E-Book Currents
Ebrary signs more publishers
Ebrary has arranged with John Wiley & Sons and the Greenwood Publishing Group to display titles from these publishers on the Ebrary Web site (www.ebrary.com). Wiley publishes scientific, technical and medical journals, encyclopedias, professional and consumer books. Greenwood publishes academic monographs, reference titles for university, public and school libraries, college texts, journals, and professional books. A similar arrangement is expected between Ebrary and Penguin Putnam. On the Ebrary site, users can search for documents or read pages at no cost, but must pay to copy or print a page. Publishers who supply the documents set copy and printing prices, which are typically 25 cents per page to print and 50 cents per page to copy. About 80 publishers currently supply material to the Ebrary site.
netLibrary in bankruptcy
In mid-November netLibrary filed for bankruptcy. The company had been running at a loss during its initial period of developing operations and revenues. At last count an archive of about 40,000 titles was in place,including material from over 100 publishers, and about 5,500 libraries and other organizations were being served by the company. Patrons of libraries that purchase e-book titles from netLibrary can view a purchased title online at the netLibrary Web site, or download it for a brief loan period. Copying of titles is prohibited.
On the same day the bankruptcy was filed, the Online Computer Library Center(OCLC) offered to purchase substantially all netLibrary assets. For those not familiar with OCLC, it is a non-profit organization that provides services to some 40,000 libraries world-wide. OCLC's intention seems to be to continue to make the netLibrary e-book collection available to libraries and other organizations. The terms on which this will be done had not yet been spelled out when this column was written. Hopefully, the needs of libraries will be foremost in plans for future operations of OCLC/netLibrary e-book services.
A lawsuit filed by Parthenon Investors of Boston, a firm that invested about$15 million in netLibrary, cites some scandalous items. The suit alleges that revenue figures were inflated, triggering a contractual requirement that Parthenon put up $7.5 million. There is also an alleged $100,000 kickback from a real estate broker, who got a $300,000 commission on finding office space for netLibrary. Another kickback of $250,000 is alleged from a vendor who sold office furniture to netLibrary.
A recent statement from netLibrary assures its customers that libraries and their patrons will have uninterrupted access to e-books, that development work at the company continues, as does analysis of e-book use data, and that content will continue to be added to the netLibrary site.
Questia cutbacks
Since Questia (www.questia.com)was launched at the beginning of 2001, the service has been providing a growing catalog of titles that is expected to reach 70,000 by the end of 2001. Users,primarily liberal arts and high school students, are charged about $20 a month for unlimited access to the textbooks, works of literature and research journals in the Questia collection. The students can read the materials online, add highlighting, make footnotes and use the materials to write their own papers. Questia pays the publishers of the materials based on the number of page views they get. Unfortunately, Questia has obtained fewer subscribers than they had expected. Since May, the Questia workforce has been reduced from 280 down to 40. However, the company had initially raised some $135 million, and has continued to receive infusions of funds from investors. The most recent is $5 million from Quanta Computer of Taiwan and another round of funding is under way, so Questia appears to have the staying power needed to weather current difficulties in the overall economy.
Skylarov trial date to be set
The date for the first courtroom trial to test the Digital Millennium Copyright Act (DMCA) will be set in April 2002. Dimitry Skylarov, a 27-year old Russian programmer who has been indicted on charges that he violated the DMCA,faces a possible 25-year jail sentence. The charges center on a software tool written in Russia at Skylarov's firm, Elcomsoft. The tool is capable of circumventing reader restrictions imposed by Adobe Systems' e-Book Reader,allowing users to copy and print e-book titles. The basis of the indictment is that Elcomsoft briefly marketed the tool in the USA. The trial schedule was delayed to allow defense attorneys to have evidence translated from Russian into English. Skylarov is represented by John Keker, a prominent San Francisco attorney, who has taken the case free of charge. Skylarov's arrest has stirred international opposition from programmers, Internet organizations, civil liberties and human rights groups.
College uses copyrighted color e-books
When the Mesa Community College in Maricopa County, Arizona made three e-books freely available on its Web site, Jill Morton, the author of the books,decided to sue. Although the college disabled the Web page that offered the books, the suit seeks injunctions and damages, because the college refused to track down copies made from the page, and to prevent further use of copies by professors and students. The e-book titles, Color Voodoo #2, #3 and #5,are sold by the author from her own company's Web site (www.colorcom.com). The trial will test the limits of non-profit use of e-books by educational institutions.
Reader restrictions do not prevent piracy
A decryption program that converts Microsoft Reader files, so they can be viewed with any Web browser, was recently demonstrated to editors of the MIT publication Technology Review. The program was developed for personal use to allow reading of e-books on multiple devices, and the developer chose to remain anonymous.
When users buy an e-book in Microsoft Reader format it is equipped by the vendor with one of three copy restriction levels, as specified by the e-book publisher. The level used for bestseller titles is owner-exclusive. Until recently, this level meant that only two copies of the title could be activated by the purchaser, with access restricted to the computers or devices on which the title is activated. Microsoft reader restriction software now allows for activating up to four copies. Such restrictions are believed to deter many potential customers from purchasing e-books.
The decryption program works by recovering hidden encryption keys in the Microsoft Reader copy of an e-book. The program reverses the process publishers use when they assemble text and image files to make up an e-book and an unprotected copy of the e-book is produced. Similar decryption programs can be readily created by knowledgeable and determined encryption experts, but they are beyond the capability of ordinary e-book users. What the decryption program demonstrates is that reader restriction software may create irritating obstacles for e-book purchasers, but it will not deter e-book pirates and black market publishers.
Success without restrictions
E-book publisher-distributors Scott and Stephen Pendergrast, who launched their Fictionwise Web site (www.fictionwise.com)about a year and a half ago, claim a 300 percent growth in revenue during the past year. By the first quarter of 2002 they expect to operate at a profit. The site began with 400 e-book titles, most of which were science fiction items. Now the site carries over 1,000 titles in many genres, including non-fiction items. Users of the site have grown from 9,000 to 30,000 during the past year. The owners attribute their success to the fact that they do not use, and plan never to use, reader restriction encryption software. "We don't believe in handcuffing our customers." They claim to have heard that some large e-book publishers plan to sell their titles on a similar unencrypted basis. In addition, Fictionwise offers their e-books in virtually every available format, including Palm device formats, and they give a 20 percent referral fee to other Web sites that provide purchasers of Fictionwise e-books.
Gutenberg asks for support
Project Gutenberg (http://promo. net/cgi-promo/pg/cat.cgi) now makes over 4,000 out-of-copyright e-book titles available without charge. The titles can be downloaded from the Project Gutenberg site. It takes a lot of work to prepare Gutenberg e-book titles for Web publication, to research copyright status on titles, and to do the rest of the work required to keep Gutenberg going. The work is done by volunteers but there are still expenses. One of the largest is the cost of filing the paper work needed to register to receive tax-deductible contributions in all states. At present Gutenberg has been approved as a 501(c)(3) organization by the US Internal Revenue Service, and paper work requirements have been met for 38 states: Alabama, Arkansas, Connecticut, Delaware, Florida, Georgia, Idaho,Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Michigan, Missouri,Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York,North Carolina, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina,South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, Wisconsin,and Wyoming. Donations should be sent to Project Gutenberg Literary Archive Foundation, PMB 113, 1739 University Ave, Oxford, MS 38655-4109.
Franklin e-BookMan ups and downs
The Franklin e-BookMan display device, which sells for about $130, has not been as successful as the company hoped. In the second quarter of 2001, returns on the device exceeded sales and it had a net loss of $1.1 million. Franklin e-book operations overall also operated at a loss for the quarter. Still,Franklin has some impressive assets. The main bread and butter item for Franklin has long been digital reference information that it sells to lawyers, doctors,and other professionals, and those sales continue. Through its new partnership with MobiPocket, a small French software developer with an e-book reading capability that can be used with many different handheld devices, Franklin hopes to gain access to millions of potential e-book readers who currently use handhelds. In addition, there are plans for a new, smaller Franklin handheld device that will sell for about $50 and will use interchangeable memory cards to carry the information that the company sells.
Random House changes e-book imprints
Random House has decided to fold up its AtRandom imprint under which it has been publishing adult e-books. AtRandom was originally created to publish short fiction and niche-oriented e-book titles. Later, AtRandom was broadened to include full-length electronic and print books. Those titles will now be offered by the Random House Trade Paperback and Villard imprints. At the same time the company has launched a new e-book imprint, Random View, for middle grade and young adult readers.
Follett offers estudy guides
Follett Higher Education Group, a major operator of college book stores, is now offering study guides and other course materials in Microsoft Reader and Adobe Acrobat eBook Reader formats. Available on the Follett Web site (www.efollet.com) are materials from Thomson Learning Higher Education Group, Wiley Higher Education, Houghton Mifflin College Division, and Bedford, Freeman and Worth Publishers. Other higher education publishers are also preparing to sell their e-book study guides through the efollett.com eBookstore.
E-Ink prototype reader
An e-book reader one centimeter thick that runs on two AA batteries has been demonstrated by E-Ink (www.eink.com)and is expected to be available to consumers in 2003 at a price of about $300. The device has a screen that measures seven inches along the diagonal, and will come with a slot for a memory card. The display is said to be very high contrast and clear, with a resolution of over 150 dots per inch, twice as sharp as that of the typical computer display. The E-Ink technology uses microcapsules printed on to a sheet of plastic film. There are both white and black particles in the film. When a negative charge is applied, white particles move to the top, making the charged area appear white. When a positive charge is applied, black particles move to the top, making the charged area appear black. By changing the applied charge so that particles do not rise completely to the top of the plastic film, four shades of gray can be produced. Power requirements for E-Ink are low, since electricity is needed only when particles are moved to make display changes, so battery life is said to be very long. An eight-color display is in design.
Howard Falk(falkho@msn.com) is an independent consultant based in Bloomfield, New Jersey, USA.
