Omnivorous Digital Wars

In the BA report ‘Brave New World’ we raised the question of new market entrants – the omnivores. These beasts are different to all that have gone before and literally do eat all before them. They have huge financial clout and could be said to care little about literature and issues such as rights and more about world domination. Their mission is not based on books and service but on dominating the search and discovery space on the Internet. The reward they seek is not in book sales but is in advertising revenue.

“So what?” you quite rightly ask and I remember discussing Amazon with a leading industry figure in the late nineties. All he could go on about was how Bertelsmann were about to crush Amazon and how they didn’t make profit. I remember well the debate and the sheer lack of understanding he had of global branding, positive cash flow and what we now all now know as ‘Long Tail’ economics. History has shown that he got it all wrong. But Amazon far from being a bad thing has stimulated, and has in general, been good for the book market.

So what about these new omnivores? Google, Yahoo and MSN are all chomping up as much digital content as they can get hold of. Amazon hasn’t gone away but doesn’t have the same clout as these new entrants. These new wars are only just starting. It is not a case of who will win, but how others react and how the landscape will develop.

We read last week about the ongoing legal battles facing Google. A group of publishers and the Authors Guild allege that they failed to get correct approvals to make copies of books. Google have now have subpoenaed Amazon, Yahoo and MSN among others. An act that has been rebuffed by Amazon and Yahoo who refuse to share their strategy and digital actions in the open. Who knows how this battle of the giants will pan out? However, Google appear to have adopted an interesting approach in another market with respect to You Tube and have defiantly set aside a huge legal war chest to fight those battles.

Last week we also read about the launch of Google’s Online Access Platform. Some of the guests appear still appear to be divided as to whether to join the party. What is certain is that many will line up for their pieces of silver.

Which model will Google adopt when it finally moves into selling digital content? Will they rent it, serialise it or sell it outright? How many author contracts cover these positions adequately? How will royalties be accounted for? Who will deal with the thorny issue of orphaned works, or will ‘due diligence’ give them the powers to ‘land grab’ all titles that are currently sitting in the that ‘grey’ area between ‘public domain’ and ‘in print’.

The omnivore issues and challenges are still significant, but will the industry face up to them or capitulate and hand over the digital space to the likes of Google? The search engine is essential in the digital world as it enables people to find, qualify and value content but does it mean that you have to hand over all the digital content over and buy it there too?
I have always believed in collaboration and co-operation, recognising what each party brings to the table and ensuring that the strategy is mutually equitable. If the omnivores stimulate digitisation and the digital market that will be good. Their presence will have an impact on the publishing value chain and may lead to some disintermediation but that is inevitable. However, if in doing so they undermine the very foundation of the market – intellectual property rights - we all will have much to answer for.