained equilibrium in the trade which was probably good for the quality and breadth of publishing output and maintained a reasonably level playing-field for chain booksellers and independents. Its passing, engineered by W H Smith in collusion with a handful of major publishers, had all sorts of consequences, good and bad: of which the appearance of price competition and the arrival of Amazon.co.uk were among the most notable. Books became discounted everywhere and bestsellers became available in the supermarkets; and publishers and booksellers engaged in a frenzy of price cutting which remains with us to this day.

Suddenly, though, what was pretty obvious to observers has now sunk in with publishers: that price competition is actually bad for them; and that higher prices, controlled by them, are necessary for the long-term health of the industry.

Other oddities have been cropping up too: for instance, twenty-two new e-readers launched at the Consumer Electronics Show in Las Vegas last month but none of them apparently bidding for market leadership by competing on price; and Waterstone’s under its new management, having finally achieved its long-held objective of a virtual monopoly on the high street, talking of better range and better service standards – and by implication less discounting - rather than the ‘pile ‘em high, sell ‘em cheap’ philosophy which has prevailed under Gerry Johnson’s regime. It’s odds on that Waterstone’s will now start selling off underperforming stores.

As our former prime minister, Margaret Thatcher, memorably remarked when ousted from power: ‘It’s a funny old world.’

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