Preparing to Sell E-Books, Google Takes on Amazon

By MOTOKO RICH

Google appears to be throwing down the gauntlet in the e-book market.

In discussions with publishers at the annual BookExpo convention in New York over the weekend, Google signaled its intent to introduce a program by that would enable publishers to sell digital versions of their newest books direct to consumers through Google. The move would pit Google against Amazon.com, which is seeking to control the e-book market with the versions it sells for its Kindle reading device.

Google’s move is likely to be welcomed by publishers who have expressed concerns about the possibility that Amazon will dominate the market for e-books with its aggressive pricing strategy. Amazon offers Kindle editions of most new best-sellers for $9.99, a price far lower than the typical $26 at which publishers sell new hardcovers. In early discussions, Google has said it would allow publishers to set a suggested retail price, but that it would set the ultimate consumer price.

“Clearly, any major company coming into the e-book space, providing that we are happy with the pricing structure, the selling price and the security of the technology, will be a welcome addition,” said David Young, chief executive of Hachette Book Group, which publishes blockbuster authors like James Patterson, Stephenie Meyer and Nicholas Sparks.

Google’s e-book retail program would be separate from the company’s settlement with authors and publishers over its book-scanning project, under which Google has scanned more than seven million volumes from several university libraries. A majority of those books are out of print.

The settlement, which is the focus of a Justice Department inquiry about the antitrust implications and is also subject to court review, provides for a way for Google to sell digital access to the scanned volumes.

And Google has already made its 1.5 million public-domain books available for reading on mobile phones as well as the Sony Reader, the Kindle’s largest competitor.

Under the new program, publishers give Google digital files of new and other in-print books. Already on Google, users can search up to about 20 percent of the content of those books and can follow links from Google to online retailers like Amazon.com and the Web site of Barnes & Noble to buy either paper or electronic versions of the books. But Google is now proposing to allow users to buy those digital editions direct from Google.

Google has discussed such plans with publishers before, but it has now committed the company to going live with the project by the end of 2009. In a presentation at BookExpo, Tom Turvey, director of strategic partnerships at Google, added the phrase: “This time we mean it.”

Although Google generates a majority of its revenue from ad sales on its search pages, it has previously charged for content. Three years ago, it opened a Google video store, and sold digital recordings of N.B.A. games as well as episodes of television shows like “CSI” and “The Brady Bunch.” This year, Google said it might eventually charge for premium content on YouTube.

Mr. Turvey said that with books, Google planned to sell readers online access to digital versions of various titles. When offline, Mr. Turvey said, readers would still be able to access their electronic books in cached versions on their browsers.

Publishers briefed on the plans at BookExpo said they were not sure yet how the technology would work, but were optimistic about the new program.

Mr. Turvey said Google’s program 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. “We don’t believe that having a silo or a proprietary system is the way that e-books will go,” he said.

He said that publishers would be allowed to set list prices but that Google would price the e-books for consumers. Amazon also lets publishers set wholesale prices and then establishes its own prices for consumers. In selling e-books at $9.99, Amazon effectively takes a loss on each sale because publishers generally charge booksellers about half the list price of a hardcover ­ typically, around $13 or $14.

Mr. Turvey said that Google would probably allow publishers to charge consumers the same price for digital editions as they do for new hardcover versions. He said Google would reserve the right to adjust prices that it deemed “exorbitant.”

Pearson Answers Schwarzenegger’s Call for E-Textbooks

(By Craig Morgan Teicher -- Publishers Weekly, 6/18/2009)

Last week, California Governor Arnold Schwarzenegger proposed replacing school textbooks with e-books in order to help plug a state budget gap. Now, textbook giant Pearson has responded with digital content to supplement California’s programs in biology, chemistry, algebra 2, and geometry.

In a statement made recently, Schwarzenegger said, “Kids are feeling as comfortable with their electronic devices as I was with my pencils and crayons. So why are California’s school students still forced to lug around antiquated, heavy, expensive textbooks?” But easing the strain on students’ backs was not the Governor’s main reason for putting out a call to developers to create electronic textbooks. The current budget gap in the state is estimated at $28 billion.

Peter Cohen, Pearson’s CEO of North America school curriculum business, said, “We believe it is important to take these forward steps toward an online delivery system and we are supporting the Governor’s initiative, recognizing there are numerous challenges ahead for the education community to work through,” including “how we ensure that low income and disadvantaged students receive equal access to technology; how we address the needs of English language learners; and how we protect the intellectual property rights of content and technology creators to support future investment and innovation.”

According to the official Web site for California’s Free Digital Textbook Initiative, e-books must “approach or equal a full course of study and must be downloadable.” The site also offers instructions and links for publishers of e-books to submit books for consideration for use in California schools.

Pearson is the first major company to respond to Schwarzenegger’s initiative, which garnered an array of responses from the media, from speculation in the U.K. that others will imitate the project, to others who point out that e-books in school are not more environmentally friendly than print textbooks.

McGraw-Hill Education Announces Digital Initiative

Programs will cultivate critical thinking and teach students ways to use the Internet for problem-solving

By Lynn Andriani -- Publishers Weekly, 6/16/2009 8:04:00 AM

McGraw-Hill Education today announced the creation of its Center for Digital Innovation, a research and development center that will focus on bringing technology to elementary and secondary classrooms. The Center will be led by McGraw-Hill Education’s team of former teachers, engineers and software developers.

The Center, in Bothell, Wash., is developing digital platforms that are customized by state standards, district requirements, and individual teacher and student needs. The Center’s digital platforms will allow teachers to quickly assess a student’s proficiency level, so that teachers can alter their instruction based on the needs of each student. Programs will cultivate critical thinking and teach students ways to use the Internet for problem-solving.

Programs will address literacy, mathematics and science. Today, the Center launched two new products that will be available in August for the new school year: CINCH Project, a collection of Web 2.0 tools for collaborative learning projects, with a community-based Web site where teachers and students create digital profiles and participate in group activities; and Planet Turtle, a K-3 social network where children can interact with their peers by developing online animal-based character avatars and completing learning “challenges” that progress as their skills improve.

While college publishers are rapidly moving into digital publishing, there has been less activity at the elhi level, something MHE hopes to address with the Center. Terry McGraw, chairman, president and CEO of the McGraw-Hill Companies, said, “Our programs will be the first to create offerings based on how students use technology to bridge the gap between digital socialization and digital learning. This will help teachers, parents and students to unite around the goals of fostering growth and development; creating richer, more involved methods of learning; and more effectively addressing issues that arise.”

"Giving It Away": When Free E-books Work and When They Don't

(Book Business, By Noelle Skodzinski)

More U.S. adults had read an e-book (15 percent) than had actually paid for an e-book this year, according to Michael Norris, senior analyst at Simba Information, based on the results of a recent Simba study called, "Trade E-book Publishing 2009."

Norris moderated a session at BookExpo called, "Giving It Away: Balancing a Sustainable Publishing Model While Discovering the Rewards of Free."

Peter Balis, director of digital content sales for John Wiley & Sons, and Brent Lewis, vice president, digital and Internet at Harlequin Enterprises, shared their experiences with free e-book efforts and their insights into the place for free e-books in a publisher's business model.

Balis, whose responsibilities span both nonfiction and trade publishing, said that this year, for the time, "thanks to mobile devices," trade titles sold more in e-book form than scientific, technical, medical and scholarly (STMS) titles—sales through "a consumer-facing retailer superseded Wiley's largest library wholesaler," he said. "That's very significant because it shows, for us, a migration from research-based [usage] to consumer [usage]. It follow our traditional best-seller list now."

Overall, Balis said, "When we explore free offerings at Wiley, we have to do so in light of our profit," he said. The company has found that "free does not cannibalize paid; free does not dilute brand; and free has some purpose," whether for marketing, public relations, or to upsell or generate traffic and/or sales/revenue on Web sites. (Wiley's online business model is a bit different than most publishers, however, as revenue from Wiley's Web sites is based on advertising, not book sales, said Balis.)

Balis discussed a few examples of the company's free e-book efforts—for Frommers.com and CliffsNotes.com. "Both are standalone, successful businesses," he said. "Any content on the site is there for these businesses' profitability."

The company, therefore, has been careful to ensure that free will not cannibalize print sales, he said. On Frommers.com, free content is "sectioned off," or served by segment, theme or destination, not by chapter or in a complete digital facsimile of print content. For example, said Balis, a search for content on accommodations or restaurants in Paris would produce a relevant chapter from a book, "but you can't read [the book] in its full form," he said.

Free content also is presented in a way that site visitors must click through multiple pages while reading, which Balis said "allows us to monetize other areas of content and create opportunities for advertising."

The lesson learned from this example, said Balis, "Is that despite offering free content in complete, but not identical form, Frommer's is the No. 1 travel site in its category and maintains its market share in travel books."

Cliffs Notes, which generally sell for $5.99 in print form, he said, are still a very successful print program for Wiley. On CliffsNotes.com, "any student can read a book in complete digital form," he notes. But, says Balls, "we find we sell the downloadable [PDF] form." In fact, 25 percent of those who view the free content convert to paid readers, paying $5.99 for a downloadable PDF. The key, suggests Balis, is the portability of the downloadable PDFs; students want something they can "take with them," he said. The bulk of orders are placed late at night when students "can't wait for the print version."

Overall, Wiley has "archived digitally the first chapter of every book, online only, non-downloadable," and a 15-page preview is offered on Wiley.com. The company also has explored (but not yet participated in) content-sharing sites such as Scribd, but said Balis, "We are cautious about our content. We want to take advantage of legitimate viral aspects, but these sites are also aiding in pirated distrubution of content."

Balis noted one example where offering content for free did not work so well. The author of "The Truth About Cheating" (M. Gary Neuman) wanted to offer his book for free on the Amazon Kindle for one week coinciding with his appearance on "The Oprah Winfrey Show."

"The book did well, but not as well as it should [have]," said Balis. "There's no question that one week [of] free download cannibalized sales." The one-week period was just too long, he noted.

Balis offered a word of caution for other publishers: Free e-books have to have some hook to a causal relationship, either by metrics and traffic increase or an upsell to future products.

Wiley is now exploring offering backlist titles for free to upsell an author's new title, as well as a "try-before-you-buy environment" for mobile.

"Be careful about how you use [free content], but don't be skittish," he said.

Lewis said that Harlequin has been doing free promotions for decades, and this year has a significant free e-book and print-book giveaway effort in conjunction with the company's 60th anniversary. The goal, he said, is "to increase awareness of our brand and the amount [and scope] of content we publish." To this end, he said, their efforts have been successful.

"I think it's really important to define the business objective of why you're giving it away free and how it's going to help your business," he said.

"The interesting thing about digital sampling," he noted, "is that a lot of people download the digital book, but don't read the whole thing; they read the first chapter and then go buy [the book]."

The key, said Lewis, is: "Make sure it's measurable—define success. What is success for you and can you track it?"

Google Promises Publishers (And Amazon) Will Sell E-Books In 2009

(paidcontent.org; By Staci D. Kramer - Sun 31 May 2009)

Nothing says we’re not a monopoly like trying to break up another perceived stranglehold. Google (NSDQ: GOOG) plans to enter the commercial e-book business this year—and, unlike Amazon (NSDQ: AMZN), apparently plays to let publishers set prices, according to The New York Times. The program would be separate from the recent book-scanning settlement. Piecing together conversations Google held with publishers at the BookExpo in New York with a presentation made by Tom Turvey, director of strategic partnerships at Google, the NYT reports:

—Publishers could set their own prices and probably would be allowed to charge as much as they do for hardcovers but Google would retain the right to lower “exorbitant” rates. Amazon sets its own prices, buying wholesale and taking a loss on some to keep the usual price for hardcover equivalents at $9.99

—Publishers still aren’t sure how the direct-to-consumer sales would work but Turvey told them the company is committed to making it happen by the end of 2009: “This time we mean it.”

—Readers would gain online access to digital titles but also would retain access offline through cached versions in browsers. (This sounds like a job for Google Gears, the sync manager which is not the most stable app in my experience. It’s the app most likely to crash in Google Chrome for me so far.)

—Access would not be limited to certain devices but would require internet access.

Motoko Rich goes pretty far for a news piece with the flat-out claim that Amazon “is seeking to control the e-book market.” Dominate, I can see, but control suggests the M word and Amazon isn’t close to that.

E-book handicap?

I recently bought a fitness e-book, enjoyed reading it on my BlackBerry Fictionwise e-reader on the way to and from work, and then moved on to finishing the print book that I was simultaneously carrying around with me. I've limited most of my e-reading to non-fiction as of yet, and didn't think anything of it until I had a conversation with my mom.

My mom, unlike myself, enjoys cooking and trying out new recipes. Since she's only into healthy cooking, the recipes in the fitness book would have been ideal for her...but I had nothing to share with her, given that it was an e-book. As a publishing professional, I understand that we want to make sharing harder, but what if I wanted to try out some of those recipes? Should I have my expensive device sitting in my kitchen while I mix and match ingredients? And what if it wasn't recipes per se, but some other interactive book that required the reader to take a quiz? How can we do this with an e-book?

I came up with two options: the publisher should either allow certain pages--i.e., those with the recipes or the quizes--to be e-mailable, or have that information available for print/download from a companion website.

Any other ideas on how to get around this e-book handicap?

Bowker Reports U.S. Book Production Declines 3% in 2008, but "On Demand" Publishing More Than Doubles

NEW PROVIDENCE, NJ -- (Marketwire) -- 05/19/09

Bowker, the global leader in bibliographic information management solutions, today released statistics on U.S. book publishing for 2008, compiled from its Books In Print® database. Based on preliminary figures from U.S. publishers, Bowker is projecting that U.S. title output in 2008 decreased by 3.2%, with 275,232 new titles and editions, down from the 284,370 that were published in 2007.

Despite this decline in traditional book publishing, there was another extraordinary year of growth in the reported number of "On Demand" and short-run books produced in 2008. Bowker projects that 285,394 On Demand books were produced last year, a staggering 132% increase over last year's final total of 123,276 titles. This is the second consecutive year of triple-digit growth in the On Demand segment, which in 2008 was 462% above levels seen as recently as 2006.

"Our statistics for 2008 benchmark an historic development in the U.S. book publishing industry as we crossed a point last year in which On Demand and short-run books exceeded the number of traditional books entering the marketplace," said Kelly Gallagher, vice president of publisher services for New Providence, N.J.-based Bowker. "It remains to be seen how this trend will unfold in the coming years before we know if we just experienced a watershed year in the book publishing industry, fueled by the changing dynamics of the marketplace and the proliferation of sophisticated publishing technologies, or an anomaly that caused the major industry trade publishers to retrench."

(Editor's Note: Members of the news media who are interested in obtaining statistics from Bowker for specific industry categories are invited to email Daryn Teague, Bowker's public relations consultant, at dteague@teaguecommunications.com.)

"The statistics from last year are not just an indicator that the industry had a decline in new titles coming to the market, but they're also a reflection of how publishers are getting smarter and more strategic about the specific kinds of books they're choosing to publish," explained Gallagher. "If you look beyond the numbers, you begin to see that 2008 was a pivotal year that benchmarks the changing face of publishing."

Among the major publishing categories, the big winners last year were Education and Business, two categories that might suggest publishers were seeking to give consumers more resources for success amidst a very tough job environment. There were 9,510 new education titles introduced in the U.S. in 2008, up 33% from the prior year, and 8,838 new business titles, an increase of 14% over 2007 levels.

By contrast, the big category losers in 2008 were Travel and Fiction, two categories in which publishers clearly saw less demand during a deep recession in the U.S. There were 4,817 new travel books introduced last year, down 15% from the year before, and 47,541 new fiction titles, a drop of 11% from 2007. Moreover, the Religion category dropped again last year, with 14% fewer titles introduced in the U.S., and that once reliable engine of growth for publishers is now well off its peak year of 2004.

According to Gallagher, the Bowker data reveals that the top five categories for U.S. book production in 2008 were:

    1. Fiction (47,541 new titles)
   2. Juveniles (29,438)
   3. Sociology/Economics (24,423)
   4. Religion (16,847)
   5. Science (13,555)

Methodology

The book production figures in this news release are based on year-to-date data from U.S. publishers and include traditional print as well as on demand titles. Audiobooks and E-books are excluded. If changes in industry estimates occur, they will be reflected in a later published report. Books In Print data represents input from more than 75,000 publishers in the U.S. The data is sent to Bowker in electronic files, and via BowkerLink(TM), Bowker's password protected Web-based tool, which enables publishers to update and add their own data.

Books In Print is the only bibliographic database with more than 8 million U.S. book, audiobook and video titles. It is widely regarded throughout the publishing industry as the most authoritative and comprehensive source of bibliographic data available worldwide, and has been a trusted source of data in North America for more than 50 years.