Steal this e-Book!

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Steal this e-Book!

by Danny O Snow
with Richard Eoin Nash, Dan Poynter, Wade Roush and Glenn Sanders

This document is intentionally formatted very simply for online viewing. For a more
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For more books and articles about electronic publishing, visit:

U-Publish.com

All rights to articles from BookTech Magazine reverted to the writer on publication,

used by permission. All rights to article from the PMA Newsletter reverted to the

permission. All other text and entire work © MMII by Danny O Snow.

Author: Snow, Danny O

Contributor: Nash, Richard Eoin

Contributor: Poynter, Dan

Contributor: Roush, Wade

Contributor: Sanders, Glenn

Cover Design: Coshow, Sabrina

Title: Steal this e-Book!

1. Publishing 2. Electronic Publishing

3. Technology

ISBN 1-59109-318-X

Table of Contents

Acknowledgements

Foreword

Preface by Richard Eoin Nash

Making the Web Pay by Dan Poynter

xix

Chapter 1

An Experience at OEB

Chapter 2

A Letter to Harvard Magazine

Chapter 3

An Excerpt from 'U-Publish.com'

Chapter 4

Riding the Bullet

Chapter 5

Microsoft Reader and Adobe PDF

Chapter 6

The Pocket PC

Chapter 7

e-Book Formats Spar and Parry

Chapter 8

Supreme Court Rules for Writers

Chapter 9

e-Rights Update

Chapter 10

iPublish and MightyWords Fold

Chapter 11

Afterword

Chapter 12

Resources

Acknowledgements

Dan Snow gratefully acknowledges the encouragement and

support he has received over the years from the late William

Alfred, Sam Ardery, Ted Bayliss, Holly Blatman, BookTech
Magazine's Gretchen Kirby, Tom Buckner, John Childress,

Richard Adrian Dorr; eBookWeb founders Wade Roush and

Glenn Sanders, Mary Frances England, Burl Frame, Bud

Gilmore, John Hartley, John Houghton, David Jeffers, L. Bruce

Jones, Florrie Binford Kichler, Charlie King, Larry Larkin,

Chuck Loesche, The Clan MacAaron, John Mace, NAPCO's

Mark Herzog, Richard Eoin Nash, Cindy Newman, Brandee

O'Brien, Mark O'Donnell, PMA's Judith Appelbaum, Jan and

Terry Nathan and staff, Dan Poynter, Robert Burns Shaw, Mike

Shartiag, Dave Shearer, Jane Shore, Mark Swisher, Rick Sutton,

Greg Temple, Bob Zaltsberg, and most of all, his #1 fans (who

also happen to be his parents) Harry David and Jeanne L. Snow.

He also thanks thousands of readers of his book titled

U-Publish.com, co-authored with Dan Poynter, whose feedback

has been invaluable in shaping the ideas presented in this

book

Foreword

The French verb 'voler'

can mean 'to steal' and 'to fly.'

Gentle Reader,

Since you're reading this, you are already a participant in this

whimsical 'experiment in unsafe texts' and thank you for

playing.

This is a retrospective look at electronic books and

electronic rights that traces the evolution of e-Books from

ancient times (1999) to the present. But it may also have some

impact on the future. Here's why:

After Dan Poynter and I finished the first edition of

our book titled U-Publish.com back in 1999, we released it in

both electronic and printed form. Ironically, even though the

book was about new publishing technologies, the company that

distributed the e-Book didn't use encryption at all. I don't

believe that this was a deliberate choice; more likely they just

didn't care enough to pay for it.

Flattering myself, I wondered if pirated copies would show

up on Usenet (they didn't) or if people would buy the paperback

that followed in January 2000 (they did).

Dan Poynter wasn't worried. 'The book will be out of

date within a year since the publishing industry is changing so

quickly,' he said, and he was right. 'I'd consider any pirated

copies free advertising for the next edition,' he quipped.

In time, we noticed that a substantial percentage of people

who downloaded the e-Book later bought a paperback. That

was a pleasant surpise '” and it was the beginning of the concept

for this book.

After March of 2000, when Stephen King released Riding

the Bullet exclusively in electronic form, people in the book

industry raised quite a fuss about digital rights management

(DRM). Unlike my earlier e-Book, King's electronic novella,

which was distributed by a real publisher, and used real copy

protection, was out for only 48 hours before pirated copies

began showing up on the 'Net. And poor Stephen had sold only

400,000 copies at that point.

It amazed me how publishers whined about DRM in the

weeks that followed. Jeez, the guy sold almost half a million

books with production and shipping costs near zero, and people

called it a failure. I longed for that kind of failure.

And I kept thinking about the people who paid for my

little e-Book with Dan Poynter, and later paid again for the

paperback, bless 'em all.

According to Glenn Sanders of eBookWeb, in a 1998

article he reported, 'Three years ago Rough Guides did the

unthinkable; they placed the full text of several of [their] most

popular travel guides on the Web,' for free. 'Ever since Rough

Guides placed its content on the site, book sales have increased

by at least 20% per year,' he added.

More recently, Dan Poynter related yet another example.

National Academy Press put an entire series of e-Books online

for free, only to see sales of their tree-Books improve.

Finally, at BookTech 2002 in NYC, I heard industry experts
surmize that e-Books could be good tools to sell tree-Books,
but their comments were more like general impressions than hard facts.

That's when this 'experiment in unsafe texts' truly began

to take shape. Here's the plan that emerged: a company called

BookSurge suggested compiling a short collection of my writing

about electronic publishing, which they would turn into both an

e-Book and a paperback. Like the first edition of U-Publish.com,

the electronic version of Steal this e-Book! is going out without

copy protection. But this time the e-Book is free, the absence of

copy protection is intentional, and we're doing it for a specific

reason.

You see, we aren't planning any advertising or promotion

for the paperback. The free e-Book will be the only form of

marketing for the tree-Book. Will anyone buy the paperback? I

don't know -- but a year from now we'll have a fairly objective

count of how many paperbacks sold as a direct result of the

e-Book floating around for free.

If you're reading an electronic version and want a printed

copy, simply order one; if you don't want a paperback, that's OK too.

You're welcome to the e-Book for free.

Personally, I plan to e-mail dozens of copies to friends and

acquaintances, and post others at Web sites where readers can

download 'em for free. You are invited to do the same, whether

you want the paperback or not. So go ahead: Steal this e-Book!

As the hacker credo goes, 'Information wants to be free.' (To

which Dick Brass of Microsoft added, 'But content providers

want to be paid.') Maybe this book will finally prove objectively

that both goals can be achieved at the same time.

-- DOS

March, 2002

Preface

by Richard Eoin Nash

Richard Nash is among the 'digerati,' the 'digital literati'

who help today's readers, writers and publishers envision the

future of books. A Harvard scholar, author, playwright, and

former rights-permissions specialist with Oxford University

Press, he also writes about e-Books for several industry trade

publications, as well as speaking at publishing events across the

nation.

When I first decided to publish a free e-Book to see if

it would catalyse sales of a paperback, he was one of the first

experts I queried for advice.

Nash is often radical in his views, yet his arguments are

compelling. At more than one of his public appearances, I've

seen fellow authors and publishers come away with a sneaking

suspicion that 'we have seen the enemy and it is us.' Happily,

the sixties-vintage title Steal this e-Book! and guerilla marketing

concept held enough appeal to his revolutionary spirit that he

agreed to write the preface:

To Buy or Not to Buy, That is the Question

By Richard Eoin Nash

The following headline appeared at www.ditherati.com on

19 February 2002:

EXPROPRIATION TAKES COORDINATION

'Open source means to prove that collaboration works better

than authority, or private authorship, for that matter.'

-- Douglas Rushkoff, predicting that getting people to

contribute to his e-book novel for free will help him move

units of the print version

Wired News, 19 February 2002

For the digerati of the world, the fact that e-Books sell

print books is so self-evident it's almost beneath contempt.

This book is for everyone else.

This book not only lays out the case for the viability of using

wired or wireless technology to deliver content electronically

as a branding, marketing, or promotional tool '” it is the case.

This is the metatextual dimension of the book. As with Tristam

Shandy and Flann O'Brien's At Swim-Two-Birds, there are nested

narratives here.

One narrative is the larger debate about what to do with

e-Books. Sell them? If so, for how much? Do we let people copy,

forward, print, listen, duplicate, select, cut? (The verbs cascade

forth.)

A second narrative connects to the evolution of intellectual

property in the 30 years since Abbie Hoffman found a new way

to announce that property is theft. In particular it concerns

the ever-less-material manifestation of intellectual property,

especially artistic works. Less and less material is required to

store and transmit intellectual property. The container of the

idea begins to slowly disappear, leaving only the idea itself, no

more palpable than a swarm of electrons.

The third is Danny's own narrative, episodes from the

last three years of his life as he comes to terms with what the

future holds for an industry, and a practice, that he holds so

dear. It's the story of the market, of the technology, of the

companies, but also the story of the writer, an 'Autobiography

of an X-Book Man.'

The fourth narrative, as I see it, is actually a theoretically

infinite number of narratives: the decision each reader (that's

you, by the way) will make as to whether to buy the print book.

What might your reasons be to buy? To prove a point, pro or

con? Because you find it easier to read as hard copy? As a way to

'pay' the author, since he'll be paid a little when a print book is

sold, but nothing at all for the e-Book? Because a friend might

like it and s/he would find it easier to read on paper '” although

you can, after all, forward an e-copy to as many people as you

like? What might your reasons be not to buy? Again to prove a

point, this time con?

To buy or not to buy, that is our question to you, and so you

too are part of the story this book is telling: 'a gift that keeps

on giving.'

There are no 'right' or 'wrong' answers to the fundamental

question posed by this book: do electronic books compete with

printed ones, or complement them?

The electronic version of Steal this e-Book! is free; the

paperback is not, and the e-Book is the only form of

advertising for its printed counterpart.

It doesn't matter whether ten paperbacks are sold, or

10,000; all of the print sales will come directly from the

availability of the free electronic version.

Whether you prefer e-Book, tree-Book or both, you'll be

right '” and you'll be helping us learn more about what the

future holds. With your help, we'll cast this digital bread upon

the waters, and see what the tide brings back.

Making the Web Pay

By Dan Poynter

Dan Poynter is widely recognized as one of the world's foremost

authorities on independent book publishing and promotion,

with more than 80 books in print. In his 'Instant Report' titled

Making the Web Pay he notes that publishers have long been

wary of electronic publishing because of a fear of sharing.

Having seen all the bootlegging of software, publishers are

understandably reluctant to release books as downloadable

files that can be copied at the click of a mouse.

Yet the report itself is available to download in PDF format

at www.parapub.com '” along with hundreds of other reports,

documents, and entire books in electronic form. The following

excerpts explain why.

Making the Web Pay
By Dan Poynter

There are millions of Internet users and [the] number of

people accessing the Web continues to grow every day. It is not

lost on publishers that everyone is interested in searching the

Web and buying online. In fact, statistics indicate that if you

are not using the Internet as part of your business you will no

longer be competitive enough to compete in the global digital

economy of the 21st Century.

While computer-book publishers are searching for new

Internet-Web manuscripts, all publishers are faced with two

different challenges: Getting on the Web and making the

making money from it.

The Internet is communication channels, and fortunately,

publishers have information that can be communicated. We

publish what the Web needs: content. Publishers may use

the Web to display their catalog of books and to sell those

books in both paper editions and in electronic versions online.

Customers may be directed to bookstores for the paper version

or they may send an order directly to the publisher. Or they can

unlock and access an online edition instantly. Now, how does a

publisher get people to visit the site and spend money?

Para Publishing has been on the Web since early 1995.

The site has continually been expanded with some very clever

marketing devices and response mechanisms. This site is an

example of what publishers can do on the Web. The site not

only shows products and describes services, it sells them. You

may wish to log on to www.ParaPub.com to test some of the

features as they are described.

For many years, Poynter has been known as an early

adopter of new technologies. For example, he was recognized

for implementing one of the earliest fax-on-demand systems,

and more recently received the Irwin Award for the best

electronic promotion campaign by the Book Publicists of

Southern California.

Many of Poynter's electronic texts are not copy protected,

yet his business is profitable. Moreover, he sells both printed

and electronic versions successfully. For example, the popular

Self-Publishing Manual has more than 175,000 copies in print.

The availability of the e-Book has not eroded sales of the tree-

Book.Poynter's success in marketing electronic texts, starting

long before most other publishers, was a big influence in my

own experiments with e-publishing, of which this book is the

latest example.

Chapter 1

An Experience at OEB, circa 1999

Letter to NPR's 'Weekend Edition'

This collection is chronological. When I say 'chronological,' I

mean that it's a series of letters and articles covering events

starting in 1999 and continuing to early 2002. They are

presented in the order of the events, not the publication dates.

For example, the first item below talks about one of the

earliest meetings of the Open e-Book Initiative, early in 1999,

though it didn't actually air until the weekend of June 3, 2000.

As an early participant in the 'Open e-Book Initiative,'

I had the pleasure of meeting with representatives of leading

publishing concerns at the headquarters of R.R. Donnelley &

Sons in Chicago, early in 1999. The discussion was heady stuff

-- nothing less than the future of books. At one point, a direct

descendant of the venerable R.R. Donnelley himself directed

my attention to a panel that slid from the wall, displaying a page

from the Gutenberg Bible. The juxtaposition was striking.

As noted ... in your broadcast, these new technologies are

still in their infancy, especially in terms of copyright protection.

In addition, they are not yet in widespread use by the general

public.

Adobe Systems offers special software products named

'Web Buy' and 'PDF Merchant' designed for the secure sale of

content from the Internet. Microsoft and Xerox have recently

announced the formation of ContentGuard Inc., which

promises to allow a document's author, publisher, distributor

or seller to secure it against piracy, track its movements, and

require users to pay before using it.

However, as noted in your interview, Stephen King's

electronic novella Riding the Bullet survived less than 48 hours,

before pirated copies started to surface on the Internet.

According to The New York Times, the May 23 announcement

about the release of Michael Crichton's thriller Timeline and

other titles for the Pocket PC was made 'even if it is not clear

yet how protected the electronic titles are from hackers.'

In 1999, the first generation of hardware devices specifically

designed for reading electronic books (the Rocket e-Book,

SoftBook, GlassBook, etc.) became available to public. At

present, however, compared to millions and millions of desktop

and laptop computers, the number of dedicated e-Book reading

devices in use is extremely limited. The new Pocket PC with

Microsoft Reader holds the promise of bringing e-Books more

squarely into mainstream markets '” but again, it will take time

before the number of Pocket PCs even begins to approach the

ubiquity of the desktop or laptop computer.

Why, then, are major publishers jumping on the e-Book

bandwagon?

The answer is simple: the economic advantages of

e-publishing are so compelling that the New York houses can no

longer ignore them.

By drastically reducing the physical expenses and economic risks

that have traditionally been borne by publishers, electronic distribution

will change the entire dynamic of what 'publishing' means in the new

millennium.

Eliminating waste and slashing production costs will change the

publisher's focus from 'playing it safe' with commercial material, to a

new era of innovation and creativity that benefits readers and writers

alike.

No one knows exactly what the future holds, but it seems

certain that e-publishing is here to stay '” and that it will

dramatically alter the way writers and publishers reach readers

in the 21st century.

The italic text above was excerpted by NPR's 'Weekend

Edition' for its broadcast that aired over the weekend of Book

Expo America. A sound byte is available at the Web location

below:

http://www.npr.org/ramfiles/wesat/20000603.wesat.04.ram

Chapter 2

Cancel My Subscription

Harvard Magazine, January 2000

The next item is a letter that appeared in Harvard Magazine.

Incidentally, the magazine is published both in print and online,

and Harvard warns its alumni that anything they publish in the

magazine will be freely available online to the teeming millions.

Personally, I like it when more people read things I've written,

so this policy is fine by me.

You can't write about electronic publishing without

discussing electronic rights at least in passing. The funny thing

is that the conversation seems too often to focus on hardware

and software issues.

My letter glossed over the issue of copyright protection

because it was written in response to an article about hardware.

I was confident that a DRM solution would be found, but

didn't know what it would be. I still don't.

The 'killer ap' for e-Books remains elusive, and I still

doubt that the answer lies solely in hardware or software.

Instead, my hunch is that the solution will be a combination of

hardware, DRM and new pricing and business models that fit

the normal buying behavior of consumers.

Sure, an 'honor system' may be naive, but perhaps not

entirely so. Look at the software industry: some shareware

developers do make money.

Using a similar marketing model, Adobe distributes the

Acrobat reader for free, but users are encouraged to upgrade to

the inexpensive pro version.

On the other hand, I hear that there's a brisk trade in black

market copies of more expensive software products.

I think that cost is a big factor. When the price is low,

consumers will pay for more ease of use, and more features.

When the price is high, they are more likely to look the other

way at piracy.

Even today in 2002, some publishers persist in charging

high prices for e-Books. It's hard to understand why, when the

production and shipping costs are so low.

This undermines a primary power of e-publishing: the

potential to charge consumers less, pay content creators more

-- and still make money.

But the power is there, for those who find ways to use it

effectively. The right combination of hardware, software and

business model will appear in time. The real issue is WHEN,

not IF.

Cancel My Subscription

The sheer economics of electronic publishing virtually

guarantee that a substantial portion of all publishing will be

electronic in the future. By drastically reducing the physical

expenses and economic risks traditionally borne by publishers,

electronic distribution will change the entire dynamic of what

'publishing' means in the new millennium. Eliminating waste

and slashing production costs will change the publisher's focus

from playing it safe with commercial material, to a new era

of innovation and creativity that benefits readers and writers

alike.Jerome Rubin '46 ('The New Gutenberg?' May-June, page

85) is dead on target in his statement that the weak link in the

chain of delivering 'content' (books, magazines, newspapers,

and more) from writers to publishers to readers electronically is

the 'user interface' (read: computer screen) where the content

is read. The publishing industry has made huge and rapid strides

in developing software solutions for the delivery of online

content, yet the hardware lags behind.

Technologists and publishing-industry watchers now

speculate endlessly about which hardware and software will

ultimately prevail in the marketplace, how they will work, how

they will protect the copyrights of authors and publishers, and a

variety of other issues. But it seems certain that e-publishing is

here to stay'”and that it will dramatically alter the way writers

and publishers reach readers in the twenty-first century.

Like Rubin, as much as I would prefer to save Harvard

Magazine the cost of printing and mailing each issue to my

snail-mail address, it simply isn't comfortable to read the entire

magazine while sitting upright before a computer screen. As

much as I enjoy your publication, I look forward to cancelling

my subscription (to the printed version) as soon as a more

satisfactory medium for reading it electronically is available.

This item is still available online in the Harvard Magazine

archive:

http://www.harvard-magazine.com/archive/00ja/

ja00.letters.html#cancel

Chapter 3

Stop the Presses!

Excerpt from U-Publish.com

First paperback edition, January 2000

The following item is a chapter titled 'Stop the Presses!' from the

first edition of my book titled U-Publish.com, co-authored with

Dan Poynter.

For historical context, note the 1999 estimate of the

Internet population at '70 to 100 million users,' and other

quaint artifacts like the reference to PDF Merchant as a 'new'

software product from Adobe.

More interesting was the prediction that 100% copy

protection might prove impossible. Remember that this was

written months before Stephen King's Riding the Bullet was

released in 'secure' PDF format '” and cracked within hours.

Mr. Poynter and I emphasized that the best strategy is to

deter piracy, by making the benefits of fair use (and ease of use)

outweigh the savings from stealing a modestly-priced product.

Stop the Presses!

What's important about a book? Does it make a big

difference whether the book is printed on white paper or tan

paper? Whether the book is 8.5x11' or 5x8' or another size?

While there are a small number of cases where physical

appearance is really important, such as picture books for your

coffee table or leather-bound classics for your library, usually it's

the words in a book that matter most to the overwhelming majority

of readers.

This is not to say that an attractive book isn't better than

an unattractive one, or that an attractive cover and good book

design aren't factors in sales. But generally speaking, people buy

books because they want the information contained in them.

With the rise of the Internet, it is now possible to deliver

information anywhere in the world in a matter of moments.

The kinds of information now available on the World Wide

Web are almost limitless, including not only websites per se, but

also online newspapers, 'e-zines' (electronic magazines) and

electronic books.

For those unfamiliar with the term, 'e-Books' are not

physical objects made of paper and ink; instead, they are full

length books that can be downloaded from the Internet directly

to the computers of an estimated 100 million or more people

around the world.

e-Books are also called virtual books, online books, digital

books, and a variety of other names. No matter what you call

them, they are revolutionizing the entire publishing industry.

Advantages of e-Books:

'Digital books make sense: By eliminating paper and ink, over-

the-road shipping, unsold copies and middlemen, Web books sidestep

the considerable environmental and economic costs of conventional

publishing. Those savings are passed on. Authors typically receive

royalty payments of 30 to 50 percent, compared to a conventional

industry standard of 5 to 15 percent. Readers come out ahead, too,

paying 25 to 50 percent less than softcover prices for most digital

books.''” Cate Terwilliger in the Denver Post, 2/8/99

When a book is published in electronic form, the publisher

drastically reduces almost all of the expenses discussed at the

beginning of this chapter that create economic risks: printing,

binding, packaging, distributing, shipping, warehousing,

inventory, percentages paid to middlemen, and returns of

damaged or unsold copies.

The last item is the most powerful one. Because e-Books

are generated 'on demand' (that is: one at a time, as each copy

is purchased) there are no wasted copies. At the same time,

an unlimited number of copies is available to the public. By

definition, e-Books are never 'out of stock.' There is always

exactly the right number of copies available: one for every

reader, not more, not less.

Electronic books also have powers far beyond those of

mortal books. For readers with vision problems, type sizes can

easily be increased. Books on subjects that change frequently

can be quickly updated, without reprinting. e-Books are fully

searchable. A library patron will never find that an e-Book is

unavailable because someone else has checked it out, nor will

there be a late fee for returning it after it is due. A thousand

e-Books can be stored in less space than a typical cookbook.

Students can copy and paste key passages from their e-Books

to book reports without retyping. e-Books can include sound,

animation, interactive graphs and charts, and links to other

online resources.

For example, if you are reading the electronic version of

this book on a computer with an active connection to the

Internet, you can simply click on the link below to visit the

homepage for this book for regular updates:

www.u-publish.com

Technical capabilities aside, the economic advantages of

e-Books are why they are turning the publishing industry upside

down. Because the cost of bringing books to market is slashed,

the publisher's financial risks are virtually (pun intended)

eliminated. Because economic risks are nominal, publishers can

take a chance on books which might not otherwise reach the

reading public. More choices for readers means more books

sold. More books sold means lower prices, and lower prices

mean more are sold.

Instead of investing $8,000 or more on an initial press

run, a publisher can now make an e-Book available worldwide

for about one tenth of that amount. If the book sells for $5,

the publisher needs to sell only about 200 copies to recover his

initial investment in full. Since there is little difference in the

publisher's cost to sell 200 e-Books or 200,000, every copy sold

thereafter creates a profit.

When economic risks are eliminated, the entire dynamic

of publishing a book changes. The focus shifts from 'playing

it safe' with writers and subjects that have proven commercial

potential, to making more choices available to readers, so there

is something for everybody. It also allows publishers to take a

chance on a greater variety of material, to charge less for books,

and to pay writers a larger share of the profits. Everyone wins:

the reader, the writer, and the publisher.

Disadvantages of e-Books:

From a strictly technical or economic perspective, e-Books

are vastly superior to conventional ones. But they are not

without drawbacks.

First of all, not everyone in the world has a computer yet.

Although the number of Internet users is huge (estimates range

from 70 million to 100 million or more) and growing daily, the

fact remains that there are millions of readers who don't own

computers, aren't online, or both. Savvy writers and publishers

won't ignore these more traditional folks.

Secondly, many people find it uncomfortable to read

electronic books on their personal computers. Given the size

of most computer screens, an entire page usually won't fit on a

computer screen, unless the monitor is very large or the type is

extremely small.

A new generation of electronic devices specifically designed

for reading e-Books, with names such as the Rocket e-Book,

the SoftBook, the GlassBook, and the EveryBook are just now

reaching the market in the summer of 1999.

These e-Book readers are smaller than a laptop computer,

usually only 2-3 pounds, and their screens are perfect for

reading. With these devices, you really can comfortably curl up

in bed with a good e-Book! As an added bonus, they're backlit

so you can read without a light on, too.

It seems likely that lots of them will appear in households

in the years ahead. At this time, however, there only several

thousand e-Book readers in circulation, compared with millions

and millions of personal computers '” so for now, most e-Books

need to be read on desktop PCs, with the limitations described

above.

Of course, it's possible to print an e-Book on your laser

printer, but the resulting hard copy loses its search capabilities

and many other features that make e-Books special.

Publishers also have security and copyright concerns about

electronic books that deserve consideration. After all, they

don't want a 'pirate' to put a copy of an e-Book on a public

website, and offer unsuspecting visitors illegal copies without

paying for them, although there are civil remedies for this.

Distributors of online content are making huge strides in

the protection of intellectual property. To cite just one example,

a new software suite named Web Buy and PDF Merchant

from Adobe Systems holds the promise of making it nearly

impossible to make unauthorized copies of e-Books, for all but

the most determined pirate.

Keep in mind, this book costs less than $10. How much

time would you be willing to waste, to steal something with such

a reasonable price? We do hope the information proves much

more valuable to you than $10 '” but it probably isn't worth

hours and hours of your time, and the risk of prosecution, to

steal it.

To skeptics who are still paranoid about pirating of

electronic books, we ask this question: suppose an unethical

reader buys a copy of any conventional book from any

conventional bookstore, then scans it and puts the resulting file

anonymously on a public website and offers free illegal copies

'” how can publishers prevent this from happening?

The truth is: they can't. While the publisher can sue if the

culprit is caught, our point is that there are no 100% solutions.

It's similar to buying a security system for your home: if a burglar

really wants to break in badly enough, he probably will. The key

is deter the crime, making the cost of the theft outweigh the

value of what is stolen. In our view, e-Books are already at least

as secure as conventional books, and rapidly becoming more

so. Nevertheless, the perception can be more important than

the reality. In the immediate future, the security of electronic

books will continue to be controversial.

For the author/publisher who distributes from his own

website, attracting readers and handling technical issues can

be a challenge. Few writers have the computer experience, or

inclination, to become full-time webmasters:

'But why not just set up your own website and sell your book

there? Because, virtual book publishers say, people are a lot more likely

to visit a site that has hundreds of books than a site that has only one

or two. And because publishers have the resources to promote their site

and their books. And because they take care of the hassle. They handle

the orders, the credit-card numbers, the downloads. All you have to do

is wait for the royalty check.'

-- Soyia Ellison in the Winston-Salem Journal, 9/9/98

One final drawback to electronic books: in most cases,

the reader needs a credit card to buy them. Most e-Books are

distributed from websites, which require the reader to input

their card number before they can download the file.

Some readers don't have credit cards. Others are simply

reluctant to use them on the Internet.

It seems certain that in time, the general public will be

more comfortable using credit cards on the Internet, or that

some other form of 'cyber-cash' will eventually be used by

meaningful numbers of ordinary people.

Meanwhile, the best plan is to combine the benefits of

electronic distribution with those of more traditional methods.

Happily, such a combination is already available, and gives the

writer/publisher an unbeatable one-two punch that knocks the

socks off any method available in the past.

Since 2000, we've published two more editions of the

book titled U-Publish.com to help readers keep pace with rapid

changes in technology and the book industry. Many sections of

the book are updated online in between editions, at a Web site

named for the book: www.U-Publish.com

Chapter 4

Riding the Bullet

eBookNet, March 2000

eBookNet broke the story that Stephen King's electronic novella

Riding the Bullet had been pirated within 48 hours of release.

(eBookNet later evolved into eBookWeb, now a leading online

resource about electronic books and devices for reading them.)

Founders Glenn Sanders and Wade Roush e-mailed the news to

me before the story hit the national wires, with the following

item appearing at the U-Publish.com Web site the next day.

Hackers Crack Stephen King's e-Book

Since 'U-Publish.com' was released in January '00, new

information has become available in some important areas:

In the early chapters of the book, the authors discuss the

advantages of electronic books in detail, as well as drawbacks.

Security concerns are among the most important. New

technologies, such as Adobe's Web Buy and PDF Merchant

software and the upcoming Microsoft Reader, hold the promise

of making it possible to distribute electronic books online,

while protecting the writer's copyright. If you are planning to

publish an e-Book, it is crucial to make sure that adequate copy

protection is used.

Even with 'industrial strength' encryption, security can

present a problem for authors of books with widespread public

appeal. As reported on 3/23/2000 by eBookNet, a leading online

resource center for electronic books, a major development that

illustrates the issue has just occurred. Click on the link below

for the full article titled 'Cracking the Bullet: Hackers Decrypt

PDF Version of Stephen King e-Book' by Glenn Sanders and

Wade Roush:

http://web.archive.org/web/20000620153828/

www.ebooknet.com/story.jsp?id=1671

Here are some excerpts:

'Pirated PDF versions of Stephen King's Riding the Bullet

have been circulating on the Internet since March 17. While

many ISPs have forced members to remove the decrypted files,

they are still available from a Swiss site, providing stark evidence

of security weaknesses in PC-based e-Book distribution systems.

The episode has irked the companies developing such systems,

who complain that export restrictions have kept them from

using more powerful encryption techniques.'

'The developments could temporarily slow the adoption

of Adobe's Portable Document Format (PDF) as a common

standard for commercial e-Books. It is still uncertain how

crackers disabled built-in encryption mechanisms, which are

intended to allow only one person at a time, the purchaser,

to display a PDF e-Book on a computer screen. But Simon

& Schuster and the commercial distributors of the e-Book are

trying hard to limit the damage to Mr. King's legal rights, and

e-Book industry insiders are equally anxious to fix the apparent

security weaknesses exposed by the decryption.

'Some in the industry fear that the pirating episode could

give publishers another reason to hesitate before releasing more

of their books on open, general-purpose devices such as PCs

and handheld computers, which are considered to be more

vulnerable to security attacks than closed, dedicated devices. A

1999 study of e-Book security commissioned by the American

Association of Publishers concluded that "Current general-

purpose devices do not provide a trusted base for applications

since they were not designed from the beginning with security

in mind ... No matter what protection the e-Book system

provides the content en route, when it is decrypted for display,

it is potentially vulnerable to interception."

Chapter 5

Microsoft Reader and Adobe PDF Go Head

to Head

eBookNet, April 2000

Microsoft made a major push to capture the fledgling e-Book

market in 2000. By releasing an XML-based alternative to

PDF, it could use its market muscle to get Microsoft Reader

installed on millions of computers (not unlike the bundling of

the Internet Explorer browser with the Windows operating

system) and move e-Books more squarely into the mainstream

of our culture.

While Adobe had an early advantage, due to the many

millions of copies of Acrobat already in use prior to 2000,

Microsoft had the power and resources to get its competitive

product widely and rapidly installed on the computers of

consumers '” whether consumers thought that they wanted it

or not.

Following as it did shortly on the heels of the Stephen

King incident, the MSR roll-out included a lot of discussion

about DRM issues. But Wade Roush and I suspected that

in the long term, the contest would be decided more on the

basis of business models than technology. Our hunch was that

the availability of content, and the price, would prove more

important than the software itself.

Microsoft Reader and Adobe PDF Go Head to Head

by Danny O Snow and Wade Roush

'May you live in interesting times,' reads an ancient

Chinese curse. For those who follow electronic books, these

are interesting times indeed. Major new products specifically

designed for delivery of online content have set the publishing

industry abuzz, amid a flurry of controversy over early efforts to

bring e-Books more squarely into mainstream markets.

Web Buy and PDF Merchant software from Adobe

Systems rolled out early in 2000, promising secure delivery of

online content across a wide range of hardware and software

platforms. Meanwhile, industry watchers are closely following

the introduction of the new PocketPC devices and Microsoft

Reader, designed to make electronic content almost universally

available to the reading public.

On March 14, Simon & Schuster released Stephen King's

electronic-only novella Riding the Bullet, and received orders

for more than 400,000 copies within 24 hours. As the first

electronic-only bestseller, the book marked a watershed in the

history of publishing. Yet within 48 hours of its release, pirated

copies of King's story began to surface on the Internet, raising

new questions about how to prevent e-Book piracy.

In this climate of upheaval, we've compiled the following

comparison of new products from Microsoft and Adobe.

Any fair comparison of these products must reflect that

Adobe Web Buy and PDF Merchant are already publicly

available, while the full version of Microsoft Reader with

ClearType has yet to be released. For this reason, the amount

of information available about the MS Reader is less detailed.

It will be possible to make a more meaningful comparison when

Microsoft Reader is available (in 'mid-2000,' according to

Microsoft). EBN readers are encouraged to weigh these factors

before drawing conclusions about either product.

In order to present a balanced view of both products,

EBN interviewed senior representatives from both companies

in April, 2000. Jeff Ramos, director of marketing for e-Books,

responded for Microsoft. Mark Heisten, former PR manager of

ePaper Solutions, and Rebecca Michals, senior PR manager of

ePaper Solutions, responded for Adobe.

Below, we list each company's responses to a series of

questions from eBookNet managing editor Wade Roush, and

guest columnist Danny O Snow, co-author of a new book

about the latest publishing technologies titled U-Publish.com,

available in both electronic and printed form. Additional notes

have been added in a few places where the writers felt that

additional commentary might help put the comments of those

interviewed in better context.

What are the technical requirements for your product?

Adobe: There are different requirements for Web Buy &

PDF Merchant, depending on the product and features used:

Acrobat Reader with Web Buy and Acrobat with Web Buy,

Version 4.05 or higher of either product on the Windows or

Macintosh platforms.

For File locking and key distribution:

Windows NT®, Intel® i486, Pentium® based, or Pentium

Pro based personal computer;

Microsoft® Windows NT 4.0 with Service Pack 5, running

Microsoft IIS 4.0

128 MB of RAM (recommended)

40 MB of available hard-disk space

CD-ROM drive

For Key distribution only:

UNIX ®

Sun Solaris 2.6 running Netscape Enterprise Server 3.63 or

later

Microsoft: Microsoft Reader will operate on desktop and

laptop computers running Windows 95, Windows 98, Windows

2000 and Windows NT, as well as on the next generation

of Pocket PC devices powered by Windows, using the CE

kernel. It will also be supported in the future on purpose-built

book reading devices. There are three primary components of

Microsoft Reader:

The client software with ClearType, which delivers a paper-

like reading experience on-screen

Tools for the creation and/or conversion of content to

Reader format

Distribution software that includes digital rights manage-

ment support as well as industrial-strength distribution

capabilities.

How is copyright protection achieved?

Adobe: PDF Merchant encrypts PDF files and allows

the encrypter and seller to control permissions for printing,

copying, and annotating documents to fit their business model.

When content is sold to a customer, the seller has several easy-

to-set options for locking content to a user's CPU ID, user ID,

local hard disk, or portable media.

We license our encryption technology from RSA

technology, which provides the highest level of encryption

available for worldwide use. To further enhance security, we

leverage industry-leading certificate authentication from GTE

Cybertrust.

Microsoft: We will be talking about our digital rights

management technologies in the near future. We recognize the

importance of digital rights management to owners of content

and have invested heavily to develop a system with which we

believe they will be supportive. We are quite confident that our

solution in this area will find wide scale adoption by authors,

publishers and retailers.

Note from eBookNet: Since this interview was conducted,

Microsoft and Xerox jointly announced the formation of

ContentGuard Inc., which will market digital rights

management system based on the Extensible Markup Language.

Microsoft has taken a minority stake in the spinoff company

(formerly the Xerox Rights Management Group) and says it

will integrate ContentGuard technology into Microsoft Reader

as well as many of the company's other tools for authoring,

distributing, and viewing content.

Like PDF Merchant, ContentGuard's Extensible rights

Markup Language (XrML) will allow a document's author,

publisher, distributor, or seller to secure it against piracy, track

its movements, and force users to pay before using it. Xerox has

published an example explaining how this process might work

for an electronic book.

At a press conference announcing ContentGuard's launch,

Microsoft CEO Steve Ballmer said 'If we do this right, it

will have benefits for everybody '” rights holders, business,

the publishing industry, and consumers.' However, he added

that 'Not all of these technologies will be available the day

ContentGuard launches. It will take our engineers a while to

get them integrated.'

Microsoft has also recently announced relationships with

R.R. Donnelley & Sons Co. and with Barnes & Noble (both the

.com and brick-and-mortar companies). Both RRD and B&N

have substantial interests in protecting the intellectual property

of authors and publishers, and have likely been coordinating

their plans for distributing Microsoft Reader documents around

the introduction of XrML.

How does MS Reader compare with Adobe's Web Buy and PDF

Merchant?

Adobe: One of the largest obvious differences is that the

Adobe digital rights management solution is shipping today and

tens of millions of potential customers already use Acrobat or

Acrobat Reader and can easily and securely purchase content.

Adobe's solution is also cross platform and cross device '”

today it operates in the Macintosh and Windows environments

on the devices that most of us are already using '” i.e. your

desktop or note-Book computer.

Adobe PDF is the de facto standard for the print/publishing

industries and most content today is available in PDF (or

PostScript) or easily convertible to PDF.

Therefore, our solution is designed to work well with

existing workflows with only minimum incremental effort.

Our strategy is based on partnerships with others in the

commerce chain that provide a wide variety of industry standard

solutions. [We] believe that the only way to get a Microsoft

solution is to work directly with them.

Any other solution is based on technology that is not yet

commercially available or tested and this creates a great risk

in terms of the reliability of the proposed solution, the time

market needed to implement a new solution as well as the risk

that customers will not adopt it. Acrobat and PDF have been

around since the early '90s and there is no question that they

work and are widely used.

Microsoft: PDF is a great solution where you need to

ensure that a document will faithfully reproduce when printed

to a fixed page size. In the future, though, one of the key

consumer benefits of e-Books will be the ability of content

to dynamically re-flow across multiple devices '” allowing

consumers to move their e-Books from their laptop to the

Pocket PC and then back again, as just one example. Or from

a purpose-built reading device to a PC. This was one of the

factors which collectively drove the formation of the Open

e-Book Authoring Group and the Open e-Book Publication

Specification, which has been adopted by a very broad

cross-section of the e-Book community, including Microsoft,

Nuvomedia and Softbook. Microsoft Reader has been designed

to facilitate that kind of 're-flow' across the broadest possible

range of devices. We believe that flexibility, coupled with

Microsoft's digital rights management solutions, will be a very

compelling customer proposition.

Note from eBookNet: From the two companies'

marketing statements, it is difficult to discern major differences

in the functions provided PDF Merchant/Web Buy and

Microsoft Reader with ContentGuard, except that Adobe's

system is specialized for PDF documents while Microsoft

has said that Reader will be compatible with any document

packaged using the Open e-Book (OEB) format.

The share of the e-Book market ultimately won by each

product may depend less on the technology itself than on

the partnerships and licensing agreements each company is

forming with organizations in the publishing and bookselling

businesses.

When do you anticipate that your products will be in widespread

use?

Adobe: Most of the customers that we have publicly

announced are either e-tailers or service providers that are

integrating PDF Merchant in their ecommerce solutions.

We are working closely with several publishers and will be

announcing specifics as they become available.

Microsoft: Pocket PCs containing the Reader will become

available this spring. A Windows and NT version will be

available in mid-summer along with the opening of the

barnesandnoble.com e-Bookstore.

Note from eBookNet: Since these interviews were

conducted, Microsoft's delivery projection for MS Reader has

been revised to 'summer.' On April 19, Microsoft and three

major consumer electronics manufacturers (Compaq, Hewlett-

Packard, and Casio) announced the availability of new palm-

size PCs running Microsoft's PocketPC operating system.

A version of Microsoft Reader comes preinstalled on these

devices, but eBookNet has been unable to determine whether

this version includes copyright protection functions. Fewer

than three dozen book titles are currently available for Reader,

and all are public-domain works that do not require encryption

for copyright protection.

What are the differences between Microsoft's ClearType and

Adobe's CoolType?

Adobe: Here is another one of those areas where it is

hard to comment because Microsoft has not begun shipping

ClearType and our information is limited. The general approach

behind the solutions is fairly similar in that they both take

advantage of sub-pixel addressing on color LCD screens. My

understanding is that Microsoft is focusing primarily on the

Windows CE platform and that their technology only works

within the Microsoft Reader, and with a limited set (6) of

TrueType fonts. In most cases, the author of the document

will not be able to use the typeface s/he originally intended,

and readers of content will similarly be restricted by not being

able to take advantage of the tens of thousands of typefaces

available.

Adobe CoolType is platform and device independent and

will work with all of Adobe's applications regardless of font

type (TrueType, OpenType, Type 1, Type 3, etc., etc.). Authors

can retain control over the look and feel of the documents and

not be restricted in their choice of operating system. Adobe

has 18 years of rendering type to screen and print and the

algorithms we have implemented provide the highest quality

reading experience commercially possible today.

Given that, it is important to note that an improved reading

experience, while very important, is only one key factor. Adobe

believes that availability of content from a variety of sources

that can be easily read on a variety of devices is much more

critical to providing the best consumer experience possible.

Microsoft: [We] do not have technical information on

CoolType, but understand it to be remarkably similar to

ClearType in principle.

Note from eBookNet: Neither Microsoft nor Adobe

invented subpixel rendering, which was first applied to computer

monitors by Apple II programmers in the late 1970s. (See Gibson

Research Corporation's excellent Subpixel Rendering Web site.)

The basic technology is in the public domain. eBookNet's

belief is that ClearType and CoolType are essentially equivalent

technologies that deliver more or less equal improvements in

readability on color LCD screens.

What kind of e-Books can readers expect to find available for

these systems? Will any of them be free?

Adobe's PDF is currently the most widely used format

for distribution of e-Books worldwide. As mentioned above,

Adobe stated that it is 'working closely with several publishers

and will be announcing specifics as they become available.'

Microsoft is currently distributing 29 public-domain titles

for Microsoft Reader on a CD-ROM accompanying the new

PocketPC devices. Microsoft also stated that a wide variety of

content will be available from Barnesandnoble.com and other

providers.

EBN's projection is that a large amount of content for the

MS Reader will become available through third-party content

conversion service providers. This model can be contrasted

with a system in which content creators (primarily writers

and publishers) release their work directly to the public. The

availability of free content is likely to depend the provider and

its business model.

Is your system suited for extended reading on a handheld device?

Adobe: One of the nice things about PDF is that you don't

need a dedicated device to read PDF files '”any personal or

desktop computer running the Macintosh, UNIX, or Windows

operating system will do! This is extremely important to most

consumers as it means that they do not need to buy (or carry) an

additional device to participate in the e-Book revolution.

Some of the dedicated devices that are being built are quite

nice and I am sure that some consumers will purchase them.

Several alternative device manufacturers are implementing PDF

solutions such as Everybook, and last month Adobe announced

plans to bring PDF to the Windows CE platform, and in

conjunction with Palm Computing to the Palm platform. In

January, we made a PDF Viewer available for Java. Adobe also

publicly announced and showed our plans to enable reflowing

of PDF documents to better support different size screens.

There will be additional device manufacturers announcing

their support going forward.

Microsoft: The cornerstone of our strategy for the Pocket

PC is to give users the power to read whatever they want,

wherever they want. If the market wants a device purposed

exclusively for reading e-Books, that's what we'll give them; if

they want a device that offers a broad range of other applications

and capabilities, we can offer that, too. The real power of

Microsoft Reader with ClearType is that content providers will

immediately be able to address the 150 million PCs that are

currently in use worldwide via the MS Reader. That's a huge

increase over the current market for dedicated reading devices,

and we feel it represents a significant growth element in the

emerging e-Book market.

Related Reading

Adobe PDF:

http://www.adobe.com/products/acrobat/main.html

Open e-Book Initiative:

http://www.openebook.org/

Pocket PC Home Page:

http://www.microsoft.com/pocketpc/

Microsoft Reader:

http://www.microsoft.com/reader/

Subpixel Rendering:

http://www.grc.com/cleartype.htm

Extensible rights Markup Language (XrML)

http://www.xrml.org

Microsoft, ClearType and Windows are either registered trademarks

or trademarks of Microsoft Corporation in the United States and/or other

countries. The names of other companies and products mentioned herein

may be the trademarks of their respective owners.

Chapter 6

Turning Content into Gold

BookTech Magazine, September-October 2000

The Pocket PC rolled out in tandem with Microsoft Reader.

Now Microsoft had both an alternative software product, and

a hand-held device to run it.

Unlike earlier efforts to popularize e-Book reading devices,

the release of the Pocket PC offered consumers features such as

word processing, spreadsheets and e-mail in a hand-held unit, in

addition to e-Book reading. Like Microsoft Reader, the Pocket

PC also had the market strength of major manufacturers behind

it. Finally, it was designed to address some of the weaknesses of

previous e-Book readers, adding features such as a color screen

and improved text display.

Perhaps most importantly, the release of the Pocket PC

triggered a flurry of new entries into the e-Book market by

media giants like Random House, Simon & Schuster and Time

Warner, later to merge with AOL. Suddenly it seemed possible

that large numbers of good books could become available in

electronic form, as big media companies followed Microsoft

into the market for electronic books.

Yet the Pocket PC was expensive, and sold only modestly.

Likewise, major publishers asked high prices for their e-Books,

sometimes higher than the printed versions!

When consumers didn't rush to buy millions of Pocket PCs,

and didn't download scads of expensive books, the momentum

was lost.

Here again, we see the power of consumer choice over

technology. Industry giants misjudged the factors that drive

consumers, and failed to harness the fundamental strengths

of electronic publishing. As we'll discuss later, this led to the

collapse of iPublish.com and other e-publishers just a short

time later.

The item below is a full draft of an article written

for BookTech Magazine, rather than the abridged version that

appeared in print.

Turning Content into Gold

Special to BookTech by Danny O Snow

In ancient times, alchemists sought in vain for the mythical

'Philosopher's Stone,' fabled to transmute base metals into

precious ones. The lure of turning lead to gold was irresistible,

but the Philosopher's Stone proved elusive, and the alchemists

faded away after centuries of fruitless searching.

In recent times, publishers have been equally tantalized

by the potentials of electronic publishing: a way to make

books available worldwide without printing costs, without

warehousing and inventory, without shipping, without returns,

without waste. The lure of these possibilities is irresistible to

publishers, yet to date, the right combination of hardware,

software and marketing to make e-publishing viable has proven

as elusive as the Philosopher's Stone.

Enter the Pocket PC with Microsoft Reader, now publicly

available: some experts are convinced that the eqivalent of the

Philosopher's Stone is now within the publisher's grasp, while

others believe that viable e-publishing remains a tantalizing

myth. Either way, the release of these new products, and a

flurry of important new business alliances related to them,

represent an important, possibly historic, development in the

history of publishing. This article will explore the strengths and

weaknesses of the Pocket PC with Microsoft Reader, as well as

a few examples of how publishers are responding to its release.

Hardware & Software:

The term 'Pocket PC' applies to a handheld computer

with a variety of uses, including reading electronic books, as well

as word processing, e-mail, web browsing, audio files, etc. There

are currently several such devices on the market, including

Casio's Cassiopeia; Compaq's iPAQ; Hewlett-Packard's Jornada,

and Symbol's PTT 2700 and run under Microsoft's 'Windows-

powered Pocket PC' operating system, a mini version of

Windows CE. Although it is intended as a multi-purpose device,

the Pocket PC is of special interest to publishers because of

its potential as a tool for reading electronic books with better

performance than earlier products, as explained below.

The Microsoft Reader is software that comes pre-installed

on a Pocket PC. It offers a variety of special functions such as

highlighting, bookmarks, notes and drawings, search, built-in

dictionary, large print, audio books, and others. Microsoft

Reader uses new 'digital rights management' (DRM) technology

from ContentGuard, a feature of great interest to publishers

because it promises the possibility of secure delivery of books

(and other content) to consumers over the Internet. Microsoft

is expected to integrate MS Reader with other major software

products soon, allowing electronic books to 're-flow' across a

wide range of screen shapes and sizes.

ClearType is special software for LCD screens that provides

significantly better readability of text than those used on earlier

handheld devices.

Specifications:

Size: about 3x5'

Weight: about 6 to 9 ounces

Memory: 16 to 32 MB

Processor: 32 bit, 131 to 206 MHz

Screen: 320x240 16-bit active matrix display with 4,096 to

65,000 colors

While the specifications above show that the Pocket PC

packs more powerful hardware than dedicated e-Book readers

do, current prices run as high as $500 to $600. Retailers justify

the higher cost by citing additional features such as Pocket

Word, Pocket Excel, Pocket Outlook, Pocket Internet Explorer,

and more. However, at this writing, it remains unclear whether

the performance of these other features will meet the demands

of consumers. For example, while the Pocket PC boasts a color

screen and ClearType software to improve the appearance of

text, the display is still only one quarter of the area of the

smallest desktop units. At Book Expo America in June, Jeff

Ramos, Microsoft's director of marketing for e-Books, drew

laughter with his forthright quip that the current generation of

Pocket PC devices can be compared to the 286 class of desktop

computers.

Earlier e-Book Efforts:

This summer's release of the Pocket PC with Microsoft

Reader is of special interest to publishers because it tries to

address key problems encountered in earlier efforts to bring

electronic books more squarely into mainstream markets. To

cite just a few examples:

Some readers found earlier devices less than ideal for

pleasure reading, due to their small and colorless LCD screens.

The Pocket PC offers a color screen. While still small, it

uses ClearType software to enhance the readability of text.

Early response from users suggests that ClearType provides a

meaningful improvement in the appearance of type, in spite

of the screen's modest size, especially when sharp black text is

displayed on a white background.

Previously, consumers questioned the value of 'dedicated'

(single-purpose) devices designed solely for reading e-Books.

The Pocket PC offers word processing, e-mail and other

functions, though critics claim that some features have been

stripped down to fit this small, hand-held device. Although this

article focuses on its application to electronic publishing, it

is important to recognize that the Pocket PC is marketed as

a multi-purpose device, rather than a dedicated book reading

product.

Many owners found the delivery mechanisms used to load

information on previous e-Book reading devices cumbersome.

The Pocket PC is designed to streamline the process of moving

information between a consumer's desktop computer and his

or her own handheld unit, although critics argue that this may

make the information more vulnerable to piracy.

For publishers, a major weakness in earlier attempts to

bring e-Books to a broad segment of the public was the

failure of copyright protection. Microsoft Reader software

uses ContentGuard, a new system of copyright protection that

promises to allow a document's author, publisher, distributor

or seller to secure it against piracy, track its movements, and

(if applicable) force users to pay before using it. While the

effectiveness of ContentGuard is still not certain, the ability to

sell electronic books without piracy will be extremely attractive

to publishers ... if it works.

Finally, the total number of previous e-Book reading

devices purchased by the public was disappointing to publishers.

Between the April 19 unveiling of the Pocket PC and June 7,

roughly 10,000 units were sold. While this is still an almost

insignificant number to publishers, it seems likely that with

the market muscle of Microsoft and other industry giants (see

following for details) behind it, the Pocket PC will reach a

broader segment of the reading public than its predecessors.

Perhaps more importantly, industry experts predict that

Microsoft Reader software will soon be integrated into the

Windows operating system and/or Microsoft's other leading

software products such as Word and Publisher, opening the

door for wider use of electronic books by consumers, whether

or not they own a Pocket PC.

In combination, the improvements attempted above could

signal the arrival of the e-Book as a viable medium for publishers,

if the hardware and software deliver the advantages promised

by their designers. While it is too early for industry judges to

hand down a final verdict on the overall effectiveness of the

Pocket PC and Microsoft Reader, its release has sparked a sea

change in the behavior of major New York publishing houses.

Major Publishers Jump on the Bandwagon:

For publishers, new corporate alliances involving Microsoft

and publishers are probably more significant that the products

themselves.

In previous years, major publishers seemed reluctant to

embrace electronic books, in spite of their obvious potential

to revolutionize the industry. Their reasons, both public and

private, varied from copyright concerns to quality control to

the understandable fear of losing market share to independent

publishers and self-publishers that could result from widespread

delivery of books over the Internet.

With Microsoft's entry to the e-Book market, it appears

that the dam has started to break. On May 23, new partnerships

between Microsoft, Simon & Schuster and Random House

were announced with a media fanfare in NYC, including the

electronic release of Michael Crichton's thriller Timeline, and

other e-Books for the Pocket PC with Microsoft Reader.

A major factor in this watershed was almost certainly

the prior announcement that Microsoft and Xerox had jointly

created a spin-off company named ContentGuard to provide

content. ContentGuard is designed be the primary security

feature of MS Reader.

Following the controversy in March over the pirating of

Stephen King's e-Book, Riding the Bullet, publishers welcomed

the ContentGuard announcement, hoping for a 'silver bullet'

to kill the specter of hacking that loomed over the future of

e-Books at the time.

In spite of a warm reception from major publishers, new

DRM technologies are still unproven. Ironically, according to

The New York Times, the May 23 announcements about new

e-Book releases from Simon & Schuster and Random House

were made 'even if it is not clear yet how protected the

electronic titles are from hackers.' As this article goes to press,

the long-term effectiveness of ContentGuard as a deterrent to

piracy is still unknown.

Concurrent with the alliances between Microsoft, Simon

& Schuster and Random House made public on May 23,

Time Warner announced that it will launch a major new

electronic publishing venture named 'iPublish.com at Time

Warner Books' in the first quarter of 2001. iPublish will include

a suite of 'channels' named iRead, iWrite and iLearn, providing

a broad selection of online content, ranging from electronic

versions of major best sellers, to works by aspiring writers, plus

a number of resources for writers and publishers.

According the Gregory Voynow, General Manager of

iPublish.com, iPublish will provide an 'online community'

for both readers and writers. The iWrite channel will offer

an open door policy for aspiring writers, who may submit

excerpts of unpublished works for peer review at no cost. The

best received iWrite titles will gain further attention from

professional editors, and may ultimately advance to commercial

electronic release from the iRead channel, or possibly even print

publication through one of Time Warner's several traditional

imprints, such as Little Brown & Company, Warner Books, or

Aspect, to name just a few.

For readers, iRead will feature electronic versions of

professionally published books, ranging from major best sellers

to re-releases of midlist titles for which traditional reprinting is

not cost effective, yet still hold appeal. Nearly 100 frontlist titles

will be available when iPublish launches, with hundreds more to

be added during 2001, as iPublish outsources selected titles to

conversion partners for deployment as electronic books. With

combined holdings of 4,000 to 5,000 titles from Time Warner's

traditional print publishing subsidiaries, iPublish's potential

catalog could ultimately rival or exceed almost any other source

of professional quality electronic books.

iRead will offer readers a choice of e-Book formats,

including MS Reader, PDF and other formats for handheld

devices such as the Rocket e-Book reader and Palm Pilot, which

can be delivered to the public natively or through third party

content providers.

iRead will also invite readers to participate in an online

community that explores their needs and wants, which will

influence iPublish's future development, and improve its ability

to meet future market demands more effectively. 'We expect

to be surprised,' says Voynow, whose comments to BookTech

clearly reflect a long-term perspective on how books will be

published in the new millennium.

iPublish's future could also be strengthened by an

impending corporate relationship between its parent,

communications giant Time Warner, and America Online, the

world's largest internet service provider.

While the sheer economics of new technologies are

virtually certain to drive publishers more and more in the

direction of e-publishing in years to come, these technologies

are still in their infancy. In the long term, it seems likely that the

Pocket PC with Microsoft Reader will be remembered more for

opening the door to serious alliances between publishers and

computer manufacturers, than for the hardware and software

per se.However, the opening of this door is in itself a meaningful

development. Unlike the earlier efforts of young high-tech

upstarts to popularize electronic books, publishing giants like

Simon & Schuster, Random House and Time Warner have the

resources to attract and meet large-scale consumer demands.

They also control large catalogs of good books for consumers to

read, compared to the relative scarcity of top-quality material

available from early e-Book proponents. As is often the case

with new technologies, it appears that a once-revolutionary

concept will now start to be co-opted by powerful industry

players, as the technologies begin to mature.

Whether the release of the PocketPC with Microsoft

Reader represents a giant step forward on the map of publishing's

electronic future, or only a modest stretch of new ground,

events in the summer of 2000 may well be remembered for

bringing the end of the road closer to view. The Philosopher's

Stone remains elusive, but is drawing closer to the publisher's

grasp.

Related Reading

Pocket PC Home Page:

http://www.microsoft.com/pocketpc/

Microsoft Reader:

http://www.microsoft.com/reader/

ClearType:

http://grc.com/cleartype.htm

http://www.microsoft.com/reader/ppc/product/

cleartype.htm

ContentGuard:

http://www.contentguard.com

iPublish.com at Time Warner Books

http://www.ipublish.com

Casio's Cassiopeia:

http://www.casio.com/corporate/index.cfm?act=10&ID=8

97&CFID=156610&CFTOKEN=59691454

Compaq's iPaq:

http://www1.compaq.com/ppresspaq/0,1497,wp~2442_

2!ob~28572_1_1,00.html

HP's Jornada:

http://www.hp.com/jornada/products/540/prod_spec.html

Microsoft, ClearType and Windows are either registered trademarks

or trademarks of Microsoft Corporation in the United States and/or other

countries. CASIO and CASSIOPEIA are registered trademark of CASIO

Computer Co., Ltd. The names of other companies and products mentioned

herein may be the trademarks of their respective owners.

Chapter 7

e-Book Formats Spar and Parry

Internet Publishing Magazine

February 2001

The battle for supremacy in the e-Book world between Microsoft

and Adobe continued throughout 2000 and into 2001.

The article below discussed differences in the strategies

used by each side for presentation of content to readers in

electronic form.

Meanwhile, both camps beefed up encryption in an

effort to satisfy publishers that their intellectual property was

reasonably secure. After the Stephen King incident, pirated

e-Books faded from the headlines. But tighter security required

more complex systems, often forcing consumers to install new

software '” which didn't help retail sales of e-Books in the

slightest.

e-Book Formats Spar and Parry

Some technology battles are classics, such as when VHS

KO'ed Beta to emerge as undisputed champion of the VCR

world. Now, a new rivalry has emerged in the fledgling, but very

hot, e-Book arena.

The two leading e-Book formats are Adobe's Portable

Document Format (PDF) and Open e-Book (OEB) formats,

such as LIT files for the Pocket PC with Microsoft Reader,

reported Danny O Snow, of Unlimited Publishing LLC,

BookTech advisory board member, and a noted authority on

new publishing technologies.

The tale of the tape reveals each format's strengths and

weaknesses. 'PDF's great strength is the faithful reproduction

of the printed page, as the book designer created it,' Snow said.

'PDF files are basically digital pictures of printed pages that

appear virtually identical '”provided that they are viewed on a

screen of roughly the same proportions as the originals, which

is not always the case.'

On the other hand, OEB formats tend to roll with the

punches. 'The power of OEB formats is precisely the opposite,'

he continued. 'Their ability to re-flow text across screens of

varying shapes and sizes makes OEB files compatible with a

wide array of hardware devices'”including some that haven't

been invented yet.'

In short, PDF's aesthetic consistency may please content

creators, while bean counters may value more highly OEB's

open nature'”compatibility with more distribution vehicles.

'Writers, editors, designers, artists and production people

tend to favor PDF, because it affords greater control of

presentation to the reader,' Snow added.

'On the other hand, many marketing and business people

feel that the potential to sell more e-content to more consumers

is more important than details like type kerning, widows and

orphans, or a river of white space running through text.'

Preparing for the next round, both contenders are working

to improve their conditioning. Snow related that Adobe is

working steadily to improve PDF's ability to re-flow, while

predicting that future OEB-compliant formats are sure to look

better and better in the years ahead.

Related Reading:

Adobe PDF:

www.adobe.com/products/acrobat/main.html

Open e-Book Initiative:

www.openebook.org

Pocket PC Home Page:

www.microsoft.com/pocketpc

Microsoft Reader:

www.microsoft.com/reader

Subpixel Rendering:

www.grc.com/cleartype.htm

Extensible rights Markup Language (XrML):

www.xrml.org

eBookWeb:

www.eBookWeb.org

Chapter 8

Supreme Court Rules in Favor of Writers

Published at the U-Publish.com Web site

July 2001

New methods for delivering content to consumers in electronic

form continued to evolve at the dawn of the new millennium.

In this context, the word 'content' includes books, music,

newspapers and magazines, and even early online movies.

As ever, the worldwide scope of the Internet fostered

new and creative business models. New technologies made

it possible to re-package, re-sell, and re-deliver all kinds of

content, in ways that were impossible just a few years ago.

The downside was (and still is) that innovative marketing

and delivery methods raised questions about ownership of

intellectual property. Copyright laws enacted in the 'analog'

(pre-digital) era were not designed to deal with the kind of

flexibility and seamless transmission of content that became

possible with the rise of the Internet. In 2001, important

disputes about electronic rights reached the courts. The Napster

case, Tasini v. New York Times and Random House v. Rosetta Books

were among the most prominent.

Specifics about these cases are widely available elsewhere

(see the following links for just a few examples) but in general

the courts held that electronic versions of various forms of

content must be treated separately from their antecedent pre-

digital forms. In other words, before turning a printed book or

article into an electronic one, you need permission from the

person who wrote it.

The summary above is of course over-simplified; arguments

about ownership of intellectual property are complex. But

the central questions remain: Is it possible to make money in an

environment where most things are free, and if money IS made, who

gets it?In my view, the eventual solutions won't come only from

the courts, any more than they will come solely from software

and hardware developers. Instead, I think the answers will

evolve from new pricing and business models that are more

compatible with the behavior of consumers.

Supreme Court Rules in Favor of Writers

Tasini v. New York Times

The Supreme Court has ruled that print publishers such

as newspapers and magazines may not re-use material online

without paying the writer in cases where they had previously

obtained only print rights. The Court's ruling establishes that

online and electronic rights are separate from print rights.

According to the National Writers Union: 'By a 7-2 majority

(Stevens and Breyer dissenting), the Court upheld a September

1999 unanimous ruling by the U.S. Court of Appeals, 2nd Circuit,

which found that The New York Times and other publishers had

committed copyright infringement when they resold freelance

newspaper and magazine articles, via electronic databases such

as LexisNexis, without asking permission or making additional

payments to the original authors.'

Extensive coverage and analysis of the ruling are sure to

follow from major news media. For U-Publish.com readers

who want to obtain the earliest, fast-breaking news, we suggest

visiting the following web locations now.

Supreme Court Opinions Web Page

http://www.supremecourtus.gov/opinions/

00slipopinion.html

National Writers Union

http://www.nwu.org/tvt/vichome.htm

Ivan Hoffman, Internet and Intellectual Property

Attorney

http://www.ivanhoffman.com/tasini.html

For other commentary, see co-author Dan Snow's article at

the new eBookWeb site:

http://www.ebookWeb.org/snow_erights.htm

Chapter 9

e-Rights Update

Publishers Marketing Association Newsletter

October 2001

When the courts shut down Napster, the big media companies

'” including major book publishers '” celebrated. Finally,

they thought, the door was closing on free downloading of

copyrighted material from the Internet.

The party was premature. Within weeks, millions of college

students resumed the practice of online music 'sharing' at other

sites, often using new software that didn't require a centralized

registry like Napster.

In the book world, the Tasini case and Random House v.

Rosetta Books dealt big publishers additional blows, establishing

that they had to pay writers for electronic rights. (Random

House's suit is still in progress; I predict it will reach the

Supreme Court.) Now publishers felt squeezed from both

sides.In the following article, I argued once again that the

solution lies in new pricing and business models, rather than

the courts or technology: 'The fundamental economics of

electronic publishing make it possible for publishers to charge

consumers less, and pay writers more.'

After a publisher has prepared a book for traditional print

distribution, I doubt that the per-unit cost of distributing

electronic copies is much more than a nickel a copy. Why not

make them affordable?

And why not try new business models? Early Internet

services such as Prodigy and AOL charged by the hour.

Consumers balked, and today's 'all you can eat' (unlimited use)

model evolved. Wouldn't the same kind of model work for an

online library of quality material?

Likewise, years ago, many telephone companies tried to

establish 'measured service' for local calls (read: pay by the call)

as the norm. NYC residents currently pay for each local call,

but it's cheap, maybe five or ten cents a call, and the monthly

bill is about the same as unlimited local calling plans elsewhere.

Either plan might work for e-Books: the single pay-per-read

(if inexpensive) or the 'all you can eat' subscription model.

'How can we make money selling any book for a dime?'

asked one colleague who works for a big New York publishing

house. 'It depends on how many books you sell,' I replied.

'There's no cash difference between a hundred thousand dollars

and a million dimes. I guarantee you'll sell more books for a

dime than for a dollar '” and what's wrong with more readers?'

My colleague then expressed a common fear among

publishers: people will stop buying tree-Books if they can get

e-Books for a fraction of the cost.

But most of what I've learned suggests that the opposite

is true. First, even when both are available, most printed

books outsell their electronic counterparts by at least 10-to-1.

Next, there are reports such as those mentioned earlier about

Rough Guides and National Academy Press, which suggest that

e-Books actually increase the sales of tree-Books. While these

earlier reports are anecdotal, we intend to pay close attention

to sales of Steal this e-Book! in printed form. This should shed

clearer light on how much e-Books catalyse sales of printed

ones.Those of us who make our livings with words may not

like the public's penchant for passing along our words without

paying us directly. Unfortunately, we don't get to make the rules,

nor do the courts or the computer companies. The public is why

we all exist, and they're the ones who will ultimately decide how

the game is played.

The lessons of history are clear: cassette tape recorders

didn't kill the music business, nor did Xerox copy machines kill

the book business. Other examples are discussed below. The

point is that we authors and publishers (not the public) must be

the ones to change and adapt to the needs and wants of readers

... not the other way around.

e-Rights Update

Special to PMA by Danny O Snow

Throughout 2001, conflicts pitting established media

giants against high-tech upstarts have focused the attention

of publishers on new technologies and e-rights. This report

reviews highlights of recent developments and concludes that

the dangers of new technologies that bypass publishers of books

may be overstated.

Napster Falls...

But Will 'Bookster' Rise from the Ashes?

Although it centers on music rather than books, the

Napster case is important to authors and publishers. That's

because the kinds of technologies used for trading music online

are already beginning to be applied to electronic books.

Napster has, of course, generated reams of general coverage

in major print media. As it relates to book publishers, one of the

most alarming aspects was reported by Columbia University law

professor Eben Moglen in The Nation on March 12, 2001: 'The

shuttering of Napster will not achieve the music industry's goals

because the technology of music-sharing no longer requires the

centralized registry of music that Napster provided. Freely

available software called OpenNap allows any computer in the

world to perform the task of facilitating sharing; it is already

widely used.'

For publishers, this raises the specter of a Napster-like

online sharing site for electronic books that might emerge

in the future, using OpenNap-style technologies. Some e-

Books can already be found on peer-to-peer networks such as

Gnutella. Moreover, some of today's leading solutions for e-

Book copyright protection are intentionally designed to allow

purchasers of e-Books to lend single copies legally.

According to Dian Killian of the National Writers Union,

'It all comes down to fair use. Before the Internet, no one cared

if you loaned a music recording or book to your family or a small

circle of friends. With Napster and e-Books, it's now technically

possible to 'loan' a recording or a book to thousands and even

millions of strangers.'

Electronic delivery of content in various forms is driving

the development of new and creative ways to wring additional

revenues from intellectual property every day. The downside is

that innovative marketing and delivery methods are also raising

new questions about ownership of rights, and compensation for

both the author and the publisher.

Tree-Rights Not e-Rights

As discussed by Jonathan Kirsch in September's PMA

Newsletter, recent court rulings in lawsuits (Random House v.

RosettaBooks and The New York Times v. Tasini) establish that

online and electronic rights are separate from print rights.

These decisions need not pose serious problems for

most publishers. They simply reinforce the need to schedule

specific rights in publishing contracts, and to pay for them as

appropriate. Many publishers already include electronic rights

in their contracts, or simply secure 'all rights' when they acquire

new titles. Electronic rights for earlier titles may be negotiated

on a case-by-case basis if necessary.

How the Book World Has It Better

'Liberation Musicology''”the article about Napster in

The Nation '” concludes with what sounds like an ominous

portent for publishers: 'What is most important about this

phenomenon is that it applies to everything that can be

distributed as a stream of digital bits by the simple human

mechanism of passing it along. The result will be more

music, poetry, photography, and journalism available to a far

wider audience. Artists will see a whole new world of readers,

listeners, and viewers.'

But let's not forget the lessons learned in the music and film

industries during the 20th century. When cassette recorders

appeared, cynics claimed that the record labels were dead.

Likewise, some said the VCR spelled the doom of [movie

theatres]. Neither prediction proved true, and in fact, the home

video market is now a major source of revenue for filmmakers.

The Internet raises the ante, but the publishing game remains

the same.

And let's also not forget that publishers can have better

relationships with readers and writers than the recording

industry has with its artists and customers. Record companies

are in danger for a couple reasons. For one, their artists feel

alienated (given the chance to jump ship, many did so without

hesitation). Also, their consumers have resented the huge

markup on CDs (often many times the margin on a printed

book), and some listeners rationalized online music 'sharing' as

a chance to recoup their losses.

The fundamental economics of electronic publishing make

it possible for publishers to charge consumers less, and pay

writers more. Publishers who adopt this philosophy may reduce

the risk of piracy by readers, and increase the loyalty of

writers'”hopefully without costly litigation, before or after the

fact.

Keeping Readers Honest

As 'brick and mortar' bookstores know, a small number

of consumers have always stolen books. Losses from theft are

a standard factor in calculating bookstores' operating expenses.

Books with high prices seem more likely targets of shoplifters

'” online or offline.

When I chatted about electronic rights recently with

three bright young graduate students, they gave me a familiar

opinion'”paying for online content is anathema to the spirit of

the Internet. Pressed on the issue of fairly compensating writers

and musicians for their work, though, the students allowed that

a modest payment for use of online books and music could

become the norm.

My experience with Unlimited Publishing LLC

(www.unlimitedpublishing.com) reveals a related pattern. We

publish books primarily in printed form, but recently began

releasing e-Books in cooperation with BookZone. We typically

price the electronic editions below $5, while paperback prices

are $11.99 to $22.99. In the planning stages, we learned that

a substantial percentage of consumers, up to 20% or more, who

download an e-Book later purchase a printed copy. As a result,

we now view e-Books as good tools to sell tree-Books, not

much different than free review copies given to journalists and

VIPs.

Keeping Writers Loyal

Many conventional publishers admit privately that their

relationships with writers are adversarial to some degree.

Perhaps this is because many writers perceive their publishers

as greedy, while few recognize that part of the income from

every book sold must offset losses from books that don't sell.

Consumer pilfering of books (whether printed or

electronic) pales in comparison to the impact of returns of

unsold copies for most publishers. Theft may account for a

small percentage of losses'”but return rates from bookstores

of 25% to 35% or even higher are not uncommon. Interestingly,

new technologies'”such as Print on Demand and e-Books'”can

dramatically reduce returns numbers, practically eliminating

the publisher's most painful problem. As a result, high-tech

publishers can pay writers more, whether the book is made of

paper and ink, or bits and bytes. For instance, we pay at least

50% of net from retail sales of printed books to clients, and

BookZone pays 76% of revenues from e-Book sales. Policies

like these foster better relationships with writers.

What's Ahead?

While copyright protection for e-Books is still a concern,

the potential to deliver books to consumers without waste may

strike many publishers as nearly irresistible'”whether the book

is printed on demand or downloaded from the Internet. The

price publishers must pay for the promise of these technologies

is a willingness to change. Whether this means developing

new production workflows, embracing new pricing and royalty

models, or both, the benefits can outweigh the costs for the

publisher of the 21st century.

This article is expanded from items published previously in print

by BookTech Magazine and online by eBookWeb, with excerpts used by

permission.

The PMA newsletter in which the entire article appeared

is also available online at:

http://www.pma-online.org/scripts/shownews.cfm?id=556

Related Reading

'Liberation Musicology'

Eben Moglen on Napster

http://www.thenation.com/doc.mhtml?i=20010312&s=moglen

Lloyd L. Rich

Publishing, Cyberspace and Intellectual Property Law

http://www.publaw.com

National Writers Union

Publication Rights Clearinghouse:

http://www.nwu.org/prc/prchome.htm

Publishers Weekly on Random House v. Rosetta Books

http://www.publishersweekly.com/index_articles/

20010305_94700.asp

Random House

http://www.randomhouse.com

Rosetta Books

http://www.rosettabooks.com

U.S. Supreme Court

on New York Times v. Tasini

http://www.supremecourtus.gov/opinions/

00slipopinion.html

Chapter 10

iPublish.com and MightyWords Fold

Published at the U-Publish.com Web site

December 2001

By the end of 2001, major publishers like Random House began

pulling the plug on electronic books. The events of 9/11 and a

general downturn in the U.S. economy were big factors '” but

not the only ones.

Sales of e-Books, and devices for reading them, remained

modest; estimates vary, but many industry observers believe the

number of dedicated e-Book reading units 'on the street' had

grown to only 100,000 or so. For publishers who want to sell

millions of books, this was not a big enough market to justify

additional investments during a recession.

Poor marketing was also a factor. Even today at some

online retailers (most notably Amazon.com) e-Books are still

segregated from tree-Books for some unfathomable reason.

Imagine if paperbacks were listed seperately from hardbacks,

or if consumers who wanted audio tapes were forced to search

an entirely different catalog. Whether this is just bad planning,

or outright prejudice isn't clear, but it certainly didn't help the

market for electronic books.

Legal issues like those discussed earlier posed additional

disincentives to publishers who had formerly planned to

re-release large numbers of good books in electronic form.

The modest number of e-Book reading units in use,

combined with a reduction in the number of quality books

available to read on them, created a 'Catch-22' for both readers

and publishers. On one hand, the market wasn't big enough to

give publishers a strong incentive to release thousands of titles

in electronic formats; on the other hand, the relative scarcity of

quality titles didn't give the public an incentive to buy e-Book

reading devices.

As a result, the following reports appeared at the

U-Publish.com Web site at the end of 2001.

MightyWords and iPublish Close

Poynter and Snow have long maintained that while e-Books

are almost certain to play a major role in the future of publishing,

print-based technologies like POD and PQN will dominate the

industry for several more years. Recent announcements about

closures at two of the largest digital-only web sites support our

view. See items below for details.

iPublish.com Folds

According to Steven Zeitchik, a reporter for Publishers

Weekly (12/10/2001) 'Trade publishing's most elaborate

experiment in e-publishing came to an end last week when Time

Warner Trade Publishing announced it is folding iPublish and

at least temporarily abandoning its idea of using the Web as a

place to troll for unknown writers.

'The company will continue reprinting e-Book editions

of paper books, and possibly even original work by print

authors, via BookMark, the house's online marketing division.

A transition team will stay on for one to two months to work on

that integration.

Of the nine iPublish authors whose books were scheduled

for print publication, the company expects most to still be

published, possibly as part of the Warner mass market division.

The iPublish Web site will be closed.'

We believe that iPublish failed because it focused almost

exclusively on e-publishing, and ignored the preference of

today's readers for printed books.

Co-Author Danny O Snow met with Gregory Voynow of

iPublish prior to its launch, and proposed publishing POD

paperback editions of at least one title per month, but Snow's

proposal went unanswered. Now, only a handful of printed

books will survive iPublish, after a loss of $13 million.

MightyWords Shuts Down

In a related story covered by Edward Nawotka of Publishers

Weekly (12/17/2001) 'MightyWords.com, which created quite a

bit of fanfare when it launched in March 2000 with plans to

digitally distribute original short works, is closing down. CEO

Chris MacAskill told PW 'The motivation for closing wasn't

that we're running out of cash. It's that the adoption for digital

publishing isn't happening as fast as we hoped.' He said the

company has about a year and a half of working capital left.

'MacAskill added, 'the only digital publishers that are

doing pretty well are those that started in digital and then went

into print.' '

Chapter 11

Afterword

What's ahead? In spite of false starts, unrealistic expectations

and plain ol' bad luck during the early years of e-Books, the

inherent power of e-publishing remains strong. The benefits

of producing books with minimal production and shipping

costs, no warehousing expense or inventory tax, and unlimited

24/7 availability still virtually insure that e-Books will be an

increasingly important part of publishing in the future.

The challenge will be to give readers a wide selection of

quality reading material, that is easy and affordable to use.

Achieving this goal will require that publishers embrace

new business models, in order to build a financial incentive to

release more good books in electronic form. It's clear by now

that millions of consumers won't pay high prices for e-Book

reading devices, or for e-Books themselves.

Alternative marketing models are plentiful. On the

hardware side, look at cell phones: manufacturers give them

away in order to sell air time, and it works. The same kind of

strategy might work for e-Books. On the content side, we've

already discussed both inexpensive pay-per-read strategies, and

'all you can eat' subscription models. Others are out there,

waiting to be tested, as we are doing here.

Publishers also need to overcome their fear that affordable

e-Books will erode the sales of tree-Books. That isn't going to

happen any time soon.

Experiments like this one, though admittedly radical, may

provide objective evidence that e-Books actually catalyse the

sale of printed books. But even if no one buys the paperback

edition of Steal this e-Book! in the months ahead, it won't mean

that readers prefer e-Books to tree-Books. More likely it will

mean that the audience for this narrow subject does.

Some of the eventual solutions may involve new hardware,

software or copyright laws, but my prediction is that real answer

will come from better marketing methods.

The changes required may sound scary to publishers at

first. Early in 2002, the publishing industry might still be

compared to a group of children contemplating a dive into

unknown waters. Each child is saying 'You go first!' In my view,

it's only a matter of time before a few brave souls take the

plunge. The others will follow when they see that the water's

fine.Cynics may argue that the failure of early e-Book libraries

to sell meaningful numbers of books proves otherwise. But let's

be frank; unlike Project Gutenberg, Online Originals, Peanut

Press and a handful of others, many early commercial e-libraries

became little more than online vanity presses, which would

release almost anything '” usually at the writer's expense. But

no one likes bad books, and it's no surprise the public didn't buy

many of them.

Real publishers, on the other hand, have vast stores

of quality reading material that could be made available in

electronic form. But the major players priced the hardware and

the content too high in the early years, with predictably poor

results.

Quality, selection, price and ease of use must all coalesce

before the true potential of e-Books can be realized. It simply

won't happen until then.

To paraphrase from Joseph Heller's Catch-22, there's a

scene where the quintessential wartime entrepreneur, Milo

Minderbinder, corners the market on Egyptian cotton '” only

to discover that no one will buy it. In desperation, he tries to get

his friend Yossarian to eat a chocolate-covered cotton ball, to

test the market for selling more of them to the Army. 'But Milo,

the men won't like this,' says Yossarian, 'Cotton is inedible.'

'But the men have to like it,' cries Milo. 'You have to make

them like it.'

Sounds absurd, but today's readers are no more likely to

buy millions of expensive, hard-to-use e-Books than to eat

millions of cotton balls. The results are already in; it's pointless

to try force-feeding the public something they clearly won't

swallow.

New ways of making good, convenient electronic texts

available at a low cost can be found. This will require some

ingenuity, and some courage, from authors and publishers.

Meanwhile, I hope that experiments like this one, however

modest or impertinent, will help the evolution of the 'printed'

word take another baby-step in the right direction. You, Gentle

Reader, can play your part too. Whether you want to read these

words on a screen or on paper is up to you. But please, pass 'em

along.

-- DOS

March, 2002

Chapter 12

Resources

ALEX Catalog of Electronic Texts

www.infomotions.com/alex

'Free ebooks in several formats.'

Amazing Web Tales

www.webtales.com

'Read Write PUBLISH!'

Beehive Microtitles

http://microtitles.com

Being Digital

by Nicholas Negroponte

http://mitpress.mit.edu/bookstore/nonpress/being.html

BiblioBytes

www.bb.com

'A large selection of free electronic books.'

BookSurge

www.booksurge.com

'Real books, real fast.'

BookTech

www.booktechmag.com

'The Magazine for publishers.'

Catch Word, Ltd.

www.catchword.co.uk

'Electronic publishing solutions.'

Dynamic Digital Content, Inc.

www.dynamicdc.com

eBookagent

www.eBookagent.net

'e-Book Placement and Promotion.'

eAuthorsOutlet

www.eauthorsoutlet.com

'The electronic self-publisher's marketplace.'

e-Book Ad Daily News

www.ebookad.com

eBook Connections

www.ebookconnections.com

e-Book Newsletter

www.e-BookNewsletter.com

'News and resources for publishers, distributors, authors and

bookstores.'

e-Books U.K

www.e-Books.uk.net

'Writers receive 80% of revenues.'

eBookWeb

www.ebookWeb.org

'A leading resource for news about electronic books and devices

for reading them.'

Electric Works Publishing

www.electricpublishing.com

'Publisher of e-Books since 1995.'

Electron Press

www.electronpress.com

'We publish books on the Internet.'

ePubZine

www.epubzine.com

'How-to, News, Reviews and Free Software for e-Book

Publishers and Authors.'

Independent Publisher Online

www.independentpublisher.com

'Leading the world of bookselling in new directions.'

Infinity Publishing

www.InfinityPublishing.com

'Where the dream thrives'

Internet Writer

www.internetwriter.co.uk

'The Internet: A Writer's Guide'

Internet Publishing Magazine

www.ipubmag.com

iUniverse

www.iuniverse.com

'The digital content leader.'

Ivan Hoffman

Internet Law, Publishing Law, Copyrights, Trademarks, etc.

www.ivanhoffman.com

National Ass'n of Independent Publishers

www.publishersreport.com

'Dedicated to the idea that independent publishing is one of

the last bastions of free speech.'

Online Originals

www.onlineoriginals.com

'An online book publishing company specializing in new and

original works in the arts and humanities.'

Open eBook Forum

www.openebook.org

Para Publishing

Primary site of Dan Poynter

www.parapublishing.com

'The definitive location for book writing, independent

publishing and promoting resources.'

Peanut Press '” Palm Digital Media

Planet e-Book

Print Media Magazine

Project Gutenberg

Publisher's Report

www.publishersreport.com

'Newsletter of the National Association of Independent

Publishers'

Softskull Press

www.softskull.com

'Radically intelligent books.'

Suite101

www.suite101.com

'The online publishing community of real people helping real

people.'

Texterity

Textcafe and e-Book Logistics

www.texterity.com

The 1stBooks Library

www.1stbooks.com

'Writing the book was hard. Publishing it doesn't have to be.'

The Publishing Law Center

www.publaw.com

U-Publish.com

'How 'U' Can Effectively Compete with the Giants of

Publishing'

by Dan Poynter and Danny O Snow

www.u-publish.com

UVA e-Book Library

http://etext.lib.virginia.edu/ebooks/ebooklist.html

'For Microsoft Reader and Palm Devices.'

Wiley and Sons

www.wiley.com

'An independent, global publisher of print and electronic

products, specializing in scientific and technical books and

journals, professional and consumer books and subscription

services, and textbooks and educational materials for colleges

and universities.'