Book publishers turn page on security

Using Microsoft's launch of its Microsoft Reader technology in New York on Tuesday as the platform, a number of the print publishing giants stepped up to the plate to back Microsoft's efforts to halt e-book piracy before it starts.

Microsoft (msft) announced that it was making available for immediate download from its Web site a version of its Microsoft Reader for Windows desktops and laptops.

Simultaneously, Barnesandnoble.com (bnbn) announced the opening of the eBook Store, which features Microsoft Reader. Simon & Schuster used the occasion to announce availability of an e-book-only version of a new Star Trek series, with the first 20,000 customers obtaining the books for a promotional price of $1 each.

As part of its Reader launch, Microsoft also announced an e-book piracy initiative, in conjunction with the Association of American Publishers (AAP). The initiative will attempt to head off e-book hacking and theft before it has a chance to start, Microsoft officials said, by combining encryption with enforcement and education.

Former Rep. Pat Schroeder, who is currently president and CEO of AAP, and Dick Brass, vice president of technology development at Microsoft, are the first two advisory board members for the fledgling effort.

"The lessons of the music industry are not lost on my friends here," said Brass, referring to top officials from Barnesandnoble.com, Time Warner Inc. (twx) and Simon & Schuster, who attended the New York Microsoft Reader announcement.

Brass told attendees of Tuesday's launch that Microsoft's intent is to "help set up an honest, reasonably priced, robust market" for e-books, a situation he claimed could stave off the creation of a digital-publishing equivalent to Napster. The Napster technology, which allows consumers to share music via the Web, is mired in legal controversy over copyright infringement.

"We need to convince people that stealing bits is just stealing," Brass said. "If it's no longer possible for authors and artists and movie makers to sell their products without them being stolen, then there's no more possibility for progress."

While Microsoft already includes strong encryption as part of its Reader technology, Brass acknowledged that hackers, "rogue governments and even 14-year-olds" would be able to break it if they so desired.

E-book piracy already is possible, even without cracking Microsoft's code, he said. All pirates would need to do is print out hard copies of e-books, with the "best pirates keyboarding offshore."

Separately, Microsoft said it is working on a new version of its Reader for the Pocket PC platform that will supply a missing decryption key, which currently prevents users from being able to download and view all e-books.

In conjunction with AAP -- which has promised to establish within a year a new committee to oversee the education and enforcement of e-book antipiracy-related efforts -- Microsoft plans to carefully monitor the illegal sale of e-books on the Web, the same way it is doing with its other operating system and application software products, Brass said.

Publishers and distributors attending the Reader launch expressed backing for Microsoft's copyright protection efforts.

"We need to make this new marketplace legitimate," said Larry Kirshbaum, chairman and CEO of Time Warner Trade Publishing. "We're talking about an author's life work. We don't want to see that in any way stolen or pirated."

At the same time, the evolving e-book encryption technology might help publishers and authors make up revenue that was lost in the print publishing world via pass-along copies, publishing officials said.

"Over the next couple of months, we will learn what (e-book) customers are willing to pay," said Steve Riggio, vice chairman of Barnesandnoble.com. "Today, (paper) books are vastly overpriced."

Riggio said that while e-books are currently 20 percent to 30 percent below the list price of paper books, they should be even cheaper.

"We are working together -- Microsoft and the publishers and the book sellers -- on this. It's a very different situation from the music industry."

Via the current e-book business model, Microsoft is making its Reader technology available for free but is charging publishers "a very small, per-copy, single-digit royalty," Brass said. He declined to provide the exact figure.

Brass added that Microsoft is hoping that the popularity of its Reader could help drive sales of its Windows operating system.