Who gets the biggest piece of the digital pie?

Once worthless, digital rights are increasing in value, and both authors and publishers want their fair share. This is the final instalment in a three-part series on the publishing industry

JAMES ADAMS writing in the Globe and Mail
February 27, 2009

A couple of years ago, no one in Canadian publishing – authors, agents, publishers, booksellers, distributors – paid much attention to digitization, digital content delivery and the emerging e-book.
Sure, the industry had seen the havoc digitization had wrought on the music recording industry, but hadn't digitization, via the DVD, also provided Hollywood with billions in additional revenue?
Publishers, meanwhile, were including electronic-publishing-rights clauses in their author contracts but there wasn't too much call or opportunity to do anything with them. “Digital” tended to mean the Internet, which publishers used primarily to promote and sell the analog wares (a.k.a. books) stacked in their warehouses.

A brave wag might occasionally declare that the digital delivery of books was destiny, that the book as physical object, beloved by five centuries of Gutenbergians, was condemned to lose its privileged position in the writing-and-reading firmament.
Still, the general feeling was that the scary future was, well, in the future.

The Amazon Kindle (pic) is one of the devices that is rapidly changing the book industry.
Now, however, the future appears to be present, and for all sectors of the industry it's a messy, confusing thing. As Jack Illingworth, executive director of the Toronto-based Literary Press Group and a consultant for the Association of Canadian Publishers, remarked recently, “There's no real orthodoxy out there; the rules seem to change every week.”

There has not been a wholesale overthrow of the traditional book in favour of portable handheld devices such as the Apple iPhone and Sony Reader, or even the home computer. It's estimated that no more than 3 per cent of total annual retail book sales in North America can be attributed to digital consumption, and most of that is occurring in the United States.

But in the last year or so there have been harbingers of what veteran publishing guru Jason Epstein calls “a historic paradigm shift.” And the “ongoing and accelerating interest,” as Illingworth describes it, has anxious authors and jittery publishers bobbing and weaving around the issue of what's a fair split of the revenues in this Brave New World.

Earlier in the decade, there was Apple's successful introduction of both the iPod, which created the expectation that, henceforth, media (and lots of it) should be portable, and iTunes, which showed that people would pay for e-content if the price was right. There's been widespread acceptance, particularly among younger people, of accessing visual content, including text, on the teensiest of smart-phone screens.
More recently, we've had the $125-million (U.S.) resolution of the lawsuit filed by American publishers and authors against Google Book Search's digitization and archiving of millions of copyrighted titles. We've witnessed the arrival of the Sony Reader and Amazon's Kindle e-books, with their huge storage capacities and paper-like screens with adjustable fonts (a boon to eye-strained baby boomers!), and the concomitant development of e-book stores to provide content to these devices. Last fall, the Canadian Research Knowledge Network, a partnership of more than 70 universities, paid 47 Canadian publishers $11-million to license e-book rights for 8,000 titles.
And just this week the country's largest book retailer, Indigo, introduced its Shortcovers service to permit the purchase and download of e-books and chapters of e-books directly to a smart-phone via a wireless Internet connection.

There is a lot more. Connect here to Toronto's Globe and Mail online for the rest.