Hurdles remain on Google's books deal

A landmark settlement between internet search group Google and publishers announced this week paves the way for a digital future for the book industry. Or does it?

Casual readers, students and researchers now will have unprecedented means to search for and buy online access to books at public libraries and universities in the US. But even as some authors salivate over the possibility that Google has laid the groundwork for an iTunes for publishing, big hurdles remain - starting with the system itself. The complex agreement - reached between Google and authors and book publishers, which had sued the internet search group in 2005 - does not cover the latest bestsellers.

Nor does it allow the purchase of a digital file that would be readable on most handheld gadgets on the market today.

Richard Sarnoff, co-chair of Bertelsmann, owner of publisher Random House and an architect of the settlement, says discussions with Google centred on out-of-print, in-copyright works that generate no revenue but attract an eager audience of students and researchers. "It's a watershed event for scholarship and research," he says.

Google has yet to figure out what types of products the new system might spawn. "We have the ability in the agreement to agree with the registry to be able to allow print-on-demand" and downloadable files, says Alexander MacGillvray, Google associate general counsel for products.

Unlike's Kindle device, accessing a book on Google's service currently requires an internet browser and a handheld wireless device that is connected to the web. Few such devices on the market will inspire consumers to spend long stretches reading.

However, Google's system leaves open the possibility to create a business in selling current in-print books and new releases. Publishers are cautiously optimistic, though they worry about suffering a similar fate as the music industry.

However, sluggish growth industry-wide has forced publishers and authors to tip-toe, if not plunge, into the digital business. Traditional consumer and educational book sales have slowed in recent years and are only expected to rise by 2.8 per cent compound annual rate through 2012, according to a recent PwC study.

The biggest growth will come from sales of electronic books, or e-books, which are expected to rise to $6.7bn, or about 5.2 per cent of all book sales, from $1.3bn in 2007. Sales on Kindle already account for 10 per cent of all Amazon book sales in digital or print.

"In the biggest sense, this has the potential to be like iTunes for books," says author James Gleick.

"It is creating an online, digital market, an arena for online commerce for books. Unlike the rest of the things been tried, it has the potential to work in a universal way."

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