New flare-up in battle over e-books

It's writers vs. publishers, even in the brave new electronic book world. It's also publishers vs. publishers when it comes to which new business model will best serve.

NEW YORK -- Nothing gets an audience of publishing-industry executives worked up like the age-old debate over the rights of publishers and writers. And sure to form, the same holds true for the emerging world of electronic-books. But in addition to the customary war of words between the two camps, an equally heated dispute emerged at e-Book World on Monday over the business model publishers should choose to capitalize on the slowly emerging e-book market. Held a stone's throw away from the corporate headquarters of a number of Manhattan's top old-media publishers, e-Book World opened with a keynote address by Richard Sarnoff, president of Random House New Media and corporate development. Sarnoff told the audience that while it's a "dead certainty that the publishing world will be rocked" by e-books, he expected the true impact not to occur for another decade or two. Even the most bullish e-book market watchers, such as Andersen Consulting, are saying that e-books won't comprise 10 percent of publishing market revenue until 2005, Sarnoff said. Forrester Research said it will comprise two percent by that time. And researchers at The Seybold Group found that consumers are more interested in digital picture frames than digital books, Sarnoff claimed. 'The first thing you need to worry about is making money -- how to make the existing (publishing) business more profitable.' -- Randall Rothenberg, columnist with Advertising Age Sarnoff pooh-poohed the potential effect on traditional publishers of peer-to-peer technology, claiming that the publishing and music industries bore few similarities. He also downplayed the threat of self-publishing to the traditional media world, claiming that few authors were well-branded enough to pull off the successful debut of Stephen King, claiming that "low-cost distribution leads to high-cost branding and marketing." And, predictably, the Random House executive didn't see book publishers or distributors going away in the brave new e-Book World. "Do we just need author/e-business intermediary/consumer?" asked Sarnoff. "Or, more realistically, will we see author/publisher/aggregator/e-tailer/consumer aggregator/consumer?" We're likely to have the same number of intermediaries, but taking different slices," he predicted. Bye, bye Xerox copies?
Sarnoff talked up some of the potential new economic models that e-book publishing could spawn. Instead of disintermediated publishing -- aka self-publishing -- publishers should look to demand publishing, he suggested. Publishers might find new revenue in charging for individual page-on-demand printing/publishing, Sarnoff said. If publishers can lock onto the right protection scheme, such page-on-demand publishing could circumvent students, publishers and others "giving Xerox machines their revenues" by copying pages and sections of books and articles for personal use, he noted. Later in the day, e-book pioneers and old-media moguls turned the e-Book World debate, once again, to business models. Tony Hendra, original editor of The National Lampoon and founder of Gigawit.com, discussed his new publishing venture, through which Gigawit will split profits 50/50 with its online and/or offline authors. The new venture has a dozen authors in its pipeline, most of them involved with writing comedy, Hendra said. Sources said Hendra also is close to finalizing a distribution deal for Gigawit's content with Barnesandnoble.com. "The idea is to exploit this cluster of (e-book) innovations and to clear the channel between the writer and the reader," Hendra explained. In traditional publishing models, authors typically are awarded 10 percent of total revenue for their book titles. "Traditional publishers are simply corporate interlopers," Hendra said. Gigawit was born, in part, out of a degree of frustration with this system, he said. Money takes precedence
During the "Inventing the business model" panel which closed out day one of the two-day conference, panelists debated how and when traditional publishers could make money from e-books. Maneker, features editor with New York Magazine, asked panelists to predict the killer app for e-books. No two participants could agree, although all seemingly concurred that the e-book hardware-software platform, which ends up dominating the market, will be less important to publishers than the moneymaking schemes that prevail. "The first thing you need to worry about is making money -- how to make the existing (publishing) business more profitable," said Randall Rothenberg, columnist with Advertising Age. "We need people to come up with different packaging ways to sell to different channels."

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