One of the big issues looming on the digital horizon is the role libraries will play with ebooks. A pre-emptive move earlier this year by the UK government has upset booksellers and shows that the industry here, too, needs to get involved in this debate.

So far, libraries’ digital activity has mostly been confined to research uses. The prevalence of the cumbersome PC as the main reading platform means the bread and butter of the book trade, fiction and general non-fiction, has barely been touched. But mobile reading devices and a surge in availability of popular ebooks are pushing libraries into the digital mainstream.

The few libraries experimenting today with ebook downloads typically have very thin collections. This is partly due to tight budgets but also stems from concerns by publishers and authors about how—indeed whether—libraries should lend digital editions of their books.

It’s the latter that has prompted the UK government to legislate so that patrons in libraries can download digital editions to their ebook readers without libraries infringing copyright. At the same time, it will issue an order under legislation “preventing libraries from charging for ebooks lending of any sort, including remotely.”

On the face of it, this looks like a big win for the reading public. Most people I speak to about ebooks get excited by the idea that they’ll be able to borrow them free from their libraries. And most people have a visceral sense that borrowing from a public library should be free to all. But this excitement is not shared as acutely by publishers, authors and booksellers.

Macmillan US CEO John Sargent put the industry problem succinctly when he said recently, “In the past, getting a book from libraries has had a tremendous amount of friction. You have to go to the library, maybe the book has been checked out and you have to come back another time … With ebooks, you sit on your couch in your living room and go to the library website, see if the library has it … You get the book, read it, return it and get another, all without paying a thing … How is that a good model for us?”

For much of the public, politicians, and librarians, this seems like a perfectly good model which accords with the common view that the digital world should operate the same way as print. But it is likely to be bad news for publishers, authors and booksellers. The former might lose sales because libraries can lend ebooks more efficiently (they need fewer websites than physical libraries) and they don’t wear out or get lost. And publishers, authors and booksellers all potentially suffer if the free option is as “frictionless” to get as their more expensive paid editions. And there might be less desire to “own” an electronic file than a real book.

Perversely, libraries are likely to suffer too from the UK government mandate to lend all ebooks free of charge. Most will not be able to afford a serious ebook lending programme without painful cuts to other services. If no other measures are taken, the result will be a crippled ebook service with a very limited selection. Ironically, booksellers concerned about competing with free loans should probably cheer the unintended consequence of this heavy-handed move.

But let’s not cheer too soon. Faced with this outcome, the government might tip the balance in libraries’ favour by forcing rightsholders to make big concessions, effectively subsidising libraries and setting up an even stronger competitor for booksellers. Its planned copyright changes to let libraries lend ebooks with or without publisher permission shows it’s not averse to forcing rightsholders’ hands.

So what is a reasonable role for libraries and how do we achieve this balance of interests? To avoid the heavy-handed legislative approach we’re seeing unfold in the UK, we need to talk directly to the library sector and other stakeholders in our own part of the world.

And we need to consider how the ebooks ecosystem will evolve.

If we look at the film industry as a comparison, there’s an initial cinematic release followed by release to rental and sell-through channels, then pay TV, then free-to-air TV. Through this measured roll-out, the industry manages to extract value at every price point, including free, and sells through many channels to reach as much of the market as possible. About 80% of the film industry’s income is earned after cinematic release.

Ebooks need a range of channels and price points too, to properly service the market and maximise the value of our creative assets. And with books it’s not just an economic equation: we have to consider social impacts.

So which channels will open up for ebooks? We’re in the early stages of developing a “full price” channel and still have a lot of work to do selling the value of digital books to consumers. And we can expect that libraries will offer some sort of free channel, whether selectively or open to all. Other (legal) free-to-consumer channels might emerge, perhaps through ISPs—and might have to develop to stem piracy.

I personally would like to see a vibrant rental channel for ebooks. And I’d like to see both libraries and booksellers participating, perhaps with release dates delayed just as DVDs today follow cinematic release. This would be an interesting “back to the future” scenario for booksellers. Before the public library movement, they had a thriving book rental market and in their heyday, there were more than 1000 “circulating libraries” in mid-nineteenth century Britain.

A paid rental option could bring much-needed money into libraries’ strained coffers, resulting in a better service to patrons who can pay and, with this improved funding, a better free service for those who can’t. For publishers and authors, it offers the prospect of fair compensation for readership through libraries.

While booksellers might be concerned that libraries are straying into commercial territory, it will be worse all around if they are backed into a corner by politicians and a public with high expectations, while not given the resources to deliver on these aspirations.

We’d then confront two equally grim scenarios: a high quality free service competing aggressively with booksellers and largely paid for by onerous terms thrust on publishers and authors by legislation. Or a crippled public library service struggling with dwindling patronage and increasing irrelevance.

These are tough issues with far-reaching impacts. Time to start talking and find a way through this.

A new usability study by leading usability researcher Jakob Nielsen lined up the printed book against digital editions on the Kindle, iPad and PC. It came up with results that might surprise advocates of the printed book.

After using each device, we asked users to rate their satisfaction on a 1–7 scale, with 7 being the best score.  iPad, Kindle, and the printed book all scored fairly high at 5.8, 5.7, and 5.6, respectively. The PC, however, scored an abysmal 3.6.

The poor showing of the PC was predictable but it’s interesting to see just how well these first-generation e-readers stack up against the printed book. Admittedly, my headline is a slight beat-up: the lead that Kindle and iPad had over print was not statistcally significant. But it’s a strong showing, especially since the reading material being tested was narrative fiction so e-readers would have gained no advantage from digital-specific functions such as search or portability.

In case you think these results might have been biased by a bunch of geeks in the survey sample, it seems the main criteria for selecting participants was that they like reading and frequently read books.

Nielsen’s study did find that electronic readers still can’t match the printed book for reading speed: the iPad was 6.2% slower than the printed boook and the Kindle was 10.7% slower.

Nielsen says the difference between iPad and Kindle reading speeds was not statistically significant but the difference between electronic and print was. However, the e-readers are already close to printed books and will rapidly improve.

And as this blog post from The Digital Reader points out, the results might have been even better if the participants had been experienced e-readers rather than (probably) newbies.

To me, the most interesting thing is it shows is that the classics — the traditional fare of free reading — have some serious competition from new works which, for various reasons, authors or publishers have chosen to distribute free.  (Not quite free: they’re subject to Amazon’s US$2.00 WhisperNet charge for international downloading). You have to look towards the end of the list to find a high concentration of the traditional classics.

A lot of these free titles, of course, are self-published and there are quite a few from established authors that have been offered as promotions. It’s a great way to get recognition and cut-through: launch as a free ebook for a limited time then switch to paid, or sell more hardbacks and paperbacks.

While these numbers are still small by US standards, what’s especially interesting is that digital now represents 7.9% of S&S revenue. With growth rates like this, even off a small base, it’s easy to see how digital will rapidly become a significant revenue stream.

The S&S results are consistent with a recent prediction by Penguin Group CEO John Makinson who  said he expected Penguin’s digital revenues to hit 10% of sales next year, up from 4% this year.

But, notes this report from Paid Content, “The increasing opportunities in the digital marketplace should push the revenues and the percentage up in coming quarters but will it be replacement or additive? This time the higher contribution from digital helped offset a 6 percent revenue drop to $151.7 million from $161.7 million.”

The reason is an escalation in Apple’s long-running battle with Adobe over its Flash platform. Apple’s latest move bans any content generated using Adobe’s Flash software from its App Store. Flash is one of the most commonly-used systems for creating rich, interactive content.

This might seem like an esoteric spat between two tech Titans but the latest turn in this long-running dispute will be a special blow to magazine and newspaper publishers, and to book publishers who were hoping the iPad would open up textbooks and illustrated books unsuited to the more basic Amazon Kindle-style ebook readers. Ironically, this ban looks like it might catch out some of the high profile magazines and newspapers, such as Wired and the New York Times, that have been trotted out in the past few weeks to show off the iPad’s capabilities.

Publishers (and indeed other media companies such as video and game developers) are heavily invested in Adobe’s applications for creating their content. They don’t want to learn new tools, they want their existing tools to take them into the new media.

[Update: 5 May 2010. Apple's move may prompt an anti-trust probe, according to this New York Post story. ]

So Adobe’s strategy with its Flash platform — to make rich media content available on any platform without having to produce a different edition for every device out there — promised to take a big burden off publishers and open up their content to the whole market.

Until Apple came along with the iPhone and now the iPad.

Apple refused to host Flash on these devices. Now that these devices are ruling the mobile web roost, their Flash no-show leaves a big hole in this tidy strategy, moving this spat from an irritation to a serious business problem for content developers.

Recently it appeared that Adobe had found a clever work-around to circumvent Apple’s strictures using technology called Packager for iPhone. This turns Adobe’s Flash code  into the native program code used by Apple’s iPhone and iPad. It’s set to be released this week with the latest CS5 update to Adobe’s software.

Apple, however, used the launch a couple of days ago of OS4.0 — a major upgrade to its operating system for iPhones, iPads and iPod Touches — to introduce new contractual terms to its tightly-run developer programme. The new terms have the effect of stymieing Adobe’s work-around and look likely to keep all Flash applications off the Apple devices permanently.

In doing so, Apple hopes to force publishers and developers to create native applications written especially for its devices instead of using Adobe’s system to produce a single generic edition to run on many different devices such as an iPad, a Blackberry and a Google Android device.

Apple hopes its move will cause publishers to rethink their strategies. Forcing publishers to produce multiple editions, or to drop support for less important platforms is great for Apple but bad news for publishers and will also lessen the chances of competing devices succeeding against Apple.

It should certainly cause publishers to rethink their strategies but not in the way that Apple hopes.

Fortunately, there are things publishers can do. But it means they’ll have to show some restraint in the face of all the “flashy” new toys for producing great-looking content, and the smooth payment system that Apple is throwing in their direction.

While Apple is exercising an iron grip on its App Store, it’s still open to the web. So developers and publishers can sidestep the App store’s strictures and use standard web technologies – including HTML, CSS, and Javascript – to produce rich, interactive content that will run on the iPad, iPhone or the many other devices that offer web access.

Ironically, this is made easier by Apple’s solid support for web standards and, in particular the emerging HTML 5 specification. Many useful HTML 5 features are already widely implemented, including the ability to run offline web apps so you don’t have to be connected all the time. Others, such as native support for video and audio (no external plug-in programs required), are not far behind. The Safari browser and open source Webkit framework that Apple uses in its iPhone and iPad are, so far, being good corporate citizens in their support of these important emerging standards.

In this regard, a useful development framework is Phonegap. This system allows you essentially to turn a website built using HTML, CSS and Javascript into an iPhone app. And according to its developers, their system, while superficially in the same boat as Adobe’s Flash platform, will survive Apple’s change to its developer terms. It offers a path to Apple’s iPhone App store as well as the Google Android app marketplace and the Blackberry.

For publishers, the downside of this is that the toolset is more the domain of web developers than their graphic designers. But they’re going to need to upgrade web capabilities anyway and sticking to web standards will make a reasonable fist of cross-platform rich content.

This is especially true for book publishers who already have a widely adopted ebook standard called ePub which is based on (X)HTML and CSS web standards (and is the standard adopted by Apple in its new iBookStore). Newspaper and magazine publishers have yet to rally behind a standard but it’s almost certain to be based, again, on web standards.

If the publishing industry can get its act together quickly enough, it’s quite possible that all of the print media could use the same standard. For instance, work on the next version of ePub should have better support for interactivity, rich media and the more story-centric structure that newspaper and magazine publishers need.

In the short term, this approach won’t offer the same slickness as a hardware-specific iPad edition, but it still offers a credible way to produce mobile media that will work for readers and advertisers. And it — or its threat — might just help nudge Apple off its path to world domination of the media business.

When Apple launched its long-rumoured iPad tablet computer late last month, it fired a major salvo in the battle for control of media in a new digital era. In its global sights were Google and Amazon who, along with Apple, are the companies driving this seismic shift in media.

All three companies are jockeying to be gatekeepers between content providers and consumers. So far, many of these battles have been playing out overseas but in 2010, New Zealanders will get to join in.

It’s the ability to get consumers to pay for digital content and reduce its reliance on a broken online advertising model that is at the heart of the media’s excitement. So it’s not surprising that a lot of the early jostling is for control of the one major medium that’s largely ad-free, books.

With business models that link online stores to specialised gadgets, companies like Apple and Amazon are proving that consumers will pay for music downloads, ebooks and even online newspaper subscriptions if you make it easy and attractive enough.

In this new world, the PC is no longer centre stage. Increasingly, what we’re spending our time doing is communicating, surfing the internet and consuming media online, not running applications like Microsoft Office. To do this, people want inexpensive gadgets that are highly portable, comfortable for lengthy reading or watching videos, simple to use, with long battery life, and always connected to the web.

It’s a wish-list that’s been tough to fill, until now. At last month’s Consumer Electronics Show (CES) in Las Vegas, a slew of new ebook readers and so-called tablet computers were announced that, to varying degrees, will fill these needs.

Many will be in New Zealand by the second half of this year by which time Kiwis will also have access to content from local e-bookstores including Kobo from the Whitcoulls/Borders group, a host of New Zealand ebooks and perhaps some magazines from local publishers, and Amazon’s Kindle should finally be here.

The excitement of CES had barely subsided when Apple, with impeccable timing, announced on 27 January the much-hyped but impressive iPad.

For book publishers and the wider media industry, the iPad and its competitors can’t come soon enough. The iPad is a thin, light tablet the size of an A5 notepad. It will surf the web and do your email (it has an almost-full-size touch keypad and a real keyboard can be attached as an option). But importantly it also lets you comfortably read books, magazines and newspapers or watch videos over its wireless internet. It’s a very different experience from a PC but a very familiar one for millions of iPhone and iPod Touch users. The iPad looks just like a grown-up iPhone.

Its unexpectedly low US$499 entry level price point will make things much tougher for the numerous companies that announced entry into this market. They’re going to have to compete more on features and specialisation, making it much harder to get a foothold.

One area is screen technology where a lot of innovation has happened. Apple chose to stick with its proven LED technology which provides crisp colour images and quick performance but is hard on batteries, difficult to read in sunlight and can cause eye strain from prolonged reading. A new breed of electronic papers solves most of these problems and many of the new devices coming out this year will use them. Some of them are targeting business rather than consumers, hoping to finally bring about the paperless office.

To show off its print media credentials at the iPad launch, Apple CEO Steve Jobs demonstrated a special edition of the New York Times newspaper and a new application, iBooks, that lets you read ebooks – not just the black and white text editions that Amazon’s Kindle restricts you to but full colour, rich media versions that will make magazines and newspapers viable too. And from its associated iTunes-like iBook store, you can buy them right from within your iPad.

The deals Apple has struck with major book publishers are rumoured to give publishers a bigger margin and better control over pricing than Amazon gives them, two areas where Amazon has got offside. Watch for iPad deals with magazines and newspapers to follow.

In this battle to win the hearts and wallets of consumers and the media Apple, with its power to popularise gadgets, has a distinct edge over Amazon and Google.

Google’s strategy is to provide its Android and Chrome operating system platforms free to any manufacturer for this new generation of media-centric devices such as smartphones, tablet computers, and ebook readers. Dozens have already jumped on board and many of the direct competitors for Apple’s iPhone and iPad will be built using Google’s systems.

In mid 2010, Google will begin selling content through its own online bookstore, Google Editions, going head to head with Amazon’s Kindle and Apple’s iBook store. But Google plans to sell to intermediaries such as online booksellers and libraries as well as to the end consumer, potentially creating a more diverse industry. Google’s technology, reach and openness to partnerships is likely to make it a major contender. But Google is new to building system software and so far Apple still has the edge, something it’s likely to take advantage of as it wins over early adopters. And Google got offside with the publishing industry, governments and much of the public with its controversial Google Books programme, something that might come back to bite it as competition heats up.

Amazon, as an online retailer, is new to the hardware game. While it’s done a credible job with the Kindle getting consumers excited about ebooks, the Kindle is a very simple device and it’s by no means clear that Amazon can scale up its hardware operation to compete with the much more sophisticated devices consumers will be demanding.

An interesting, but little-noticed part of Apple’s announcement is likely to make Amazon’s job even tougher. Apple, like Google, is throwing its weight behind an industry-sponsored open ebook format called ePub. This might finally end the ebook ‘format wars’, tipping the balance in favour of a single format, ePub, and forcing Amazon to rethink its own proprietary Kindle format. Losing control of both the device and the format will make it tougher for Amazon to control the distribution of digital content. There are signs its market control is already weakening.

Other companies are in the picture, including Microsoft, and it’s too early to rule out a dark horse emerging. But so far, it’s looking like a three horse race to rule over the global distribution of digital content. Following Apple’s latest move, I’d say it’s Apple in front by a nose.

- Martin Taylor

[Update: 1:37pm Just had a call to tell me that Amazon is not presently able to ship to New Zealand but will ship to Australia. Have amended story.

Update: 9 October 2009.  See story: Details still unfolding.]

And if you don’t want to buy a US$279 Kindle from Amazon.com, you can still access it from the free Kindle app for the iPhone. The international wireless support comes via the AT&T wireless network. Outside the US, AT&T uses the common GSM system supported by operators such as Vodafone, Telecom and Hutchison. Amazon will add a US$1.99 surcharge for each ebook download from outside the US to cover wireless charges.

Among the publishers supporting the Amazon move with global rights, making their ebooks available for sales to non-US territories are:

Atlantic Books, Bloomsbury, Canongate, Faber and Faber, Hachette, Harlequin, HarperCollins, Lonely Planet, Penguin, Profile Books, Quercus, Simon & Schuster and Wiley.

A notable absence, Random House, is still in discussions with Amazon.

As well as books, more than 85 newspapers and magazines, including many international publications, are now available for subscription on the Kindle.

For those among who would have liked less global and more local in the territorial rights issue, it’s time to put that debate behind us and work with the new rules that will clearly be predicated on global editions. This will impact on English language titles and many other geograpahically dispersed languages such as Spanish.

• For publishers in all territories, it’s now time to do deals with Amazon, not just for international sales but for an early shot at early adopters in their domestic markets.
• For Amazon competitors in the ebook reader space such as Sony, it’s time to put the leisurely pace of global roll-outs behind them and crank into high gear. Let’s hope New Zealand and Australia are at the front of the queue now.
• For Amazon’s bookselling competitors, it’s time to get started because if they don’t build brand awareness in this space fast, they won’t get into the game. There’s only going to be room in customers’ heads for a tiny number of sites when they think where to go and shop. Booksellers at the country level will need to differentiate on the basis of local prices (Kindle sales are still $US but that will change), local title availability and local promotion.
• Expect to see the global rights issues sorted out pretty soon by early global e-booksellers such as Barnes and Noble‘s Fictionwise and the recent Canadian entrant with global aspirations, Shortcovers.

Amazon is already a major global presence. In the press release announcing this, Amazon CEO Jeff Bezos refers to the “millions” of existing international Amazon customers. Certainly, a lot of them wil reside Downunder so we’ll expect a lot of Kindle users arriving here pretty smartly.

It’s our job now to make sure they’re reading local as well as international books. In this regard, the announcement this week that New Zealand copyright collective Copyright Licensing Limited (CLL) will lead the charge to get New Zealand books digitised and licensed to groups such as libraries, booksellers and others, couldn’t come soon enough. I’ll be part of that through the work we’ve been doing with the Digital Publishing Forum and the 1000 Great New Zealand Ebooks initiative.

Publishers will increasingly need to work with trusted digital content agregators  to get their digital content into many places, to negotiate with large players, track their digital sales and make sure their content is properly managed. Rights organisations such as CLL are well placed to do this if they can adapt from their current print-based role to the digital environment.

This very timely blog from Mike Shatzkin speculates on the need for such a role for the US rights organisation, the Copyright Clearance Center. Following the lead from CLL in New Zealand, we’re going to see more of this.

We live in exciting times.

“By permitting Google to engage in a wide array of new uses of most books in existence the settlement would alter the landscape of copyright law,” said head Marybeth Peters in testimony to a US congressional committee. “That is the role of Congress, not the courts.”

To its credit, the US Register of Copyright submission also went strongly into bat for international rightsholders.

We are troubled by the fact that the proposed settlement implicates so many foreign works even when they have not taken steps to enter the United States market. While it would be appropriate to allow foreign nationals to participate voluntarily in licensing programs that may be developed by the BRR [Book Rights Registry] or other collectives, they should not be automatically included in the terms of the settlement. Moreover, we are aware that some foreign governments have noted the possible impact of the proposed settlement on the exclusive rights of their citizens. Indeed, many foreign works have been digitized by Google and swept into the settlement because one copy was in an academic research library in the United States. As a matter of policy, foreign rights holders should not be swept into a class action settlement unknowingly, and they should retain exclusive control of their U.S. markets.

This is the sort of spirited defense that we’d like to have heard from our own side. While European governments have been vocal, even gaining some concessions from Google to put Europeans on the BRR board, not an official peep has been heard from either the New Zealand or Australian governments on this matter, despite prodding and widespread coverage and concern.

Here’s a link to Peters’ full submission to the US House Judiciary Committee. Thanks to Lynley Hood for the link.

I’d welcome comments, corrections or alternative points of view from anyone who might be better informed on some of this stuff that I am.

Disclaimer: I’m not a lawyer, I haven’t read the 300+ pages of the document and, despite having read widely about this, I don’t recall having seen a really thorough summary of the deal.

So, here’s what I’ve done and some of the issues or knowledge gaps that have led me down this path.

1. I’m personally opting out.
2. Whatever you do, do something because doing nothing is bad. It seems you’ll be deemed to have opted in and will get the “benefits” whether you like it or not. In my opinion, the financial benefits look too small to make a leap into the unknown for.
3. You will certainly be handing over some non-exclusive rights to Google if you opt in. I’m not familiar with all of the rights you’re handing over (the right to scan and hold the file is a minimum).  And I’m not sure how granular your control over them will be (eg to restrict them from selling, or restrict from viewing, or limit amount viewed, etc). However, as a matter of logic, if you assign some digital rights non-exclusively to Google then you’ll never be able to assign those digital rights exclusively to anyone else later, though you will be able to assign them non-excusively. And you’re handing those rights over for a very long time as far as I know. I don’t think you can cancel once in, only that you can restrict usage.
4. If Google sells your work, I’m not sure you will have much control over price and terms. eg The sale might for be for a one-time fee, eg libraries and institutional buyers would buy your book outright for a single payment and no further payment – eg a per loan charge – would be needed. This would restrict, and create competition for, your other channels. I personally think this approach — selling digital copies outright to allow their long term, payment-free lending — would be a mistake. I think Google has the potential to distort and devalue the ebook market on a huge scale in the same way that I believe Google has distorted the advertising-driven media market.
5. If you opt-out of Google selling your book because you want more control over it, I’m not sure what benefit there would be compared to simply using the Google Books Partner Program (terms  here) to scan your book purely for search purposes.
6. Even if you don’t opt into the class settlement, I’d guess you’ll be able to do business with Google at a future date, possibly on more favourable terms and certainly with the benefit of more time to see how it evolves.

I hope this is of some help. As noted, I haven’t read the agreement or seen any comprehensive summary of its 300pp, so it’s quite possible some of these concerns might be misguided but if I’ve got them I imagine there will be others out there with similar concerns.

The trouble started when Amazon withdrew an ebook version of Orwell’s novel after it found the edition infringed copyright. But its hamfisted method of doing this — dipping into its customers’ Kindles without them knowing and removing the offending work — has unnerved a lot of people. It also prompted an embarrassed, almost grovelling, apology from Amazon CEO Jeff Bezos.

But as this New York Times story shows, critics are quick to use the issue as an attack on Digital Rights Management (DRM) as well as civil liberties.

The civil liberties issue is clear enough: If Amazon can withdraw a purchased ebook without consent from its owners’ Kindles, what could a ruthless government or censor do to remove material causing offence for other reasons? In this respect, it’s hard to miss the irony that it was an edition of Orwell’s 1984 that has prompted this fear.

The connection to DRM, widely hated and seen many many as infringing consumer rights, is an interesting turn in this argument. It looks like it was Amazon’s DRM system that was used to remove access to the offending file. Campaigners are now using this incident to attack Amazon’s overall use of DRM.

The legal problem comes from a related issue. An awkward aspect of US copyright law called the First Sale Doctrine could well create problems for Amazon and its publishers. The First Sale Doctrine is a US legal statute that essentially states that once a person buys a copyrighted item, the copyright owner’s control over how the new owner uses and transfers that item largely ends. So for instance the legitimate purchaser retains their right to resell, lend, rent or give the item away. Other jurisdictions may have a similar principle to contend with so the issue is by no means confined to the US or to works sold into the US.

In a possible attempt to circumvent this legal principle, Amazon’s terms of sale state that the ebook is licensed rather than sold outright. This is probably news to a lot of Kindle owners who feel like they’ve bought ownership of their ebook with the same rights as a p-book.

Personally, I think Amazon and publishers should be able to limit transfer of ebooks. But Amazon’s problem here — legal as well as public relations — is that it’s creating the appearance that its ebooks are sold outright rather than on some sort of royalty-free license-to-use basis.  This point — that if it looks like a sale, it probably is a sale in spite of what your terms of sale say — caught out software maker Autodesk a couple of years ago in a case that you could imagine would share a lot of similarities with ebooks if a disgruntled Amazon customer decided to challenge Amazon’s or a publisher’s post-sale behaviour. In the Autodesk case, an eBay trader was selling used copies of its software which it argued were only sold in the first instance on a license-to-use basis. The judge didn’t buy this argument, in spite of Autodesk’s explicit terms of sale, because it gave the appearance of being an outright sale.

The industry, and Amazon, needs to start an education process to make this issue much clearer. And they really need to do some soul searching about whether they can, in fact, have a bob each way on this issue. It’s understandable why Amazon, and no doubt many of its publishers, are being a bit ambiguous on this point. Who, after all, will want to pay close to the full price of a p-book for something that is essentially a long term rental?

But if they don’t come clean, there might be some unpleasant and unexpected consequences. If First Sale rights, or a similar legal doctrine, is recognised in case law or statute as covering ebook sales, there could be interesting consequences, particularly if DRM is also challenged on similar grounds. For instance, a second hand copy of a paper book is generally much cheaper than a new one, doesn’t travel widely, and gets less valuable as its wears out. But what value will a “second hand” ebook file have? If it doesn’t wear out and it travels well, a library or rental store can lend it continually for years with no discernible lessening of quality and no further payment to the author or publisher. And hey, let’s not forget how sociable the web is these days. It’s easy to imagine your favourite internet book club becoming a vast channel to free loans from your large network of online “friends”. Sound familar?