Book industry takes lessons from Napster
(IDG) -- An easily read, portable e-book that puts a whole library's worth of reading at your fingertips--even on a crowded subway--may be the future of publishing.
But in the meantime, book publishers struggle to determine how to make money in this new digital world. They fret that traditional sales models don't work, and technologies like e-books seem to give away their treasures.
Only by satisfying consumers can book publishers stay competitive as the industry moves online, advises Seth Greenstein, counsel for the Digital Media Association. Greenstein addressed executives at the Association of American Publishers meeting in Washington this week.
The Digital Media Association is an organization of 30 media companies formed to educate government policy makers about digital industry issues. Addressing the panel's theme, "What if your book were a song?" he said publishers can benefit from the lessons learned by the online music industry through the recent Napster lawsuit.
"The only way you're going to be able to sell is by being the most convenient for the consumer. They don't want to lose their investment when they buy online," Greenstein said. "Consumers expect user flexibility, like being able to archive the material and transfer ownership." As Napster showed, if your book were a song and you haven't built a content system for it, someone else will come and take the business away, he added.
"Until the day comes when I can take a sheet out of my pocket and read an e-book on the bus, they won't be convenient and people won't use them," Greenstein said.
Learning From Music's Mistakes
Publishers must find ways to translate the rights, privileges, and legal protection of traditional book selling to cyberspace, because online consumers expect the same rights they get with books made of paper, panel members agreed.
"When I buy a CD or book, I can do anything I want with it, and digitally I expect to get equivalent rights," Greenstein said.
The music industry has been the test case for dealing with copyright issues and licensing agreements for business in the Internet age, noted Billy Pitts, an executive vice president of government relations with MP3.com.
"Napster did us all a great favor and showed us the technologies out there that consumers want," Pitts said. To satisfy music listeners' appetites, licensing agreements in the digital world must be updated, he added. MP3.com, for example, gets up to 250 new artists a day, seven days a week, and "it's next to impossible in the current apparatus to get licensing agreements with all artists as quickly as we want to," Pitts said.
Mark Seeley, a vice president of the publishing company Elsevier Science, said changes in law mirroring changes in technology is not a new phenomenon.
"But the pace of change the Internet represents is of a frequency all its own," he added. He observed that a pattern of litigation and discussion is emerging, which shows a major divergence between consumers and industries.
Reconciling New Technology, Old Law
It's not necessarily a friendly divergence, observed Julia Cohen, an associate professor of law at Georgetown University Law Center.
"Lately it seems to be a contest of which side can call the other a dinosaur in the most colorful terms," Cohen said.
Cohen put the current debate about digital works into a historical context, noting that copyright law has evolved over time. Many think it should continue to expand with new technology as distribution becomes more powerful, Cohen said. But critics within the industry believe the law is stifling new technologies in the name of copyright protection, as educators and publishers try to apply old rules to a new environment.
"Most generally agree that the principles of copyright law are a pretty good thing, but we must figure out how to live in a technological world where hopefully no one is a dinosaur," Cohen said.
One tricky point for copyright laws and the Web is controlling copies of a digital work, so publishers and creators are compensated for their product. Each time a book is passed along, money is lost on the sale.
Different Books, Different Needs
Greenstein, of the Digital Media Association, says content providers should identify the specific legal protection they need. For example, in commercial publishing, the more a book is shared, the bigger the boost to the author's next book. Distributing a book online can spur an exponential buzz that launches an author's popularity more quickly and to a greater degree.
But this is not the case for educational publishers, whose market is often fixed. Each segment of the industry has special needs, Greenstein said. And adapting to Internet business also means distinguishing between customer expectations in different types of industries when doing business on the Web.
"The differences in consumer distribution play differently for each business. If your book were a song," Cohen noted, applying the panel theme to make her point, "looking at this group your song probably would not be Madonna, but it might be Bach or Coltrane."
Yet whether it's about music, textbooks, or literature, it's better for publishers to make mistakes online than miss out altogether, Greenstein said.
"It's not really about books," he said. "It's about content, in the same way that music is really a service. It's all information connected by context. What a great thing--and what a licensing nightmare."
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