That will be $9.99 plus tax, Mr. Bezos

This website tries not to traffic in rumors but the one that Michael Kozlowski, writing on trade blog G00d eReader, posted over the past weekend is too titillating not to mong (and yes, “mong” is a legitimate verb).

“Amazon sources close to the situation,” writes Kozlowski, “have told us that the company is planning on rolling out a retail store in Seattle within the next few months.”

Amazon’s purpose is to explore the profitability of physical bookstores, which would carry Amazon e-readers and related products, as well as books from the various Amazon imprints (but not likely anybody else’s). Though described as a “boutique,” it would undoubtedly be a cross between an Apple store and a Barnes & Noble superstore. “The company has already contracted the design through a shell company”, says Good eReader.

Not so fast, Kozlowski.

For one thing, the world of bricks and mortar is as far from the world of digital as the 18th century is from the 20th. Though Amazon’s automated warehouses are state of the art, bookstore retailing calls for many disciplines outside Amazon’s comfort zone.  More significant is Amazon’s aversion to paying taxes.  The company has moved heaven and earth to minimize state and local tax liabilities, something that will be all but impossible to achieve with physical stores.

So, for now we’ll relegate this story to the rumor bin.  But if there is any truth to be told we won’t hesitate to mong it.

Amazon in the Process of Launching a Retail Store

Richard Curtis

Despite the gloomy talk about the death of the book it’s pretty clear that printed books serve an essential function in our culture and will always be with us. For those who greet this statement with skepticism, we reiterate that there is nothing wrong with printed books – just the way they are distributed.

The big difference between the past and the present is that for the first time in history, printed books are optional. The implications of this fact are profound.

Until very recently the only mode for publishers to introduce content was print.  Printed books defined publishers. With the advent of digital technology, however, a new breed of publisher arose that can if it chooses publish a book originally in digital format and postpone the print edition or skip it altogether.  Well into the present decade traditional publishers like Random House and Simon & Schuster and Macmillan clung to the imperative to issue print volumes before releasing them as e-books.  Eventually they yielded to the exigency of releasing the e-book simultaneously with their print edition.  Issuing e-books without having to do print editions at all, however, is not a measure to be taken lightly.

One reason is commercial. Original e-books put traditional publishers at a serious competitive disadvantage. Whereas those houses currently pay 25% net royalty to authors, most independent e-book publishers pay at least twice that much, and self-published authors can get as much as 70% royalty by direct uploading of their content. The Hachettes and Harpers and Penguins can reason that they are adding value and brand-name prestige, but that argument doesn’t hold water for many authors who are simply in the game for money.

More significantly, by electing not to print a book at all, these so-called legacy publishers put themselves in danger of losing the very thing that defines them. What profiteth a publisher to gain the world and lose its soul? Today Random House is a completely different species from independent e-book publishers like Open Road.  But by becoming a pure e-book publisher, the playing field is leveled, and the difference between Random House and Open Road becomes simply one of scale.

When we talk about the death of printed books we are really talking about the death of printed books distributed in bookstores.  With the death of a Borders and the announced reduction of Barnes & Noble’s  bookstore floor space by 25%, print on demand, a business model that does not depend on store sales or the returnability of books the way traditional bookstores do, increasingly becomes an option. If publishers elect POD for all their books they will not only continue to make money from printed books but could potentially rescue their identities, and maybe their souls as well.

Richard Curtis

When Amazon offered in December to reward customers who scanned book bar codes in bookstores and then bought the book on Amazon instead, we wrote “Amazon’s strategy could backfire.”

“When Amazon’s sales reps call for an appointment to pitch their list,” we pointed out, “they may find the owners’ phones turned off.” (See Please Shut Off Your Cellphones. This is a Bookshop)”

They did. Barnes & Noble will not carry books published by Amazon’s publishing imprints.

“In a sharp answer to Amazon and its expanding publishing efforts,” writes the New York Times‘ Julie Bosman, “Barnes & Noble said on Tuesday that it would not sell books released by Amazon Publishing in its bookstores. The ban includes books released by New Harvest, a new imprint of Houghton Mifflin Harcourt that recently struck a deal to publish and distribute books released by Amazon Publishing’s unit based in New York.

“’Barnes & Noble has made a decision not to stock Amazon published titles in our store showrooms,’ Jaime Carey, the company’s chief merchandising officer, said in a statement. ‘Our decision is based on Amazon’s continued push for exclusivity with publishers, agents and the authors they represent. These exclusives have prohibited us from offering certain e-books to our customers. Their actions have undermined the industry as a whole and have prevented millions of customers from having access to content. It’s clear to us that Amazon has proven they would not be a good publishing partner to Barnes & Noble as they continue to pull content off the market for their own self interest.’”

B&N’s decision may impact negatively on the authors and their agents contemplating selling their authors to Amazon Publishing.

Though some publishing executives may take a measure of satisfaction that B&N, now the victim of Amazon’s aggressive marketing strategies, is paying dearly for its own predatory practices when it was the ruthlessly dominant bookseller of the twentieth century, consumers will rally around it and its more helpless independent bookstore cousins. Publishing industry old-timers like to say “What goes around comes around” and for Amazon it has come around.  We hope however that Amazon Publishing will itself come around – to an open policy of mutual cooperation in the fragile ecology called publishing.

Details in Barnes & Noble Won’t Sell Books From Amazon Publishing

Richard Curtis

The latest statistics tell us more kids are reading e-books.  But the progress bar has not advanced nearly as far as prognosticators expected or manufacturers hoped.  A Bowker executive, addressing a recent Digital Book World conference, reported on findings culled from a survey of about 1,000 teens and some 2,000 parents and caregivers of young children.  Among older kids, 19% have tried e-books but only 6% read them witn any regularity. As for younger ones, only 25% of parents even own an e-book reader.  Among children 7 to 12 only 13% read on e-readers and 11% on tablets.

Is that a bad thing?  Not necessarily.  Though more and more adults are adopting digital reading habits, they are encouraging their kids to read print books and in fact promoting something akin to Luddism, such as sending them to schools where no digital devices are to be found (see High-Tech Kids in No-Tech Schools).  At bedtime they will put their Nook or Kindle down and go into their child’s bedroom to read a print-book bedtime story. So  when it comes to e-books it’s a matter of Do as I say, not as I do. And though picture book apps, including stories that “tell” themselves without parents present, are great fun, they just don’t seem to have the same appeal as the warm body and familiar voice of mommy or daddy.

Schools and libraries do not seem to be tripping over themselves to promote e-reading either. One good reason is that the children’s print business is one of the few sectors of the publishing industry that are thriving, so there is a strong financial incentive for publishers to maintain the p-book status quo.

But children form their own opinions about e-books and many reject them for very practical reasons. Because mobile phones are the device of choice for teens, the small screen size and short battery life are deterrents to e-reading.  The price of e-readers is prohibitive for many kids, who get along fine with borrowing books from the library or from each other.  And speaking of borrowing, DRM restrictions on sharing e-books is another dampening factor for teens, just as it is for adults.

For years we have expressed skepticism that, due to their high distraction quotient, screens are the best medium for young readers (see The Medium is the Screen, the Message is Distraction), and (with the exception of autistic children), there has been little recent evidence to the contrary.   In a recent New York Times article, K, J. Dell’Antonia reported an observation by Lisa Guernsey of the New America Foundation’s Early Education Initiative that “when we read with a child on an e-reader, we may actually impede our child’s ability to learn.”

“Children sitting with a parent while an e-reader reads to them, Dell’Antonia writes, “understand significantly less of what’s read than those hearing a parent read. Researchers at Temple University, where the study was done, noted that parents reading books aloud regularly asked children questions about the book: ‘What do you think will happen next?’ Parents sitting with the child while a device read to them (like a LeapPad or some iPad apps) didn’t ask these questions, or relate images or incidents in the book to the child’s real life. Instead, their conversation was focused on how to use the device: ‘Careful! Push here. Hold it this way.’” (Details in Why Books Are Better than e-Books for Children)

Does that mean that the next generation will reject e-books?  Not likely.  But as research develops about the reading habits and learning and retention of children using e-books, we may see a greater balance between electronic and printed books than the e-fatuation that has us in its grips today. If we don’t – well, see Digital Distractions Producing a Nation of Morons?

Richard Curtis

Did we get your attention, grammarians? We hope so, because this story is about apostrophes.

It seems that the new head of Waterstone’s, the British bookshop chain, has dropped the possessive apostrophe because Digital Age rules prohibit that punctuation mark in domain names.  “Waterstone’s,” the Telegraph reports, “will become plain old Waterstones.” Worse, it will become waterstones, with a lower case w.

Punctuation, like puppies, has fanatic defenders in Britannia, and the apostrophe is no exception. John Richards, who is swear-to-God chairman of an organization called the Apostrophe Protection Society, characterized the change as “slapdash”. Take that, you miserable barbarians!

Waterstones ditches apostrophe

Richard Curtis

In our recent report on HarperCollins lawsuit against e-book publisher Open Road Media (See Can Open Road Beat the Harper Lawsuit Rap?) we wrote: “Our own guess is that this case will never go the distance and will instead be settled.”

Shows how wrong one can be, and it proves once again that when great principles are involved, litigants will fight harder than they will over mere money.

Today Publishers Weekly reports that Open Road has decided to lawyer up. The e-book publisher recently launched by former Harper CEO Jane Friedman, accused by Harper of infringing on the latter’s rights, has retained the team of attorneys that represented the Authors Guild in its class action case against Google.  Open Road Chief Operating Officer Chris Davis said “It appears to us that HarperCollins is trying to intimidate authors, overturn established law and grab rights that were not in existence when the contracts were signed many years ago. We are confident that we will successfully defend authors’ rights and we look forward to filing our response in court.”

Considering that copyright authority Lloyd J. Jassin calls it “The Court Battle that Could Determine the Fate of the Book Industry,” authors and publishers may get their wish to see contradictions and ambiguities in book contracts, respecting digital rights, resolved once and for all.

But at what fearful price? The cost of litigating the issues to the max, including appeals that could rise as high as the Supreme Court, will be millions. Both parties have deep pockets. The whole world will be watching.

For Jassin’s superb analysis of the issues and potential legal strategies, read Who Controls eBook Rights?

Richard Curtis

Mr. Leonard Riggio
Barnes & Noble, Inc.
122 Fifth Avenue
New York, NY 10011

Dear Mr. Riggio,

I am founder and CEO of E-Reads, a leading independent e-book publisher. I’ve just learned that Barnes & Noble has put its Sterling Publishing subsidiary up for sale (Barnes & Noble Said to Put Publishing House Up for Sale). I would like to tender our offer for the company, and though the deadline for bids has passed, I hope that when you hear our proposition you will extend the closing date for us.

When I read the Sterling announcement in the trade news I could scarcely believe that you would contemplate shedding a publishing company boasting a backlist of 5,000 titles, one of the most valuable sources of content to come on the market in the Digital Age. While your principal rival Amazon builds its publishing list incrementally, you possess a ready-made trove of e-book content that is the envy of every competitor. The fact that both this treasury and the Internet channel to distribute and retail it are controlled by one and the same corporation gives B&N an almost unimaginable business advantage.  Yet you are prepared to abandon it in order to concentrate on marketing your Nook e-reader. No one I know understands the strategic or financial benefit of dumping all those books. Is content no longer king in your value system?

Well, Mr. Riggio, it is in mine, and thus with this letter I am happy to extend our offer to acquire the Sterling list for one dollar plus 50% of our revenues in perpetuity.  Though this may seem facetious we are absolutely serious and confident that you will make more money this way than the best buyout offer on the table. If you project the annual sale for each of those 5,000 titles at somewhere between 1,000 and 10,000 e-book units – a far from unreasonable projection — and the average net revenue per sale at $5.00, the potential annual revenue is in the hundreds of millions of dollars. Of which Barnes & Noble’s share would be 50%. Compared to the return on investing in hardware, the yield on book content is laughably superior.  If you can’t see it, give the content to someone who does.

I trust you will take our offer under the most serious consideration, and I look forward to hearing from you.

Sincerely,

Richard Curtis
President and CEO
E-Reads

Copyright authority Lloyd J. Jassin calls it “The Court Battle that Could Determine the Fate of the Book Industry”, and that’s no exaggeration. The principles are of the very highest order, and every author, publisher and agent has a major stake in the outcome.

We are referring to HarperCollins’s infringement lawsuit against Open Road Media about which we reported the other day. Open Road, the independent e-book publisher started by former Harper CEO Jane Friedman, issued an e-book edition of Julie of the Wolves, a children’s book classic that is still in print with HarperCollins.

In his masterful analysis, posted on his “Copylaw” blog, Jassin cites a number of key arguments in Harper’s brief. Principal among them:

1. Does the “exclusive right to publish in book form” – the phrase in Harper’s original contract – cover digital formats undreamed of when that contract was originally framed?

2. Similarly, does contractual language like “computer storage and retrieval,” “future technologies” and “now known or hereinafter” apply to a medium three decades over the horizon?

3.Does Open Road’s e-book violate the noncompetition language of HarperCollins’s contract?

Significantly, Jassin doesn’t see a knockout punch for either contender. The publishing establishment could either score “an unfair competition protection windfall, or meet their digital Waterloo.”

One huge factor he doesn’t mention is the expense of staging this legal battle. If litigated to the max, including appeals that could take the issue to the highest court in the land, the costs could run into the millions of dollars. In an earlier lawsuit brought by Random House against another indie e-book publisher, RosettaBooks, the parties settled after Rosetta won early rounds in the court system and the price tag for both parties started to get prohibitive. If Open Road decides to fight it out, it will look at the arguments presented by Rosetta. But it will also look at the expense.

One other interesting note is that Harper has elected not to sue the author.  As she signed the Harper contract she is the logical party to go after for the infringement.  But suing authors is bad public relations. What about Open Road? They too have a contract with the author, one that relies on the author’s warranties.  Open Road has the option to claim that the author breached those warranties and licensed rights she didn’t clearly own.  But that doesn’t look so hot either. So, looking to the author for satisfaction is simply not an option for either Harper or Open Road.

Our own guess is that this case will never go the distance and will instead be settled.  Though that’s the prudent thing to do, it will just leave the issues hanging for another day.  Too bad. We’d all like to know where we stand. Thousands of contracts containing language as ambiguous as the old Julie contract hang in the balance.

Read Lloyd J. Jassin’s The Court Battle that Could Determine the Fate of the Book Industry:A Review & Analysis

Richard Curtis

“Amazon, Gmail, I’ve seen all sorts of shopping, I’ve seen eBay. You name it, I’ve seen it,” says Dr. Stephen Luczycki.

What has Dr. Luczycki, a medical director in a surgical intensive care unit, seen?  He’s seen doctors, nurses and technicians in operating rooms using their smartphones and computers to text their friends, check their emails, and bid on eBay while a surgery was in progress. “This phenomenon has set off an intensifying discussion at hospitals and medical schools about a problem perhaps best described as ‘distracted doctoring’,” writes Matt Richtel in the New York Times.  “My gut feeling is lives are in danger,” says another doctor who wrote a recent article about “electronic distraction” in a medical journal.

A few days after writing about electronic distraction in the operating room, Richtel turned his attention to the growing national debate over phone addiction in automobiles, a growing cause of death, maiming and mayhem on the road. At any give moment, a study discloses,  660,000 drivers are holding phones to their ears.

These are but a few symptoms of a troubling decline in the attention span of our populace. We have become a distracted society, and what should be of deep concern to parents and educators is the effect that this collective malaise is having on our children. If adults cannot handle their media addiction, why would anyone think that children can? There is evidence that they can’t.

One significant manifestation is the glorification of computer screens as an educational tool. Gloria Mark, a University of California professor who studies human-computer interaction, notes that “people are continually distracted when working with digital information. They switch simple activities an average of every three minutes (e.g. reading email or IM) and switch projects about every 10 and a half minutes. It’s just not possible to engage in deep thought about a topic when we’re switching so rapidly.” 

Maryanne Wolf, a professor of child development at Tufts and author of Proust and the Squid: The Story and Science of the Reading Brain, points out that “No one really knows the ultimate effects of an immersion in a digital medium on the young developing brain….My greatest concern is that the young brain will never have the time (in milliseconds or in hours or in years) to learn to go deeper into the text after the first decoding, but rather will be pulled by the medium to ever more distracting information, sidebars, and now, perhaps, videos (in the new vooks).

“The child’s imagination and children’s nascent sense of probity and introspection,” Professor Wolf writes, “are no match for a medium that creates a sense of urgency to get to the next piece of stimulating information. The attention span of children may be one of the main reasons why an immersion in on-screen reading is so engaging, and it may also be why digital reading may ultimately prove antithetical to the long-in-development, reflective nature of the expert reading brain as we know it.“

“Techno-addiction is creating a generation of students with hypertrophied thumbs and atrophied intellects,” we wrote not long ago (Digital Distractions Producing a Generation of Morons?). The Times‘s Richtel has been hammering on this theme for  some time (in particular read his cogent article Growing Up Digital, Wired for Distraction) As our homes and schools become more and more committed to the romance the computer screen we need to pay attention to the warnings Richtel has been marshaling.

Can our addiction to media be cured? In a Sunday New York Times editorial, “The Joy of of Quiet“, Pico Iyer writes, “The central paradox of the machines that have made our lives so much brighter, quicker, longer and healthier is that they cannot teach us how to make the best use of them; the information revolution came without an instruction manual. All the data in the world cannot teach us how to sift through data; images don’t show us how to process images. The only way to do justice to our onscreen lives is by summoning exactly the emotional and moral clarity that can’t be found on any screen.Maybe that’s why more and more people I know, even if they have no religious commitment, seem to be turning to yoga, or meditation, or tai chi; these aren’t New Age fads so much as ways to connect with what could be called the wisdom of old age. Two journalist friends of mine observe an ‘Internet sabbath’ every week, turning off their online connections from Friday night to Monday morning, so as to try to revive those ancient customs known as family meals and conversation.”

Immersion into beauty, meaning and tranquility. It’s a start.

Richard Curtis

Okay, all you street corner prophets. Given the depressing if not depressed economy, last year’s dismal holiday retail sales, the meteoric triumph of e-books, the advent of bookstore showrooming that drives customers out of bookstores, and the bankruptcy of Borders, how do you think bookstore sales will fare over the 2011 holidays?

If you said Down the Crapper, go back to Prophecy 101 and relearn the first two principles: #1, Never Give a Specific Time Line. And #2, The Odds That a Prediction Will Be Correct are 50-50.  Julie Bosman, covering the book beat for the New York Times, reports that “The initial weeks of Christmas shopping, a boom time for the book business, have yielded surprisingly strong sales for many bookstores, which report that they have been lifted by an unusually vibrant selection; customers who seem undeterred by pricier titles; and new business from people who used to shop at Borders, the chain that went out of business this year.” Sales are up as much as 16% over the same period in 2010.

One of the biggest surprises is that “glossy, expensive hardcover books have emerged as sleeper successes,” says Bosman. There’s a brisk trade in books of $75 and more. To what can we attribute this counterintuitive if not perverse surge in consumer commitment to print?  Our guess is that now that consumers have had a few years of e-books, they are starting to distinguish between books they merely want to read but not own, and those they want to read and own.

But that raises another question: why aren’t they buying them on Amazon and BN.com to take advantage of heavy discounts? Many book lovers we’ve spoken to have said they would rather pay list price and support their local bookstore than get a high discount that may lead to the demise of that store.  If you thought writers were strange, what can you say about readers?

One book we think you will want to read and own is The Oxford Companion to Beer by Garrett Oliver, arguably the world’s authority on the beverage.

Here is Oxford University Press’s product description for the book:

For millennia, beer has been a favorite beverage in cultures across the globe. After water and tea, it is the most popular drink in the world, and it is at the center of a $450 billion industry.

The first major reference work to investigate the history and vast scope of beer, The Oxford Companion to Beer features more than 1,100 A-Z entries written by 166 of the world’s most prominent beer experts. Attractively illustrated with over 140 images, the book covers everything from the agricultural makeup of various beers to the technical elements of the brewing process, local effects of brewing on regions around the world, and the social and political implications of sharing a beer.

Garrett Oliver is the Brewmaster of the Brooklyn Brewery and author of The Brewmaster’s Table: Discovering the Pleasures of Real Beer with Real Food. He has won many awards for his beers, is a frequent judge for international beer competitions, and has made numerous radio and television appearances as a spokesperson for craft brewing.

RC