The move affects partners in the US, Canada, the UK and Australia. In Australia, partners Dymocks and Booktopia have only been selling Google Ebooks since Christmas. Other launches, including The Co-op Bookshop and QBD were planned. Resellers will have until January 2013 to find an alternative ebook platform or withdraw from the market. Booktopia already appears to have acted, with no sign of Google Ebooks on its site other than an old home page mention.

It’s important to note that Google isn’t pulling out of ebooks: it’s simply dropped its strategy of working with booksellers to help them sell ebooks.  “That effort — the reseller program — has not gained the traction that we hoped it would,” said Google on its blog.

Bringing bricks and mortar booksellers into the ebook revolution was always a brave — even noble — effort by Google, given how little online presence and expertise booksellers had. In fact, the scale of the challenge Google Ebooks faced was clear from its launch in December 2010 which included a high profile partnership with several hundred US indie booksellers. As we noted at the time:

Alas, early implementations by US booksellers are poor and show that both Google and the indie booksellers have a long way to go if they want to take share from established players such as Amazon and Kobo.

The indie booksellers that joined using the American Booksellers Association’s IndieBound platform used a simple search facility to integrate Google ebooks into their sites … . This won’t attract customers away from Amazon and its ilk. The only site I found that offered browsing and some sort of curated Google ebooks service, albeit fairly basic, was US indie Powells. All of this serves to underline just what a tough job indies will have getting into the game given their failure to embrace the web in any meaningful way.

As booksellers ponder their strategy in a post-Google world, the option of withdrawing from ebooks will no doubt be seriously considered by many. If Google’s clout wasn’t enough to crack this market for them, will any alternative be better? One thing that’s increasingly clear is that there is surprisingly little in common between offline and online bookselling. Google’s blog post hinted at this when it noted, “it’s clear that the reseller program has not met the needs of many readers or booksellers.” The reality is that most readers have shown little interest, or loyalty, when it comes to buying ebooks from their local bookstore: they prefer to buy from ebook specialists — often tied to the e-reader devices they own. And booksellers’ traditional strengths don’t translate well online.

For those booksellers who decide to stick with ebooks, there are now plenty of white label ebookstore suppliers who can step in to fill the gap left by Google. In Australia, home-grown offerings ReadCloud and Booki.sh could benefit. So could the Australian Publishers Association (APA) and Thorpe-Bowker who recently announced a partnership with US white label ebook provider Copia to power the forthcoming Titlepage Plus ebook service for booksellers.

But even with this backing, booksellers have a tough challenge ahead of them. Copia, with three years of development already behind it, still has some significant rough edges to iron out. Notable among them is its truly awful e-reading app which inexplicably requires scrolling through the ebooks (none of the easy page swipes that are offererd by all other e-readers); and it offers only basic formatting and a minimalist feature set. This is one of the most critical consumer-facing items so it’s surprising the service would launch in this state.

So, where to for Google? Google has rightly decided to focus its efforts on selling directly to the consumer as part of its larger Google Play store where ebooks join music, video and apps in the digital content business. This approach is closer to its major rivals Amazon and Apple who enjoy advantages from their direct strategy and the greater control it gives them over product and delivery.

Expect, too, that Google will move quickly to address one of the other gaps in its strategy — offering its own device  — something that has proved vital to the success of rivals, including ebook specialists Kobo and Barnes and Noble.

And perhaps we’ll also see Google quickly open its Ebooks store to the rest of the world: Until now, its policy has been to only sell ebooks in countries where it had established local partnerships.

This year will mark the fifth anniversary of Amazon’s launch of the Kindle, the

Source: AAP (Association of American Publishers)

event that triggered the spectacular rise of the ebook. Amazon has remained the biggest beneficiary of this growth, with its global market share estimated at 60 per cent or more. But changes are afoot that threaten its dominance and could shake up the whole market that has evolved around the ebook.

The catalyst is the release of new ebook formats that offer richer formatting and take advantage of new hardware. Late last year, the industry group behind the five year old EPUB standard released its successor, EPUB3, which will appear in ebook readers and apps during 2012. Shortly afterwards, Amazon announced Kindle Format 8 (KF8), successor to the venerable mobi format at the heart of the Kindle phenomenon. KF8, like EPUB3, is based on the new web standards of HTML5 and CSS3.

Both EPUB3 and KF8 open the door to highly illustrated and complex works, with EPUB3 having the edge through its support of video and a programming language called Javascript to add sophisticated interactive features. KF8 might add these later but they’re absent from the initial release, probably due to hardware limitations — Amazon is keen for some of its older, but under-powered, black and white Kindles to remain compatible. So far, only its new colour e-reader, the Kindle Fire, supports KF8.

These new formats might set the stage for Round Two of the battle between Amazon and the rest of the industry which has largely coalesced around the EPUB standard. But just weeks into the new year, things changed again when Apple fired a shot across the bow with iBooks 2. Apple’s iBooks app and its iBookstore support EPUB but iBooks 2 adds a new twist — a version of EPUB3 that is similar to, but incompatible with, the industry standard.

Apple cleverly made its initial target textbooks rather than trade ebooks although its technology can span both markets. Its strategy goes well beyond introducing its own format. The launch of iBooks 2 went hand-in-hand with a user-friendly authoring tool called Author which lets anyone, including teachers, authors and small publishers, produce these rich ebooks. The catch? If you want to sell an ebook made with Author, you have to sell it through Apple’s iBookstore.

Apple played another trump card to boost adoption of iBooks 2, launching the free iTunes U app. For several years, Apple has nurtured a section of its iTunes store called iTunes University which now features thousands of free video and audio courses from universities around the world. iTunes U opens this to schools (US only initially), integrates iBooks textbooks, and expands functionality with learning management system (LMS) features that manage courses and track students’ progress. All of this, combined with Apple’s deep roots in educational sales, is likely to make Apple and its hugely popular iPad a must-buy for education and a major market for digital textbooks. This popularity will likely spill over to the trade book market.

So, even before the first EPUB3 ebook goes on sale, we have three (incompatible) variations of the industry standard. For those of us who’ve followed technology markets over decades, and witnessed the tactics of dominant companies like Microsoft, this is deja vu. Microsoft, whose dominance is waning as mobile devices replace the PC as the centre of computing, is famous for its ‘embrace and extend’ approach to standards. It adopts a standard then adds incompatible ‘enhancements’, a strategy that carries through to the internet today with the so-called browser wars that mean websites look different in different web browsers. Expect ebooks to follow suit.

All of this manoeuvring will affect the book industry profoundly, including the emerging ebook ecosystem. The traditional dominant players — publishers and booksellers — will have little influence over its outcome and it’s a time when technology leadership might change, including Amazon’s dominance of the first major wave of ebooks.

Will traditional publishers still have a role? Probably. Unlike simple narrative works, the complexity and cost of producing high-end multimedia ebooks will demand the financial and human resources of big publishers. It’s unlikely the future digital Jamie Oliver cookbook blockbuster will be self-published — but will Oliver appoint Penguin, or a new player like BBC, perhaps through its Lonely Planet acquisition or US media giant NBC, both of which now have ebook operations with access to cash and multimedia expertise?

A fragmented ebook market might also upset existing ebook distribution channels. Ebooksellers like Kobo, Barnes and Noble, Google, and the many booksellers who use their technology, rely on the EPUB standard to access a large range of ebooks. This access will be threatened by demands from Amazon, Apple and some emerging players that sales go through their platforms. As ebooks become more complex to produce, publishers could start to limit the number of editions they support, making it harder for minority platforms to compete for top titles.

There are still plenty of pieces in this puzzle to emerge from both incumbent and new players — including the book’s print cousins, magazines and newspapers. But one thing is almost certain — the shift to rich media ebooks means positions that emerged in the past few years could change again. And yes, EPUB3 — the industry’s attempt to control the book’s digital evolution — and even Amazon if it missteps, could be casualties.

Really Blue Books publisher Sarah Bailey sees an opening in the market for a publisher with a digital-only focus prepared to promote new, creative talent. ”We are particularly keen to benefit and nurture our home-grown writers by providing them with an attractive alternative to self-publishing in the digital publishing realm,” she says.

The five titles available at launch are all fiction, including three young adult titles, but the company also plans to publish non-fiction. Bailey expects to publish between 20 and 40 titles in RBB’s first year.

eREPORT caught up with Bailey to find out why she and her business partner started Really Blue Books and what they plan to do differently from traditional publishers.

eREPORT: Tell us a little about Really Blue Books and why you’ve started it.

Sarah Bailey, Really Blue Books

SB: Really Blue Books is essentially your rogue epublisher and ebookshop of the modern digital publishing industry. Our aim is to be an island of quality and consumer trust in the sea of poor quality digital works created by widespread self-publishing and fluctuating pricing strategies.

While major publishers may only wish to consider their bottom lines and minimise risk in only publishing known authors, we wish to gain from a wider source and distribute back to the community. We are focused towards nurturing debut and current authors wishing to launch into digital as part of their professional writing careers. We are passionate about getting new talent out into the marketplace and we think that the readers will appreciate having a new, modern alternative with reasonable prices, providing accessible content in multiple formats.

eREPORT: What’s your background? Publishing? Technology?

SB: Both, luckily. Really Blue Books is run by myself and my brother, Sam Bailey. I am from an editorial/publishing background with a digital focus, and Sam is an expert in IT systems development and programming – the perfect collaboration of skills for creating ebooks and web-based platforms in the current market.

eREPORT: How do you get started as an indie digital publisher? Name brand authors with backlist rights reverted? Fresh new talent? Any signs that big authors are open to risk-taking to help start-ups? (They should be)

SB: I completed a Masters degree based around digital publishing and saw an opportunity unfolding in the market for digital start-ups. As we had the skills required to set up, and healthy egos, we decided to shake up the traditionalists and offer both authors and readers a new, modern option built specifically to cater to the ebook market sector.

It is one thing for existing publishers to adapt, re-skill and build new systems, and quite another to be purpose-built for the future market. So far, all our predictions and observations of the market have been realised, filling us with confidence as to the direction and method we’ve chosen. I’ve heard that RBB is to be cast as the Oracle in the next Matrix movie. Really.

As for our author base, I suspect many big authors are locked into long-winded, long-term contracts with their current publishers or see the safety in remaining with the known. While some previously published authors have found their way to our modest abode, they are ones who either have a particular interest in digital – the new market and its innovative possibilities, have found their current agents and publishers resistant to digital-based works, or have been bribed with delicious chocolate and excellent royalty rates (mostly chocolate though). Many submissions are coming from new talent and we’ve been pleasantly surprised at the volume and quality of the works bombarding our inboxes. It’s absolutely brilliant and very flattering!

eREPORT: What are your three or four key promotional strategies to cut through? How do you use digital marketing?

SB: Really Blue Books has to interact with customers through digital mediums to effectively communicate with those most interested in ebooks. Therefore social media, search engine optimisation and third-party customer bases are important to us. Reviews are still an important part of gaining reception, but word of mouth and viral advertising are even more effective when it comes to audience reach. We also have a few (top secret) strategies to distinguish RBB as a digital publisher with a difference, increasing interactivity, feedback, communication forms and accessibility. We are so entrenched and committed to digital that our office itself is virtual and yet all components – author, publisher, IT, customer etc. – can interact effectively. We ARE the Internet. Our long-range view of digital publishing is very, well, long.

eREPORT: What innovations will an indie publisher like yours introduce to the author/publisher relationship?

SB: We are currently building a web management system through which authors and their editors and publisher can interact, all working on the same manuscript. Authors will be able to check their manuscript’s status right from submission through production to completion and listing for sale.

Another of our ‘soon to come’ features is an RBB author-specific forum through which our authors can support each other in this digital sea of madness, working together to create ideas, give feedback, and summon lynch mobs into being to hold their errant publisher accountable should we stuff up.

Of course, our royalty rate is second to none and we believe in working WITH the author on their labour of love/ball and chain (choose appropriate) to create the best work possible for both sides of the partnership, rather than taking the faceless corporate mentality of content acquisition.

We even try to provide feedback and suggestions for as many submissions as possible. If authors have given us the privilege of reading their version of War and Peace, then it is our responsibility to afford each work the respect it deserves. Writing an entire novel is no easy task!

Also, as no doubt others are adapting to now, we acquire world rights to our titles. The Internet makes all distribution equal and we will see a huge reduction in the division of rights into territories.

eREPORT: Who else is doing what you’re doing in Australia and are there signs of a community developing?

SB: Surprisingly no one! Existing Australian publishers are converting their backlist and releasing new titles in print and digital simultaneously, and some, such as Pan Macmillan, have gone as far to launch new digital-only imprints. However, after a thorough search (and we’re happy to be proven wrong as we’d love to be part of a supportive digital community), Really Blue Books seems to be the only digital-only trade publisher in Australia. This is perhaps why we feel the need to develop our own community with our authors to bolster independent digital publishing and assist those new to digital with the transition and differences in reaching their audience.

eREPORT: How important is the DRM issue to the commercial success of what you’re doing (given that the vast majority of ebook sales go through ebooksellers with DRM applied)? If an author wants DRM, will you allow them to?

SB: DRM is a key issue for us. Huge. It cannot be disputed that as soon as a new version of DRM is created, it is cracked and the information widely available to any with access to a search engine. It seems pointless to us and unreasonably limiting for the consumer. We do not presume to tell the reader how to read their book. We are not a lending library as Amazon wishes to be.

There is no evidence that those who download pirated works would have otherwise purchased them, so it seems ridiculous to annoy customers by ineffectively preventing them from doing what we already know they will. You only have to look at the parallels between the book industry’s digital revolution and that of the music industry when Apple appeared with iTunes to see that DRM is unlikely to be a long-term solution to piracy, and we are anticipating that eventuality. Piracy has been an issue from the birth of books and is unlikely to be stopped now by a few lines of code, hence we do not see any commercial liability in pursuing this path.

If an author was particularly keen on having DRM applied to their work, then there are plenty of other publishers out there who will happily comply (and will see no other option). In fact, at the Digital Book World Conference recently, publishers have been advised to drop DRM for their titles, as we have anticipated. This stance is an integral part of our company philosophy and is non-negotiable in our contracts. It is the author’s challenge, should they choose to accept it.

eREPORT: Tell us about your list and the titles you’ll have available at launch.

SB: We plan to publish somewhere between 20 and 40 titles in our first year. It may sound excessive (and vague) but the size and type of publication can vary, as can the amount of editing, design and production required to get Cinderella to the Ball.

We have five titles for launch:

• THEM by Adrian Deans (author of Mr Cleansheets) – adult speculative fiction in an Australian setting
• Kiss Kill by Jeni Mawter (author of the ‘SO’ series published by HarperCollins) – a unique transmedia teenage fiction novel
• Milo and I by Antony Mann – digital release of his UK and Japan published adult crime fiction short stories with a comedic twist
• Repetition by Elissa de Heer – debut teenage fiction novel
• Pendulum by Nick Duhigg – debut teenage fiction novel

Our ebooks are available from our website and web management system which will be our main, and cheapest, distribution platform from a consumer viewpoint.

“Publishers have started to do the hard work of making the digital transition and they’re finding that it is, indeed, hard work,” says James McQuivey, vice president and principal analyst at Forrester Research.

The hard work has probably been delayed by early windfall profits from ebook backlists, with major publishers still reporting good results, despite the mayhem in the book trade.

But if the transition is going to be successful for incumbent print players, it will need a shift in thinking. The biggest barrier is the widely-held idea that ebooks are just another format. They’re not.

It’s an easy idea that reassures staff and stakeholders and provides a potential lifeline for the existing business. But it’s damaging because it leads publishers to focus on the similarities and overstate their advantages. These similarities are much less important than the differences.

The paperback was just another format. It fitted neatly into the same business model and the same supply chain. It had the bonus of delivering everyone more business. Cheaper books brought armies of new buyers to buy the same books from the same group of sellers through the same channels.

But digital isn’t like this.

• The supply chain is completely different. The companies driving the structure of the ebook industry are technology companies, not publishers, booksellers or book distributors.
• The economics are different. That includes both the overall cost structure and the marginal cost of delivering one more unit anywhere in the world.
• The value proposition to the reader is different. That means price but it also means a host of other benefits. And the ability to instantly access your books or buy any book 24/7 from anywhere is a killer app, no matter how much you love the feel and smell of paper.
• The barriers to entry are different. They’re both lower (for a publisher/self-publisher) and impossibly high (for most booksellers). And soon Google Ebooks and a beefed-up Amazon partner programme might flip this around again and make the entry barrier so low that not only indie bookstores but every website and blogger will be able to sell ebooks.
• The value chain and power relationships among major participants are radically different. If you want proof of this, you only need to see how Random House was backed into a corner by agent Andrew Wiley. The reason? No one believed one of the world’s biggest trade book publishers had any more power getting an ebook to its readers than a miniscule start-up.
• The content will be different once the digital tail starts wagging the print dog and richer digital editions diverge, instead of being cheap replicas of print-ready PDFs. Of course, this can be an opportunity for big publishers — or big new entrants — to shine.
• The rights are different. Authors don’t have to tie the two formats together and increasingly they won’t. Publishing and distributing narrative works as ebooks is actually easy and inexpensive, and plenty of service providers and ebooksellers are jumping in to help authors.
• Major customers are different. How much time do publishers spend peddling ebooks to today’s most important customer group, bricks and mortar booksellers? Almost none. How important are sales reps for ebooks? Not very.
• Marketing is different. If your book is digital, almost nothing in a traditional book marketing plan is relevant. Scratch everything tied to bookstores (all the in-store, most author touring). Reviewers are usually different (bloggers, readers — most traditional reviewers don’t review ebooks though that will change in time). Merchandising happens online.
• Most jobs are different. Many—possibly most—skills are different from those found in a traditional book company, whether publishing or supply chain. Whether you’re selling ebooks (to whom? how?), marketing them (how? to whom?), producing or editing them (books as software), your job in an ebook business will be different. Very different in many cases.

So just how different must ebooks be before they’re not just another format? I know from personal experience the challenges CEOs face as they’re torn between serving existing customers, resource demands and processes; and giving new ones the freedom, resources and fresh-thinking to grow. What they almost always do is tether an exploding new business to a limping old one in the name of synergy — and to cover the old business’s overheads.

But how much synergy did Amazon need when it got into online bookselling in the mid 1990s? Jeff Bezos had an IT degree and worked on Wall Street. He’d never sold books. How much synergy did Barnes and Noble leverage when it completely failed to get into the game? This article from Fortune magazine of September 27, 1997 is a great example of an incumbent overstating the value of what it brings:

The big guys can just as easily join the fun. Barnes & Noble, the nation’s leading bookseller, opened its own online bookshop (at www.barnesandnoble.com) three months ago and has swiftly exposed the tenuousness of Amazon’s head start. It turns out that figuring out the sexy new stuff, like Web pages and online order taking, is a lot less difficult than figuring out such drudgery as how to cost-effectively finance, stock, and move the physical stuff, the books.

Anything Amazon.com can do on the Internet, so, too, can Barnes & Noble. “There was a mystique about how difficult it was to get started on the Web,” says Steven Riggio, chief operating officer of Barnes & Noble, “but it’s quickly fading.”

In fact this article— and B&N — were 180 degrees wrong. Barnes & Noble failed miserably, Amazon shone. It turns out that the ‘sexy new stuff’ is actually hard and important, and the ‘drudgery’ of the old business was much easier to figure out (and mostly irrelevant to online success). The guy who came to work every day to sweat over the new stuff, without distraction or compromise, won.

Says Ingram Book Group CEO John Ingram in this insightful Q&A:

Publishers have two business models to run: a legacy print model and a new digital one. What competencies are needed now? And if they’re different competencies, and I think they probably are, how do you pay for those? How can the business be restructured so that cash can be created to pay for new things that need to happen?

Unfortunately, very few legacy businesses can sever their digital arms to give them the best chance to compete. The reason: doing this will create huge internal problems. Everyone will be frustrated, nothing will seem to work, communication between the print and digital businesses will be terrible. Out in the real world, it won’t matter, but inside the company it will become a major issue. So the digital business will be reined in and have to serve two masters.

Is this why executives in the Forrester survey are pessimistic about their own company’s chances of winning?

Creating ‘synergies’ with the legacy business — which the ‘just another format’ thinking encourages — too often ends up being a straitjacket for the new one. That’s pennies from heaven for those upstart new competitors.

While the technology is important, Apple has a unique combination of assets to pull off a home run in the education market. Unlike major rivals such as Amazon and Google, which are consumer-focused, Apple has deep roots in education. This includes a large, highly-skilled direct sales force with strong relationships in schools and universities around the world. It has big support in education where Apple regularly jostles for top spot in market share around the world.

Before looking at the implications of its announcements, here’s a brief summary.

• iBooks 2.0. This is a rich media ebook format for Apple’s iBooks e-reader app. Apple’s move follows the release of Amazon’s KF8 format for the Kindle, and EPUB3 which is the rich media upgrade to the industry’s own EPUB standard. While iBooks 2.0 is based closely on EPUB3 (as is Kindle’s KF8), it’s not compatible. Unlike the Kindle KF8 and EPUB3 announcements, which were primarily focused on the general consumer ebook market, Apple chose to launch its rich media format with textbooks as its main target. But the format can, and no doubt will, serve as a general purpose ebook format.
• iBooks Author is a free — and impressive — tool to create rich ebooks in the iBooks 2.0 format. Author is aimed at regular users, like teachers and self-publishers. What is especially interesting is that Apple’s concept of a textbook production tool shares a lot in common with elearning rapid authoring tools such as Articulate and Adobe Captivate, with their quizzes, interactions, and Powerpoint/Keynote integrations.
• Apple’s iBookstore gets a textbook category to sell textbooks in the new iBooks 2.0 format.
• iTunes U gets some major changes. In many ways, iTunes U is likely to be the biggest part of Apple’s play, even though it’s received less attention. iTunes U is the free educational podcast section of iTunes which  has more than 1000 universities from 20 countries including Australia and New Zealand who provide some great educational content. Apple’s changes will open it up to schools as well (US only for now). A new app, the iTunes U app, lets teachers create courses and students access them. And the new web-based iTunes U Course Manager provides the sort of course creation and delivery features found in a full-fledged LMS (learning management system) like Moodle, the widely-used open source LMS.

Apple’s moves have been met with a great deal of publishing industry scepticism and disquiet. Critics of iBooks 2 have focused on two main areas:

1. Its format ties it to Apple devices: You can’t read iBooks 2.0 on anything but an Apple device, and Author is Mac-only.
2. Its distribution is tied to Apple’s iBookstore, unless you want to give your textbook away. The terms of use for iBooks Author, the tool for producing the new format, prohibit paid sales from anywhere but Apple’s iBookstore.

Neither of these is a good thing for the industry. But focusing on these areas is likely to throw publishers off recognising what is fundamentally right about Apple’s strategy. Apple can, and probably will, open up its platform when the time is right, just as it did by making key applications like iTunes available on the Windows platform.

Apple’s strategy is very smart and potentially very big. Here’s why.

The thread that runs through these announcements is the convergence of ebooks and elearning. Elearning and ebooks have followed parallel paths but seldom intersected. Apple sees that most textbooks, once digital, will be closer to elearning courseware than ebooks. With iTunes U and iBookstore, Apple has cleverly opened two distribution channels for digital textbooks.

And guess what? In spite of its partnerships with major textbook publishers at the announcement, Apple doesn’t see them leading this convergence. With its simple-to-use tools and distribution channels, Apple (rightly) picks that packaging and distributing educational content is something teachers and students, not publishers, should do, just as they do with classroom learning. A deluge of free content, neatly packaged and easily shared among teachers, will be a powerful incentive to buy into Apple’s ecosystem. And those users will in turn make Apple’s ecosystem an essential target for publishers’ paid content.

Apple’s move will boost the nascent open source content movement by providing high quality tools and extensive distribution for sharing educational content. This attacks the heart of traditional publishing but for Apple, what it loses in iBooks sales it more than gains from hardware and services.

There will certainly be a place for publishers, but it’s going to be quite different from providing today’s static, uniform textbooks. And it’s more likely to be based on selling specialised services or licensing quality content elements for digital mashups. Expect to see iTunes U adding a content licensing repository at some point in the future with educational terms more liberal than today’s contracts offer.

While publishers like to focus on the importance of great content as a value-creator, it’s going to grab a smaller chunk of the educational value chain in future.

Most of the textbook market has so far resisted digital transformation. It’s been fragmented with no effective solution. Unlike the simple narrative ebook sold by Amazon, the digital textbook market is complex in structure, content, sales process, and delivery. It’s lacked a standard technology with easy-to-use tools to produce interactive, rich media ebooks; and a distribution model that is scalable enough to reach deep into education. Apple’s latest package of announcements, combined with its unique assets, is big enough and good enough to fill that vacuum.

So whether Apple ends up dominating educational publishing or being one player among many, the path it set out with yesterday’s announcements will define the way educational publishing heads into its digital future.

The issue was exposed by The Australian Literature Review (AusLit) in a blog post headed, D Publishing by Dymocks Books – AUTHORS BEWARE. AusLit was concerned that, under the contract:

Authors grant an exclusive license to Dymocks for commercial rights worldwide for the duration of the copyright, including all subsidiary rights to the work.

While an author would have the right for their name to be attached to the work, they are essentially HANDING OVER CONTROL OF THE COMMERCIAL ASPECTS OF COPYRIGHT WORLDWIDE, INCLUDING ALL SUBSIDIARY RIGHTS, FOR THE DURATION OF THE COPYRIGHT.

Authors inexperienced in the business of publishing and in dealing with publishing contracts may not realise the implications of what they  are agreeing to.

What makes this grab for authors’ rights especially cynical is that the Dymocks service gets these rights for doing almost nothing. If Dymocks posts an ebook for sale on its website, it will have done enough under the contract to earn its exclusive right to the work worldwide for the author’s lifetime plus 70 years — and not just in book form: all subsidiary rights such as film, and other electronic forms are included.

AusLit’s criticism led to some minor changes to the contract. But Australian publishing contract expert Alex Adsett, who assessed the D Publishing contract after changes were made, told the Weekly Book Newsletter she thought it was ‘as terrible as some of the online commentary suggests’.

Other problems cited by AusLit and Adsett include:

• D Publishing has the right to amend the terms and conditions, including the royalties, at any time.
• Under the contract, this could entitle D Publishing to pay zero royalties for some rights.
• Signing up to it is as simple as clicking an online ‘accept’ button.
• There is no way for the author to terminate the contract, other than through a breach of contract by D Publishing — unlikely since the contract places almost no obligations on D Publishing. A copyright in Australia lasts for the author’s lifetime plus 70 years.

Adsett told Weekly Book Newsletter (WBN) that the aspects of the contract she was most concerned about were not replicated in commercial publishing contracts or in ‘common vanity press contracts’.

I’ve reviewed the Dymocks contract as it stands. It really is as bad as its critics allege and is not typical of publishing agreements.

The damage it could do is made worse by the use of Dymocks’ good name and the targeting of authors who are  inexperienced in the business of publishing.

Dymocks’ initial attempt to address the issues raised by AusLit failed badly. This is not surprising when Dymocks general manger of ecommerce Michael Allara, speaking to WBN, put the problems down to “how technical legal contracts can be interpreted out of context.”

Says AusLit:

The major change has been to bury key details in less direct language and disperse that key information piecemeal across more clauses. This may make key details less obvious to inexperienced authors until they have accepted the agreement but doesn’t address the problems.

I think it’s time for the Australian Society of Authors and the Australian Publishers Association to step in to clean this up. The Publishers Association especially should be concerned that the industry is not tainted by such a high profile abuse. This is not a typical publishing contract.

Dymocks also has a strong presence in New Zealand so it would be disappointing to see this contract pop up in other markets. It seems to be planning to expand the geographical reach of its digital publishing initiative.

The publishing contract is posted here. Hopefully it will be updated and quickly brought into line with reasonable industry practice. Given the inexperience of its target market, and the online self-service environment, this should include  a clear and prominent summary of the key terms, not just nine pages of legalise.

[Update: 12 January 2012. Dymocks revised its contract again, partially addressing some of the concerns raised and doing a slightly better job of explaining the contract terms. AusLit has produced a detailed account of these changes. Says AusLit:

I think this is a big opportunity being wasted by Dymocks. I also think most authors are not going to be prepared to license their rights to a publishing service which takes the rewards of an upper-end traditional publisher while taking on obligations similar to a hands-off self-publishing service or vanity press in return.

I agree with this conclusion. This remains a terrible contract which authors should avoid.]

“This Christmas will be a very important one for ebooks in Australia,” says Google’s eBook Partnerships Manager Mark Tanner. “Devices that are ebook ready will be a very popular gift item,” he says.

With barriers to ebook adoption coming down, this could be the Christmas that ebooks go mainstream in Australia. One thing that points in this direction is Amazon’s move in September to sell Kindles through Woolworths’ Big W and Dick Smith chains. Prior to that, the Kindle was only available online from Amazon’s US site though Amazon still managed to ship more than 370,000 units to Australia, according to a PriceWaterhouseCoopers (PwC) estimate.

Price drops open up market for eReaders

A look at the Kindle’s pricing also shows how much more affordable eReaders have become. The cheapest model this Christmas is the Kindle WiFi which Big W is selling for A$139, a little more than half the price of the cheapest Kindle last Christmas. Competitors like Kobo have followed suit with its entry-level model matching the Kindle’s price.

Dedicated eReaders have been a key to the ebook market’s rapid growth. Amazon’s continuing success with its black & white Kindles in the face of competition from Apple’s iPad shows it remains an important option, especially since owners of dedicated eReaders spend more on ebooks than those who use smartphones, computers, or other general-purpose gadgets. PwC estimates that Amazon has 70% of this market in Australia, a position it achieved without the benefit of a local retail presence.

A hot new product category this Christmas is the colour ebook reader, led by the 7-inch Kindle Fire and Barnes and Noble’s second generation Nook Tablet. These won’t reach Australia until next year but rumours are that Amazon alone could ship 5 million units by Christmas. The Kindle Fire’s compact size and US$199 price point look set to make it a serious competitor to Apple’s hitherto-unchallenged iPad in the tablet market.

While Amazon is delaying the Fire’s Australian release, competitors aren’t waiting. Kobo’s new colour offering, the Kobo Vox, arrived in time for Christmas with Kobo partner Collins Booksellers selling it for A$299, about half the cost of the entry-level iPad. And local ‘social eReading’ start-up ReadCloud is selling the Cumulus, a 7-inch colour device preloaded with its reading app, through indie booksellers including Mosman’s Pages and Pages.

The entry of colour eReaders coincides with new generation ebook formats – EPUB3 and Amazon’s Kindle Format 8 – that will soon lead to richer, more colourful designs and content. Expect to see these ebooks appearing in 2012.

Google Ebooks opens for business in Australia

If you’re reading ebooks on a general purpose device or a non-Kindle dedicated eReader, good news arrived in early November with the long-anticipated launch of Google Ebooks in Australia. Almost a year after it launched in the US, Google opened its ebook doors to Australian readers through partnerships with Dymocks and online bookseller Booktopia. Partnerships with university bookseller The Co-op Bookshop and bookselling chain QBD will follow.

Google’s ebooks use the industry standard EPUB format. The company doesn’t offer a dedicated eReader like Amazon and Kobo. Instead its ebooks can be read over the internet using a standard web browser, or by using an eReading app that you install on your smartphone, tablet or PC. Google offers its own apps or you can use one like Bluefire, a free app for Apple’s iPhone and iPad that Dymocks recommends its customers use if they want to read Google Ebooks purchased from the Dymocks site. The bookseller also offers a Dymocks-branded app for Android devices.

Given how important branded devices have been to the success of ebookstores, it will be interesting to see if Google’s partners follow suit – or, indeed, whether Google itself releases a branded eReader to support its retail partners. In the US and Canada, Google promotes a third party eReader from niche player iriver but has so far avoided entering this market directly.

Google claims its Australian store will bring “hundreds of thousands” of ebooks to local customers. A search of the Dymocks site at launch showed 148,000 titles already in the catalogue, including many from Australia’s top publishers. Dymocks has integrated Google Ebooks into its Booklovers rewards programme so that ebook purchases earn credits that can be spent online or in-store on digital or printed books. It also sells ebook gift cards in-store and online.

Australia is the third international market that Google has entered since its original launch in the US in December 2010. In October this year, it entered the UK market through partnerships with academic bookseller Blackwell’s and book wholesaler Gardners whose Hive network supports independent booksellers. In early November, Google launched in Canada, choosing as partners the Campus Ebookstore and leading indie bookseller McNally Robinson.

Australia’s indie booksellers have been enthusiastic followers of Google’s ebook plans with many voicing hopes that they would enter the ebook market with Google-powered stores. But the absence of a shared technology platform among Australia’s independent booksellers would have made it difficult to offer full integration cost-effectively so Google launched without this facility. In the US, the American Booksellers Association has the IndieBound platform and in the UK Gardners has its Hive network, both of which simplify the ‘deep’ integration of Google Ebooks into bookseller websites.

Independents opt for local initiatives as they enter ebook fray

Aussie ebook start-ups Booki.sh and ReadCloud have jumped in to fill the vacuum created by Google – and by delays in the industry’s own platform, TitlePage, which was set to offer an ebook service. That now appears to be on hold as the industry lobbies government for a $5 million cash injection it says it needs to support independent booksellers with white label sites, and to compete in range and functionality with the large international players.

Melbourne-based Booki.sh launched its white label service in January, spearheaded by Readings and since joined by Fullers, Mary Ryans, Gleebooks, Avid Reader and Books for Cooks. ReadCloud is new on the scene. Its first site, Pages and Pages, launched in early November. ReadCloud could be the big beneficiary of Google’s absence from the indie market, claiming it’s signed up 200 bookstores to participate in its programme.

ReadCloud and Booki.sh are ‘cloud’ eReading systems meaning that your ebook library is stored on the web. Both systems allow ebooks to be read online or offline but they differ in how they do it. Booki.sh is the simplest. All you need to read its ebooks is a modern web browser so there’s no software to install. And it uses a feature of new browsers called ‘offline caching’ to store a local copy that you can read when there’s no internet connection. One advantage of the Booki.sh system is that you can even read its ebooks on some Kindle models using their built-in web browser.

ReadCloud uses a different system. You must first download the ReadCloud software or app in order to read its ebooks. To read offline, you download the ebook in EPUB format with Adobe encryption. This also makes the ebooks available to eReaders such as Sony, Kobo and others that support the widely-used EPUB/Adobe DRM combination.

Interestingly, Google Ebooks is a hybrid of these two approaches: Like Booki.sh, it allows online and offline reading using just a web browser; and like ReadCloud, it offers eReading apps and the ability to download an EPUB file wrapped with Adobe DRM for offline storage and reading.

But there’s good news for Australian booksellers, bloggers and other website publishers who might want a simple ebook option to test the waters. Google opened its affiliate network – the same one it uses to serve ads on partner sites – to Google Ebooks. This means you can place links to Google Ebooks on your site and earn a commission if the visitor you sent ends up buying an ebook. At its simplest, this can just be a link to the Google Ebooks home page but other options are available to link to specific books or to lists of titles.

With local booksellers now staking out their ebook territory, will the readers buy?

We seem to have gone very quickly from famine to feast with many competing – and perhaps confusing – options now open to Australia’s reading public. So will they buy from bricks and mortar booksellers or will the international online giants like Amazon leave little on the table for local businesses?

Jon Page, of ReadCloud partner Pages and Pages Booksellers, thinks the public will support the locals. “We want to give our customers the same service and expert advice they expect from us for physical books. The response has been fantastic so far,” he says. Among Page’s initiatives to achieve this is an in-store kiosk that brings the ebookstore inside the physical store.

From selling and supporting eReader hardware, to various promotional tie-ins such as Dymocks’ Booklover loyalty scheme, to serving communities with specialist needs such as campus bookstores, the new players will be aiming to pick up market share points from the giants, a point at a time.

Readings’ Mark Rubbo is under no illusions about how tough this will be. “It is going to be pretty hard for anyone to compete seriously with Amazon’s clout and GST free prices. The best we can hope for is to build a niche that complements what we do physically,” he says.

Kobo’s Malcolm Neill thinks all of the activity is going to be good for the market. “With the independent booksellers establishing a couple of boutique ebook options and Google finally reaching the market, we think that the education of the consumer in digital reading will now move at a rate commensurate with the rest of the world,” he says.

And that consumer awareness and education spells good news all around. In a rapidly rising market, it should leave plenty of room for newcomers.

 [This story was originally published in the November issue of the Australian Booksellers Association magazine News on Bookselling.]

]]> http://activitypress.com/blog/2011/12/06/australian-ebook-buyers-offered-choices-aplenty-this-christmas/feed/ 0 http://activitypress.com/blog/2011/12/06/australian-ebook-buyers-offered-choices-aplenty-this-christmas/ http://feedproxy.google.com/~r/ereport/~3/WokY81zwMKY/ http://activitypress.com/blog/2011/11/08/google-ebooks-launches-in-australia-with-dymocks-booktopia-as-partners/#comments Tue, 08 Nov 2011 04:51:48 +0000 Martin Taylor http://activitypress.com/?p=1615 Almost a year after it launched in the US, Google has opened its ebooks business to Australian readers through partnerships with national bookselling chain Dymocks and online bookseller Booktopia.

The two sites went live today and will bring “hundreds of thousands” of ebooks to Australian customers. A search of the Dymocks site shows 148,000 titles already in the catalogue including many from Australia’s top publishers. Dymocks plans to integrate Google Ebooks into its BookLovers rewards programme so that ebook purchases earn credits that can be spent online or in-store on digital or printed books.

Google’s Australian launch will soon include partnerships with university bookseller The Co-op Bookshop and bookselling chain QBD. And it comes just a day before another offering comes to market. High-profile indie bookseller Pages & Pages kicks off a series of launches from indie booksellers who are adopting the made-in-Australia “social eReading software” ReadCloud.

Google’s Australian move follows its opening in the past month of UK and Canadian ebookstores. Its strategy is to sell through partners as well as selling directly from its own site, Google Ebookstore, and via its iOS, web and Android apps. In choosing its early partners, Google is focusing on quality operators with bookselling experience, making it a direct rival of Canadian operator Kobo.

However, in one respect they’re different: so far, we haven’t seen a Google-branded ebook reader backing its offer. Google has also been much slower than Kobo in doing deals with ebook manufacturers to make it their preferred ebookstore. So far, a deal with minor player iriver back in July is the only one that Google has done. This mirrors the cautious approach Google took with its Android smartphone where it initially worked with a single partner HTC.

We can expect things to change now that Google has bedded in its systems and is developing broader distribution. It will have an added incentive to quicken the pace with the announcement from US number two ebookseller Barnes & Noble that it will be rolling out its successful Nook internationally in 2012.

Meanwhile, in that far outpost of Australia, New Zealand, we’re yet to see Google Ebooks and Google representative Mark Tanner confirms there’s nothing to announce at this stage. Dymocks is active in New Zealand but its Australian store is off-limits to New Zealand customers and Google’s own app is yet to appear in Apple’s New Zealand App store. Indeed, we’re still waiting for Apple’s iBookstore to open to New Zealand consumers, a year after it reached Australia. So for now, Kindle and Kobo, the latter through local bookselling chain Whitcoulls, remain the only major players for Kiwi readers.

The Prime service is restricted to US residents at the moment. In addition, to take advantage of the Kindle Owners’ Lending Library, you need to be — a Kindle owner. A Kindle app user won’t cut it. Amazon is clearly using this to encourage its users to support the full Amazon kit.

Members of the lending programme can choose from an initial catalogue of 5,000 titles. There’s no time limit on their loan period but they can only check out one ebook at a time and they can borrow a maximum of one ebook a month.

And it looks like it’s not just libraries who struggle to get ebook lending rights from publishers. Amazon has had to do some arm-twisting itself to get publishers on board. There are no titles from the US Big Six publishers and the company admits that in some cases it’s actually buying a copy at full wholesale price each time the ebook is borrowed. Amazon is clearly determined to prove its belief that lending will be good for everyone, not just Amazon. “Kindle owners will read even more, publisher revenues will grow, and authors will see larger royalty checks,” argues Russ Grandinetti, Vice President, Kindle Content.

The Kindle Owners’ Lending Library follows Amazon’s move in September to open up the Kindle platform to ebooks borrowed from public libraries.  This initiative, again for US customers only, is operated through a partnership with library ebook distributor OverDrive and shows Amazon’s determination that its Kindle owners won’t be penalised for their loyalty: library ebooks are almost universally now in the EPUB format which isn’t directly readable on Amazon gadgets.

While today’s move is great for Amazon’s customers, and might be good news for publishers and authors, it should prompt libraries to consider how it might impact on them longer term. It’s clear now that lending books on a commercial scale will no longer be a de facto library monopoly. Amazon and others (Google has already hinted at some sort of rental service) are determined to supply digital content to consumers in as many ways as they want it. And they are sure to do it in a way that makes commercial sense for both Amazon and the publishers and authors who, for now, can call the shots on how — and whether — these deals are done.

One thing is for sure, when it comes to doing deals to get digital lending rights, libraries are no longer the only game in town. If libraries aren’t feeling threatened, they should. Are we going to see something akin to the impact of cash-rich pay TV which routinely outbids free-to-air and public service broadcasters for premium content? If our libraries become repositories of second-tier content, we’ll all lose. This doesn’t have to happen but it needs big changes all round to give our libraries the chance to stay relevant.

Like EPUB3, the new Kindle format introduces support for the latest web standards, HTML5 and CSS3, and adds a host of new features that will allow development of much richer ebooks. From Amazon’s announcement:

KF8 is the next generation file format for Kindle books – replacing Mobi 7. As showcased on Kindle Fire, KF8 enables publishers to create great-looking books in categories that require rich formatting and design such as children’s picture books, comics & graphic novels, technical & engineering books and cookbooks. Kindle Format 8 replaces the Mobi format and adds over 150 new formatting capabilities, including fixed layouts, nested tables, callouts, sidebars and Scalable Vector Graphics, opening up more opportunities to create Kindle books that readers will love.

This is good news. But for those of us who had hoped that EPUB3′s arrival might prod Amazon into adopting direct EPUB support, this announcement is a pretty clear indication that, if it comes at all, it will be some way into the future. We’ll have richer, higher quality ebooks but we’ll have incompatible formats. For the time being, this probably won’t bother Amazon’s users who are a happy lot. Amazon has done a great job of pleasing them with an eco-system that’s easy to use, with the best selection of ebooks, and support for most of the e-reading devices they’re likely to want to use.

But for publishers, it could add challenges as the new features these formats offer mean ebook production requirements and costs will scale up. And for the newly-minted EPUB3, it poses a challenge to stay relevant as Amazon’s importance as the number one sales channel might tempt some publishers to bypass it.

Even where sales of EPUB ebooks lag behind Kindle sales, many publishers have now built their workflow around EPUB as their primary source files. These convert well into the current Kindle format, allowing publishers to maintain a single format. To keep this workflow, it will be important that Amazon supports error-free EPUB3 conversion in its Kindle Gen 2 toolset. But as complexity increases, so do the opportunities for things to break. We won’t know until Amazon releases more details whether EPUB3 can continue to serve as this reference format. Indications are that EPUB3 is a richer format so publishers might want to restrict themselves to a feature subset that’s common to both platforms. No mention yet, for instance, of JavaScript support, MathML, or EPUB3′s extensive accessibility features.

It will certainly be in Amazon’s interests to make sure that ebooks look and function as well on a Kindle as they do on an EPUB3-compatible e-reader. What we still don’t know is whether Amazon might use its current dominance to lead, rather than follow, the industry standard. We’ve seen this in the “browser wars” that for many years saw web browser vendors, especially Microsoft, introducing non-standard features to try to keep users in its camp and drive the standards in ways that suited their interests. Could we be in for the e-reader wars?

We might start to see the so-called “embrace and extend” strategy that’s familiar in the wider tech world. This tug-of-war strategy sees a dominant vendor selectively adopt an industry standard in a show of inclusiveness but extend it with unique features in an effort to draw developers and users into its ambit. We’ve already seen Apple filling the vacuum prior to the release of EPUB3 with its own ‘fixed layout EPUB‘, an extension of the EPUB standard aimed at the illustrated book market that only works with its iBooks e-reader app.  Here’s hoping EPUB’s dream of a single format isn’t stillborn and Amazon, Apple and others decide to play nicely this time. Otherwise, publishers and users will get caught in the cross-fire of another format battle.