It's Not About Libraries, It's About Amazon

When Douglas County (Colorado) Libraries decided to put "Buy this book" buttons on their online catalog pages (example), the response was strong. In just 11 days, the buy buttons had garnered almost 700 clickthroughs. According to Library Director Jamie LaRue, the library is putting buy links direct to publisher-supplied urls when they are provided (often to Barnes and Noble).  Of the 700 clickthroughs, 389 went to Amazon and 262 to Tattered Cover, the independent bookstore with 3 locations in the Denver area. In isolation, this data seems to be strong support for the notion that a digital presence in libraries can support sales of books. The withdrawal this week by Penguin from library ebook lending platforms (such as Overdrive) would seem to be a profoundly shortsighted move.

Viewed from a big six publisher's point of view, the situation looks different. If Douglas County's book buying rates match the rest of the country, its residents would purchase 2.1 million books per year, almost 6,000 books per day. The 7.1 million items circulated by Douglas County Libraries in 2008 would present as an attractive market opportunity.

It's hard to know what the bookselling environment will look like 10 years from now, after a transition to digital reading platforms. While some publishers hold out hope that they could play a much larger role in servicing the demand that libraries meet in today's market, it's not libraries that worry them today, it's Amazon. Today's big six publisher sees the Douglas County clickthrough numbers and worries that those 389 library patrons are being captured by Amazon. Amazon is pushing $79 Kindles to those patrons and then effectively owns their book consumption.

The casual observer might not imagine how much of a threat Amazon presents to a big six publisher. After all, Amazon is sending them huge amounts of money. But think about how this might play out. If Amazon, with its proprietary e-reading ecosystem, grows to dominate book sales the way it currently dominates ebook sales, then it will be easy for Amazon to squeeze out the big publishers. Amazon can acquire exclusive content by dealing directly with authors, and is already doing so. They will be able to demand that publishers reduce their margins so that they really are marginal. Publishers would have no choice but to surrender and perhaps die.

The Penguin move should be seen not as corporate verdict on libraries, but as a reaction to Amazon's entry into the library market. When Overdrive was distributing content to libraries on their own platform, the publishers were able to view Overdrive, and libraries in general, as a counterweight to Amazon. But the extension of Overdrive lending to the Kindle flipped libraries into the Amazon column. That's the best way to understand the Penguin decision, though you won't see them saying that.

The recently announced Kindle Owner's Lending Library demonstrates that Amazon, blessed with its trove of marketing data, understands the power of libraries to promote sales. But it also demonstrates that Amazon is not content to leave libraries to libraries. Amazon wants in on the lending action, too.

Bookstore closings and bankruptcies are just the first set of casualties in the war for dominance in the ebook industry, which has only just begun. Institutions with footprints as large as libraries won't be able to avoid cross-fire, or even direct attack. Neutrality won't be an option. The advance of technology doesn't respect the innocence of bystanders.

What's clear to me, at least, is that libraries could do worse than to follow the lead of Douglas County, stepping into the marketplace for ebooks without fear, with eyes open and with server logs studied.

eBook Markets Need eBook Quality Standards

Yes, the Kindle is UL rated!

Underwriter's Laboratory (UL) issued its first standard, covering "tin clad fire doors", in 1903. It then became easier for architects to specify fire-resistant doors for new buildings, which no doubt was a boon to tin clad door manufacturers, who no longer had to compete with doors made with too-thin tin. The UL® labels now let consumers buy all sorts of electrical products without thinking about whether their new Amazon Kindle will burst into flames in the middle of Maharaja's Mistress.

Think about all the things you didn't have to think about today. If you nuked a mug of water for tea this morning, you probably didn't consider whether the microwave's magnetron would fry you. You probably don't even know that your microwave oven has a magnetron. Our modern civilization is built on being able to not think about these things. Quality standards such as those developed by UL help us to think less, and help marketplaces sell more.

Unfortunately, if you're an avid ebook reader, in 2011 you have to think more than you want to about ebook quality. When Neal Stephenson's new novel, Reamde, came out, early purchasers of the book were dismayed to find that it was rife with typographical errors. (But not the title. That "typo", for ReadMe, is intentional!) Amazon was forced to suspend sales.

I've been watching an important effort on ebook quality. It's worth supporting. The entry deadline for the Publishing Innovation Awards is this week, November 15. Entrants submit ebook files which are evaluated for quality, innovation and design. New this year is the "QED" seal, which is awarded to entrants that satisfy a checklist of basic ebook quality no-brainers:

1. Front matter: the title does not open on a blank page.
2. Information hierarchy: content is arranged in such a way that the relative importance of the content (heads, text, sidebars, etc) are visually presented clearly.
3. Order of content: check of the content to be sure that none of it is missing or rearranged.
4. Consistency of font treatment: consistent application of styles and white space.
5. Links: hyperlinks to the web, cross references to other sections in the book, and the table of contents all work and point to the right areas. If the title has an index, it should be linked.
6. Cover: The cover does not refer to any print edition only related content.
7. Consumable Content: The title does not contain any fill-in content, such as workbooks and puzzle books, unless the content has been re-crafted to direct the reader on how to approach using the fill-in content.
8. Print References: Content does not contain cross references to un-hyperlinked, static print page numbers (unless the ebook is intentionally mimicking its print counterpart for reference).
9. Breaks: New sections break and/or start at logical places.
10. Images: Art is appropriately sized, is in color where appropriate, loads relatively quickly, and if it contains text is legible. If images are removed for rights reasons, that portion is disclaimed or all references to that image are removed.
11. Tables: Table text fits the screen comfortably, and if rendered as art is legible.
12. Symbols: Text does not contain odd characters.
13. Metadata: Basic metadata for the title (author, title, etc.) is in place and accurate.

Next year, I hope they add a checklist item for typographical errors. If a publisher can produce print with minimal errors, there's no excuse to allow them in digital books. As the Reamde debacle showed, even typos can create significant customer service expenses for retailers.

A few years from now, it's likely that any ebook that doesn't meet these standards will be unsaleable; for now, a QED seal is a great way for publishers to realize the value of making a good digital product, and for readers to be able to think less.

Notes:

1. In building Unglue.it, we've realized that we need to give book lovers some assurance that the ebooks they support for ungluing will be of a quality that they will be proud to have contributed to. We'll point to QED as a reference point for the quality we expect from unglued ebooks.
2. I read the print version of Reamde. I thought the spin-up was Stephenson's best, but there was a lot of carnage as things spun globally out of control.

Creative Commons Media Neutrality and eBook Rights after Rosetta v. Random

Here's where it gets complicated.

Not so long ago, book publishers had no idea that there would be such things as digital books. Publishing contracts mentioned nothing about ebooks. Literary agents made sure to keep derivative rights separate, so that translation rights, film rights, stage adaptation rights, etc. for a successful book could be separately monetized.

When ebooks started to become important, the digital publisher Rosetta Books took advantage of the situation, and started acquiring ebook rights to well-known books such as Kurt Vonnegut’s Slaughterhouse Five. This did not please the print publishers at all. Random House, one of the "Big Six" US publishers, took Rosetta to court, saying that their publishing contracts gave them exclusive rights to distribute books, and ebooks were books.

And here’s where it gets REALLY complicated. The District Court ruled against Random House, but narrowly, and the Appeals Court upheld. It wasn't that the ebook's bookness was obvious one way or another.  The courts only refused Random House’s request for an injunction.  Random House had asked the court to order Rosetta Books to immediately “cease and desist” selling ebook editions of Random House books.  Without an injunction, Random House would have had to continue with a lengthy legal preceding to assert its publication rights.

Instead, Random House negotiated a settlement with Rosetta Books, one which allowed some older books to be issued in ebook format by Rosetta. Rosetta got their ebook rights and Random got an undisclosed revenue share, according to Publisher’s Weekly. The details are not public, but the practical result seems to be that if Random House does not want to reissue an ebook of a book based on an older contract, they will allow the author to contract separately with a third party, such as Rosetta.   Open Road Media is a more recent, and more aggressive, ebook "reprinter," and they have also contracted separately with authors and estates for ebook editions, such as the "enhanced" From Here to Eternity; Random House retains print rights only.

Despite this uncertainty, the book publishing industry has managed, for the most part, to avoid destructive legal battles. It seems to be understood by literary agents that ebook rights for works under pre-Rosetta print contracts are to be offered first to the publisher with print rights. While Random House will often waive ebook rights, Harper, S&S, Penguin, Macmillan, Hachette seem to block 3rd party licenses, slowly adding the backlist ebooks to their ebook catalogs, and only if they can get authors to accept the current standard ebook royalties, 25% of net.  If no agreement can be reached on royalties no ebook is published.

For other publishers, the situation is confusing. According to Rosetta, "in England, the agent and author community has been clear for ten years that these backlist electronic rights are owned and controlled by the authors". Smaller publishers will often revert ebook rights because conversion and distribution costs for backlist books make it too expensive to create an ebook only to keep ebook rights.

The effect of the Rosetta v Random non-decision has been that a large number of works whose print rights remain with a publisher have ebook rights which  may be subject to dispute.  Often these books are scholarly works or trade books with little commercial value.

Our goal in building Unglue.it is to work with rights holders to re-license books such as these with the financial backing of book lovers everywhere. These "unglued ebooks" would be "given to the world" under something like a Creative Commons (CC) license. But how can such a license be applied when there is  such uncertainty around ebook rights?

One problem is that the Creative Commons licenses are media neutral. If I release a print book under a CC license, there's nothing in the license to stop anyone from scanning it, turning it into an ebook, and distributing it on their website. Similarly, a CC ebook can be printed and bound, and redistributed with the same license, so long as the other license terms are obeyed.

It's not enough to have ebook rights to release a Creative Commons ebook, you need to have print rights cleared as well! ¹ (If you thought this article had reached the zenith of complicationness, you thought wrong.)

If what you're really interested in is ebook rights, then why use a Creative Commons license? With a CC BY-NC-ND license, the allowed noncommercial print uses are probably not very valuable.

Looking at this issue with our legal counsel, we considered the option of creating our own "Unglue.it eBook License" which would be similar to Creative Commons but which would prohibit even non-commercial printing. Unfortunately, this option would:

1. require us to establish an entirely new publishing "standard" license;
2. add legalese and restrictions that supporters and rights holders alike would find unfamiliar and undesirable;
3. lose the benefit of the universal and clear standards of the Creative Common licenses.  CC licenses, for example, can be recognized and acted on by automated search engines.  Precedents exist for what is allowed. For almost a decade, CC licenses have allowed authors such as Lawrence Lessig and Cory Doctorow to publish successful commercial print and ebook editions alongside open access, CC-licensed ebook editions.

A different strategy would be to use a standard CC ND license, but to add a technical obstacle to printing which does not conflict with open access for the digital version.  If we created something inherently digital (e.g. with revisions that include animations throughout that can’t be printed), then printing a version without animation would violate the non-derivative aspect of the license.

We're not enthusiastic about this option either.  Just as legalese confuses normal people, the subtleties of media technology are likely to confuse lawyers and Judges. If someone wants to object to our interpretation of a “derivative use,” there's no technology that can keep them from suing.

A third option is by far our top choice, and is the one we will pursue. Get the various rights holders to agree among themselves!  Since the CC BY-NC-ND license only allows incidental and not-for- profit printing of ebooks, print publishers willing to let an author unglue an eBook using this license should also be willing to waive any conflict with their “exclusive” print rights.

Authors and publishers have mostly managed to get on with business without a clear legal decision on whether an ebook is a book. The possibility of a crowd-funded payoff shared by print and digital rights holders should create a strong incentive for them to work together to unglue the ebook.

How hard could it be?

Notes:

1.  Or at least, you need to have any publisher with “exclusive” print rights waive those rights with respect to any “non-commercial” printing of a CC ebook for personal use.
2. My colleague Amanda Mecke contributed to this article.
3. Yes, that's the new logo for the Unglue.it service, coming soon!
4. Standard IANAL disclaimer.

The United Nations of Reading

The Internet Archive

I had a great time at Books in Browsers, even though I completely lost my voice on the second day. The assembled talent and brainpower made almost every moment a thrill. When my talk from the morning of the first day was given prominent mention in the New York Times' Bits Blog, I got so excited that I couldn't pay attention to an amazing talk on annotation of medieval manuscripts.

But the most important talk of the two days was Brian O'Leary's closing presentation, which prompted the Twitter backchannel to unanimously elect him the "Secretary-General of the United Nations of Publishing".

Here's his abstract:

Although business models have changed, publishers and their intermediaries continue to try to evolve their market roles in ways that typically follow the rules for “two-party, one-issue” negotiations.  In an environment in which the negotiations are better framed using models for “many parties, many issues”, these more limited approaches have made the design of a flawed ecosystem even worse, shifting burdens onto valued intermediaries (libraries and booksellers, among others).

Content abundance, coupled with improvements in available technologies, gives us an opportunity to reshape the competitive framework.  This talk will examine options to apply the principles of effective game design to create a set of new, targeted and evolving business models for content dissemination in an era of abundance.

O'Leary talked about the changes occurring in the entire ecosystem of what used to be called "publishing": authors, agents, publishers, distributors, retailers, libraries, and of course readers. He noted that relationships throughout the ecosystem were being renegotiated without an awareness of the effects of these changes on the rest of the ecosystem. As a result, frameworks, arrangements and processes that could benefit the entire ecosystem were not being given the consideration they deserve.

The future of EPUB

O'Leary pointed to the discussions leading to the United Nations Convention on the Law of the Sea as a possible inspiration for a reading-ecosystem way forward. The breakthrough in those discussions was the introduction game-theory models that helped the parties see the effects of agreements and provisions on all stakeholders in the Law of the Seas negotiations. If a similar sort of model could be developed for the activities surrounding publishing, it might be possible to do a lot more that to "save publishing". Intelligent, collaborative application of digital technologies should be able to increase the effectiveness of an industry whose purpose is to promote reading, education, culture and knowledge.

According to O'Leary, we need to figure out ways to fund the sort of research that could be the basis of modeling for the reading ecosystem. One possibility would be to create a cross-industry organization to do so.

If such an organization were created, I hope that its membership mirrors the composition of Books in Browsers attendees. Many inhabitants of the reading ecosystem were represented, despite the technology emphasis of the meeting- publishers, librarians, agents, academics, authors, designers. The contrast with last week's DPLA Launch meeting was striking- hardly any publishers or authors were in evidence at DPLA. It seems to me that with everything that's at stake, we could do a lot worse than to listen some more to Brian O'Leary.

Update (10/31/11): The text of O'Leary's talk is posted here.)

Creative Commons - ND (No Derivatives)

When I was a sophomore in high school, I read Catcher in the Rye. To me, the amazing thing about this book was the language. It seemed like every other word was "bastard", "goddam" or "sonofabitch". What were my teachers thinking?

Imagine if the Salinger estate decided to release a Catcher in the Rye ebook with a Creative Commons License so that 10th graders around the world could read it for free. What sort of license would they choose? In particular, would they choose a "No Derivatives" license?

Here's the "legal code" of the No Derivatives (ND) restriction in the CC BY-NC-ND license:

The [granted] rights include the right to make such modifications as are technically necessary to exercise the rights in other media and formats, but otherwise you have no rights to make Adaptations.

"Adaptation" means a work based upon the Work, or upon the Work and other pre-existing works, such as a translation, adaptation, derivative work, arrangement of music or other alterations of a literary or artistic work, or phonogram or performance and includes cinematographic adaptations or any other form in which the Work may be recast, transformed, or adapted including in any form recognizably derived from the original, except that a work that constitutes a Collection will not be considered an Adaptation for the purpose of this License. For the avoidance of doubt, where the Work is a musical work, performance or phonogram, the synchronization of the Work in timed-relation with a moving image ("synching") will be considered an Adaptation for the purpose of this License.

The advantage of allowing derivative works (Adapations) is that people would be free to use Catcher in the Rye for all sorts of amazing things. There would be a thousand YouTube dramatizations of Catcher in the Rye, free to all. There would be fan fiction. There would be novels about Holden as a homeless person, Holden as a Wall Street tycoon, or as President Caulfield. There would be translations, graphic novels and operettas. Best of all there would be versions of Catcher that would have all the goddams replaced by gosh darns and bitches replaces by guns, and that's what 10th graders would read in Texas. Imagine what they'd read in North Korea: Brother Ho Gathers Rice.

J. D. Salinger is rolling over in his grave even as we ponder the scenario. I think it's safe to say that Catcher in the Rye will not see a license allowing derivatives in my lifetime or in yours. It's not about generosity at all, it's about the artistic vision of the author. And J. D Salinger is not alone in wanting to ensure the integrity of his works. That why Creative Commons offers the "No Derivatives" option for its licenses in the first place.

There are lots of cases in which it's valuable to be able to change a work. As much as it hurts when your edit is reverted, the most amazing feature of Wikipedia is that anybody can change it. For a jazz singer, a song that you can't riff on is not jazz at all. For a teacher, a textbook that you can't adapt to your curriculum is just wrong. In these and many other applications, an ND license seriously reduces the value of a work.

But to date, most books have been written with the expectation that the the version that goes out to the printers is more or less the version that will be read. Authors have not incorporated the possibility of remixing and read-write literature into their creative visions. Certainly this will change as new forms and conventions emerge. But for now, most authors want to control the expression of their creations, even if they're willing to set them free. For the purposes of Unglue.it, we have to respect these wishes if we are to convince authors to release their works into the public commons. Money is not the issue.

As Mike Taylor, a long time friend of this blog, commented on a previous post, the ND aspect of our "standard" license clashes somewhat with the second two bullet points of Creative Commons'  "Share, Remix, Reuse" slogan.  It's important to recognize that even the CC BY-NC-ND license that Unglue.it will use by default unlocks "Remix" and "Reuse" activity that falls under "Fair Use".  The Creative Commons licenses leave untouched the fair use rights of users, and are hostile to Digital Rights Management (DRM) software that in practice impedes these rights. DRM typically blocks many types of fair use, and in the US, the Digital Millenium Copyright Act (DMCA) criminalizes the circumvention of this DRM.

Many of the derivative works that have Salinger spinning are allowed under fair use no matter what the license. But an ND license lets an author keep potentially valuable movie rights and translation rights. The value of these would be enhanced by letting everyone in the world read the book for free through ungluing, and this incentive will benefit the public by reducing the authors' ungluing price.

It's hard to know what sorts of "adaptations" of a work will be possible in the future. However, the Creative Commons licenses, including the ND licenses, make it clear that users have the right to migrate the work to new formats for the purposes of accessibility and compatibility with new media and technology. This is important to all of us, because without this right, it's quite possible that many of the ebooks we use today will be unreadable 50 or a hundred years from now.

Notes:

1. As always, don't confuse this blog with legal advice.
2. According to Wikipedia, Catcher in the Rye continues to sell 250,000 copies a year. 
3. The Catcher in the Rye is #410 on Amazon's best-seller list. 
4. A fair "ungluing price" for Catcher in the Rye would be at least $4,000,000.
5. I've previously posted about the Attribution and Non Commercial attributes of Creative Commons Licenses
6. It's funny. Don't ever tell anybody anything. If you do, you start missing everybody.