Google's settlement of a three-year old lawsuit challenging its Book Search program, which scans books and make portions available online, creates a new revenue stream for authors and publishers (and itself) — but the financial benefits are dwarfed by the clear field the company now has to complete an ambitious program to create a global digital library.
Google agreed to pay $125 million to settle lawsuits by authors and publishers who sued to stop the company from digitizing out-of-print — but copyright — material. Under Book Search, it has already scanned some 7 million books and estimates there are 20 million more that would qualify, BusinessWeek reports.
A finding against Google could have subjected them to significant infringement penalties — $700 to as much as $150,000 per book, according to Pillsbury Winthrop Shaw Pittman copyright attorney Cydney A. Tune. "If you look at the number of copyrighted works that were involved in the case and multiplied it by the number of statutory damages for each work," said Tune, "that's a huge amount of potential damages."
But, more to the point, a court ruling against Google would have had a chilling effect on a program whose purpose is not to make any money per se but to preserve the knowledge in libraries the world over, and make it more widely available.
At present, only Google has the will — and probably the wherewithal — to tilt at such a windmill. Only Microsoft has attempted anything similar — and it abandoned its Live Search Books initiative earlier this year.
With the incentive of being paid something, authors and publishers now have little reason to fundamentally oppose the project few probably did anyway on principle alone.
But by creating a market (and now by settling) Google has provided a bit of a windfall for the content holders, whose out-of-print works were not likely to get back into "print" any other way, with the establishment of a new non-profit Book Rights
Registry to manage royalties.
Authors are the ultimate winner, says Laura Martin, an analyst with
Soleil Media Metrics, “because it gives them a precedent so that anything that Google puts on there, anything Google does in the digital space, it will have to recognize and pay the copyright owner.”
Under the agreement, out of print, copyright protected books will continue to be scanned, but publishers now have the option of activating a “Buy Now” button for readers to download a copy of the book. Google will take a 37 percent share of the profits, and the remaining 63 percent will go to authors and publishers.
In addition, Google plans to charge an administrative fee of 10 to 20
percent from the author-publisher's share, said David Drummond, senior vice president, Corporate Development, and chief legal officer for
Google in a press teleconference.
Google could potentially make quite a bit of money from all the new revenue streams, but analysts agree that getting into the book-selling business is more of a strategic move than a financial one.
“The revenue share on the books is a plus, but I think it’s more to accommodate the publishers so that they can see this as a way where they’re not just providing free access to their content,” said Clayton
Moran of Stanford Group Co. “I wouldn’t really view this as a competitive threat to Amazon.”
Universities and institutions can also buy a subscription service for unlimited viewing of the entire collection, and U.S public libraries will have terminals for students and researchers to view the catalog for free.
Regardless of who benefits more as a business, this certainly a big win for readers.
Photo: Flickr/timetrax
