Digital books: Free is a very good price

Chris Anderson Credit: Hyperion Books.

Musicians want to be heard. Actors need to be watched. Writers like to be read. And what better way to get an audience than to make these works free? But artists also need to eat. How to reconcile?

Chris Anderson, author of "The Long Tail" and Wired magazine's editor in chief, says the two are not mutually exclusive. He's also putting his money where his mouth is. The 47-year-old Berkeley writer is giving away his latest book, titled "Free: The Future of a Radical Price" and published by Hyperion Books.

More precisely, he's letting people read the entire book free till Aug. 10 on Scribd, a site that lets authors set their own price for digital copies of their works. The book's title aside, the giveaway is not as radical as it seems. In fact, it's perfectly rational, Anderson said in an interview.

"The book is about making money from free," he said. "I felt it was important to walk the talk."

For one thing, his book is free for only a month, after which readers will have to buy it (the hardback version retails for $17.99 on Amazon.com). Secondly, it can't be downloaded on Scribd; readers have to read the free version online. This fits with the "freemium" model -- give away the basic version to build your initial audience, then sell them premium features, such as the ability to download the book or having a physical copy.

A host of well known online services follow this model, including ...

Justice Department launches formal investigation into Google's book settlement [UPDATED]

The U.S. Department of Justice said today that it has launched a formal investigation into the proposed agreement between Google and book publishers and authors.

"The United States has reviewed public comments expressing concern that aspects of the settlement agreement may violate the Sherman Act," wrote William F. Cavanaugh, the Justice Department's deputy assistant attorney general, in a letter to Federal District Court Judge Denny Chin, the judge overseeing Google's settlement.

The letter goes on to say that although the department has "no conclusions as to the merit of those concerns," it did see issues that "warranted further inquiry."

Google emphasized that it is cooperating with the Justice Department investigation and maintains that the settlement would be good for consumers.

"The Department of Justice and several state attorneys general have contacted us to learn more about the impact of the settlement, and we are happy to answer their questions," said Google Spokesman Gabriel Stricker. "It’s important to note that this agreement is non-exclusive and if approved by the court, stands to expand access to millions of books in the U.S."

The settlement reached last fall between Google and the Authors Guild and the Assn. of American Publishers stemmed from the search giant's project to scan millions of books and create a searchable digital library of works that would potentially become the basis of a digital book market.

Paul Aiken, executive director of The Authors Guild, downplayed the significance of today's move by the Department of Justice. "It appears to be just an official acknowledgement to the court of an investigation that we have known about for weeks," Aiken said. "It’s no indication that anything has changed."

Reports surfaced in late April that Justice Department regulators had questioned Google and several advocacy groups that have spoken out against the settlement. Weeks later, publishers and The Authors Guild also confirmed receiving civil subpeonas from Justice seeking more information on the settlement. But until today, the Justice Department has not said whether those inquiries constituted a formal antitrust investigation.

In recent months, a number of parties have objected to the agreement, including a group of libraries, a consumer rights group and the Internet Archive, a nonprofit organization that seeks to digitize public domain books and make them freely available online to all readers. Many of the objections involve concerns that Google would create a monopoly for millions of "orphan" books whose rights holders cannot be located.

The Justice Department did not immediately return calls for comment.

Updated 4:25 p.m.: This post has been updated to include comments from Google and the Author's Guild.

-- Alex Pham and David Sarno

Authors Guild defends Google Books settlement

Authors Guild President Roy Blount Jr. speaks out in favor of the Google books settlement. Credit: Valerie Shaff.

The Authors Guild, which hasn't said much since last fall after it settled its lawsuit with Google over the search company's book scanning project, today issued a statement defending the settlement against recent criticism.

Specifically, the letter by author and Guild President Roy Blount Jr. addresses the topic of orphan books, which are works that are out-of-print and unclaimed by any copyright holders. You can read the entire letter here.

The concern is that Google, having digitized millions of such books, would have a monopoly on them should the settlement be approved by a federal judge later this year. That's because the settlement lets Google use orphan works without first getting approval from their authors. The Justice Department has reportedly started an inquiry into these antitrust concerns but has not said whether it has launched a formal investigation.

The number of orphans is tough to nail down. Some estimate it's 50% to 70% of all books published after 1923. Paul Aiken, executive director of the Guild, said that's hogwash.

"Our experience is that we can find upwards of 80% of rights holders once an effort is made," Aiken said in an interview.

In his letter, Blount argues that the number of orphan books, whatever it may be, will diminish over time as rights holders come forward to claim the money that Google will be obligated to set aside for authors for a period of five years and held in escrow by a newly created entity called the Book Rights Registry.

"As the registry starts sending out royalty checks, books will exit the orphanage in a rush," Blount wrote. "Nothing gets an author's attention like a royalty check. It's not an orphan-books problem that this settlement presents. It's an orphan-books solution."

-- Alex Pham

A Cool-ER electronic reader?

The Cool-ER electronic reader in the color "blue sky." Credit: Interead

Intrepid techies and avid readers who want to have hundreds of books with them wherever they go have had very little choice on electronic readers. It's either Amazon's Kindle ($359) or Sony's Reader ($270 to $350).

Now, there's a new kid on the block -- the Cool-ER, made by Interead.com, a British startup called that appeared just five months ago. (Right now it's available only on the company's Coolreaders website, but Chief Executive Neil Jones said he's in talks with major U.S. retailers.) At $249, it's the lowest-priced reader thus far. It has the same screen size as its rivals and uses the same E-Ink display, but is lighter and smaller.

That's because the Cool-ER doesn't have a lot of the bells and whistles the Kindle and Reader do -- no accelerometer, no wireless Internet adapter, no Bluetooth, no 3G connection and no keyboard. That's led some reviewers to give it a thumbs-down.

"The device in and of itself doesn't really break any new ground," said Sarah Rotman Epps, an analyst at Forrester Research. "What's interesting about them is that they went from nothing to putting out a product in less than six months. It shows that the bar for entering this market is very low, and that we can expect to see a lot more competition in this space in the coming months."

That spells good news for electronic bookworms, who can look forward to lower prices, more innovation and a wider selection of devices, said Rotman Epps, who estimated that prices could drift below $200 by the end of next year.

"From the consumer perspective, pricing is really important," she said.

So is style. With a choice of eight colors, Cool-ER is hoping to tap into a segment of consumers who consider personalization and fashion a factor in their gadget purchase.

Vivid violet, anyone?

-- Alex Pham

Scribd signs up Simon & Schuster, adds 5,000 books to its e-book site

 

Screenshot of Scribd's online store for Simon & Schuster books to open Friday. Credit: Scribd.

Scribd, the upstart San Francisco publisher of online content, today added stalwart New York book publisher Simon & Schuster to its roster of partners.

The deal adds 5,000 titles to Scribd's digital books catalog. In addition, it makes available thousands of other titles for online preview. If readers like what they see, Scribd will send them to Simon & Schuster's website or other online bookstores where they can buy the paper version. Simon & Schuster, owned by CBS Corp., represents such best-selling authors as Stephen King, Mary Higgins Clark and David McCullough.

Digital books make up less than 3% of the overall book industry revenue, but the category is growing fast as readers gravitate to electronic reading devices such as Amazon's Kindle, Sony's Reader and even Apple's iPhone.

"It’s a very high growth opportunity for us," said Ellie Hirschhorn, chief digital officer and executive vice president of Simon & Schuster. "It's growing 300% year over year, but it's still relatively low numbers. It’s a small base with rapid growth."

-- Alex Pham

Scribd's online store hopes to start new chapter for book publishing business

One of the $2 books that debuts Monday on Scribd. Credit: Kemble Scott.

Scribd is proposing to do for books what iTunes did for music -- let readers buy only what they want to read.

Eight years ago, Apple turned the music industry upside down when it launched iTunes, an online music store that let listeners cherry-pick one or two songs instead of having to buy the whole album. Starting Monday, Scribd is letting readers pay a few dollars for a chapter or two from a travel guide or cookbook. 

That's just one example of the flexibility that digital book purveyors are experimenting with as printed content migrates to digital format. Another is the pricing model. Paperbacks have largely been priced at around $10 to $15. Hardcovers are $25 to $30. With digital books, that price could be any amount. Scribd just takes 20% of whatever price publishers and authors set for their works. The rest goes to the writer or publisher. Some authors, for example, are releasing their books on Scribd for $2. 

One of them is Kemble Scott, a 46-year-old San Francisco writer whose first book, "SoMa," was published as a trade paperback in 2007. For his second book, "The Sower," Scott eschewed print and decided to debut his novel on Scribd as a $2 digital book.

Scott chose the digital route for its immediacy. His thriller makes a number of contemporary references such as swine flu and Susan Boyle, a Scottish singer who rose to media stardom on the wings of YouTube, Twitter and Facebook. "Publishing a book the traditional way can take a year to 18 months from the time you find a publisher to the time it ends up on store shelves," Scott said. "Now I can publish a book instantly that makes the most contemporary pop culture references of the day."

As for the $2 price, Scott said ...

Google's Schmidt says he won't resign from Apple board amid inquiry

Google Chief Executive Eric Schmidt. Credit: Denis Poroy / Associated Press

Google acknowledged today that the Federal Trade Commission was making antitrust inquiries into ties between the search giant and Apple. But Google Chief Executive Eric Schmidt said that relinquishing his seat on the Apple board of directors "hasn't crossed my mind."

"I don’t think Google sees Apple as a primary competitor," Schmidt told reporters before the company's annual shareholder meeting in Mountain View, Calif.  And if board discussion turns toward a business area in which the two companies more closely face off -- mobile phones being the primary example, with Google's Android operating system vying against Apple's iPhone -- Schmidt says he recuses himself.

Google General Counsel Kent Walker pointed to the Clayton Antitrust Act, which he said allowed companies to share board members as long as the companies don't have "overlapping revenues." The inquiry was first reported by the New York Times on Monday.

Google is also the focus of a separate inquiry by the Justice Department in relation to its project to digitize millions of books. But executives said they welcomed the scrutiny and that market leaders should not be immune from it.

"We should expect governments around the world to pay attention to what we do," Schmidt said, "and also to hold us to the principles that we've articulated."

-- David Sarno

Amazon unveils the Kindle DX [UPDATED]

The Kindle DX. Credit: Amazon.

Now you can read newspapers, textbooks and PDFs -- all for just $489!

That's because Amazon.com unveiled the third iteration of Kindle, its digital book reader, at a press conference in New York today helmed by CEO Jeff Bezos. Called Kindle DX, the device features a 9.7-inch screen, compared with 6 inches in the previous model, and the capability to store 3,500 books, up from the previous model's 1,500.

Being a digital bookworm doesn't come cheap, though. The $489 price tag is quite a bit higher than that of the $359 Kindle 2. The Kindle DX costs more than some netbook computers and as much as some big-screen TVs.

But it's a small price to pay for saving the newspaper industry, right? Amazon announced partnerships with the New York Times Co. and Washington Post Co. to deliver the New York Times, Boston Globe (if it's still around) and Washington Post on the Kindle DX to readers outside their subscription areas. They have to sign up for a long-term subscription to the newspapers to be eligible for the deal.

"We will extend our reach to our loyal readers who will more readily be able to enjoy their favorite newspapers," Arthur Sulzberger Jr., chairman of the New York Times Co., said in a release.

Other new features include a PDF reader and auto-rotation so that the Kindle can be read in portrait or landscape mode. It's one-third of an inch thick and has 3.3 GB of memory. The device is expected to ship this summer.

Amazon also struck a deal with colleges including Princeton University and the University of Virginia to make Kindle DX available to students this fall. The new model is more suited for reading textbooks, Amazon says.

Updated, 12:10 p.m.: Here's the take on the Kindle DX by Carolyn Kellogg at the LA Times' books blog, Jacket Copy.

-- Alana Semuels

Libraries ask court to monitor Google after book settlement is approved

Google's project to digitize books is garnering objections. Credit: Wonderland via Flickr

Three organizations representing 139,000 libraries today asked the judge overseeing Google's settlement with authors and publishers to make sure that the company doesn't violate the privacy of readers who would use its vast digital books collection.

They also petitioned U.S. District Court Judge Denny Chin to ensure that Google doesn't set the price for access to its digital books "beyond the reach of many libraries."

The organizations, which include the American Library Assn.; the Assn. of College and Research Libraries; and the Assn. of Research Libraries, said they were not opposed to the settlement, which was reached in October between Google and the Assn. of American Publishers and the Authors Guild.

"The Settlement has the potential to provide unprecedented access to a digital library containing millions of books," the library groups said in a letter to the court. "But in the absence of competition for the services enabled by the Settlement, this impact may not be entirely positive. The Settlement could compromise fundamental library values such as equity of access to information, patron privacy, and intellectual freedom."

The proposed settlement, which requires court approval, would create ...

Justice Department looking into Google Book settlement

The U.S. Justice Department has started to make antitrust inquiries into Google's settlement with authors and publishers over the Internet giant's ambitious project to scan books and put them online.

Some authors and Google critics have complained that the deal, agreed upon last year and pending a judge's approval, would hurt competition by giving the company a stranglehold over the burgeoning market for online books.

The Justice Department has met with Google at least once in the last several weeks about the settlement, and more talks are scheduled for the near future, according to a person familiar with the matter, adding that Google has not been notified that a formal investigation has been launched.

Inquiries by law enforcement officials do not necessarily lead to formal investigations, nor even to a public objection by the agency.

The Justice Department also contacted Consumer Watchdog after the Santa Monica advocacy group sent it a letter expressing concerns about the deal.

"They talked to us with what I thought was great interest," said John Simpson, an advocate with Consumer Watchdog who participated in an hourlong discussion with Justice Department attorneys.

Google declined to comment, and a Justice Department spokesman was not immediately available.

In other developments in the case today, U.S. District Judge Denny Chin extended, from May 5 to Sept. 4, the deadline for authors to opt out of the Google Book settlement. Chin had been ...