Thursday, January 16, 2014

ASCAP for eBooks? Norway Tries a National Broadcast Model for Royalties

With the Author's Guild continuing to keep its lawsuit against Google's library book digitization festering, much of the book industry seems to have dozed off into complacency when it comes to dealing with monetization models for digital books. DRM works just fine, thank you very much, and life-plus-a-lifetime global copyrights for books is now an accepted norm. Amazon? Hey, if you can't beat 'em, sell on 'em, and charge 'em the same for a twenty-year old book as for a new one, because, well, that's what we do, don't you know.

Hmm.

Well, that's all well and good, but fortunately some folks who are concerned with issues such as the vibrancy of our culture and affordable learning to boost productivity are taking a bit of a different tack on licensing book content. Enter the National Library of Norway, which is embarking on a project to digitize tens of thousands of older in-copyright Norwegian book titles, from masterworks by Nobel laureate Knut Hamsun to the first detective novels by Nordic noir king Jo Nesboe. The outlet for this effort is called bokhylla.no ("bookshelf"), an online ebook portal that's not notable for its design but rather for how it's making these digitized in-copyright books available. The price to the consumer: free.

Now, before publishers and authors start jumping into their dragon boats to mount an assault on Norway, put your horned helmets aside long enough to hear the good news for copyright holders: the Library of Norway is paying rights holders good royalty money to do this. Six cents per page view, to be exact, which, if you look at the length of a typical book, is a pretty good pricing scheme for more-than-fair-use content exposure. In essence, the Library of Norway is trading in savings for collections management for the ability to get valuable content that's a critical part of its culture into its citizens' hands with as little friction as possible - a key factor for many nations and cultures whose long-standing traditions and identity are beginning to sink beneath an increasingly global media culture. Social media links in each ebook's display page help the content to be publicized on the Web, helping to drive up book content "viewership."

We've seen this kind of business model before in a semi-public venue: broadcast radio and video. Whenever a song is played on the radio, an organization such as ASCAP or BMI increments a few pennies' worth of royalty revenues due for payout to a song's rights holders, extracting bulk payments from broadcast outlets in exchange for dealing with the back end of royalty payouts. Number-one hits on the airwaves get the same income per play as obscure songwriters, but since the hits are played more often, it all adds up. This has worked since pretty much the dawn of the radio industry, and has enabled public venues such as government-licensed radio frequencies to serve the public with free content, paid for indirectly by advertisers, in this instance.

The free broadcast model with a royalty back end is perfect for helping books of all ages go viral much more quickly, of course, but short of countries like Norway smart enough to turn local culture into a key national asset, I doubt that the book industry will be moving towards this model any time soon. However, there are some variations on this theme that may yet stand a chance in today's fast-moving digital media markets. Exhibit A for alternatives would be Netflix, which corrals a boatload of old movies and TV shows for all-you-can-eat viewing for a nominal monthly subscription fee. Pandora, Spotify, Google Play All Access Music and other services do likewise for audio content. It's a private approach, and one that tends to crowd out lots of good alternative content, but they are successful business models. There are ad-based variants mixed into these models as well, of course, so consumers can approach copyrighted content from another of payment angles.

The point is this: whether you're a smaller nation or a local economy trying to find a place for your unique culture and knowledge assets in a global marketplace or an up-and-coming book publisher trying to brain out better ways to expose new authors, they back-end royalty model for per-page viewing could be a lifesaver for the book industry. Polls by Pew Research and other trusted sources are showing that a new generation of TL;DR online readers (too long; didn't read) just aren't picking up the book reading habit as younger generations have. Payment models must shift, therefore, to ensure that artists have diverse revenue options. We've seen this before, of course: before radio, music royalties flowed through the sales of phonograph records and sheet music. Once radio came along, record sales soared as this content got mass exposure on free airwaves equipped with a royalty back end. Convenience and experience quality of personal media trumped free radio for enough people to make the difference. New technologies may challenge old business models, but that's no reason to dilly-dally when they come along. If record and sheet music producers had been boycotting radio stations instead of working out royalty schemes, the recording industry would have missed out on decades of lucrative growth.

So fine, Author's Guild, get mucky all you want with Google, but the truth of the matter is that if you spent a fraction of the effort that you've put into this lawsuit into working out a Web-wide standard for per-page-view royalty back ends, you'd all be wealthier and have not missed out on reaching a generation of readers now largely ignoring books. The world is a culturally poorer place as the result of this misguided energy, I fear, but hopefully some late-in-the-game rethinking of royalties on the Web can set things right. Always glad to help, of course.

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