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E-Publishing Panel a Sell-out
Jim Milliot -- 6/5/00
Standards, security, sales among issues discussed by industry leaders

A standing-room-only crowd of 120 people heard a recap of the status of the e-publishing business from a number of the industry's major players at two panel discussions sponsored by the Book Industry Study Group in New York City May 22. Of the various topics discussed, there was widespread, though not unanimous, agreement, on the need to develop common standards and the need for publishers to take more responsibility for the creation of digital files. Better security was also described as an "urgent need."

Leading off the discussion, Erick Goss, group product manager for e-books at Amazon.com, said the growth of e-publishing is resulting in a growing interdependence among the different players in the industry, and that the roles played by the various parties are changing. Observing that both Amazon and barnesandnoble.com have their own distribution systems, Goss predicted that retailers and distributors will likely evolve into what he termed "distributailers." He said retailers are likely to become aggregators of content, and that with so much information available, retailers will best serve consumers by helping them find exactly the information they want.

Goss predicted that authors will not establish their own Web sites to reach consumers directly. "There is too much involved in developing an infranet," Goss explained, adding that he d sn't think most authors would be willing to bypass an advance in order to go directly to readers. He did note that it is possible that authors may partner with e-book publishers for certain projects, and he urged publishers to maintain control over what content looks like. "Production values can make a book unique," he noted.

Ken Brooks, v-p of digital content for Barnes & Noble, said the company views e-publishing as e-books, online access to content as well as print-on-demand, and that B&N is positioning itself to exploit opportunities in all three areas. He noted that B&N is negotiating relationships with a wide range of e-book parties and that the company's print-on-demand system in Memphis will be tested this summer. Brooks, who predicted that the industry will see a shift "from 'p-books' to e-books over the next five years," also expects to see a consolidation among the different e-book formats.

In response to a question from the audience, Brooks said he "d sn't see pricing leaving publishers' control," while Goss said the different players will need to work together on a pricing model. "There is going to be some experimentation," Goss predicted.

Ed Marino, president and CEO of Lightning Source, agreed that standards are critical to the development of the industry, but acknowledged that it was probably "a little early" in the growth of the industry for a single standard to be in place. Still, the biggest problem Lightning Source is currently faced with is that most of the material it receives is so varied in format, while the standards of its customers "are moving targets."

Woody Palasek, executive v-p, strategic technology at netLibrary, told the audience that while the technology is "out in front" of a new publishing business model, an e-book business d s in fact exist, and he pointed to the "five- and six-figure checks" that netLibrary is paying to some publishers monthly. Palasek further noted that netLibrary sold 30,000 copies of Stephen King's Riding the Bullet and that sales in its Peanut Press division "are going up every month."

SoftLock.com CEO Scott Griffith admitted that his company had underestimated the demand for Riding the Bullet, but said that SofLock had since improved its security systems. Griffith said the acceptance of e-books by the public will depend in part on pricing. Publishers need to price e-books at a discount, or add enhancements if they plan to charge full price. He also noted that SoftLock is working with customers to develop different types of products, such as serialized books and book rentals. Agreeing with some of the other panelists, Griffith said the industry "d sn't need any more new devices." He said the industry should launch a campaign to educate the public about copyright, because, unlike college students' willingness to listen to pirated music, he d sn't think the general public will want to use pirated software.

Nat Green, director of publisher relations for ebrary, said his firm is focusing on making pieces of information available for sale through the Internet, arguing that "e-books will never approach the penetration level of people using the Internet." E-books will be best suited for works dealing with education and medicine, Green said.

Microsoft director of business development David Witus said Microsoft is committed to e-books and supports open standards. He noted that Microsoft is continuing to invest heavily to develop software that will improve upon the readability of e-books provided by ClearType, and is also working on security applications. Witus strongly urged book publishers to take more responsibility for the development of e-books. "The tools are there for publishers to create content the way they want" an e-book to appear, Witus said. "It's really up to publishers to build e-books. Microsoft d sn't want to be in the conversion business," Witus stated.

Night Kitchen CEO Bob Stein picked up on Witus's theme, advising publishers that they "need to bring new-media skills in-house." Without in-house expertise that can help cultivate authors who are looking for e-publishing distribution, publishers risk losing talent to a new set of publishers, Stein contended. Stein also speculated that the industry is still probably three to five years away from having devices that provide a reading experiencing that is comparable to reading on paper.

Martin Eberhard, CEO and co-founder of NuvoMedia, argued that while security is an important issue for the industry, it is impossible to make the distribution of content secure in an open platform. Eberhard also shared NuvoMedia's experience with the sales of titles for its Rocket eBook, telling the audience that while 75% of its titles come from pure e-book publishers, two-third of its sales are generated by titles from traditional publishers. Moreover, he estimated that while 20% of Nuvo's titles are midlist books, 45% of sales come from that category.
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