Nevertheless, piracy of digital content is a paramount concern – as indeed piracy of printed books in the developing world has been for many years – though sometimes it becomes unclear whether the concerns are about publishers’ lost sales or the abused rights of authors and other copyright owners. The Publishers Association here has made the fight against piracy one its core issues, working with local police authorities in India and elsewhere to bring a number of high profile and successful legal actions against pirates of printed material, and tracking down sellers of illegal digital material. It has set up a Copyright Infringement Portal on the web to enable members to report copyright abuse.

Last week Victoria Barnsley, chief executive of HarperCollins UK, addressed the All-Party Parliamentary Group on Publishing, a group of members of parliament interested in the media and copyright industries, supporting a government proposal to oblige ISPs to withdraw services from those found guilty of illegal file sharing. This is included in the Digital Economy Bill, which is intended to bring into law some of the recommendations made by Lord Carter in his Digital Britain report  earlier in the year. Although the All-Party Group has no legal teeth and can in practice only lobby for the shared interests of its members, it is an obvious way for the industry to make its voice heard within parliament. Barnsley stressed the value of the publishing industry to the British economy, contributing an estimated £5bn to the domestic economy, and the need for copyright to be enforced, particularly in the digital space, if its strength was not to be undermined.

That the government is proposing legal redress against illegal file sharers is in some measure evidence that the industry is being heard. Nevertheless, it must be acknowledged that other media industries – music, film, and so on – are threatened to a greater extent than publishing. It is easy to see how illegal downloading of a music track or a movie deprives legitimate copyright owners and licensees of a reward for their intellectual property and a sale of their product; books and their content don’t make quite the same impact. How society or governments balance the force of the law (in something like the internet where enforceability is next to impossible) with the realities of daily life is a tough call. Publishers are obviously right to worry about piracy and to press for governmental and legal sanctions against it, but they are probably lucky their very livelihoods are not at immediate risk.

On another matter, there seems to be general agreement that the international launch of Kindle was not a mould-breaking event. There will be, as I predicted previously, a more significant moment when Kindle is supplied locally and competes directly on price with locally available readers. However, with growing indications that dedicated reading devices are not the future, it may be that Kindle won’t have the same kind of success here as it enjoyed at launch in the US. As Kindle’s USP – its wireless connectivity – becomes increasingly copied and probably becomes an essential requirement for e-readers, it begins to look as if the competing devices will have to measure up against the more basic criteria of overall functionality, operating efficiency, look and feel, and of course price. That isn’t good news for the e-reader industry. 

It may not happen. I gave a presentation at the International Supply Chain Meeting at the Frankfurt Book Fair this year showing how wrong digital predictions have usually been, particularly where timing is concerned, and I remain sceptical about the universal substitution of printed books by digital content. But if I’m wrong, and the industry is going to survive and prosper, it needs to be ready to cope with the consequences.

One of the big issues here is identification of e-books. The UK industry (unlike the situation in the USA) has by and large accepted the official International ISBN Agency’s position that every digital manifestation should be assigned a separate ISBN, appreciating that this admittedly potentially cumbersome mechanism is the best way to trade digital products in the supply chain, enable them to be discovered using trade-wide databases and in a wider search context, and facilitate reporting back to publishers and to such services as Nielsen BookScan, the UK sales data agency. Despite this, there remains concern about ‘metadata bloat’ – the number of product records which may have to be maintained for a single entity - and the number and cost of ISBNs (for we have to pay for them over here) such a policy demands. Some publishers, ignoring the wishes and needs of their reselling partners, are assigning a single ISBN to an .e-Pub file even though that particular file is never going to be traded. This could prove an expensive mistake if the digital market doesn’t develop in the way they expect.

Another issue is the standardization of sales reporting. At the moment resellers and intermediaries supply retrospective sales data to publishers in a variety of file formats and at irregular intervals. Whilst this may just be a time-consuming annoyance for the recipient publishers, who generally deal with them using manual processes, it is clear that as the number of intermediaries and the amount of traded content grow as they must if digital is to have a significant impact on publishers’ revenues it will become an unmanageable burden unless automated processes are established. The time to do that is now, not when the pressure becomes intolerable.

A third – and most contentious – issue is that of territorial rights in digital content, but that probably needs a post of its own… 

Certainly this seems a natural time to be launching: at the time of the Frankfurt Book Fair and with Christmas approaching. The rumour has been fuelled by reports of recent meetings with the major publishers and a ratcheting up of the pressure from Amazon UK’s Kindle evangelist Genevieve Kunst to persuade publishers to make their titles available.

What if it’s true? As previously indicated here, the UK has been in a kind of limbo as far as e-books are concerned, waiting for Kindle. Waterstone’s, Borders and more recently W H Smith have e-readers available to buy – and reasonable but not spectacular numbers have been sold - but the volume of downloads had been distinctly lacklustre. It is certainly possible that the much more user-friendly Kindle will grow the market very quickly, especially if it makes the process of buying and downloading content a simpler and more intuitive process.

There is concern here, though, about pricing policies: probably one of the most tricky issues facing the emerging e-book market. Clearly this will be dictated by Amazon in the end (and it’s unlikely that publishers will hold out against it) but there must be anxiety that cheap e-books (that is, e-books priced well below that of a hardcover equivalent) will further undermine the value of the book market – although it is arguable that the levels of discounting in the marketplace have already done exactly that. And, as I mentioned in my last post, the fact that e-books are subject to value-added tax where printed books are not means that in commercial terms you can’t make like-for-like comparisons in any case.

So, things may be about to change here; and it could be an interesting few months ahead. To what extent in the final analysis the impact of an e-book reading device will dictate the way people consume content is not yet clear. There are those who believe that e-readers are a distraction from the main issue; but a dominant player such as Amazon, with an established customer base and an innovative new way of delivering its content, is bound to send ripples through this market and perhaps mark a decisive digital moment.

If the rumours are true… 

*Postscript

The announcement was duly made – expectations had been raised too high for it not to have been - but it was very far from being a full-blown launch. It begs too many questions to be answered right now, especially whether it will indeed be enough to change the landscape of UK digital publishing.
At first glance, the answer is no. First, the Kindle will be sold only via the Amazon.com site and shipped from the US at a dollar price of $279. Potential UK consumers have been quick to note that there are substantial carriage costs to add to that, plus import duties, plus – apparently – a $1.50 surcharge on each downloaded file. The wireless technology, based on AT&T’s network, will work for many but not for all: some will have to download to a USB device before loading onto Kindle.

It seems probable that Amazon has done things this way to manage the expectations of the UK publishers who have agreed to make their content available. We know from experience that this is not the way Amazon normally launches potentially huge new developments and no doubt the Kindle will come properly to the UK in due course; but that moment does not seem to be now.
I will report further when the dust has settled and the Frankfurt Book Fair has had its say.

At a recent event, David Attwooll, a veteran digital publisher from before such a term had been invented, presented an entertaining ten ‘e-myths’, debunking some of the current hype around e-books. His message was the sane appraisal that publishing is not defined by any particular delivery mechanism but existed to provide content or information to an interested audience by whatever means that audience required.

Here are the myths (and you can read them in greater detail on the Bookseller web site at http://www.thebookseller.com/blogs/97286-my-favourite-digital-myths.html and http://www.thebookseller.com/blogs/97827-my-favourite-digital-myths-ii.html):

- Content is king (context is everything).
- There will be an ‘iPOD moment’ for e-readers.
- Do nothing: no one’s making any money (they are: Reed Elsevier have revenues of £3bn from digital publishing; and in the US – if not here - Kindle sales   are growing to significant levels).
- We need to do everything ourselves (outsourcing of digital services is no different from outsourcing print or copy editing).
- You have to be a techie/under 25/a futurologist (you don’t).
- We’re all doomed!
- We’re all going to be unimaginably rich.
- E-books cannibalize print sales.
- People read online in the same way as printed books (studies show that even readers of academic journals have a much less sustained online reading experience).
- You have to be big.

You could argue that there are some internal contradictions within these myths, but the message is clear: digital publishing is best viewed in the context of publishing in general and not as something which needs to be re-invented.

The meeting also included an informative rundown from Tanya Price from the Random House Distribution Division on the issues publishers of e-books need to address. These included the necessity to acquire electronic rights not just in a text but also in related illustrations and images as well perhaps as in fonts; the crucial role played by metadata in enabling discovery of digital products; and the timely reminder that digital editions are – unlike printed books – subject to value added tax, currently at 15% but scheduled to revert to its previous level of 17.5% in January. This inevitably distorts the issues around pricing raised in my last post: an £18.99 Dan Brown in printed form is a £16.50 e-book (£16.15 in January). The government takes the difference!

So first, the hype. The UK book industry has undoubtedly joined the international obsession with e-books. All the major publishers have invested in digital asset management systems of more or less sophisticated kinds and done their deals with digitization and conversion houses. Some are experimenting with new workflows to assist in bringing digital products to market, while digitization of backlist titles continues apace. There is evidence everywhere of initiatives to exploit ‘the long tail’ as e-books or in print on demand programs.

The reality, however, is more sobering. There is little real evidence yet that a sustainable market for e-books exists. Published sales growth rates are impressive but start from such a low base as to be meaningless. Sales of e-readers are increasing but there is nothing to indicate that we have reached the much-touted ‘iPod moment’. Like you, we don’t have the Kindle - there is still, it seems, no suitable wireless network available to supply the download technology – and this puts us in a fundamentally different place as far as e-book exploitation is concerned from the US situation. Amazon is a powerful force in the UK marketplace, the dominant online bookseller by a substantial factor with around 15% of the total books market; and with an innovative product such as Kindle known to be in the wings, it is unsurprising that the attempts made by the land-based retail chains - Waterstone’s, WH Smith and Borders – to seize a commanding place in the market have lacked lustre, though Waterstone’s have made strenuous efforts to promote the Sony e-Reader.

The e-book revolution, then, is still waiting to happen, and it would be a rash prophet who would predict how things will develop and when: there’s no shortage of digitized content (but not nearly enough titles to make e-books a plausible substitution for the printed article), a supply chain still in the making, a lamentable lack of good metadata to enable discovery, no clear policies on pricing, no automatic granting of e-book rights by agents and authors - not even to mention the impact there may be on the trade in general from the outcome of the Google settlement.

This is well exemplified in a blog by Philip Jones on the Bookseller website on the day of the publication of the new Dan Brown. ‘I’d have thought,’ he writes, ‘ that the launch of the biggest book of year as an e-book on the same day as the printed edition might prove a useful test-case for the immediate future of digital reading here.’

On the previous day (14 September), he discovered that of the main e-book sites only WH Smith even provided a buying option, but refused to allow a download until the 16th, the day after publication. Borders seemed not to know anything about it. Even Waterstone’s did not make it available until well after publication day had begun; and when they did sent out mixed messages about price: ‘Having been coy about the e-book price for the past two weeks, Waterstone’s today lists it as expected at £9.49 [the recommended price is £18.99], the same price as the hardcover. Oddly though, it gives a list price of £11.86, so the offering is only a 20% discount.’

All these subjects will be featuring in future posts, I have no doubt.

Ironically much of the excitement is about using digital content to promote the sale of physical books: the various search inside programmes, jacket/cover images, widgets and other marketing collateral. In order to have such things available, however, it is necessary to have book content in digital form in the first place; and UK publishers have been on the whole ready to provide material to Google Book Search, Microsoft Live Search Books (while it lasted) and to Amazon.co.uk. All see benefit in having a degree of browsability available to online users to support physical sales. Some of the largest companies, however, – Random House, HarperCollins, Penguin, etc – have sought to keep control of their assets away from their powerful trading partners by setting up their own repositories of digital content.
This hugely expensive enterprise is also providing a way of storing digital content in a form which will allow a proliferation of repurposed products, either physical or digital. And that, of course, is the prize if and when e-books become a serious proposition.

The frustrating thing about the UK market in this regard is that we are still waiting for things to happen: Google are not trying to sell content; we don’t have the Kindle or a Sony E-Reader; practically no digital content is yet being traded. That doesn’t mean that there is not a huge amount of activity under way to prepare for what may happen in the future.

The big fear last year was that publishers, aided and abetted by Google, would seek to exclude booksellers from the sale of digital content by direct selling to the consumer. The UK Booksellers Association, ever defensive of booksellers’ place in the supply chain, has been very active, commissioning a series of reports and documents (available at http://www.booksellers.org.uk). However, the debate has moved on now and few believe that disintermediation is a serious threat: after all the company best placed to make digital sales is a bookseller (Amazon); and both Waterstone’s and Borders are in the process of setting up web sites which are certainly planned to feature e-books. Gardners, one of the two major general wholesalers, has set up a digital warehouse into which publishers can deposit their content; and their competitor Bertrams clearly has a similar project in its plans.

There is, however, general agreement that a plausible e-reader is an essential component of the market for e-books gaining critical mass. Kindle is not yet available in the UK and because of its wireless connectivity may not be unless a deal is struck with one of the UK mobile phone networks. This has not yet happened but presumably talks are under way. The Sony e-Reader is not yet available here either but there is speculation that it will be launched in the autumn, possibly in collaboration with Waterstone’s. It had previously been mentioned in connection with Borders (now only connected with the US company through a small minority stake), but Borders have recently announced that they will sell the iRex iLiad reader at £399, bundled with 50 classic out-of-copyright titles. Although this is the only dedicated e-reader on the market, obtaining additional digital content to read on it is by no means easy (not available from Borders, or from Waterstone’s or Amazon, but only from a handful of e-books sites not guaranteeing compatibility).

Compatibility is the matter of most concern. The decision taken by Amazon.com to sell only proprietary Kindle content has been widely interpreted in the UK as an attempt to dominate the market through a standards war (VHS v. Betamax). Almost everyone here (outside Amazon) would argue that the more interoperability of products and formats there is the better it will be for the growth of a mature e-book market.

To summarise, there is much talk and not much action here. The Publishers Association is organising two ‘digital summits’ primarily to address issues of copyright in digital content. Soon afterwards the Liaison Group of the Publishers and Booksellers Associations will be holding a meeting dedicated to digital issues. Book Industry Communication, the UK’s supply chain organisation, has set up a Digital Supply Chain Group which held a one-day workshop recently to discuss a range of contentious issues.

Chief among these at the moment is the question of identification of digital content. It has been generally taken for granted that e-books, like physical books, should be identified using ISBNs. The ISO ISBN standard says that each digital format traded should carry its own individual ISBN, exactly as various versions or formats of a physical product do. This position has been endorsed in a joint publication of Book Industry Communication and the Book Industry Study Group published in January. Not all publishers are persuaded, however, encouraged by the coincidental appearance of the generic .epub file format: apparently fearful of the number of ISBNs they might have to assign if they sell chapters or fragments of their titles, the cost of numbers (though most big publishers already own vast stocks of unused ISBNs rashly assigned when the system came into being), and the possibly burdensome impact on their systems, they have sought to assign a single ISBN to all digital manifestations and find other mechanisms to distinguish them in their own systems. Most of them have seem not to have thought through the consequences: that e-books sold through library intermediaries such as NetRead or MyiLibrary will need individual ISBNs by format if sales are to be correctly reported (this would raise the unwelcome possibility of intermediaries assigning ISBNs to publishers’ titles); and that assigning an ISBN to a source file such as .epub implies that the publisher has no interest in the form in which the product is sold after it has been sold to an intermediary for repurposing.

To conclude: while the marketplace remains so ill-defined there is very little advice which can be given to Canadian publishers with digital content to sell in the UK. Most for whom it is appropriate will already have established links with Ingram’s (formerly Coutts’) MyiLibrary and other intermediaries in the library market. Dawson Books are the latest UK entrant with their Dawsonera offering. In the consumer market, the situation might change very quickly if there were to be a disruptive intervention in the market by one of the global goliaths (Google, Amazon) or even a hardware provider, perhaps even an organisation with no connections to the book trade so far. But so far, the industry is just trying to be as prepared as it can be for something which doesn’t yet exist.

This seminar was organised by the UK Publishers Association’s Digital Publishing Forum in collaboration with the Centre for Publishing at University College London. It was attended by around 45 delegates from a wide spectrum of companies.

The seminar was introduced by Hugh Look and Sue Sparks, consultants with Rightscom, a London-based consultancy well-known in the media world. They emphasised that, against a background of growing complexity and proliferation of digital as well as physical products and a need to keep track not only of where assets were but also what rights and permissions attached to them, larger companies could no longer expect to depend on the memory or private systems operated by experienced individuals.

The distinction was emphasised between the so-called DADs (Digital Asset Distributors) and DAMs (Digital Asset Management systems), though the responsibilities of each are not clear-cut. Typically DAMs are internal to publishers and are used to store and track all the components of their titles, from the print-ready PDF to the individual source files which have been generated in the editorial, production and design processes, together with adequate metadata. By contrast, DADs are outward-facing, converting or massaging content in the DAM system ready for distribution to the marketplace.

Many publishers have been slow to commit themselves to either DAMs or DADs. This was attributed to concerns about cost and potential business disruption. Unlike many business investments there was very little history in the way of models adopted successfully elsewhere and few people around with the necessary skills or breadth of understanding.

There were three options for publishers: to start from scratch; to buy a core package and customise it; or to outsource the whole operation to a subcontractor. Before doing any of these, however, it was essential to identify existing assets and start building metadata to support them.

The first option (starting from scratch) can be expensive and painful, and a number of attempts to do so have failed. However, outsourcing does not take away any of the problems either: just as outsourcing physical distribution does not change anything in the way the core publishing functions operate, nor does outsourcing digital distribution to DADs. DADs as a supplier type are still in their infancy and their roots lie in a variety of places: typesetting or text conversion, printing, publishing itself or technical solution providers. Publishers should look for the most appropriate fit for their particular needs.

It was emphasised strongly that any move made in this direction, however, would inevitably involve some business re-engineering and consequently needed support and commitment from the very top of the business hierarchy

Andy Williams of Cambridge University Press was currently working with Rightscom on a DAM project. CUP had first embarked on such a project in 1996, though it was subsequently abandoned, but they have some experience in this area: they have set up a Content Services department and operated an XML repository since 2004. The current project was initiated in early 2007, would be going out to tender with suppliers later in the year, and was scheduled to go live in 2009.
So far much of the effort had gone into scoping the project: dividing responsibility between DAM and DAD, deciding whether to use the DAM as a storage vault or develop a full XML production workflow, establishing how both complete titles but also chapters and other components would be identified.

A key point was that all assets had rights attached and that meant that every title and all multiple components needed to be checked for copyright clearance. Rights were an integral part of all digital trading and awareness of their importance needed to be communicated to all parts of the business. Clear and accurate metadata was essential throughout the publishing process to enable content to be readily accessed.
It was obvious that CUP had embarked on an ambitious project which had a high risk attached. Andy Williams emphasised that it needed the assurance of support at the top level of management and of financial commitment; and a fairly radical re-engineering of many business processes.

Graham Bell presented the experience of HarperCollins and demonstrated the DAM system (North Plains Telescope Enterprise) which they had implemented. This had replaced very primitive manual systems of storage but was now a very effective business tool. All book components were stored, including print-ready PDFs and source files, with metadata both for the product and for the assets which it comprised. The system gathered files in logical groups and had a powerful search mechanism to enable users – subject to strict access controls – to find files quickly and easily. However, he warned that such a system needed to be built to allow for substantial growth as digital content increased in volume very rapidly.

The prime criterion for selecting a DAM supplier was stability and longevity. In the present state of development, all the focus was on putting things into a digital warehouse, whereas the benefit would not be apparent until it was used to extract content, perhaps some years in the future. And that was the problem: Graham concluded by saying that it was impossible to justify the investment using normal ROI criteria; but that it was a price that had to be paid to ensure companies’ survival in the coming years.