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Volume 10, No. 6 - September 2000  
Table of contents for this issue

E-Book Gold Rush
Welcome to the Electronic Backlist

FOR THE LAST TWO YEARS, a Colorado-based e-book distributor called netLibrary has aggressively courted presses with an offer that sounds too good to be true -- an opportunity to turn a profit from their stolid scholarly titles. Already, the University of California Press has agreed to put more than a thousand of its books online under the company's auspices. With more than $100 million in private funding, netLibrary has grown from eight employees to 430, populating an impressive "campus" of three spacious, handsomely furnished buildings, once dubbed "the Branch Librarian Compound" by a publisher struck by the firm's almost cultish devotion to its digitizing mission.

Thus it was fitting that this summer's annual meeting of the Association of American University Presses took place in Denver, just a short drive from netLibrary's Boulder headquarters. At the meeting, the company's logo was so ubiquitous that one dazed publisher facetiously claimed to have seen it on a Colorado license plate. Hundreds of conference attendees shuffled from session to session with free netLibrary-emblazoned book bags slung over their shoulders. The bags were stuffed with everything from netLibrary literature, to netLibrary notepads, to netLibrary breath mints. Meanwhile, busloads of publishers were shuttled to Boulder to see the firm's offices and production facilities.

The netLibrary tour ran like a Swiss watch. The grounds were neatly manicured; the employees were confident and composed. Every question had an answer, and every answer made sense. Even the box lunch was delicious. But it was at the end of the tour, while publishers sat in an executive conference room facing the Rocky Mountains and sipping free beverages, that netLibrary chief operating officer Nancy Talmey made a truly lasting impression. "One medium-sized university press," she said matter-of-factly, "received a check for $65,000 for last month's e-book use." Everyone looked at each other. "The month before they received $100,000."

Can it be true? Can university presses make real money from e-books? Dennis Dillon, the head of collections and information resources at the University of Texas at Austin, claims that even the "most skeptical, curmudgeonly faculty members" are embracing e-books, perhaps because they offer easy access to rare materials and enable readers to do keyword searches. Such a promise has investors pouring over $500 million in venture capital into the digitization of academic books. But exactly how, ultimately, will the e-book pay off?

There seem to be as many e-book business models as there are e-book businesses. NetLibrary began asking libraries to buy a number of "copies" of an e-book. Users who want the on-screen editions can then check them out like they would print books. (These days, netLibrary also offers publishers a range of other services, including print on demand.) But two new companies, scheduled to launch in the next year, have come up with different arrangements. Ebrary will digitize books and allow open access to everyone through the Internet. The catch? Users pay by the download or printed page. Then there's Questia, which will charge individuals a monthly or annual fee for unlimited access to its e-books -- as well as for a research service that will automatically generate footnotes and collect a bibliography in any of five styles. Questia users can also annotate their e-books: The company's database will preserve personalized files containing readers' marginal notes.

For all the excitement, however, the e-book still induces anxiety. In Denver, one panel brought the eager e-book merchants face-to-face with their cautious academic counterparts. Publishers' questions were legion. What happens if a start-up makes your book available online and then goes out of business? Or if it wants to place advertising on the screen beside an academic text? How will digital revenue affect traditional bookstore revenue? How do e-book ventures pay publishers? And how does the publisher in turn pay the author? The question of rights and payments is particularly perplexing. Should the e-book, like a paperback reprint, simply be considered another edition of the print book? If so, then authors would be entitled to a standard royalty rate on e-book revenue. But what if the e-book is better understood as a subsidiary right? That would entitle authors to a cut of the licensing fee rather than a stream of royalties. And what should that cut be?

All these unanswered questions send up red flags for some publishers. Kate Wittenberg, a senior executive editor at Columbia University Press, wonders if university presses wouldn't be better off going it alone. "These high-tech, well-capitalized services offer tempting solutions for publishers who may not have the knowledge, funding, staff, or temperament to undertake their own online publishing projects," she says. "On the other hand, by offering a seemingly simple, low-risk opportunity to enter the digital-publishing arena, these companies are allowing publishers to avoid the process of developing this capacity for themselves.... University presses are in danger of licensing away gems of content in this frenzied environment of dot-coms."

Indeed, developments in academic publishing have hit an almost dizzying speed. And Wittenberg, who directs the Electronic Publishing Initiative at Columbia (EPIC), a prize-winning collaboration among Columbia's libraries and its press, is hoping she'll be able to help make a little sense of it all. EPIC recently received a three-year, $530,000 grant from the Andrew W. Mellon Foundation to evaluate the success of its various e-book ventures -- a study Wittenberg hopes will help university presses develop better long-term digitizing strategies.

It will be interesting to see what kind of numbers Wittenberg's study returns in 2003. Of course, by its own measure, netLibrary could digitize another 105,000 books between now and then. And one has to wonder if any of the numbers that Wittenberg has coming will prove as persuasive as the ones netLibrary's Talmey put on the table in Boulder.

Andrew R. Albanese


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