E-book industry warned of piracy threat

The electronic-book industry must be diligent and energetic in its efforts to avoid the copyright problems the music industry has experienced due to the widespread use of file-sharing technologies, a Microsoft Corp. executive said Monday at a government-sponsored e-book conference.

The e-book industry thus far has escaped a threat like that brought by Napster Inc. to the music industry, partly because its customers are older and less rebellious and because relatively few books are available in digital format, said Dick Brass, vice-president of technology development for Microsoft. E-books account for only about one per cent of the industry’s US$20 billion in annual revenue, he said.

But that figure is expected to grow to 10 per cent by 2005, Brass said, quoting a study prepared by Andersen Consulting Inc. for the Association of American Publishers, and the industry has to be ready for a time when a typical reader will carry the digital equivalent of a library full of books in their knapsack.

Speaking at the Electronic Book 2000 conference sponsored by the National Institute of Standards and Technology (NIST), Brass said one of the key things online booksellers must do is to establish an “honest market” before software pirates gain a toehold. The recording industry paid a price for failing to do that because it was afraid of upsetting retailers and losing control of the distribution channels, he said.

“That gave the pirates an opportunity to become the Wal-Mart of music,” Brass said, referring to the popular U.S. discount chain store. “Publishers are not going to make that mistake. I believe we’ve convinced them they must move, and they must move quickly.”

There are signs that publishers are stepping up to the challenge. Earlier this year, Simon & Schuster Inc. released Stephen King’s Riding the Bullet as an e-book, making it available for download, and more than 500,000 copies were snapped up in 48 hours, Brass said. Also, Time Warner Inc. recently announced the formation of iPublish.com, an effort to solicit, distribute and nurture new works online. Microsoft is promoting its Reader software by teaming with Random House, Simon & Schuster and Barnesandnoble.com to offer free e-book versions of a Michael Crichton novel and several Star Wars titles for Pocket PC handhelds.

Brass, reiterating some of the points he made in a speech last month, said the industry also must implement good copy protection that is easy to use, must call for firm enforcement of copy protection laws, and must educate the public about the dangers of breaking the long tradition of paying for intellectual property.

Microsoft is well-known as one of the IT industry’s biggest crusaders against the illegal copying of software – especially of popular programs like Microsoft Office – largely through its backing of organizations like the Business Software Alliance. Brass said to prevent software piracy, the industry has done well at establishing an honest market, educating the public and enforcing copyright law, but it has not done well at making copy protection easy and convenient.

The Electronic Book 2000 conference is the third annual sponsored by NIST, a division of the U.S. Department of Commerce. Victor McCrary, chief of the high performance systems and services information technology laboratory at NIST, said that since the first conference in 1998, much of the focus in the e-book industry has been on standards.

NIST has worked with industry representatives to develop the open e-book (OEB) standard, which was introduced last year. The e-book industry is beginning to see “vast adoption” of OEB, which is backed by Microsoft, McCrary said. Other companies, however, such as Adobe Systems Inc., consider it a step backward from the widely used PDF (portable document format) standard.

Much of the discussion at the conference will be about standards, said Michael A. Looney, senior director of marketing and business development for e-books at Adobe. PDF is structured to represent exactly what the publisher intended, Looney said. It also offers tens of thousands more fonts than OEB and features such as graphics that flow across the binding of a page.

“At the moment we feel we surpass the OEB standard,” Looney said. “We are not opposed to being OEB-compliant; however, for us it would be a step backward.”

NIST, in Gaithersburg, Md., can be reached at http://www.nist.gov/. Microsoft, in Redmond, Wash., can be reached at http://www.microsoft.com/; Adobe, in San Jose, Calif., can be reached at http://www.adobe.com.