In 2013, eBook Sales Collapsed... in My Household.

2013 was not the year the ebook industry was expecting. We hoped that ebooks would continue their explosive year-on-year revenue growth, and that the replacement of print by digital would proceed apace. We suspected that the growth of ebook sales might moderate, because, as HarperCollins CEO Brian Murray told Publisher's Weekly, "Nothing grows by triple digits for too long." But just as CDs replaced vinyl and digital downloads replaced CDs, it seemed obvious that the the age of the printed book was nearing its end; the century of the ebook was dawning.

We got a few things right. Internationally, ebook sales growth was strong. Print continued its slow decline. Bookstores continued to close. But for some reason, ebook sales in the US stopped increasing. And even started declining!

There are many possible explanations for this turn of events. There are technicalities with the data collection, particularly with publishers such as Amazon's imprints that don't report their sales numbers. Young Adult sales dropped steeply, as there was no smash hit to follow on the huge success of Hunger Games. 50 Shades of Gray didn't turn out to be a lasting relationship. And there's been a downward trend on prices, particularly as publishers start to use dynamic pricing to stimulate sales. But it seems to me that something in the environment is changing, more than just a market maturation.

Amazon probably has enough data to understand what's happening, but they're notoriously opaque about reporting numbers. On the other hand, they're quite good about reporting to customers what they've bought. So I decided to analyze my own household's Amazon data. I had the impression that my family was spending less on ebooks, but I wasn't sure, because they still seem to spend all hours of the day reading. The results were kind of shocking.

The graph shows my household Kindle ebook purchases from 2009-2013. As you can see, 2013 marked a steep drop from the 2009-2011 peak years of about $1000 per year.

I don't buy Kindle ebooks myself (I buy ePub only, so I can hack on them) but other members of my household have bought quite a lot. The average price paid is about $7, and this has held quite steady. But in 2013, Kindle purchases stopped almost completely, and they were not replaced by purchases on other platforms.

Based on detailed "interviews" with the subject ebook purchasers, here are some non-factors in this collapse:

1. "Netflix-for-Books" services. Nobody but me has heard of them.
2. Kindle Owner's Lending Library. Despite an well-used Amazon Prime subscription, they haven't figured out how to use it for ebooks.
3. Our public library. Nobody but me has used it for ebooks.
4. Piracy. As if!

The two main reasons for this spending collapse turn out to be:

1. The Kindle acquired in early 2009 reached end-of-life due to a cheaply made power cord, and was replaced by an iPad. The lack of in-app purchase for the Kindle App has resulted in a significant impediment to Kindle purchases. The iBookStore has not attracted a single ebook purchase.
2. The iPad owner now spends the vast majority of her reading time in fan-fiction websites, mostly fanfiction.net and ArchiveOfOurOwn.org. Same for the iPad borrower, but a different mix of websites.

I find it worrying that the Justice Department pursued an big antitrust suit against Apple and 5 of the big 6 publishers, won, and despite making an issue of Apple's in-app purchase ban in iOS, it seems to have lost the argument with Judge Cote. We'll see how that turns out.

It's worth paying close attention to the fan fiction sites. After all, 2012's biggest revenue engine for the book industry, 50 Shades, was a repackaged fanfic. On an iPad with a decent internet connection, the fanfic sites work better than ePubs. They link and they script. Just try making a link from one ePub to another and you'll get my point.  They deliver content in smaller, more addictive chunks, and they integrate popular culture MUCH more effectively than books do, for reasons relating primarily to copyright. The authors are responsive and deeply connected to readers; they often ARE the readers!

There's a fanfic site to appeal to every reader; I highlighted Wattpad earlier this year. ArchiveOfOurOwn.org ("AO3"), a project of the Organization for Transformative Works, a non-profit, experienced the growth in 2013 that was missing from the ebook sector. The number of works hosted by AO3 doubled to just under a million works, covering almost 14,000 "fandoms". (A good example of a fandom is the "Dragonriders of Pern" fandom, which currently hosts 534 works). Fanfiction.net, an advertising supported site, hosts almost 2000 fandoms and over 1.3 million works, more than half of which are in the Harry Potter or Twilight fandoms. Game oriented discussion forums also engage in fanfiction. (Popular in my house is spacebattles.com)

My anecdata might be completely anomalous, although Amazon, a very data-driven company, seems to be aware of the same phenomena. They've been making the Kindle into a full featured tablet to go head-to-head with the iPad. They've also launched a fanfic site called Kindle Worlds, which has 15 worlds and 341 works.

Early stage venture capitalist Josh Kopelman says that many of the best opportunities for startups are not those in expanding markets. "We love investing in technologies and business models that are able to shrink existing markets. If your company can take $5 of revenue from a competitor for every $1 you earn – let's talk!",  he has written on his firm's website. Kopelman founded Half.com in the early days of the internet, a company which shrank the book market by getting people to resell the books they had just bought for a fraction of the price of a new book. Microsoft's Encarta shrank the Encyclopedia business from $1.2B to $600M before Wikipedia shrank the business by another 90%.

In 2014, I'm guessing it's the book publishing industry's time to shrink. A convergence of tech startups, tech monsters, and tech non profits seems to be ready for the assault. The fanfic sites, the Wattpads, the Project Gutenbergs and the Manybooks, the Readmills, the Leanpubs and the Smashwords (and I hope the Unglue.its); these are people building the foundations of a creative industry that will flourish even if the ebook sales collapse that I see around me spreads to your house as well.

Happy New Year!

eBook Heaven

Do you believe in heaven?

Well, why not? There are many ways to think about heaven. Most people will admit that there's something of us that lives on after we die, even if it's just the memories that we leave in others or the impact of our lives on the material world. And whatever that something is, it doesn't need food to eat or even air to breathe. It certainly doesn't require a paycheck. Truth and beauty and wisdom, those qualities don't really die with our bodies, do they? If the bit that we leave behind has of its essence some truth or beauty or wisdom, doesn't that sound like heaven?

If you have a favorite library, you know what book heaven is like. Words can live on long after their creators have turned to dust. Libraries work each and every day to bring all the truth, beauty and wisdom in their collections to their communities, both present and future. They cooperate with each other, so that even if your library is missing the book you need, another will fill the void. The rules governing our society have recognized how important all this is, and allow us all to benefit from the labors of those whose existence has faded to memories.

I believe in ebook heaven. In ebook heaven, there are no royalties to pay to Herman Melville or William Shakespeare or Dante Alighieri.  There's even a slushpile in ebook heaven, where the weight of the world presses a diamond or two from unpublished graphene sheets.

The ebook heaven I believe in – some call it Open Access.

There's ebook hell, too, and that's what libraries live today. In ebook hell, books don't live forever, they disappear after a year. Or they're snatched into the kindles of eternal damnation by digital rights demons, lawyers and engineers. Every read must be monetized to feed some hungry monstrosity, and truth and beauty and wisdom are memories like the smells of leather bindings and musty paper.

Or maybe it's ebook purgatory. Dante imagined purgatory as a mountain that souls must climb before being admitted into paradise. In each circle around the mountain, the deadly sins that have stained the souls – envy, greed, lust, etc. – are purged by suffering, sanctified by fire and purified by agony. At last, the remains enter into the Garden of Eden, where everything has returned to its original perfection.

As we look to the future of ebooks, all we can see today is a long circle of purgatory. Our copyright theology posits that we must track millions, perhaps hundreds of millions of creators and their deaths into the far future so that we may say if a work has passed into ebook heaven. In more circles around Purgatorio mountain, we must track national boundaries, regional rights, governing laws, inheritance claims, contract disputes, international conventions, and perhaps even patent rights.

But still, I believe in ebook heaven.

Libraries are still endeavor to create little circles of ebook paradise. Within the bubble of a library, ebooks can be free to read. Digital archivists see that some books really do outlast us. New generations of minds encounter all sorts of new knowledge and enlightenment.

Libraries still work with each other to connect their bubbles and make their ebook paradises bigger. We need to enlarge those heavens, book by book, year by year, library by library. And we can't restrict ebook paradise to academia, any more than a belief system can restrict spiritual paradise to its priesthood. We need to find ways to expand the boundaries of availability for every book, to build bridges between today's best sellers and the far future of the public domain.

eBook heaven is worth working towards, together.

Do you believe in it?

Magic Rights Management for eBooks

The Fraunhaufer Institute in Germany is apparently marketing some "new" technology they're calling SiDiM which embeds digital data into texts by changing words in the text. They're telling publishers that it will fight piracy by making it easy to track files uploaded to torrents and file lockers back to their reprehensible sources.

It sounds kinda dumb, doesn't it?

The internet has over-reacted of course. Perhaps everyone is hypersensitive because of the revelations about the NSA and its data collection practices. Nick Harkaway jumped the shark a bit and called it "surveillance". The idea of changing words in books is easy to ridicule and deserves to die, but let's please take a deep breath.

There are lots of ways to put information in an ebook file, and license information is no different. For example, I've been advocating that Creative Commons licensed books should embed a digitally signed license so that the license can be relied upon. When you buy an ebook, an embedded license could protect you from accusations of infringement. Digital signatures can also tell you that a books content hasn't been tampered with.

When you buy a Harry Potter ebook direct from Pottermore, your identifying information gets digitally stamped into the ebook. According to the The Digital Reader, Pottermore uses watermarking technology from Booxtream, and I've been evaluating this technology myself for an Unglue.it project. So far, I'm impressed.

The rationale behind Pottermore's watermarking is that it prevents people from sharing the book beyond what their license allows. If the book gets on a public filesharing site, it can be traced back to the purchaser, and consequences could ensue.

Booxtream claims to be using 9 different watermarking techniques to make the embedded data hard to remove. For example, Booxtream adds digital codes to the names of the content files inside the EPUB, and adds data into image files. Although it's straightforward to strip some of the embedded info, Booxtream needs only to make it uncertain that stripping has been complete to retain some deterrence value.

For the user, the bottom line is that nothing the purchaser does or would want to do is impeded by the Booxtream watermarking. Nothing visible to the user is altered except for an ex libris page that tells the user that the copy has been personally licensed to him or her- it's customizable by the vendor.

A close analogy to ebook watermarking is the bullet serialization that's been proposed as an alternative to gun control. If every bullet was traceable to a purchaser, investigation of weapons related crime would be reduced to finding the bullet and looking it up in a database. Law abiding gun owners shouldn't notice the difference. Or maybe it would be de facto ban on ammunition. YMMV.

The argument against digital watermarking is that there will always be ways to remove the embedded data, no matter how clever you are at hiding it. Someone will make a one-click watermark stripper, and the value in watermerking will be diluted. But almost two years after Pottermore launched their digitally watermarked ebooks, it's quite hard to find watermark stripping tools. Why would anyone bother? There's nothing that the vast majority of ebook purchasers want to do that's impeded by the watermarking. Contrast that with the ease of finding tools to strip PDF watermarks, which are annoying.

You might wonder why SiDiM would be selling their technology with such a scary-dumb sounding marketing pitch. It's because publishers are the customers. I've been talking to a lot of publishers, and they're very clear that they want DRM. Or at least they THINK they want DRM. What they really want is magic. The want their ebooks to come with a magic bullet that stops piracy and over-sharing dead in its tracks. They don't understand the technology behind DRM, but many of them swallow the story that comes with it- that nobody would pay for digital files if they can get them for free from piracy sites.

The truth is that if there's magic in the kind of DRM that comes with Adobe, Apple and Kindle, it's of the variety that Voldemort would use. If there's magic in the watermarking techniques used by Pottermore, it's of the Dumbledore variety. If there's magic in SiDiM, it's like Neville Longbottom's Switching Spell that put ears on a cactus.

I'm here to tell you that magic is real. There's real magic in the stories that authors tell. There's real magic in communities and in relationships between people, between authors and readers. There's real magic in libraries. It's that real magic that will stop piracy and help authors earn a good living in the digital future.

Dumbledore's fictional magic can help make the real magic manifest, and that's what we should work towards

Related articles

• Social DRM Provider BooXtream Can Now Add Watermark DRM to Kindle eBooks
• Pottermore Wins Digital Strategy of the Year Award
• New German DRM Named SIDIM Will Stop eBook Piracy
• New DRM Changes Text of eBooks to Catch Pirates
• New DRM Promises to Ruin a Good eBook in the Name of Protecting It

One eBook to Prove Them All

I've not written much about it here, but over the past year I've been participating in the American Library Association's "Digital Content Working Group". DCWG is broken up into smaller groups focusing on specific areas. I've been working on "Business Models". At ALA's Midwinter meeting, DCWG sponsored a jam-packed symposium.

The DCWG's meetings at ALA's mid-winter and annual conferences are open for anyone to attend, and they've been covered by the library press. Our recent meeting in Seattle was covered by Library Journal's Matt Enis, and he highlighted an idea that came out of our subgroup, the "One eBook" program:

The American Library Association’s Digital Content and Libraries Working Group (DCWG) has begun exploring an idea that could help publishers better understand the powerful impact that libraries can have for their authors and their bottom line.

I've finally had a chance to write this up for American Libraries' E-Content Blog:

There’s a lot of data suggesting that exposure to books in libraries increases sales for those books. There’s also a lot of data that suggests that many publishers believe the opposite—namely, that the availability of books in libraries depresses sales, and that if libraries improve the ebook lending process, making it easier for library users to substitute loans for sales, then ebook sales will be hurt even more. 

That word “suggests” is the problem. We don’t have controlled experiments that have really measured the broad effect of the library lending of ebooks on ebook sales. ALA’s Digital Content and Libraries Working Group has been examining the situation, and we had an idea. What if libraries all around the country promoted a single ebook for a month? What if that ebook’s publisher offered a special deal so that for that one month, libraries could lend that ebook to as many patrons in their communities as possible without decimating their acquisition budgets? Once the month was over, that specially promoted library ebook deal would end. What do you think would happen?

There are a lot of details to work out of course, but we've had a lot of positive reactions. It's the practical and technical details I'm thinking about right now. For example, how can we make such a program available to as many libraries as possible, regardless of whether they are currently offering ebooks? How can we make the ebooks work on all sorts of platforms? How do we make the one-ebook ebooks expire after a month?

As if I didn't have enough to do...

Anachronisms and Dysfunctions of eBook Front and Back Matter

The process of digitizing a printed book involves much more than the conversion of ink on paper to bits in a file. Functional aspects of the book must be mapped to digital equivalents. Thus we have tables of contents and indices turning into hyperlinks and spine files, page numbers that beget location anchors and progress indicators.

The terms of art for this stuff are front matter and back matter. I'll cover the many dysfunctions of ebook copyright pages in another article, but let's step back for a moment. What is this stuff for for, anyway?

A good example is the bastard title (or half title) page. This a page, usually printed with only the book's title, that precedes the title page in the book. When dinosaurs roamed the earth, the function of the bastard title was to identify and physically protect the paper text block until it was bound. Sort of like the tissue paper they still put in fancy wedding invitations. I daresay that ebooks do not require any such protection. It is utterly without use in an ebook. Begone!

Next, consider the title page. It typically displays the book's title, author, and the publisher.

In a print book, the title page is a declaration of bookiness. You don't have title pages in magazines or newspapers. The title page says "get, ready, here comes a book, so go find a comfy chair."

But a digital book needs something different. It needs a start page. Think about the start screen of a DVD. (You DO remember those, don't you?) Now think a bit more generally. Modern ebooks share their underlying technology with websites, so why not convert the title page of a book into a home page for the book, with the sort of utilities you expect on a home page?

If all we do is replicate the functions of a print book, then we haven't done our 21st century thinking very thoroughly. What kinds of things might an author or publisher want on their book's home page? The ability to share via social networks? Definitely! Probably a channel for conversation. A way to connect to other books from the author and/or publisher? Yes please! Maybe even a usage tracker.

From my perspective, thinking about what our Creative-Commons licences editions should look like, there are a number of front-matter and back-matter tweaks needed. We add lists of supporters, for example. One of the author-publishers participating in Unglue.it, Melinda Thompson (support her book here), had these great suggestions:

The first page of an unglued book should contain only two things: an unglued logo and a small “what’s this?” link. Initially, “unglued” won’t mean anything to anybody, but over time they will learn what it means as some people click the “what’s this?” link and learn more. Once a person clicks on the “what’s this?” link they’d get a very short menu with things listed like: What is an Unglued Book, Rights, How to Share this Book, Supporters, etc. And behind that short menu could be all the details you want.

I would love to see a share button (like you have on the Unglue.it website) at the end of each and every unglued book – inside the book on the very last page. If the whole point of unglue.it is to give books to the world, then people should be easily able to do that from a technological perspective. People should be able to download an unglued book for free and then, technologically, the book should really be free and easy to share effortlessly via email, Facebook, Twitter, Goodreads, and other social media websites. And, from your branding perspective, people should be able to easily tell your story on your behalf. People should literally, easily be able to give an unglued book to the world.

But it's not just unglued books that need work. Let's look at the book Book: A Futurist's Manifesto, by Hugh McGuire and Brian O'Leary, which is a very interesting collection, by the way.

Here's what it looks like in iBooks. (It's the version released in 2011, though a later version is labeled the first edition.)

Thankfully, these futurists have axed the 18th century bastard title, but the title page itself looks lost. There's not even the customary publisher name.

Here's the PDF embed from scribd:

Book: A Futurist's Manifesto; A Collection of Essays from the Bleeding Edge of Publishing by O'Reilly Media, Inc.

The title page is dressed up a bit, but hey, it's pdf.

Now take a look at the booky part of the book's homepage, first on O'Reilly's website :

And then on Pressbooks, where it really IS a website.

You can see that this browser version has started down the road to rethinking the front matter.

Look at these homepage captures and think about how many of these functions would work just fine inside an ebook, on an ebook reader intermittently detached from the web. Take out the "buy" buttons, and you have a decent start page for the book. Or leave in some buy buttons if you want to sell print copies or you want to upsell to a deluxe version.

So how do we proceed? These things work better if readers don't have to learn different UIs for every ebook they read, but at the same time, there's no need to leave users in the previous century. Maybe book designers could share their start page designs for everyone's benefit. Wouldn't that be nice? Have you seen an innovative start page on an ebook? What else would you like to see on a book's start page?

Update 4/10/13: Suw Charman-Anderson has a great follow-up post.

The Object-Oriented Book

To most people, objects are things you can touch, see, maybe even smell. They have existence on their own. Software developers talk about objects as well. Although they're more abstract, software objects can also be touched- programs can interact with them, and they exist on their own as packages of code and data.

In some recent conversations about books and content containers, I've been hit in the face with the fact that most people in publishing haven't been steeped in Object-Oriented Programming (OOP) the way I once was, and as a result, some of the things I've written about the evolution of the book into digital form have sounded a bit strange to many people. So I've decided to write a bit here about how books are becoming software objects, and why it matters.

Object orientation is a style of programming that models problems as spaces of objects from various classes. The programmer solves problems by manipulating objects; the objects communicate among themselves by passing messages. The messages that objects pass are governed by interfaces; every class of objects is defined by the interfaces it supports. If that doesn't make sense to you, don't worry, I'll have some examples.

Let's think about how we might model the book as a software object. With a physical book, you know how to get the title and name of the author. You open up the book to the title page, and there you find the title, probably the words in the largest type size, and the author's name, probably printed below the title, perhaps with a designator word such as "by".

In the prehistory of programming before OOP, a book program might define data structures containing tables of book titles and author names. The program would look in these tables for the book data. An object-oriented program would instead send the book-object messages saying "what is your name?" and "What person was your author?" An object-oriented approach binds the code and data together, so that objects of the book class know what their title is, how many chapters they have, and what the 20th word of the 32nd paragraph of their 3rd chapter is. The set of messages that an object can respond to defines its class. A programmer knows that any object in the Book class will be able to tell you its title.

Another key concept in object orientation is inheritance. A cookbook is a book and inherits from the Book class the ability to tell you its title. But you expect a Cookbook to have recipes, and you should be able to ask it how many recipes it contains.

The reason I think this is important for non-coders to understand is that very soon, the book industry will become focused on producing lots and lots of these software objects. And I'm not talking about some far-fetched digital utopia.

The third revision of the EPUB standard is very soon to become a reality, and I believe its use will quickly become pervasive in the book industry. It would be a mistake to think of EPUB3 as yet another document format. With the adoption of EPUB3, the book industry will, for the first time ever, have standardized a software object model for the book. This comes along with EPUB3's use of HTML5 as a foundational layer.

An object model became associated with HTML documents very early in its evolution. Called the DOM, or Document Object Model, it was developed by programmers working with HTML documents, and it quickly became the basis for most software that works with HTML documents. With the development of Javascript, HTML documents delivered over the web could bind to code that accesses and manipulates their data via the DOM. It's only with HTML5, however, that the DOM is officially becoming part of the HTML standard.

With HTML5 as its basis, EPUB3 becomes a very capable "container" of content. The whole discussion of how containers limit the ways in which content can interact with consumers becomes completely moot, and a bit silly. EPUB3 binds a complete "API" (application programming interface) onto the content, and provide many mechanisms for the extension of that interface. The "API" and the "container" are one and the same.

If we look at the immense infrastructure that arose around the book as a physical object, from book bags and compact shelving, to printing plants, warehouses, libraries and used bookstores, we can get an inkling of the infrastructure that will grow up around the book as a software object. In the coming weeks, I'll try to write about some of the implications of EPUB3 for the industry as a whole.

Open Access eBooks, Part 3. Business Models for Creation

Here's the third section of my draft of a book chapter for a book edited by No Shelf Required's Sue Polanka. I previously posted the introduction; and What does Open Access mean for eBooks subsequent posts will cover Open Access E-Books in Libraries and a Conclusion. Note that while the blog always uses "ebook" as one word, the book will use the hyphenated form, "e-book". The comments on the second section prompted me to make significant revisions, which I have posted.

Business Models for Creation of Open Access E-Books

Any model for e-book publishing must have a business model for recouping the expenses of production: reviewing, editing, formatting, design, etc. In this section, we’ll review methods that can be used to support Open Access e-book publishing.

In 2009 Cory Doctorow put together a collection of short stories called “With a Little Help” and documented the process of publishing it in a series of columns on Publisher’s Weekly. He used a variety of business models to support the project, as detailed below, and the e-book version was released under a Creative Common License.

DIY publishing models

One way to meet the costs of e-book production is to keep those costs close to zero. Free blogging sites have made it simple for authors to produce blogs and other sorts of websites; additional tools are available to add keywords, links, and images. Other tools can convert a blog or similar website to the EPUB e-book format; EPUB export is available in Apple’s Pages word processor and it’s likely that other programs will soon follow suit.

Given these tools, authors can produce e-books on their own, with no other expense than the value of their time. For With a Little Help Doctorow did most of the production himself; as the title suggests, he got friends to help out with things such as cover and book design.

In the “Do It Yourself” or DIY model, there are essentially no expenses to recoup. If the author wants to earn something, additional money needs to be spent on an ISBN and a bit more to get metadata into a feed for Amazon. But if income is not the object, the e-book can simply be posted on a website and made available to the world. A CC license allows the e-books to be distributed in a wide variety of channels.

In fact, with the consent of the editor, this book chapter will be released as a DIY Open Access e-book in EPUB format, with a CC BY-ND license. The author hopes to profit primarily from the experience of doing so.

Freemium models

“Freemium” refers to the business model, common on websites, to offer one level of service for free, and then, when the user is solidly hooked on the use of the service, to offer them a premium level of service for a fee. The difficulty of this model is to have a service that’s attractive enough at the free level of service to drive premium conversions, and at the same time to have the free service be limited enough that upgrades deliver significant value.

In the e-book space, the traditional premium service is typically either the print version or an updated or otherwise enhanced digital edition. O’Reilly has used this model to great effect, by allowing authors to make free PDF versions available on websites while O’Reilly sells print versions through traditional channels.

In Doctorow’s project, he offered Print-on-demand versions through Lulu.com for $18 each, along with 250 “super-limited hardcovers” for $275 each: These were hand-bound on acid-free paper and included original paper “ephemera”, and came with a memory card with the full text of the book and audiobook. The $275 version turned out to be the big moneymaker.

As e-book readers become preferred over print by users, using print as a revenue engine may run out of steam. Bloomsbury Academic is building a platform that also uses e-book versions as the premium. While CC noncommercial versions are available for reading online, the books will also be issued for purchase in print and on Kindle and Sony readers. It’s possible that publishers will look at enhancing e-books with supplementary content or deep semantic mark-up as their revenue driver; a bare-bones Open Access version would serve as promotional vehicles for the core product.

Advertising and promotional models

Cost-free and Open-Access content can promote more than just a premium edition of the same content. E-Book formats are much like HTML web sites in that they can embed links; even javascript functionality is becoming available in e-book content. Publishers can use these types of functionality to generate revenue through advertising. A quick look at iPad or Android App Stores reveals a huge selection of free, advertising-supported Apps, including many apps that simply wrap e-book content.

In one scenario where this might happen, an author of a book series might produce an OA electronic version of the first in the series. The free e-book could have embedded links or “in-app purchase” buttons for subsequent books in the series. OA E-books might also be supported by contextual links and/or product placement; imagine a story featuring a sports car where the brand and model of the car are chosen based on support from a car company.

Another type of promotion that can be furthered by all types of free e-books is personal brand-building. It could be argued that Cory Doctorow’s biggest payoff from the With a Little Help project was that it increased his fame and thus his ability to make money on appearances, commissions, and on the Boing-Boing website. (One story in the collection was a $10,000 commission) Seth Godin

Public funding

Some books, such as those relating to education, public health, political or social advocacy, or scientific research, fulfill a public purpose. Publication of these books using a form of Open Access will further their public purpose. The costs of production and release of these-books can financed by foundations, charities, political action committees, private individuals, or governments.

European governments have joined together to fund the digitization and distribution of cultural heritage works through Europeana. Funded by the European Commission and national ministries of culture, Europeana acts as a portal enabling distribution of large numbers of OA e-books. In the US, books created by the federal government belong by law to the public domain, but there’s no centralized funding of OA e-books or their distribution.

In developing countries, governments seeking to provide textbooks to large numbers of student will eventually find that producing e-textbooks, released for free, is the only scalable method of providing for their national educational needs. Many states in India, for example, already release their state-published textbooks on an OA basis.

A variation on public funding for OA e-books in the context of academic monograph publishing has been proposed by Frances Pinter. Her idea is for libraries to join together in a cooperative, diverting a fraction of their acquisition budgets to fund the fixed costs of producing new monographs by university and commercial scholarly presses, which would then be made Open Access. She estimates that individual libraries could save over 75%, depending on the participation rate.

Another sort of public funding model with a long history of use is the “tip-jar”, or more profitably, the pay-what-you want model. Here, the creator urges his audience to leave some money as a “thank you” in return for value received. Doctorow reported receiving over $1200 using a Paypal-powered donation box, which actually did better than his print-on-demand offering.

Crowd-sourcing

Wikipedia and the more specialized wiki sites it has spawned are excellent examples of Internet resources created by large numbers of individuals working together virtually. These volunteer collaborations have replaced printed encyclopedias for most people, and might be considered to be the largest, most dynamic Open Access e-books in existence. Most users wouldn’t consider these websites to be books, even though the printed equivalents certainly were.

An organization called “Distributed Proofreaders” (DP) is an aggregation of volunteer effort clearly focused on e-books. Many of the digital texts in Project Gutenberg have been produced by DP volunteers who check and correct OCR transcriptions of scanned books. While OCR (optical character recognition) can be very accurate for modern books, books and magazines printed in the nineteenth century and earlier present a variety of challenges. The resulting digitized works are dedicated to the public domain.

Crowd-funding

The model that the author is working on at Gluejar Inc. is crowd funding. It’s analogous to the method that public radio and public television is funded in the U.S., except that every book that’s to be released with a Creative Commons license has a fund drive of its own. Once the producer’s price has been matched by reader pledges, an Open Access e-book is released. The pledge drives are managed by a website.

Authors have used crowd-funding websites such as kickstarter.com to cover the expenses of completing a new book. For example, Mur Lafferty raised over $19,000 from more than 250 backers to fund book design, cover design, and e-book conversion for a fantasy audio series. In a few cases, the projects use Creative Commons licenses. Stephen Duncombe, a Professor at NYU, has been trying to raise $3500 to fund the further production of an open-source version of Sir Thomas More’s Utopia, which is distributed with a CC BY-SA license. (Of course the underlying work is in the public domain, but the new translations, annotations, and commentary is subject to copyright.)

To get a better idea of how crowd-funding might scale to large numbers of books, consider the author of a romance series. Rights for the earliest books in the series have reverted to her, but there’s no cash to convert the book to e-book formats. She contacts the pledge-drive website, and enters an offer to release the first book under a Creative Commons license in exchange for a lump sum payment that she considers to be fair and which covers the conversion to e-book. Fans of the series can then go to the site and pledge support. If the author's offer price is met, supporters get billed, and the author gets the payment. The resulting e-book file is sent to all the people who have pledged, and put on a feed for the rest of the world to pick up. Since the e-book is now Creative Commons licensed, it can be redistributed for free.

In another scenario, a reader launches the pledge campaign, perhaps someone who has found the book in a library. The library metadata is pushed to the pledge-drive site and other fans can pledge their support. Eventually, the pledge amount gets big enough to attract notice from rights holders, who can then show up, deliver the e-book, and take the cash off the table and divide it among themselves.

Notes:

1. Cory Doctorow's With a Little Help Project
   
2. Bloomsbury Academic
   
3. Seth Godin's What Matters Now
   
4. Europeana
   
5. Distributed Proofreaders
   
6. Mur Lafferty's Kickstarter Project- The Afterlife Series: Heaven, Hell, Earth, Wasteland, War
   
7. Stephen Duncombe's Open Utopia project on Kickstarter:The Open Utopia: A New Kind of Old Book 

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Open Access eBooks, Part 2. What does Open Access mean for e-books?

Here's the second section of my draft of a book chapter for a book edited by No Shelf Required's Sue Polanka. I previously posted the introduction; subsequent posts will include sections on Business Models for Open Access E-Books, and Open Access E-Books in Libraries. Note that while the blog always uses "ebook" as one word, the book will use the hyphenated form, "e-book". The comments on the first section have been really good; please don't stop!

What does Open Access mean for e-books?

There are varying definitions for the term “open access”, even for journal articles. For the moment, I will use this as a lower-case term broadly to mean any arrangement that allows for people to read a book without paying someone for the privilege. At the end of the section, I’ll capitalize the term. Although many e-books are available for free in violation of copyright laws, I’m excluding them from this discussion.

Public Domain

The most important category of open access for books is work that has entered the public domain. In the US, all works published before 1923 have entered the public domain, along with works from later years whose registration was not renewed. Works published in the US from 1923-1963 entered the public domain 28 years after publication unless the copyright registration was renewed. Public domain status depends on national law, and a work may be in the public domain in some countries but not in others. The rules of what is in and out of copyright can be confusing and sometimes almost impossible to determine correctly.

In addition to public domain books that are made available by Project Gutenberg, works digitized by other efforts may be available on an open access basis. It’s not true, however, that any digitized public domain book is also open access. That’s because the digitizer can restrict access to the works using license agreements. For example, JSTOR has many digitized public domain works included in its subscription products, but the terms of the subscription prevent republication of their scans. Similarly, Google puts restrictions on the public domain books from partner libraries that it has scanned, digitized and included in Google Books. While they’re available for free, there are limits on what you can do with them.

The public domain is more than just free; it belongs to everyone. Public domain works can be copied, remixed, altered or extended. A book publisher can take a public domain text, print up bound volumes, and sell them in bookstores. A movie producer can create a cinematic dramatization of the public domain work; derivative works such as the movie acquire copyrights of their own and are not in the public domain.

Free Copyrighted Content

Laypeople often confuse public domain for “free”, and vice versa. Most content available for free on the web is copyrighted, which restricts what people can do with it. Often, the content is made available using an advertising model, trading the opportunity to read and interact with content for the user’s attention to ads or links to e-commerce websites. But website users are usually not free to republish content or email the content to friends beyond the bounds of fair use. They’re bound by whatever terms and condition the website chooses to employ; if there are no explicit terms and conditions, they still can’t copy the website’s content for other uses.

Even professional publishers are sometimes confused by copyright on the web. In 2010, the editor of “Cooks Source”, a Massachusetts magazine got into hot water for republishing a blogger’s work without permission. The publisher’s response to the blogger, on being asked for restitution, made the rounds of the Internet, and is striking for the bellicose ignorance it betrays:

Yes Monica, I have been doing this for 3 decades, having been an editor at The Voice, Housitonic Home and Connecticut Woman Magazine. I do know about copyright laws. It was “my bad” indeed, and, as the magazine is put together in long sessions, tired eyes and minds somethings forget to do these things. But honestly Monica, the web is considered “public domain” and you should be happy we just didn’t “lift” your whole article and put someone else’s name on it! It happens a lot, clearly more than you are aware of, especially on college campuses, and the workplace. If you took offence and are unhappy, I am sorry, but you as a professional should know that the article we used written by you was in very bad need of editing, and is much better now than was originally. Now it will work well for your portfolio. For that reason, I have a bit of a difficult time with your requests for monetary gain, albeit for such a fine (and very wealthy!) institution. We put some time into rewrites, you should compensate me! I never charge young writers for advice or rewriting poorly written pieces, and have many who write for me… ALWAYS for free!

Many free e-books are available on a similar basis as free websites. They may include advertising or advocacy. Promotional literature and instruction manuals often fall into this category. Many publishers make free e-books available for limited periods of time as a means of marketing them; that doesn’t make them free to redistribute, though it happens.

Creative Commons Licensing

Creative Commons licensing arose to expand the range of creative works available for others to build upon legally and to share. Many authors really want their works to be redistributed for free in venues such as Cooks Source, but they want to make sure attribution is given, and often want to prevent their work from being altered or chopped into pieces. Others want to make sure that if their work is altered or somehow improved, the altered or improved version will also be available for free. Sometimes, authors are happy to have their works reused non-commercially, but want to keep their works from being commercially exploited without permission. Creative Commons licenses give authors the tools they need to accomplish these goals.

CC BY-SA mark

The different licenses available from Creative Commons are designated with a special mark, with added code letters that indicate the features invoked by the rights holder. For example, the “Attribution-ShareAlike” license is denoted by the letters “CC BY-SA” and the mark shown. This license requires attribution as to the author of the work, and the ShareAlike features bind the licensee to share any modifications or improvements.

It’s important to note that in the Creative Commons licenses, the owner of the copyright does not give up ownership of the work. The owner is free to re-license the work under any terms they desire, and can still sue people who infringe on the copyrights. The owner licenses the work to the user, who accepts the license as a condition of use. The user can in turn distribute the work along with a copy of the license to other users, who accept the terms of the same license from the copyright owner as a condition of their use.

Creative Commons licensing is now widely used for free e-books distributed on the web. Perhaps the best known e-books using CC are the works of Cory Doctorow, a blogger, science fiction author and advocate for copyright law reform. It’s also used for Wikipedia contributions, and is supported by Flickr for use in photos.

Copyleft

While Creative Commons licenses are the most frequently used for e-books, other licenses can be used to allow for the free reading of books. Noteworthy among these is the GNU Free Documentation License (FDL), created by the Free Software Foundation to allow software documentation, manuals and other text to be distributed with strong “copyleft” provisions compatible with the GPL software they’re meant to accompany. The GNU FDL can easily be applied to e-books; many ebooks have been released with this license and with other Free Software Foundation licenses.

The idea of copyleft is that licenses can be used to prevent someone from taking from the commons without also giving back. For example, when a book publisher adds commentary and illustrations to the text of a Shakespeare play, the resulting book is covered under copyright and permission must be given for redistribution even though the underlying work is in the public domain. This would not be allowed by a copyleft license. The Creative Commons SA licenses have weak copyleft; the GNU FDL is stronger, and even forbids the use of DRM. It’s not clear whether it would be legal to distribute a GNU FDL e-book to a Kindle e-reading device without permission from the author.

Open Access vs. open access

Consider the book How Wikipedia Works by Phoebe Ayers, Charles Matthews, and Ben Yates. Is it an open access e-book? Based on the page at the Free Software Foundation, you might assume the answer is an easy yes, because it comes with a GNU FDL license. If you search for this book on Google, however, you’ll have to dig quite a bit to get a free e-book. Amazon will sell you the Kindle version for $21.64. You can buy it in three different formats from O’Reilly or from No Starch Press, the publisher, for $23.95. Google books has it through their publisher program; it appears to fully available and Google doesn’t try to sell it to you. You can find the e-book in a library through Worldcat, but the libraries that hold it restrict access to their own users. Wikipedia itself has a page for it, but no download link; for that you need to look on the talk page.

The intent of the publisher of this book doesn’t seem to be to make the e-book available openly, even though it uses a “free” license. The free distribution of the e-book is not effective. There are a lot of ways to license content, but at the end of the day, it’s the intent of the rights holders and the effectiveness of the free distribution that makes an e-book “Open Access” with capital OA.

Notes:

1. How Wikipedia Works: is available (GNU FDL license) as PDF (here (15 MB)). The Google books version is here. It's listed on a GNU web page.

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Open Access eBooks, Part 1

I've been working on on a book chapter for a book edited by No Shelf Required's Sue Polanka. My chapter covers "Open Access E-Books". Over the next week or two, I'll be posting drafts for the chapter on the blog. Many readers know things that I don't about this area, and I would be grateful for their feedback and corrections. Today, I'll post the introduction, subsequent posts will include sections on Types of Open Access E-Books, Business Models for Open Access E-Books, and Open Access E-Books in Libraries. Note that while the blog always uses "ebook" as one word, the book will use the hyphenated form, "e-book".

Open Access E-Books

As e-books emerge into the public consciousness, “Open Access”, a concept already familiar to scholarly publishers and academic libraries, will play an increasing role for all sorts of publishers and libraries. This chapter discusses what Open Access means in the context of e-books, how Open Access e-books can be supported, and the roles that Open Access e-books will play in libraries and in our society.

The Open Access “Movement”

Authors write and publish because they want to be read. Many authors also want to earn a living from their writing, but for some, income from publishing is not an important consideration. Some authors, particularly academics, publish because of the status, prestige, and professional advancement that accrue to authors of influential or groundbreaking works of scholarship. Academic publishers have historically taken advantage of these motivations to create journals and monographs consisting largely of works for which they pay minimal royalties, or more commonly, no royalties at all. In return, authors’ works receive professional review, editing, and formatting. Works that are accepted get placement in widely circulated journals and monograph catalogs.

In the late 1970’s and 1980’s academic libraries became acutely aware that an expansion of research activity had resulted in the growth of both the numbers of journals and the numbers of articles published in the journals. The combination of increased subscription prices and the number of journals needed to support research resulted in a so-called “serials crisis”. Libraries were forced to cancel subscriptions. The reduction in circulation forced publishers to raise subscription prices further to make ends meet, and the resulting cycle of cancellations and price increases led to a fear that the whole system would collapse. If few libraries could afford subscriptions, fewer scholars would be able to read the articles, diminishing the attractiveness of publishing.

The advent of web-based publications in the 90’s led many to believe that the solution to the serials crisis would be a shift of the scholarly publishing industry to so-called “Open Access” business models. Open Access publications are those that can be read at no cost to the reader or the reader’s institution. The traditional model of publishing supported by subscription fees was thus styled as “Toll-Access” publishing. It was hoped that the combined cost reductions from digital distribution and automation would stop the cycle of rising expenditures.

Perhaps the most successful implementation of Open Access has been ArXiv, a database of digital preprints and reprints (“e-prints”) originally focusing on the particle physics community. Originally started by Paul Ginsparg, a physicist at Los Alamos National Labs, ArXiv is now located at Cornell University and hosts more than 670,000 scientific articles in e-print form. Authors deposit articles they’ve written into the repository, and other scholars are free to search, browse and download articles without needing any sort of subscription.

One reason for the success of Open Access archives has been that they have grown up in a parallel coexistence with the traditional academic journals, which have mostly shifted onto the web. In the so-called “Green” model for Open Access, many journals allow versions of accepted articles to be made available via repositories. Authors can thus submit their articles to high-prestige subscription-supported journals without worrying about colleagues’ access, because scholars that need to read their works can always access versions from free sources.

Meanwhile, the shift of traditional journals onto the web has allowed the rise of secondary distribution channels. Most academic libraries today enjoy access to a much broader range of journals compared to 20 years ago because of the availability of article databases that aggregate content from large numbers of journals.

The past decade has also seen the rise of “Gold” Open Access journals. These journals leverage low cost Internet distribution to allow articles to be read universally with no subscription charges. Led by Biomed Central and PLoS, these journals cover expenses by charging publication fees to the submitting author. They build prestige  and avoid becoming “vanity” presses by establishing rigorous review processes.

The success of Open Access journals and articles has for the most part not yet been duplicated in the word of books. There are a number of possible reasons for this. The first is the matter of cost. Publication fees for Open Access journal articles are in the range of $600-$3000; editing and production expenses for a book published by a university press are estimated to range from $10,000 for a book that’s mostly text to much more for a book with figures, photos, equations and cover art. Author-funded publication fees this large are unlikely to be practical, even with significant institutional subsidies.

Another factor holding back Open Access books may be a preference for print books over e-books. Books are much longer than journal articles, and many readers are uncomfortable reading a book on a computer screen. It’s only in the past two years that dedicated reader devices such as the Kindle and tablet computers such as the iPad have improved the e-book experience enough to gain wide consumer acceptance.

The business environment for book publishers is another possible factor. The university publisher loses money on much of its catalog, but compensates for this by having one or two titles that cross over to be successful outside the academic environment. Amazon.com has bolstered this pattern, by providing wide distribution for small print-run titles that would never have been available in bookstores before. In contrast, journal articles almost never cross over into non-professional markets.

Nonetheless, there have been a few notable attempts to publish Open Access e-books. I’ll cover these later in a section on business models for Open Access e-books, but it wouldn’t be right to omit mention of Project Gutenberg at this point. Project Gutenberg (PG) produced not only the first Open Access e-books, it produced the first e-books, period. Started by Michael Hart in 1971, PG aimed to take the text of public domain works and make them available via the Internet. To date, PG has put over 34,000 works into its collection, entirely through the efforts of volunteers.

Distribution of Open Access e-books can be thought of as an enterprise separate from their production, since the costs involved are of a different nature. The scaling laws of Internet distribution favor centralization, and as a result, organizations such as the Internet Archive are able to distribute appropriately licensed e-books on a vast scale; businesses such as Google are able to search and organize them; libraries, blogs, and portal sites are able to select and “curate” them. To some extent, this type of distribution depends on the self-contained nature of the book; it shouldn’t require the context of a specific website to retain and accumulate value.

Open Access for e-books provides many benefits in addition to allowing people to read for free. Access to the full text of books makes for more complete indexing. The utility of Google Books, and the effort Google has put into digitizing books from libraries, even when they are unable to make the books available because of copyright, is testament to the value of indexing the full text. Long-term preservation of our cultural heritage is another public benefit of Open Access to e-books.

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OverDrive and the Library eBook Convenience Paradox

The OverDrive iPad App, released just last week, is nice. Luckily, it's not TOO nice. Let me explain.

But first- a bit about OverDrive. OverDrive, the leading provider of ebooks in public libraries, has been battling some user experience issues. At last week's Tools of Change conference, librarian Katie Dunneback (@younglibrarian) went through the twenty-one steps a patron needs to take before they can read a library ePub book on their ebook reader. Kirk Biglione joked on Twitter that "it's actually easier to make an ePub file than it is to check one out of the library".

Once the initial configuration process is done, however, it's not so hard to start reading library stuff in the Overdrive App (actual name: "OverDrive Media Console"). I find Overdrive's discovery interface- which is a website and not part of the app- to be a bit mystifying. For my local library, which gets Overdrive books through the "ListenNJ" consortium, the main problem is finding an ebook I want to read that hasn't already been checked out.  The growing popularity of ebooks  is such that most of the ebooks are checked out, and since these use the "Pretend-It's-Print" model, I can't read them when someone else is doing so. Worse, the Overdrive website doesn't let me browse just the books that are available. Do people really exist who want to browse books that are checked out?

The browse interface also mixes up audio books with ebooks. I think most users want one or the other. It lets you sort by "creator" (Do real people know what a "creator" is?) but it doesn't provide a list of creators to browse. Granted, most library websites don't do much better, but isn't that why they still have stacks to wander?

Luckily, Overdrive also distributes public domain books from Project Gutenberg. These have the magical property that a new copy appears on my library's e-bookshelves as soon as one is checked out, like the milk cartons that get restocked from the rear in my grocer's refrigerator. If there were Creative-Commons licensed "unglued ebooks" in the library, they would behave the same way.

Although the public domain ebooks are a real godsend, the Overdrive website handles these clunkily, too. When I first searched for "Moby Dick" I found only a Penguin "enhanced" ebook version that was already checked out. I had to do a separate search in the Project Gutenberg section to discover the public domain Moby Dick that's always available.

The OverDrive iPad app itself delivers a nice reading experience. There's a single app that works on both iPhone and iPad - if you already had the iPhone version, you just need to update it. It's not as slick as some e-bookstore apps, but pretty good for a first version. And the books are quite readable. I borrowed Christie Golden's Omen, a Star Wars novel. The reading experience is on par with the Kindle App; I particularly liked the positional indicators: OverDrive's "7 pages left in chapter" is much more helpful than the Kindle App's "Location 3013-3019 --- 44%". The best part of the process was I was sitting in a ski lodge 259 miles away from my library.

Despite the the website issues, this whole lending thing seems great all around. Library patrons like me get to read books from the library in our preferred environment. We're exposed, without risk, to a variety of books we might not have considered acquiring on our own. And apart from feeling obligated to support our library when the friends group asks for money or raising our voices when the municipal budget gets cut, it doesn't cost us anything.

So what's the problem? Why am I going around showing demand curves and mathematical inequalities, claiming that lending ebooks doesn't create economic value like it's some mathematical proof or something?

In doing that, I'm guilty of some oversimplification. So now I'm going to show you yet another demand curve and recomplexify everything for you.

Remember print books? Let's review the book industry's method of squeezing every last dollar out of a book's demand curve. It's done by segmenting the market. When a hot new book comes out, it's a hard-cover that costs maybe $30. The people who buy the book are those that value it the most and the truly impatient. If the book is successful as a hard cover, then maybe a year later it comes out as a softcover priced at $12.95. A whole new wave of purchasers buy and read the book. The hardcover and softcover markets are segmented because they attract a different audience. Consumers perceive this as fair because the softcover feels like an inferior product, even though the manufacturing cost differences are quite small.

Consumers who don't even want to pay for a softcover are served by libraries and used book stores. Although it doesn't cost anything to borrow a library book, you may have to wait for it to be available, you have to get yourself to the library, and when you're finished with it, you have to take it back. Instead of the cover price, you pay the price of time and inconvenience.

Another form of market segmentation is accomplished by splitting regional rights. A book might be priced lower in India than in the US (and higher in the UK) because consumers in each country have somewhat different expectations as to what a book should cost.

Market segmentation is harder to achieve with ebooks. You can't put a hard cover on an ebook, and price differences are harder to sustain across national boundaries when the commodity is purely digital. A publisher can drop the price of an ebook with time after publication, but this can be hard to do because of supply chain issues, author royalty contracts, and consumer perceptions of value.

The library ebook distribution channel presents another opportunity for market segmentation. Libraries "buy" the ebooks, resulting in revenue for rights holders. Consumers can read the books without paying for them, but they have to be willing to put up with 21 step configurations and account IDs, and face the possibility that a book might not be available right away and may have a long lending queue. At least with ebooks, there's not the inconvenience of going to the library again to return the book at the end of the lending period!

But imagine if the Overdrive website made it as easy to find and borrow a book  as Amazon's makes it to get a Kindle Edition. Imagine that you didn't need an Adobe ID separate from your library card number. What would happen to the inconvenience barrier that allows publishers to still capture the high end of the price curve at full price? It seems clear to me that without the inconvenience barrier, publishers would quickly remove their desirable content from library lending programs to protect their retail sales.

So here's the paradox: libraries can only be successful at ebook lending if they do a bad job of it.

While I don't think it's tenable over the long term for libraries to specialize in inconvenience, I still think it's very important for libraries to be offering ebooks through services such as Overdrive. Even if the lending models of today turn out to be transitional, they help everyone involved become comfortable with library ebooks. Once the library ebook experience becomes embedded in our everyday lives, readers, publishers, authors and librarians will be able to recognize the novel digital distribution models that benefit everyone.