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FW: Chicago Tribune E-books solving a problem consumers don't ha ve.h tm



     Electronic publishing
      E-books solving a problem consumers don't have


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      By David Streitfeld
      Special to the Tribune
      Published August 9, 2001

      Richard DeGrandpre wrote "Digitopia" as a warning about the false
promises of the wired world. Then it was published as an electronic book,
and all his predictions came true.

      "Digitopia," issued by Random House in March, was never reviewed or
promoted or, it seems, downloaded. "My book is just dead," said DeGrandpre,
a psychologist.

      So are just about everyone else's e-books. The publishing world's
attempts to turn electronic fiction and non-fiction into a lucrative revenue
stream have yielded only a trickle of customers.

      Flaccid sales aside, publishers face even bigger challenges.
Digitizing the printed page has put the very nature of books up for grabs,
unleashing heated battles among writers, readers, librarians and
technologists over who should control electronic books.

      "There's only one place e-books are popular: the courtroom," said
publishing consultant Lorraine Shanley.

      This week in San Jose, Calif., a judge released on bail the defendant
in the most explosive e-book case yet.

      A Russian graduate student named Dmitry Sklyarov was arrested three
weeks ago for writing a program that breaks the encryption on e-books.
Prosecutors say he was violating copyright law. Sklyarov's defenders say he
was merely trying to give owners of e-books some of the same rights that
owners of printed volumes have.

      The first person to be jailed under the Digital Millennium Copyright
Act, Sklyarov could receive a sentence of up to five years.

      "Arresting Sklyarov was insane, but there's an increasing tension
between people who need and use information and those who want to control
it," said Michael Mellin, a consultant who founded Random House's electronic
publishing operation.

      Strong billing

      Two years ago, e-books were heralded as a technology that would make
the traditional printed volume obsolete.

      Random House, like Time Warner, Simon & Schuster and other major
publishers, began developing an e-book line. Enthusiasm was stoked by an
Andersen Consulting study done for the Association of American Publishers.
It concluded that by 2005, 10 percent of book sales, or $2.3 billion a year,
would be electronic.

      Another study said 1.7 million specialized devices for reading e-books
would be sold by then.

      "E-books had a glow about them similar to what music videos had in the
mid-1980s," said Random House spokesman Stuart Applebaum.

      "You weren't cutting edge, you weren't a truly progressive publishing
executive, if you didn't see e-books as part of the great future for your
imprint."

      E-books are downloaded from on-line book sellers such as Amazon.com
and Barnesandnoble.com to specially designed devices such as Gemstar's REB
1110 or to desktop or hand-held computers equipped with the requisite
software made by companies such as Microsoft Corp. and Adobe Systems Inc.

      Worried about being "Napsterized" -- with their books freely
distributed in digital form around the globe -- publishers enveloped their
e-books with digital locks to prevent transferring, copying and printing.

      Sklyarov is accused of figuring out how to pick the lock.

      Last summer, Random House, eager to demonstrate it would still be
viable in the post-paper world, officially announced its first 20 e-books, a
list that included such relatively well-known names as Harper's magazine
editor Lewis Lapham and economics writer Robert Samuelson.

      Changing course

      But as the stock market drooped and the zeal for all things tech
withered last fall, Random House began to hedge its bets. The original low
price of $5 for each e-book download was doubled. The publisher also
announced that limited print runs would accompany electronic publication.

      The result, according to author DeGrandpre, was the worst of both
worlds: an e-book that no one cared about and a printed book that no one
knew about. The print version of "Digitopia" recently ranked 658,756 on the
Amazon.com best-seller list, about as low as it is possible to get.

      "I tell people not to buy it," DeGrandpre said.

      "If it's going to be a failure, it might as well be a huge failure."

      Cameron Dougan, whose "Because She Is Beautiful" was the only novel on
the first Random House e-book list, was somewhat more upbeat.

      "My experience was bittersweet," he said, noting that "the technology
has a lot of catching up to do" but that at least now he is a published
novelist. Still, when he's done with his second novel, "I don't believe my
agent will be pushing it as an e-book."

      While no industrywide statistics are being kept on e-book sales,
consultant Jim Lichtenberg said the market is practically nonexistent.

      "There's no standardization in technology," he said. "It's all a big
mess. This is like having a car in 1905. It breaks down instantly, which
means you have to travel with your own mechanic -- and since there are no
roads, there's nowhere to go anyway."

      Favoring paper

      Equally gloomy is a recent study by the research firm Odyssey, which
found in a survey of 500 households that 40 percent had a "poor" initial
impression of e-books. Three-quarters of the respondents said they didn't
care how good the computer screen was, they preferred to read off paper.

      "E-books are solving a problem that consumers don't have," said
Odyssey analyst Devin McDonell.

      One reason for the consumer rejection may be all those strict controls
the publishers put on their e-books. The controls are backed up by the
Digital Millennium Copyright Act, passed by Congress in 1998. The act
broadens the rights of the producers of content while restricting those of
consumers. It is now a crime not only to violate copyright but to make tools
that enable such a violation.

      It always would have been a violation of copyright to photocopy dozens
of copies of Dougan's novel and sell them on the street. Now, critics argue,
it's as if the photocopier itself is illegal.

      Doing the impossible

      That's the predicament Sklyarov is in. An employee of the Russian
company ElcomSoft, he helped develop software that removed certain
restrictions that were built into Adobe System's e-book software.

      Using ElcomSoft's Advanced eBook Processor, someone could take a text
on a computer equipped with Adobe's software and make a backup copy, or
transfer it to another computer in his house, or make a copy for a friend --
all things that are supposed to be impossible.

      Adobe Systems, which set Sklyarov's arrest in motion and was
consequently the subject of demonstrations and a boycott movement, has
backed off, saying it doesn't want him jailed. The Association of American
Publishers, however, continues to hail the government's action, saying
Sklyarov's software "facilitates theft, and makes it less likely that
e-books will soon become a popular reading format."

      Allan Adler, a vice president at the Association of American
Publishers, said that while publishers are often being portrayed as
money-gouging bullies, they're merely trying to stay alive.

      If libraries were routinely able to convert their collections to
digital formats, and then offer their patrons remote access to that
material, they would essentially become and maybe even replace publishers.

      Vulnerable position

      Publishers, Adler said, "are extremely vulnerable now."

      That's why Random House is continuing its fight against RosettaBooks,
a small New York electronic publisher. Rosetta acquired from three Random
authors the rights to digitally distribute their novels.

      Random is afraid that it will have to renegotiate the electronic
rights to its entire backlist of thousands of classics. These are books it
signed up long before any publisher knew to ask writers for digital rights.

      A New York judge denied Random's request for a preliminary injunction
that would stop Rosetta from selling the novels by Robert Parker, William
Styron and Kurt Vonnegut. Random is now appealing.

      "The lawsuit is all about the future, and the potential for e-books
that has yet to be realized," said Random spokesman Applebaum.

      At least one of the writers whose work is being fought over doesn't
believe that potential will ever come to pass.

      "The e-book is a ridiculous idea," said Vonnegut, who hasn't read his
work on a computer and never intends to.

      "The printed book is so satisfactory, so responsive to our fingertips.
So much of this new stuff is utterly unneeded."

      By David Streitfeld is a staff writer for the Los Angeles Times, a
Tribune newspaper.


      Copyright © 2001, Chicago Tribune



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