The $125 million preliminary settlement between the Authors Guild, the AAP and Google is viewed as not only the end of three years of litigation but also as providing the broad framework for how books—and their content—will be sold in the digital age. Although there are many questions to be answered, the agreement ensures that, according to Bertelsmann Inc. co-chair and AAP chairman Richard Sarnoff, in the online world books will be discovered and rights holders compensated. The agreement gives authors and publishers two things they want the most: control over what is browsable and control of pricing for in-print copyrighted books. “We applaud this landmark settlement agreement, which provides an innovative framework to enable more access to more information by more people than ever before, while protecting the rights and interests of authors and publishers,” said William J. Pesce, president and CEO of John Wiley & Sons, one of the five publisher plaintiffs in the lawsuit.
The settlement also gives Google something it wanted, too, the opportunity to continue to (legally) scan copyrighted works and make them viewable, with the permission of the rights holders. The out-of-court settlement also avoids setting a precedent of what constitutes fair use in the digital age. Google had contended that its scanning of copyrighted books for which it would show only snippets was fair use, a theory publishers and authors rejected. Both Authors Guild executive director Paul Aiken and Google legal counsel David Drummond acknowledged that they will continue to disagree on copyright law. Copyright attorneys expected that if the two cases went to court, they would begin to create case law in the electronic age. Because this had the potential to undermine not only the way Google scanned books but also the way it copies online material, Google was eager to prevent this from becoming a test case.
For Sarnoff, one of the key architects of the settlement, an important outcome is the access to millions of out-of-print books that will now be available through Google, books that now have a chance to be read and purchased by the public. And by creating an ASCAP-like agency in the Book Rights Registry, the publishing industry will now be able to track the online usage of books and make payments accordingly.
Another contentious issue addressed by the agreement is how much of a book could be made viewable online. Rather than limiting what appears on a screen to snippets, readers will be able to view up to 20% of a book's text with the permission of the rights holder, a key point for authors and publishers afraid that viewing a portion of a book online would destroy any chance to sell the physical copy of the title.
Both Google and authors and publishers stressed that the settlement will create a way for rights holders to receive payment for their works that appear in Google Book Search, but how much that will be and when rights holders will begin receiving money is uncertain. Authors whose books have already been scanned eventually will receive at least $60 per work.
And the new revenue channels are unlikely to generate significant income anytime soon. A hint at how much revenue may come in the early years is provided in an agreement pertaining to the Public Access Service license that will be granted to public and university libraries. Under the agreement, free full-text online viewing of out-of-print books will be permitted at designated computers. Libraries that offer printing services must offer printing of the online material based on a per-page fee. Google will pay the cost of printing by users for the first five years or up to $5 million.
Even when income starts flowing, it will be a significant challenge for the BRR to sort through the different revenue-generating items to determine how much money authors and publishers are entitled to. Since Google Book Search first launched, Google has split ad revenue with publishers, but some publishers are still wary about accepting the money, since they are not sure their royalty systems can correctly funnel the small amount of money owed to each author. With micropayments coming in from more sources, it is unclear how publishers' systems will handle that.
The agreement does not mean all issues between publishers and Google have been settled. After giving Google 1,400 of its titles, the Hachette Book Group stopped adding more books. “It makes me uneasy to let third parties make copies of our files,” explained Hachette CEO Arnaud Nourry. He said it was “good news” that publishers are not fighting with Google any more, adding that with the agreement in place, Hachette will review its relationship with the search engine giant.