Digital Digest: Gauging Google’s E-book Impact

Adrian Versteegh

For the approximately 10.5 million Americans who regularly read e-books, 2011 could mark a conversion to what’s been dubbed “device agnosticism.” Since e-readers first appeared on the consumer radar nearly four years ago, most have locked users into proprietary formats and into ghettoized electronic bookstores—constraints that have only gradually eroded with the introduction of industry standards such as ePub and the proliferation of cross-platform reading apps. But when the long-anticipated Google eBookstore launched on December 6, 2010, supporters pointed to its compatibility across more than eighty-five devices as a game-changing challenge to the closed systems of Amazon, Apple, and Barnes & Noble.

In truth, of course, the familiar limitations are still in place, with many of Google’s four thousand publishing partners—including the six big New York houses—electing to restrict the sharing of their wares through Adobe’s rights-management software. Along with the “hundreds of thousands” of e-books available for sale (the figure released last summer, when the nascent project was still known as Google Editions, was around four hundred thousand), the search giant offers three million free titles drawn from its massive book-scanning initiative, a number that will presumably explode if the $125 million Google Books settlement, which has been languishing in federal court for two years, is approved. Customers can browse the eBookstore by subject area, by reader recommendation, or by New York Times best-seller ranking. In a concept familiar to Gmail users, purchases are linked with individual Google accounts and stored in the digital “cloud,” where they can be arranged on virtual library shelves and accessed from almost any screen with an Internet connection—plain old Web browsers not excepted. Aside from syncing across multiple devices, books can also be downloaded for reading offline or while traveling outside the United States (the platform will debut in Europe this spring, and is scheduled to launch in Japan and Australia by the end of the year).

Device agnosticism may be enough to pique interest, but perhaps the most notable aspect of Google’s eBookstore is its integration with the virtual storefronts of independent booksellers. More than half a year before it went live, the scheme received the imprimatur of the American Booksellers Association (ABA), and as of this writing 178 retailers in thirty-six states offer Google eBooks through their Web sites (a continually updated list of participating members is maintained at “The book industry is changing,” Emily Powell, president of Portland, Oregon–based Powell’s Books, said last December, “because the way our customers read books is changing. By working with Google, we’ll continue to get books into the hands of our customers, whether the book format is new or used, hardcover, paperback, or electronic.”

When its partnership with the ABA was first announced, Google also disclosed long-term plans to let customers browse and purchase its eBooks alongside their print counterparts in brick-and-mortar stores—a vision of peaceful coexistence that has heartened some bibliophiles. William Petrocelli, whose northern California store Book Passage is a Google retailer, stresses that the expansion will underscore the complementary merits of each format. “We’ll learn to love and respect each other,” he wrote in the Huffington Post, “just as long as they don’t barge into the kitchen and start trying to run things.”

But the touted openness of the Google eBookstore is premised upon the growth of digital rather than print-based reading, a market trend evidenced by the avalanche of tablet devices unveiled at the Consumer Electronics Show in January. According to Gartner Research, tablet sales reached twenty million last year and are expected to approach sixty million in 2011—led, most likely, by the iPad 2. Google may not have a tablet of its own (yet), but that isn’t stopping it from taking on Apple directly with its Android operating system, already the dominant platform for smart phones and now sporting, in its latest iteration, a direct connection to the Google eBookstore.

As for Google’s other chief competitor, the Kindle remains the only major e-reader not supported by Google eBooks (although the company has said that it is “open to supporting them in the future”). Just days after Google entered the market, Amazon unveiled a suite of features—including Kindle for the Web, an Android store of its own, and an end to registration requirements—that essentially matches the functionality of Google’s program. And by late December all three big e-book vendors were rumored to be either developing or tweaking existing newsstand platforms to enable periodical-subscription models that more closely mirror their print antecedents. For its part, Google, according to the Wall Street Journal, is said to be sweetening the pot by settling for less than the 30 percent cut Apple takes for magazine issues (each of which Apple counts as an app), as well as by offering to share customer information with publishers.

It’s precisely this trove of information that has many industry watchers worried. With most media searches now routed through Google, the company is en route to becoming the world’s literary intermediary, altering—or perhaps usurping—roles once played by librarians and local booksellers. And given that Google earns the majority of its income from advertising, some analysts are predicting the advent of an ad-based publishing model. “Books are the only medium left not significantly sponsored by advertising,” says Forrester Research’s James McQuivey. The launch of Google’s eBookstore “means that soon we will no longer need to force the entire cost of a book on the buyer, but instead can extract value from readers in direct proportion to the value they get from it. In other words, the more pages they read (the more value they get), the more ads they see and the more value the publisher and author receive.” While McQuivey sees advertising as an economic shot in the arm for an ailing industry, detractors worry that once books are supported on a page-by-page basis with targeted pitches, the influence will inevitably make its way along the chain of production, affecting editing and even writing itself. (WOWIO, a digital platform for comics and graphic novels, is already using a proprietary technology that allows its e-books to be “sponsored.”)

What’s more, not only are online sellers already beholden to Google’s digital architecture—through the imperative for metadata wrangling and the importance of so-called search engine optimization—but those willing to throw in with the eBookstore are caught in a curious arrangement that positions Google as both a wholesaler and a retailer. The company will reportedly pay publishers 52 percent of the list price for e-books it sells directly, taking a 30 percent cut of titles sold under the agency model (where publishers specify prices). For sales made through independent storefronts, that 30 percent—minus Google’s fee (said to be comparable with the single-digit percentage collected by the digital arms of conventional wholesalers, such as Ingram)—will go to the retailer. The upshot of this system is that Google is also a direct competitor to its indie “partners,” at least where nonagency titles are concerned. While Google has pledged that it will continue to include links to alternate sellers in its search results, a quick check shows that Google is matching Amazon’s $9.99 price point on many best-sellers, opening up huge disparities between itself and its partners. With most independent booksellers too small to absorb such deep discounts, consumers will ultimately have to be willing to pay more to support their favorite retailers—a resolution more easily made in a neighborhood bookstore than in the cold light of a computer screen.

But whether the Google eBookstore proves to be a Faustian bargain for indie retailers remains to be seen. E-book sales, according to the latest data from Forrester, reached nearly one billion dollars in 2010, a watershed number that puts the medium in the big leagues. With that figure expected to triple by 2015, even the dustiest independent booksellers are bowing to pressure and accepting that digital literature is a market they can’t afford to ignore—even if the only way to secure a piece of it is by hitching their wagons to a colossus. If, as Google asserts in one of its videos, the new eBookstore is “all about choice,” then that choice may come down to play or perish.

Adrian Versteegh is a Henry MacCracken fellow at New York University and the editor-at-large of Anamesa.