iSpeech gives publishers three options for creating content. They can convert PDFs to audio files; they can add a widget to a website that essentially adds a “play” button to an article; or they can use more sophisticated developer tools built on iSpeech’s API and add them directly to their web pages. Pearson is using the PDF option for its textbooks. Evernote is using the developer tools to integrate speech technology into its web reading platform Evernote Clearly. “The natural evolution of this is to potentially bring this functionality into all of Evernote’s products,” iSpeech COO Yaron Oren told me. “One of the things we hear directly from Evernote customers is they want to be able to listen to their Evernote notes in the car, so it would be great to have this kind of of functionality.”

The publishing platform’s business model is basically pay-per-use, Oren said, and the cost usually ends up totaling “less than a tenth of of the cost of professional narration.” For websites, iSpeech charges by the word, which varies depending on volume but ranges from $0.01 to a fraction of a cent per word. For books, the company charges by the page; there are volume discounts, but Oren said that in general, the maximum cost to convert a 250-page book to audio with iSpeech would cost around $1,000. “We’ve heard from publishers that a book with voice talent tends to cost in the order of $15,000 per book,” he said.

Amazon ran into legal trouble when, in 2009, it automatically added text-to-speech technology to ebooks. The company insisted that text-to-speech features don’t violate copyright, but said at the time, “We strongly believe many rights-holders will be more comfortable with the text-to-speech feature if they are in the driver’s seat,” and decided to let rights-holders “decide on a title by title basis whether they want text-to-speech enabled or disabled for any particular title.” Oren says iSpeech will avoid those issues by leaving the decision to publishers — though it seems as if Evernote Clearly could potentially run into trouble, since it doesn’t hold the copyright to the articles that users save to its platform. (Evernote says it’s “comfortable” with the feature and is only running it on the article pages, not on articles saved into Evernote.)

For now, iSpeech’s publisher tools are primarily going to be of interest to nonfiction publishers — not publishers of, say, novels. “It’s a viable alternative to nonfiction, textbooks, or more straightforward news content,” Oren said. “For fiction, or other content where there’s more emotion and differences in reading style, this is not an alternative [yet].” But, he said, “this is about making more content available [as audio]. Professional voice talent is very expensive, and as a result, most books never get made into an audio format. Now there’s an option.”

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• As previously reported, Financial Times digital subscriptions overtook print subscriptions for the first time in 2012. The FT now has “almost 316,000″ digital subscribers, compared to about 286,000 print subs, and “mobile devices now account for 30% of FT.com traffic and 15% of new subscriptions.” The company said it expects advertising to remain weak, “with profits reflecting further actions to accelerate the shift from print to digital.” Pearson CEO John Fallon denied rumors that the company is selling off the FT.
• The Economist isn’t nearly as far along in the digital transition: Total print and digital circulation was 1.67 million, “of which 150,000 customers bought digital-only copies.”
• At Penguin, ebooks accounted for 17 percent of global book revenues, up from 12 percent in 2011, and “almost 30 percent” in the U.S., compared to 20 percent in 2011. Penguin’s total revenues worldwide were £1.053 billion (USD $1.59 billion), up 1 percent over the previous year. Global app sales were up by 200 percent, but the company didn’t break out app revenues.

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“We have closed our investigation and took no action,” a DOJ spokeswoman confirmed.

The merger, which remains under review by other antitrust authorities including the European Commission and the Canadian Competition Bureau, would create the world’s largest publisher. According to the announcement sent by Pearson, “Pearson and Bertelsmann continue to expect the transaction to close in the second half of 2013, after all necessary approvals have been received.”

Pearson’s full announcement:

Pearson and Bertelsmann today announce that they have been notified by the U.S. Department of Justice that it has closed its investigation into the proposed merger of Penguin and Random House, without conditions.

The two companies announced their agreement to combine Penguin and Random House in October 2012. The proposed merger is currently under review by the European Commission, the Canadian Competition Bureau and various other antitrust authorities around the world. Pearson and Bertelsmann continue to expect the transaction to close in the second half of 2013, after all necessary approvals have been received.

Following completion, Bertelsmann will own 53% and Pearson 47% of Penguin Random House. It will encompass all of Random House and Penguin Group’s publishing units in the U.S., Canada, the U.K., Australia, New Zealand, India and South Africa, as well as Penguin’s operations in China and Random House’s publishers in Spain and Latin America. Pearson and Bertelsmann believe that the combined organisation, the world’s leading consumer publishing company, will have a stronger platform and greater resources to invest in rich content, new digital publishing models and high-growth emerging markets.

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In a press release sent out after the market closed Wednesday, Barnes & Noble said it ”expects its fiscal year 2013 Nook segment EBITDA loss to be greater than it was in fiscal 2012 and expects fiscal year 2013 Nook Media revenues to be less than $3 billion.” Previously, B&N had expected Nook Media’s FY 2013 revenues to be $3 billion, with EBITDA losses comparable to those in FY 2012.

Barnes & Noble had also been set to announce its third-quarter earnings for fiscal year 2013 on February 22, but said Wednesday it will actually report them a week later, on February 28.

Nook Media is supposed to be the profitable part of the company. Consisting of B&N’s Nook and college businesses, Barnes & Noble spun it off in 2012 with a $300 million investment from Microsoft and, as of late December 2012, an $89.5 million investment from Pearson. (Barnes & Noble holds 78.2 percent of Nook Media.) Instead, Nook is doing worse at the same time that Barnes & Noble’s other segments — retail stores and BN.com sales — are also doing badly. Over the holidays, Nook device sales, BN.com sales and in-store sales all fell compared to the previous year. And the company plans to close up to a third of its retail stores over the next decade.

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In Inkling Habitat, the company’s founder and CEO, Matt MacInnis, sees an opportunity to take the digital reading revolution beyond Amazon and Kindle. He believes Amazon is totally reliant on text-based titles that make up only a fraction of the total book publishing market, and calls Apple’s iBooks Author — free software that’s supposed to let anyone create interactive ebooks for the iBookstore — a flop. “Our message to the industry is that the first bit of digital publishing was great,” he told me, “but the real stuff is just beginning.” It’s early days for Inkling, which has only 400 titles in its store so far compared to Amazon’s millions of Kindle titles. But MacInnis is convinced that the next step is illustrated: Textbooks, travel guides, cookbooks, how-to books, and so on. And it’s this area, he believes, where Inkling — not Amazon — will dominate.

As I reported last year, Habitat “lets publishers create interactive e-books with HD video, interactive features and 3D content in a free, cloud-based program. E-books can immediately be published to iPad [and now the iPhone] and the Web in HTML5, with updates pushed to both platforms at once…Multiple groups can collaborate on the content simultaneously, so a production editor in New York City can look at the same project as a designer in India, simultaneously.” Starting Tuesday, publishers using the platform can also export their books as EPUB files, so that they can sell them through Apple’s iBookstore and other platforms. And each book created on the platform is fully indexable by Google.

Eight months ago, MacInnis told me, the cost of taking content from a print-destined file and turning it into structured content that can be crawled by Google or easily navigated on an iPad was $30 to $60 per page. “We’ve gotten that down to $3 a page,” he said. The tool is free for publishers and consumers, though Inkling will take a 30 percent cut of each sale through the Inkling store. Beta clients included O’Reilly, Frommer’s, Workman, and Wiley; new publishing partners announced Tuesday include HarperCollins, DK, Lonely Planet, Rick Steves Kaplan and Time Inc.

Inkling is also launching a subscription enterprise product, intended to compete with Adobe, that allows clients to build products under their own brands on top of Inkling’s APIs. Clients at launch include Pearson, the world’s largest book publisher; Elsevier; and Wolters Kluwer. Presumably, the enterprise clients’ subscription fees help keep Habitat free.

Finally, Inkling is rolling out an academic model of Inkling Habitat, which is completely free and doesn’t take a cut of sales. The company is partnering with the 20 Million Minds Foundation, which is backed by the Bill and Melinda Gates Foundation and will distribute 50 free, open-source textbooks to community colleges in California.

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Inkling’s interactive ebook publishing platform, Habitat, also now supports iPhone.

Inkling is based in San Francisco and backed by Sequoia Capital as well as major textbook publishers like McGraw-Hill and Pearson.

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Book publisher Penguin is embracing self-publishing with its acquisition of Author Solutions, Inc. (ASI). This morning, Penguin parent company Pearson announced that it has purchased the company from Bertram Capital for $116 million.

Author Solutions, based in Bloomington, Ind., had revenues of $100 million in 2011 and has published 190,000 books by 150,000 authors since its founding in 2007. It “will be integrated into Penguin’s back office and technology infrastructure but will continue to be run as a separate business.”

Penguin already offers some self-publishing services through Book Country, its community writing platform, but the acquisition of Author Solutions reflects a new focus on the area. “This acquisition will allow Penguin to participate fully in perhaps the fastest growing area of the publishing economy and gain skills in customer acquisition and data analytics that will be vital to our future,” said Penguin CEO John Makinson in a statement.

Author Solutions CEO Kevin Weiss said, “We are thrilled to be a part of its vibrant culture, and look forward to accelerating the pace  of change the industry is experiencing. As part of Penguin, we will be on the front-end of that change and have the broadest set of offerings of any publisher today. That means more opportunity for authors and more choice for readers.”

“Curated self-publishing”

Penguin’s Makinson said that Penguin’s partnership with ASI “will fall somewhere between self-publishing as presently defined, and Penguin publishing as presently defined.” He mentioned “curated self-publishing” and imprints drawing on self-published content. Weiss noted that ASI already provides white-label self-publishing solutions to publishers like Hay House and Thomas Nelson. He says that ASI will call certain titles to Penguin’s attention for traditional publication. “Within our imprints, there will be several authors that Penguin will want to take a look at,” he said. “There’s no commitment that they will [publish them], but when we see something that has promise, we’ll share that with them.”

Makinson said that an increasing number of bestselling books either are self-published or started out that way. The two most well-known examples are 50 Shades of Grey and Amanda Hocking’s ”Trylle” trilogy. And Penguin recently  acquired the rights to two bestselling self-published titles, On the Island by Tracey Garvis-Graves and Bared to You by Sylvia Day Bella Andre.

Publishers Marketplace’s Michael Cader pointed out that those titles were actually self-published electronically, through free platforms like Amazon’s KDP, and not through higher-end platforms like Author Solutions. “We’ve been competing with free options for a long time,” Weiss said. “We have not felt any pressure thus far from the free publishing market.” And Makinson claimed there is “growing category of professional authors who are going to gravitate to the ASI model rather than to the free model.”

Weiss said the acquisition provides legitimacy to self-publishing. Recalling a previous job at IBM, he said, “When IBM gave its stamp of approval to the PC industry, what happened next was nothing short of remarkable. This feels very much like what happened with the PC industry back in the early eighties.”

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But now a German company called PaperC is trying something new. It’s running with the idea of try-before-you-buy textbooks and taking it further by offering users not just the chance to buy a whole book, but also a particular chapter or even just a page.

Soon it plans to add a monthly subscription option that gives unlimited access.

The idea of buying a single page may sound odd, but it makes a lot of sense in the context of textbooks, where readers often don’t need the whole manuscript. And PaperC’s approach to free previews is similarly sensible: where Amazon shows you the opening chapter or two, this startup lets its users choose which 10 percent of the book they’d like to see without paying (they have a time limit on how long they can look).

PaperC has a search engine and a web reader that allows annotations and sharing, and has partnered with Sony on optimizing its tablet experience. Most importantly, the Leipzig-based firm already has 120,000 registered users and around 100 content deals with publishers like O’Reilly, Pearson, Wiley and others.

“PaperC is not only a bookstore but a library, offering its users a full suite of tools to facilitate their research,” international content manager Bill Glucroft told me, adding that while PaperC’s market so far is in German-speaking countries and eastern Europe, more than half the service’s content is in English.

All sounds fine so far, but here’s an extra twist: the company’s looking for more funding, which it hopes to obtain through an auction-based crowdfunding platform called Innovestment that’s quite interesting in itself.

Here’s the pitch (in German with English subtitles):

PaperC hopes to raise between €50,000 – €100,000 ($61,000 – $123,000). With the campaign already underway for a week, it has already amassed almost €16,000 through the sale of 14 silent shares – with each share representing 0.04 percent equity, the auction currently has the company’s total valuation at €2.6 million.

But hold up. Investors won’t be getting a share of the existing PaperC.de platform, which is based on PDF technology. They’ll be buying into PaperC.com, its HTML5-based successor (shades of Inkling). This is a bet on future value, rather than a chance to get a chunk of what already exists.

“We need additional resources to continue acquiring high-quality content from major, international publishers,” Glucroft said. “Moreover, we want our from-scratch-built HTML5 platform to be the best platform out there for buying, reading and working with academic eBooks. That means giving it the same set of interactive and study-friendly features that our PDF-based platform at PaperC.de already has, and having the ability to convert PDFs of our choosing to ePub, so they can be compatible with PaperC.com.”

PaperC is also working on raising its profile with U.S. and Canadian universities, he added.

The company fits into two notable strands of the Berlin scene: the e-reading bunch, as typified by Readmill and Txtr, and the academia-facing likes of ResearchGate.

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Titles include popular undergraduate textbooks as well as specialized MBA, medical and scientific titles. Students can purchase the entire textbook or “‘Pick 3′: a cost-saving alternative that allows students to buy just three chapters for a fraction of the price of a full textbook.” Then they can read the textbooks on the Inkling iPad app or on Inkling’s soon-to-be-launched web platform.

Inkling, based in San Francisco and backed by Sequoia Capital as well as major textbook publishers like McGraw-Hill and Pearson, recently launched its own e-book publishing platform and sells consumer titles as well as textbooks.

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