News

Publishers Embrace Gemstar's E-book Devices
Calvin Reid -- 10/16/00
High price points, but Yuen promises heavy advertising and promotion to sell the devices to readers over the holidays


The former Softbook is
now the Gemstar eBook.
The e-book market may be small, but you couldn't tell from the standing-room-only Manhattan press conference held to unveil the new Gemstar eBooks, the two devices developed to replace the Rocket eBook and the Softbook units.
Gemstar-TV Guide International CEO Henry Yuen and Lou Lenzi, v-p, new media, of Thomson Multimedia/RCA, the company building and distributing the devices, were joined by a number of heads of major houses as Yuen announced plans to have the new devices available by Thanksgiving. He also announced plans to sell them through consumer appliance outlets like Office Max, Circuit City and Best Buy, supported by major broadcast, print and online advertising and promotion.

In response to questions about the readers' high price and proprietary format, Yuen breezily offered plans for secure copyright, distribution and sales that clearly make publishers and authors comfortable, but which may prove offputting to some consumers. Gemstar's approach drew Time Warner Trade chairman Larry Kirshbaum; Penguin Putnam CEO Phyllis Grann; HarperCollins CEO Jane Friedman; Richard Sarnoff of Random House; Kate Tentler of S&S Online--all there to announce plans to offer selected upcoming titles as Gemstar eBooks. Bestselling author Patricia Cornwell also praised Gemstar.

The devices are now called the REB1100 ($300), which replaces NuvoMedia's black-and-white Rocket eBook, and the larger, full-color REB1200 ($700), which replaces the Softbook. Yuen announced the end of the Rocket eBook and Softbook brand names; they have been merged into one company, one device and one technology. The new machines are easy to use, with large viewing screens and storage capacity. They also eliminate the need for a personal computer for hard-drive storage. Equipped with modems, the devices can be used to log directly onto a personal Gemstar eBook account to buy and download books. Consumers can also buy books at different online retailers or in person at bookstores. The purchase is registered through a serial number and the book uploaded to the consumer's Gemstar e-book account. It can then be accessed along with all the user's other Gemstar e-book titles.

Speaking with a small group of reporters prior to the main press conference, Yuen explained that the new Gemstar eBooks will provide a "high-value reading experience," much better than "squinting at a PDA." The devices and the e-books themselves will be priced higher than many had expected. E-book titles will not be discounted to avoid "devaluing the book," said Yuen. "We don't want to give the impression that e-books have less value." Besides, he said, Gemstar is offering "instant delivery by download and no shipping charges; that's a 15% saving on average." And, he said, the pricing was also a "challenge to the notion that everything on the Internet should be free."

He notes that Gemstar's proprietary system can better "protect intellectual property from the new breed of casual pirate." Why a dedicated device in an era when multi-use devices (for e-mail, music, organizers and books) are cheaper, and getting faster and more powerful all the time? Yuen said that in the same way that hardcover books have advantages over paperbacks for many consumers, Gemstar's e-book devices "emulate the page experience, enhanced by digital technology" and are for "readers who want the top reading experience. We think consumers will pay value for value."

Thomson's Lenzi emphasized that the RCA license to manufacture the Gemstar device was not exclusive, and he expected other manufacturers to follow and to bring the price of the unit down. He also noted that an A.C. Nielsen test (450 people over the age of 18 with incomes over $40,000) reported that users rejected extra features. Yuen noted that Gemstar has a revenue-sharing agreement with RCA; "they make more money the more we sell," no matter who builds the device, he explained. They seem to have all the bases covered--Lenzi and Yuen both noted that more functionality can be added to the devices with software that will be made available in the future.

Yuen was even bold enough to predict that by 2001, the device may sell for $100; and by 2003, publishers may be able to offer the device as a free premium for, say, buying hardcovers.

Yuen's model for e-book publishing emulates the current "time-phased model." Gemstar eBooks would be released prior to print publication at print prices. And much like hardcover to paper, the e-books would then be released in other, less secure e-book formats over time. "This is not new," said Yuen. "Consumers will pay an appropriate price at each release."

Publishers and authors seem to think Yuen has the answer. Phyllis Grann told PW, "We're security minded, and we are confident that this system will protect our authors. It may move more slowly than others, but that's fine with us."