Thursday, October 29, 2009

The McBook wars

The one important lesson history teaches us is that 'history teaches us nothing'. (I guess the big guy also needs to laugh and entertainment himself now and then. Look at those fools ... look at 'em shooting themselves... look at 'em.)

Wal-Mart started by offering upcoming hardcover releases of Sarah Palin's Going Rogue and John Grisham's Ford County, amongst others at US$10 with shipping.

Amazon.com matched it. Wal-Mart took its offer to US$9. Next morning, Amazon.com also had US$9 books.

Richard Nash, Indie publisher and literary tweeter, says "Since Amazon/Walmart/Target prices lower than wholesale @kashbk suggests indie cancel orders from pblshers & order them from giants!"

Absolutely!

In the Klang Valley in November alone, some half a million books will be available at warehouse and remaindered prices with (rumour has it) a third from local publishers and distributors including a substantial quantity from Singapore. Yes, its called dumping. It is probably illegal. As far as we know there are strict laws governing 'sales', although anything can be 'arranged'. This is kow thim country. But, what's really going on? Is someone big going down? Sure sounds like a closing down sale to me, even if it is done by proxy.

Meanwhile, if you are a book retailer, you should know where you need to be.

Most people think that the current form of the book industry has been around forever. Actually no. The Net Book Agreement in the UK was ruled illegal only in March 1997 and, and by 2009, 500 independents closed down as a result. (Dillons and Waterstones actually started offering books on discount in 1991 -- still, not all that long ago).

The book, then, officially became a shoe in the UK, and thus entered the McBook.

Book retailing once used to be seen as an interaction of a consumer with a specialist shop. That model is, largely, not applicable anymore. By the late 1990s only 45% of sales were by specialists whose core business was bookselling.

I looked at history and dug up some interesting facts, that it always takes a crisis to inject some sense into the industry. The current pattern of the book trade was, more or less, defined in England at the start of the nineteenth century -- publishers injected the risk capital, wholesalers distributed and retailers sold the books to the public. (The practice of remaindering also began around then, in 1790, to clear old stock to make way for the new.) But the industry was bedevilled by cash flow and undercutting, particularly, at the booksellers end. In 1829, in the aftermath of the banking crisis of 1826, a group of major publishers and booksellers tried to impose some sort of stability into the system with the Bookselling Regulations, which fixed trade and retail prices. Unfortunately, the committee that formulated the Regulations did not fully represent the industry. Then in the expanding economies of the 1830s, these Regulations were deemed no longer necessary. (Talk of short memories.)

There was another attempt at reviving the Regulations in some form in 1848, but the protesters (who included Charles Dickens and Alfred Tennyson) won the day. The times were too good. Free trade and laissez-faire were the buzzwords of the period. Unfortunately, but predictably, this defeat was extremely bad for the industry. By 1880, it became a major crisis for booksellers, with publishers threatened with the prospect of being cut off from the market due to a shortage of retail outlets.

Then in 1890 Frederick Macmillan, who inherited his well-established family business, proposed that books should be published with 'net' retail prices with a discount to the bookseller to ensure a reasonable margin. Retailers who broke the rules were cut off. Despite initial protests, this 'net agreement' spread through the industry ensuring stability and growth. The industry could not ignore the enthusiasm for Macmillan's initiative. A London Bookseller's society was formed around then and, in 1895, the society became the Associated Booksellers of Great Britain and Ireland (which later became the Booksellers Association).

The Net Book Agreement survived up to 1997.

Biblio: A History of British Publishing by John Feather.

Thursday, October 15, 2009

Understanding the Google deal

In her weekly video podcast, German Chancellor Merkel appeals for more international co-operation on copyright protection and says that her government opposes Google's drive to create online libraries full of scanned books.

Last month French publishing house La Martinière, the French Publishers' Association and an authors' group asked a Paris court to fine Google €15m (£14m) and €100,000 for each day it continued "to violate copyright" by digitising their books.

In the US, the Authors Guild and the American Association of Publishers have asked for the Fairness Hearing into the Google Settlement to be postponed as they seek to address concerns raised by the US Justice Department last week.

So is Google the new evil empire?

The more I read about the reactions to the 'Google Deal' the more it sounds like it. I am confused. But when Microsoft and Amazon complain about it, I cannot help but get a little suspicious. What the hell is going on?

Depending on which report you read, Google has so far digitised 7 to10 million books from major libraries, with many of the out-of-copyright (OOC) books made available for free limited browsing, with links to libraries that have them and bookstores where one could buy a copy. That's one heck of a lot of work with little monetary benefit to Google as far as I can see. (It's a pretty good service, and I use it often for research). Altruism? Or is there another motive?

Then after years of negotiations (in an effort to resolve a 2005 lawsuit brought by the Authors Guild and others) a deal was announced according to which Google would pay US$125m to create a Book Rights Registry with which authors and publishers could register works and be paid for books and other publications that are put online.

Microsoft, together with Yahoo, Amazon, some professors and state attorneys (calling themselves the Open Book Alliance), warn that Google and America's publishers are "misusing the judicial system" to create a "monopoly in digital books." And the whole project is now in jeopardy.

The Open Book Alliance -- or “Sour Grapes Alliance,” as Google calls it -- says: “The mass digitization of books promises to bring tremendous value to consumers, libraries, scholars, and students ... The Open Book Alliance will work to advance and protect this promise. And, by protecting it, we will assert that any mass book digitization and publishing effort be open and competitive.”

The Alliance claims: "Many startling challenges to copyright and competition policy lie buried in the settlement’s 300+ pages ..." It spells out how the settlement is not good for consumers and book-lovers, libraries and schools, authors and small publishers (especially Google's opt-out deadline), and that it sets a dangerous precedent.

I am all for open competition, serving schools and libraries, and hate that Google deadline thing. But why are Microsoft, Amazon and Yahoo involved? As Marcellus says to Horatio: Something is rotten in the state of Denmark.

As far as consumer interests are concerned, I cannot disagree with Tim Wu of Slate. A project such as this can only be a boon to academics, researchers of all kinds and even the curious lay-reader. It would allow one to venture far off the beaten track, to dig up obscure, but extremely, useful material that would otherwise disappear from our culture for good.

But is the deal exclusive to Google? Can Microsoft and others not establish their own digital libraries of scanned material -- if they are willing to spend their time and money?