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Summary:

The e-book industry is dominated by Amazon and Apple, but the game will change later when Google launches its online e-book service, Google Editions. The company will allow users to download books in multiple ways, opening another front in the ongoing war of Open vs. Closed.

As it stands now, the e-book industry is dominated by two closed and proprietary giants: Amazon and Apple. Both have e-book platforms — the Kindle and the iPad — which they design, manufacture and control, and both have been busy trying to convince book publishers to do business with them, with Amazon pushing for lower prices and Apple giving in to publishers’ demands for a more flexible approach. The landscape will change dramatically later this year, however, when Google is expected to launch a digital book-selling unit called Google Editions. The search company’s entry promises to turn the e-book business into yet another battle in the ongoing war of Open vs. Closed.

According to Google product manager Chris Palma, who described the search giant’s plans at a recent publishing industry event in New York, it will start selling digital books in late June or July. And unlike books bought from either Apple or Amazon, which are locked by digital rights management software and can only be read on the proprietary devices sold by those companies, Palma said that e-books bought from Google Editions will be accessible from a range of non-Google websites and will be readable on any device that has a web browser (including presumably a Google tablet, if one ever materializes). It doesn’t get much more open than that.

The Google staffer said that users will even be able to buy versions of the e-books they want directly from book retailers, which would allow them to keep a larger portion of the revenue from a sale. When it comes to pricing, however, the company apparently hasn’t decided whether to set prices itself or adopt the so-called “agency model,” which lets publishers set the price. The choice is an important one: Amazon has been pushing to get publishers to lower prices, hoping to spark demand for e-books that will help sell more Kindles (the same strategy Apple chose when it was using iTunes to sell iPods). But Apple has decided to play nice with publishers and use the “agency model,” which tends to keep e-books higher-priced.

Whatever pricing scheme it chooses, it seems clear that Google wants to come down on the side of being as open as possible — a choice likely designed, at least in part, to set the company’s service apart from the proprietary models of its main competitors. In a recent interview with Ken Auletta in the New Yorker, Google engineer Dan Clancy said that the company’s approach is designed to create “much more of an open ecosystem,” and that Google was “quite comfortable having a diverse range of physical retailers, whereas most of the other players would like to have a less competitive space, because they’d like to dominate.” But will an open approach pull in consumers who have grown used to the Kindle or the iPad and iBooks?

The one who stands to lose the most by Google’s entry into the e-book market is Amazon. The company has already lost a lot of the ground that it used to hold, thanks to Apple’s support of the “agency model” of pricing. Earlier this year, Amazon tried to force publishers to accept $9.99 e-book deals by threatening to remove their books from its online store — and in one case, it actually did so, with books published by Macmillan. Unfortunately for Amazon, however, Apple launched the iPad, and along with it came an agreement with publishers to allow them to set their own prices for books, based on their existing sales models for hardcover and paperback editions.

Google’s arrival on the scene is likely to give even more power to publishers, since they will gain even more leverage over Amazon (and to a lesser extent Apple). That will almost certainly make it harder for the company to try and bully publishers into accepting its pricing model. And if Google decides to go with the “agency model” as well, and allow publishers to set the price, that could leave Amazon without much of a leg to stand on. It’s not clear whether that will necessarily be good for readers, however — at the moment, Amazon is the only one pushing for lower prices, and the rise of the agency model threatens to give publishers more power than they had before, which could keep e-book prices high, at least in the short term.

Related content from GigaOM Pro (sub req’d): The Price of E-Book Progress

Post and thumbnail photos courtesy of Flickr user Stewart

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  1. Apple’s likely already failed in this landscape, since iBooks are Not Flying Off Shelves.

    1. Not according to this story – Apple’s book sales to date are a success by any measure:

      http://blogs.computerworld.com/iphone_ebook_book_amazon_kindle_apple_sdk_app

  2. david robins Sunday, May 9, 2010

    The analogy is between democracy vs. dictatorship and Open vs. closed!
    Why put a wall around people’s choices???

  3. Books sold by Amazon are not locked down to a device. They can be accessed from phones, PCs, iPad, as well as the Kindle. Borders also plan on going down this route.

    Its also unclear if publishers will release content via google’s “open” format. I also find it ironic that so many people are buying into google’s promises without understanding its goals. Which is to make money. Like any other company. Be prepared for advertisements to be inserted into your favorite content.

  4. Reading in your web browser doesn’t sound ideal. It’s a one size fits all solution. And does it mean having to connect to the ‘net in order to read your book? Sounds like it.

    Google is as open as Walmart is. Anybody can go compete with Walmart too. :)

  5. disposableidentity Sunday, May 9, 2010

    How “open” can it be if the book you just bought from Google is locked into a web browser? Wouldn’t you want to take you new book on a plane? Or to the beach?

    Besides, none of these e-book options are really open, as long as they are wrapped in some kind of DRM (or on Google’s case, trapped behind a login on the web). I’m not saying that’s a problem, authors don’t want people making unlimited copies of their books. The only “open” ebooks we’re likely to see are books out of copyright.

  6. Apple’s sold over 1.2 Million iBooks. Not bad for less than a month.

    And less we forget. There are lots of free books out there. This means lots of iPADs selling off the shelf.

    And don’t forget the audio books.

    All in all, iTunes made Apple $1.2 Billion last quarter. And that’s all that matters.

  7. Open vs. Closed is a false dichotomy. Google is no more open than Apple or Amazon, it just has a different Closed business model than they do. Google’s so called “open ecosystems” (This is sort of like Adobe’s concept of “open content” in Flash: utterly meaningless but it sounds nice if you suspend thought.) are all designed around collecting and exploiting user identifiable information to a degree far beyond what anyone else is doing. But they aren’t “open systems” in any meaning of the term. Google simply claims everything they do is open and the tech press are too naive and infatuated too critically examine whether they are or aren’t. “Open” in this context is just a word applied to a subject where it doesn’t mean anything.

    1. One word reply: Yup!

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  13. I cant even read through my rss feeds anymore …. Everyone is so dam negative about every single tech to hit the market. Just sit back relax and enjoy the freedom of choice grated my competing products.

  14. Ahhh, but how will they priced used e-books?

    And will there be a Half-Priced E-Books store?

  15. I’m not impressed that they have to be read on a web browser. That’s the worst definition of open I think I’ve seen. By those standards, Amazon is “open” as well since I can read their ebooks on my laptop, ipad, or PC. They all have the kindle app (not that I’ve bought any books from them yet) as well as a web browser. How does connectivity factor in also?

    Not to sound all gripey. It could help with competitive price models, maybe. But all these headlines about Google’s “open” ebooks are so misleading.

  16. kindle reader on the ipad, the way to go man

  17. “[...] e-books bought from Google Editions will be accessible from a range of non-Google websites and will be readable on any device that has a web browser [...] It doesn’t get much more open than that.”

    Huh?

    Openness isn’t just about compatibility. If it were, MP3 would be the most open music format ever.

  18. It all depends on the definition of “browser.” For example, a browser can be used off-line on an html file stored on your hard drive. A browser could have plugins to read and display any other formats such as PDF – or almost anything.
    If Google requires you to be online to read a book, that indeed would not be very handy or cool. But every computer has a browser and any browser could be made capable to read and display any format. That would be handy and cool.

  19. As a self-published author, I’m stoked for Google to enter the ebook fray. It’s just another outlet for electronic books and hopefully lessens the market power of Amazon in this space.

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  25. Interesting read, enjoyed your article.

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