A Four-Part Series on How Publishing Will Adapt, now that “the big stones have been moved” in technology, the short list for the Booker Prize, plus McMillan pushing for lower e-book royalties.

Going “Deeper Than Just the Glow of Technological Changes: We Need to Adapt to the Modern Information Age.”

Booker Prize Contenders Shortlisted to Six Titles

Macmillan Pushes for Lower E-book Royalties; Bookstore Numbers Down in Germany, US

Kent Anderson opens a four-part series on The Scholarly Kitchen today, with his piece Let The Adaptations Begin! The series will address various issues relating to rights and royalties technology.

Anderson wrights:

“The big rocks have been moved. The network is in place, wireless is abundant, devices have proliferated, media have been absorbed (moving pictures, still pictures, sound, text, and interaction), and people have connected. The rest of the physical work is going to be about landscaping and sifting, not long sessions with the backhoe.

But if the changes to the infrastructure are largely known in their direction (networked information), scale (huge), and aspects (social/devices/mobile/collaborative), the challenge becomes, “What do we do now?”

The series, to be continued tomorrow, Thursday, and Friday, will include installations by will touch on the following points:

• Will editorial creativity become an emphasis (and I don’t mean writing style)?
• Will editors finally begin working with electronic publishing platforms rather than using “print as an input”?
• Will online advertising finally claim its crown as more important than print?
• Will creativity be directed at the networked information possibilities rather than at static, print-like designs, layouts, and form factors?
• Will publishing a comment be equated to publishing a letter to the editor in every possible dimension?
• Will universities begin to look at substance instead of form (e.g., would running an excellent blog count as much toward tenure as publishing a single review article in a mid-tier journal)?
• Will journalists stop being brow-beaten by economics, poor management, and outmoded technologies and take the reins?

Peter Carey, Parrot and Olivier in America (Faber and Faber)
Emma Donoghue, Room (Picador)
Damon Galgut, In a Strange Room (Atlantic Books)
Howard Jacobson, The Finkler Question (Bloomsbury)
Andrea Levy, The Long Song (Headline Review)
Tom McCarthy, C (Jonathan Cape)

In other awards, China Miéville’s The City & The City and Paolo Bacigalupi’s The Windup Girl tied for the Hugo Award for best novel.
Complete list of winners

The inaugural Penguin Prizes for African Writing went to Pius Adesanmi’s You’re Not a Country, Africa! for nonfiction, and Ellen Banda-Aaku’s Patchwork for fiction.

Publishers Marketplace broke the news earlier today of a new contract being pushed out by Macmillian to agents in the United States that asserts the company will only offer a 20% royalty rate for e-books, down from the typical 25% and would be applicable to “all exploitation of the content of the book in digital form.” Agent Richard Curtis, who posted the letter from Macmillan’s John Sargent to his blog, suggested to the New York Times that the move was entirely in the wrong direction: “The point is whether we should be playing on such a low ballfield at all and whether the industry should not really be thinking about a 50 percent royalty of net receipts.”

A survey conducted by buchreport reveals that the number of bookstore branches in Germany is decreasing for the first time in several years. The number is down 3% this year to 945 and has mostly affected small specialty shops in the DBH Group, which closed several Weltbild and Wohlthat branches. Overall selling space for the survey group increased by only 1.2% (as opposed to the previous year when that increase was +13%). Book chains are also filling more of their space with non-book products like gifts and DVDs.

Meanwhile, in the United States, Publishers Weekly reports that Barnes & Noble—the largest bookstore chain in the United States—anticipates that the large format bookstores will shrink in coming years. All the company’s B. Dalton stores will be closed by January and company COO Mitch Klipper said during a recent earnings conference call, “There are 1,500 superstores now, there won’t be 1,500 five years from now.”

Sony steps it’s e-reader game up, while Kindle pulls ahead in web searches for e-readers.  And one of the most popular tweets of the week.

Sony’s Potential to Change the e-Book World

Kindle Leads As eReader Internet Searches Are Up

From Twitter: Print isn’t Dead This Week

Larry Dignan, ZDNet

Sony has been rolling out a line of revamped e-readers, to compete with Amazon and Barnes and Noble,  but the real win for Sony will be in places like Russia, Brazil and China. Why? Sony’s brand carries a lot of weight. And Sony has the retail partnerships that wrap around the globe. Meanwhile, Amazon and Barnes & Noble will be hard-pressed to replicate Sony’s global reach. If the global trend is to move away from paper to bits of data the e-reader market worldwide is just beginning. Sony can be everywhere its primary rivals can’t. Meanwhile, Sony’s real rivals—companies like Samsung—don’t have e-readers or the content that needs to ride shotgun. Sony’s store is comparable to the others and has seen its 10 millionth book download.

According to Experian’s Hitwise UK, generic searches for eReaders have doubled in the last year.

Kindle is leading the pack, as Kindle-related searches have increased eight times. Robin Goad, Research Director at Hitwise UK explains more in his blog: “What’s interesting to note from the above chart is the rise in popularity of Kindle-related search terms against other branded terms. In the last month searches for Kindles have never been higher. Amazon’s product is pulling away from the competition, where previously the volume of searches has been roughly even between Kindles and other e-readers.”

Hitwise also found that branded search terms are more common than generic eReader search terms. Goad wrote: “Searches for branded terms search as ‘sony reader’ and ‘amazon kindle’ have always been more popular than ‘ebook’.”

And finally, what’s popular on Twitter this week:

A Tweet from author Jason Pinter regarding the first week sales of Suzanne Collin’s Mockingjay has been one of the most commented upon and shared in the book world this week.  Mockingjay has sold 450,000 copies since its August 24th release, for an average of 45,000 books sold per day.

Steve Jobs, in another black turtleneck appearance, announces big book downloads by iTunes users, plus why “print publishing will never die,” and, the value of a book.

Apple Users Download 35 Million Books; iTunes Goes Social

Why Print Publishing Will Never Die

A Question of Value

In a news conference yesterday, Apple CEO Steve Jobs announced that iTunes users had downloaded 35 million books.

eBookNewser covered the event as Jobs unveiled iTunes 10–adding social networking functions to the online store. .

Here’s more from their coverage: “The new iTunes is all about discovery and includes a new tool called ‘Ping,’ which operates like a social network, where users can share content and comments with their friends.”

“Yes, print publishing will shrink as e-books and e-readers continue to take market share, but that’s all to the good, and not just because of the trees it will save. Most books do not contain information that needs to be preserved in physical form. If print publishing becomes a smaller market aimed at collectibles or high-end artisanal products, books themselves will still retain the utility they have always had. (To whatever extent physical books are vulnerable to flood and fire, it’s also true that a physical book exists independent of electronic hardware failures or battery capacity.)

Publishing is a flawed business, but books are not flawed devices. Print publishing will never die because even today a book is still a completely functional delivery system for the content it contains.”

“What is a book worth? Well, there’s list price created by the publisher. That seems to be the value referenced by publishers. Then there’s the price consumers actually pay. That gets more complicated, of course. You have to break it down to various levels including the price for the first sale and the price for the second sale. Library patrons pay a different price; we call that “property tax”.

Oh, and then there are the books acquired for free.

This is what I think about when I hear publishers talking about this, that, or the other devaluing the price of content. And by devaluing content, they really mean consumers paying far less than publishers would like. This is absolutely a valid concern.”

A free webcast tomorrow on e-readers; Borders bears more bad news; and DRM vs. Copyright

eReaders Webcast: The New Mass Market? (Roundtable: 9/2/10)

Borders Q2 Loss Widens

Does This iBook Have DRM (and, Is It Copyrighted?)

e-Readers: The New Mass Market?

• Register to participate LIVE.

The chain is also closing several underperforming stores, and in an attempt to compete with discount retailers like Walmart, it is introducing a paid loyalty program to leverage customer loyalty. The $20 program will offer consumers discounts and free shipping.

Borders Inc. CEO Mike Edwards said more changes are in the works. Since the beginning of the fiscal year the company has ended seven leases at underperforming stores early, and will continue to do so throughout the year.

“We are increasing our assortment in the high-end stationary and gift items, and expanding other productive non-book categories such as adult games and puzzles, which were a runaway success last holiday,” Edwards said in a call with analysts.

Borders also introduced a paid loyalty program, in which members pay $20 a year for access to discounts and free shipping.

Loss for the quarter ended July 31 totaled $46.7 million, or 67 cents per share. That compares with a loss of $45.6 million, or 76 cents per share, last year.

Revenue fell 12 percent to $526.1 million from $594.2 million.

Revenue in stores open at least one year fell 6.8 percent. This is a key indicator of a retailer’s performance, because it excludes growth at stores that open or close during the year. Weakness in trade book sales was offset by strength in the company’s bargain and cafe departments. Revenue from Borders.com rose 56 percent to $15.5 million.

Borders is focusing on its selection of electronic-book readers to drive higher revenue.

The company lowered its Kobo electronic book reader price by $20 to $129.99 and will also offer the Aluratek Libre eBook Reader Pro for $99. Borders offers six electronic book readers in its stores and plans to expand that before the holidays arrive.

Border’s chief rival Barnes & Noble Inc. last week reported a first-quarter loss, partly because of costs related to a lawsuit and proxy contest with billionaire investor Ron Burkle, who has criticized the way the company is being run. Barnes & Noble has said it is exploring strategic options including putting itself up for sale.

Borders shares fell 2 cents to $1.06 during midday trading.

Katie Gatto wrote yesterday on how to tell if an iBook is protected by DRM, using a few simple steps in iTunes. The article drew some quick responses, pointing out that she was conflating the concepts of DRM and copyright.

Chris Meadows’ response, on Teleread, breaks down the often-overlooked differences between what DRM means, and copyright means.  He writes:

“(Gatto) begins the article with “If you want to know which of your ebooks are DRM free and which have been protected by copyright,” then mentions that this process “will let you know if a book has DRM protections or if you’re free to share it with others,” and says that if a book is listed as protected, “it has a copyright attached.” She then concludes, “Use accordingly to avoid lawsuits.”

Of course, if you use according to her advice, you probably won’t be avoiding lawsuits. It should be needless to say that plenty of non-DRM-protected e-books (such as those sold by Baen, or posted online by Cory Doctorow) are fully copyright-protected—meaning that while you might be able to share them with friends, you are not necessarily legally free to unless the holder of the copyright allows it.

Might a decreased understanding of copyright be one of the casualties of the media industry’s reliance on DRM? I didn’t think the fact that everything is copyrighted under current copyright law (including books, e-books, Internet posts, and even scribblings on the backs of napkins) was that hard to understand, let alone that foregoing DRM does not mean you are foregoing your right to protection under the law.”

“When MP3-players became popular in the late 90s the music industry started to panic about a supposed drop in revenues. Likewise, the film industry panicked when computers and dedicated equipment were able to play video files easily on computer screens and television sets.

Both claimed that such technologies, and the file-sharing networks that sprung up to support them, have decimated their industries. And yet both groups have never been healthier financially.”

So begins a piece weighing the perils of piracy and DRM flaunting against the potential for industry growth.  This is a familiar debate going back to the RIAA vs Napster era, but here the issue is discussed in the context of digital books, in a recent piece by Ben Jones (Note: the piece appears on the website Torrent Freak, so make sure your grain of salt is handy.)

The piece highlights several recent cases in e-book rights, and is a worthwhile read for that summary alone.  Jones concludes:

“E-books have the potential to increase sales of physical books as well as provide their own source of income. That is, if authors and publishers are willing to accept them and deal with their users fairly, instead of hiding behind curiously high prices or DRM…. The lessons should have been learned from the 10+ year music fight. Throwing money at enforcement and litigation doesn’t work. Instead embracing the medium can be beneficial.”

“Publishers are now strenuously making the argument that ebooks are like paperbacks, a primary right, and they cannot create a publishing strategy for a title without controlling rights to both print and digital.  Some agents and independent e-publishers, meanwhile, foresee a future in which ebooks are just one more right to carve out, like audiobooks, to sell to the print publisher at a price or to an independent digital house. But around the edges of debates about the old model, a new possibility is arising.”

And from the possibly more innovative perspective, she writes:

“What if ebooks force a wholesale re-thinking of the contract for books in all shapes and forms?

The argument goes something like this: in entering the ebook world we’re moving from the most stable and mature market for creative works that exists — the 500-year-old print book market — into the vast unknown. It makes no sense to demand that an author turn over rights to the publisher for the rest of his or her life plus 70 years when no one can tell what the market might look like 10 or 20 years from now. On the other hand, if the agent is too aggressive limiting what rights are granted with an eye to what might happen in the future, the publisher has no room to experiment and innovate.

One approach is a generous rights grant limited by clauses that force a renegotiation after a few years or in the event of a general market shift, and many agents are now doing this.  But this approach fails to contemplate the possibility that ebooks may provoke severe disruption in the market causing publishers and booksellers to crack under the pressure of disappearing margins, remaking the book world in the ebook’s image, on an altogether less physical plane, and leaving the path a book takes from author to reader unalterably changed.

This is the world the revolutionaries dare to contemplate, and in anticipation they have written a new kind of book contract.”

“The publishing industry is in a state of turmoil. New sales channels are arising, new formats, new terms of sale.  Authors deserve the chance to renegotiate as the industry evolves.”

The goal of Nash’s start-up, Cursor, is to free up authors from having to carving out rights and royalties. Instead, they hand almost everything over to the publishers and give them maximum flexibility to experiment with format, pricing, sampling, enhancements, and territory –  for a very limited time, and at the end of that period, everyone reassesses.

A switch to this kind of contract would upend the current rights model in publishing and force the legacy businesses into a massive reorganization, probably involving no small degree of shrinkage. Is this the way forward?

A free WEBcast from Digital Book World, Rethinking Contracts and Copyrights, will explore the challenges and opportunities presented by digital rights (e-books and beyond), and discuss alternative models that publishers and authors are experimenting with.  Topics will include:

• Are ebooks a primary or subsidiary right?
• Are there viable alternatives to life-of-copyright contracts?
• How can publishers fully exploit “a fairly broad basket of rights”?
• Are such deals in an authors’ best interests?

CONFIRMED SPEAKERS

• Jason Allen Ashlock is the co-founding Principal and Manager of Movable Type Literary Group, which seeks to meet the needs of an industry in transition by serving authors and publishers at each point on the creative continuum. Prior to MTLG, Mr. Ashlock worked as an Associate Agent with Marianne Strong and Associates, while completing graduate work in both American literature and Religious Studies.
• Devereaux Chatillon is a media and commercial litigator in Sonnenschein Nath & Rosenthal LLP’s Litigation Practice. During her 30-year career, Ms. Chatillon has worked in all facets of the media and entertainment industry, including most recently as Senior Vice President and General Counsel of Scholastic Corporation, the global children’s publishing, education and media company. Ms. Chatillon has also counseled and represented book publishers, movie studios, magazines, newspapers, internet content providers, television and cable entities, and independent film producers.
• Jim Hanas is the author of Cassingle: Five Stories (2009) and Single: Two Stories (2006), two e-book collections of short stories that previously appeared in McSweeney’s, Fence, One Story, the Land-Grant College Review, Joyland, and elsewhere. In the fall, Joyland and ECW Press will release Why They Cried, an expanded e-book collection including these and other stories.
• Richard Nash ran Soft Skull Press, now an imprint of Counterpoint, from 2001 to 2007 and ran the imprint on behalf of Counterpoint until early 2009. He’s now consulting for authors and publishers on how to reach readers and developing a start-up called Cursor, a portfolio of niche social publishing communities, one of which will be called Red Lemonade. He was named one of “50 Visionaries Who Are Changing Your World” by Utne Reader, and one of “15 Twitter Users Shaping the Future of Publishing” by Mashable.com.

Moderated by Emily Williams, co-chair, BISG Rights Subcommittee.

Rethinking Contracts and Copyrights will be webcast live on Tuesday, September 28th @ 1pm EDT / 10am PDT

Mackenzie was writing on the Guardian’s website in response to author Ray Connolly’s recent article for the paper arguing against the need for publishing houses in the digital revolution.  (Though recent news regarding The Wylie Agency and Random House is likely to have been a factor in Mackenzie’s decision to speaking out.)

She said the services publishers provide are “more useful than ever” to authors and readers. She argued: “The idea that publishers ‘now appear frozen in the headlights of the onrushing digital revolution’ is simply untrue.  Long before the digital revolution had become a reality for readers, most major publishing houses have been planning and investing in their digital divisions in addition to ‘doing the day job’, publishing and selling their authors in all formats and in all markets.”

She added: “Digital publishing programmes are firmly embedded in all publishing businesses: these range from simultaneous e-book editions of new titles, republishing backlists digitally, revitalising old formats with new digital content, and creating title-specific apps on the latest devices. Publishers are absolutely aware that it is in their interests, and the interests of their authors, to embrace change in the industry.”

Mackenzie further enforced the role publishers play in discussing anti-piracy issues and said the digital sphere presents new problems. She added: “Protecting copyright and ensuring authors are properly paid is a key function of every publisher: publishers have created and manage anti-piracy schemes and contractual rights for e-books, often taking legal action where an author’s copyright is breached.”

She said while some authors may prefer to publish their own work, “a good publisher knows their market whether they are publishing in print or digitally”. Mackenzie added despite Amazon’s growing digital sales the “demand for print works remains very strong” and as many authors want their work in print, publishers are “a vital part of the process”.

Mackenzie disputed Connolly’s claim that “anyone who is computer savvy can become a publisher”. She said: “Many readers like knowing the book they are going to be spending their valuable time reading has been filtered through a selection process by people whose job is to guide the reader to what they want and ensure that they spend their time – and money – wisely.”

New print textbooks continue to dominate the college instructional materials market, at a projected $4.46 billion in 2010. But the hard-charging e-textbook segment will grow about 50% to an estimated $181 million, according to Simba’s most recent strategic market report.

Some the e-textbooks making up this surge will undoubtedly be open-source, such those from FlatWorld.  A growing percentage of the textbook market switching to digital will clearly require a re-jiggering of the traditional textbook royalty models.

Further info on Simba’s report can be found at www.simbainformation.com.