October 29, 2008

Google Settles; Now The Fights Really Begin [7:20 am]

After all, this is quite an imposing barrier to entry: Google Settles Suit Over Book-Scanning (pdf)

Settling a legal battle, Google reached an agreement with book publishers and authors that clears the way for both sides to more easily profit from digital versions of printed books.

The agreement, under which Google would pay $125 million to settle two copyright lawsuits over its book-scanning efforts, would allow it to make millions of out-of-print books available for reading and purchasing online.

It outlines the framework for a new system that will channel payments from book sales, advertising revenue and other fees to authors and publishers, with Google collecting a cut.

The deal goes some way toward drawing a road map for a possible digital future for publishers and authors, who worried that they were losing control over how their works were used online, as the music industry has.

Also Google search starts new chapter with $125m deal (pdf); Google Settles Publishers’ Lawsuit Over Book Offerings (pdf)

From the LATimes article, Google settles copyright dispute with publishers and authors (pdf)

Of the $125-million payment, $34.5 million would be used to form a registry to store copyright information and arrange payments. Google also would pay about $60 per copyright holder for copyrighted books it has already scanned and would give 63% of all money from sales, subscription and advertising revenue to copyright holders.

“What this agreement does is, it provides a model for us to work together,” said Macmillan Chief Executive John Sargent.

The deal would give Google, which has scanned more than 7 million titles, more Web content to help pump up a book search business that has yet to gain momentum. Yet it has little competition: Microsoft Corp. ended a similar books search program in May, essentially ceding the business to Google.

Google has carved out a lucrative business selling advertising alongside digital content and splits the revenue with partners rather than selling access to the content.

Selling access to content is one of the new ways the company is exploring to make money, said Adam Smith, a Google director of product management.

David Carr also has a column: Mourning Old Media’s Decline (pdf)

For readers, the drastic diminishment of print raises an obvious question: if more people are reading newspapers and magazines, why should we care whether they are printed on paper?

The answer is that paper is not just how news is delivered; it is how it is paid for.

More than 90 percent of the newspaper industry’s revenue still derives from the print product, a legacy technology that attracts fewer consumers and advertisers every single day. A single newspaper ad might cost many thousands of dollars while an online ad might only bring in $20 for each 1,000 customers who see it.

The difference between print dollars and digital dimes — or sometimes pennies — is being taken out of the newsrooms that supply both. And while it is indeed tough all over in this economy, consider the consequences.

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