NY Times
Could book publishers suddenly be in the position of telling Google what to do?
With the impending arrival of digital books on the Apple iPad and feverish negotiations with Amazon.com over e-book prices, publishers have managed to take some control — at least temporarily — of how much consumers pay for their content.
Now, as publishers enter discussions with the Web giant Google about its plan to sell digital versions of new books direct to consumers, they have a little more leverage than just a few weeks ago — at least when it comes to determining how Google will pay publishers for those e-books and how much consumers will pay for them.
Google has been talking about entering the direct e-book market, through a program it calls Google Editions, for nearly a year. But in early discussions with publishers, Google had proposed giving them a 63 percent cut of the suggested retail price, and allowing consumers to print copies of the digital books and cut and paste segments. After Apple unveiled the iPad last month, publishers indicated that Apple would give them 70 percent of the consumer price, which publishers would set.
According to several publishers who have been talking to Google, the book companies had balked at what they saw as Google’s less generous terms, and basically viewed printing and cut-and-paste as deal breakers.
Now that both Apple and Amazon have agreed to terms more to the book companies’ liking, several publishers said that their conversations with Google have taken on a more flexible tone.
These publishers, who requested anonymity because their discussions with Google are confidential, said Google had relaxed its plans to allow customers to print or cut and paste.
“Google has always been open to working with publishers as part of Google Editions, in terms of supporting an open and competitive e-book market,” said Daniel Clancy, director of Google Books.
How e-books are sold — and for how much — has been a crucial topic of debate among publishers and retailers for the last two years, as digital books have taken off. Led by Amazon.com’s Kindle electronic reading device, the e-book market is growing at a fast clip, fueled partly by cheap digital editions. Amazon and several other retailers now offer new releases and best sellers for $9.99, far less than the typical $26 cover price on hardcovers.
Publishers have been fretting that such pricing has devalued books in the minds of consumers and have been looking for ways to regain control of what readers pay. When Apple unveiled its iPad, it said it had agreements with five of the country’s six largest publishers. Under those agreements, publishers would set e-book prices — within limits — so that new releases of most general fiction and nonfiction would sell for $12.99 to $14.99. Apple will act as an agent of the publishers — a set-up known in the publishing world as the agency model — and take a 30 percent cut of each sale, leaving the rest for publishers to split with authors.
In early negotiations, the 63 percent Google had been offering publishers was based on a wholesale model, but executives briefed on the discussions said that Google was now open to talking about an agency model and was also prepared to discuss paying publishers 70 percent of each sale.
Even Amazon has been forced to back off its $9.99 pricing in an agreement with Macmillan, one of the country’s six largest publishers. In a recent dust-up after Macmillan told Amazon it was moving to the 30 percent agency model with higher consumer pricing, Amazon removed direct access to Macmillan’s physical and electronic books from its site for a week. Amazon later surrendered to the publisher’s terms.
Google’s e-book retail program would be separate from the company’s class-action settlement with authors and publishers over its book-scanning project, under which Google has scanned more than seven million volumes — mostly out of print — from several university libraries. That settlement was recently imperiled by a filing from the Department of Justice that said it still had significant legal problems with the agreement, even after a round of revisions. The settlement is subject to court approval.
Google users can already search up to about 20 percent of the content of many new books that publishers have agreed to enroll in a search program. According to publishers, Google originally said it would automatically enroll any book sold through Google Editions in the search program. An executive from at least one of the six largest publishers said the company did not agree with those terms. Mr. Clancy said that Google would not require books sold through Google Editions to be part of the search program.
Last May Tom Turvey, director of strategic partnerships at Google, told publishers at the annual BookExpo convention in New York that Google’s program for selling new e-book editions would allow consumers to read books on any device with Internet access, including mobile phones, rather than being limited to dedicated reading devices like the Amazon Kindle.
Google, without its own e-reader, wants to be a Switzerland of sorts, competing with Barnes & Noble and other e-book sellers to become the preferred digital bookstore on devices other than the iPad or the Kindle, such as Android smart phones.
In general, publishers are eager for Google to enter the e-book market because they want more competition. “We would love to have a diverse marketplace for e-books,” said Maja Thomas, senior vice president for the digital division of Hachette Book Group, which publishes blockbuster authors like James Patterson and Stephenie Meyer. Since Google would contribute to such diversity, Ms. Thomas said, “we welcome them.”
If Google does enter the e-book market, it would be one of a handful of programs under which the company sells content directly to consumers. Google generates the majority of its revenue from ad sales on its search pages and on the Web sites of publishing partners. It is now charging for content through its YouTube unit, renting digital versions of independent films tied to the Sundance Film Festival.
With the impending arrival of digital books on the Apple iPad and feverish negotiations with Amazon.com over e-book prices, publishers have managed to take some control — at least temporarily — of how much consumers pay for their content.
Now, as publishers enter discussions with the Web giant Google about its plan to sell digital versions of new books direct to consumers, they have a little more leverage than just a few weeks ago — at least when it comes to determining how Google will pay publishers for those e-books and how much consumers will pay for them.
Google has been talking about entering the direct e-book market, through a program it calls Google Editions, for nearly a year. But in early discussions with publishers, Google had proposed giving them a 63 percent cut of the suggested retail price, and allowing consumers to print copies of the digital books and cut and paste segments. After Apple unveiled the iPad last month, publishers indicated that Apple would give them 70 percent of the consumer price, which publishers would set.
According to several publishers who have been talking to Google, the book companies had balked at what they saw as Google’s less generous terms, and basically viewed printing and cut-and-paste as deal breakers.
Now that both Apple and Amazon have agreed to terms more to the book companies’ liking, several publishers said that their conversations with Google have taken on a more flexible tone.
These publishers, who requested anonymity because their discussions with Google are confidential, said Google had relaxed its plans to allow customers to print or cut and paste.
“Google has always been open to working with publishers as part of Google Editions, in terms of supporting an open and competitive e-book market,” said Daniel Clancy, director of Google Books.
How e-books are sold — and for how much — has been a crucial topic of debate among publishers and retailers for the last two years, as digital books have taken off. Led by Amazon.com’s Kindle electronic reading device, the e-book market is growing at a fast clip, fueled partly by cheap digital editions. Amazon and several other retailers now offer new releases and best sellers for $9.99, far less than the typical $26 cover price on hardcovers.
Publishers have been fretting that such pricing has devalued books in the minds of consumers and have been looking for ways to regain control of what readers pay. When Apple unveiled its iPad, it said it had agreements with five of the country’s six largest publishers. Under those agreements, publishers would set e-book prices — within limits — so that new releases of most general fiction and nonfiction would sell for $12.99 to $14.99. Apple will act as an agent of the publishers — a set-up known in the publishing world as the agency model — and take a 30 percent cut of each sale, leaving the rest for publishers to split with authors.
In early negotiations, the 63 percent Google had been offering publishers was based on a wholesale model, but executives briefed on the discussions said that Google was now open to talking about an agency model and was also prepared to discuss paying publishers 70 percent of each sale.
Even Amazon has been forced to back off its $9.99 pricing in an agreement with Macmillan, one of the country’s six largest publishers. In a recent dust-up after Macmillan told Amazon it was moving to the 30 percent agency model with higher consumer pricing, Amazon removed direct access to Macmillan’s physical and electronic books from its site for a week. Amazon later surrendered to the publisher’s terms.
Google’s e-book retail program would be separate from the company’s class-action settlement with authors and publishers over its book-scanning project, under which Google has scanned more than seven million volumes — mostly out of print — from several university libraries. That settlement was recently imperiled by a filing from the Department of Justice that said it still had significant legal problems with the agreement, even after a round of revisions. The settlement is subject to court approval.
Google users can already search up to about 20 percent of the content of many new books that publishers have agreed to enroll in a search program. According to publishers, Google originally said it would automatically enroll any book sold through Google Editions in the search program. An executive from at least one of the six largest publishers said the company did not agree with those terms. Mr. Clancy said that Google would not require books sold through Google Editions to be part of the search program.
Last May Tom Turvey, director of strategic partnerships at Google, told publishers at the annual BookExpo convention in New York that Google’s program for selling new e-book editions would allow consumers to read books on any device with Internet access, including mobile phones, rather than being limited to dedicated reading devices like the Amazon Kindle.
Google, without its own e-reader, wants to be a Switzerland of sorts, competing with Barnes & Noble and other e-book sellers to become the preferred digital bookstore on devices other than the iPad or the Kindle, such as Android smart phones.
In general, publishers are eager for Google to enter the e-book market because they want more competition. “We would love to have a diverse marketplace for e-books,” said Maja Thomas, senior vice president for the digital division of Hachette Book Group, which publishes blockbuster authors like James Patterson and Stephenie Meyer. Since Google would contribute to such diversity, Ms. Thomas said, “we welcome them.”
If Google does enter the e-book market, it would be one of a handful of programs under which the company sells content directly to consumers. Google generates the majority of its revenue from ad sales on its search pages and on the Web sites of publishing partners. It is now charging for content through its YouTube unit, renting digital versions of independent films tied to the Sundance Film Festival.
