Steve Riggio Discusses BN.com Plans to Take Lead In eBook Publishing

May 1, 2001
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Riggio Discusses BN.com Plans to Take Lead In eBook Publishing

An Authorlink Exclusive Interview With the Vice Chairman

by Doris Booth,

Authorlink Editor-in-Chief

“Book publishers have been the middlemen between writers and booksellers for too long,” Riggio told Authorlink. “In the digital world, the publisher adds little value. . . ."

See related analysis: Searching For the Elusive eBook Market

—Who Are the Players; What Do They Really Want?

New York, NY/4/01–In an unprecedented move this winter , Barnes & Noble.com, the nation’s second largest online bookseller, became a full-fledged eBook publisher with plans not only to shape the new medium, but to vertically dominate digital publishing, distribution and sales. Barnes & Noble.com is approximately 40% owned by Barnes & Noble, Inc., the nation’s largest brick and mortar bookseller; and approximately 40% by German media superpower, Bertelsmann, which in turn owns Random House. The remaining stock is held by public shareholders.

Authorlink talked with Steve Riggio, vice chairman of both Barnes & Noble.com and Barnes & Noble, Inc. in his New York office in mid-April about his vision of eBooks for the future.

According to Steve Riggio, Barnes & Noble Digital, an imprint of Barnes & Noble.com will seek to buy eBook rights directly from writers for its new eBook publishing program.

“Book publishers have been the middlemen between writers and booksellers for too long,” Riggio told Authorlink. “In the digital world, the publisher adds little value. It’s easier for Barnes & Noble Digital to deal directly with writers. We add more value because we have the customers [more than seven million], and we know how to reach them. There are no publishers in between.”

While Barnes & Noble Digital will resurrect some titles from “out of print” and buy digital rights to other existing titles, it appears a number of eBooks necessarily will derive from what Riggio prefers to call “personal” publishing, as opposed to “vanity” press—generally un-vetted, unedited manuscripts accepted from anyone who wants to publish.

"The local stores will have to address the phenomenon of established publishing against personal publishing."

And what of the chaos this might create in what Jason Epstein of the New York Review of Books terms the new “wilderness of choice”?

“The local stores will have to address the phenomenon of established publishing against personal publishing,” says Riggio.

Barnes & Noble is already involved in “personal” publishing as 40% owner of iUniverse, which evolved from a self-publishing website to a leading provider of digital technology for “vertical” publishing (from content preparation and customization to printing and delivery). In January of this year, the investment firm Warburg Pincus infused iUniverse.com with $21 million in new capital funding, with a promise of more dollars to come, perhaps influenced by Barnes & Noble.com’s entry into eBooks as an integrated publisher and seller.

iUniverse publishes both in eBook and print-on-demand formats (short print runs of physical books, printed at the time the customer orders). POD has been a major source of income for self-publishing sites that either charge writers up front fees, or build in substantial profits on sales of copies to the authors themselves.

". . . Until the battles over eBook copyrights are resolved, not enough good titles will be available. We are waiting for content to come to us.”

“We know that trends in the physical world as they are today have to shape content for our customers. We know, too, that the market for electronic books has been slower to develop. But we believe there is a tipping point, and we have to get ready for it now by acquiring eBook rights. Ebooks are not available on Palm Pilots.”

Riggio explains that while the physical means for eBook delivery may be in place, the shortage of available first-class titles hampers rapid growth, at least in the short term. Many major publishers and agents have been reluctant to sell eBook rights until certain legal copyright issues are resolved.

“We need books to sell, but several things have to come together first,” said Riggio. “The most important factor is digital rights. Until the battles over eBook copyrights are resolved, not enough good titles will be available. We are waiting for content to come to us.”

The “tipping point” Riggio seeks may lie in a landmark case that begins hearings May 7—though Barnes & Noble.com has no direct involvement.

The “tipping point” Riggio seeks may lie in a landmark case that begins hearings May 7—though Barnes & Noble.com has no direct involvement. The lawsuit pits the giant Random House against Rosetta Books, LLC, a small eBook publisher with—interestingly—a growing eBook “boutique” already featured on Barnes & Noble.com’s site.

Rosetta Books has contractually acquired and paid for the electronic-publishing rights to nearly 100 titles, including several works by William Styron, Kurt Vonnegut and Robert Parker. Random House, Inc., a wholly-owned subsidiary of Bertlesmann, filed suit in Federal Court against Rosetta Books LLC, alleging that Random House owns exclusive electronic rights to the titles by Styron, Vonnegut and Parker, and that Rosetta is infringing Random House’s rights by publishing these titles electronically.

Random House seeks to prevent Rosetta from approaching the authors of the nearly 21,000 Random House backlist titles. Random House claims to own the electronic rights to its entire backlist whether there is a specific electronic rights grant in the contract or not. (See more details on the Random House/Rosetta case at www.rosettabooks.com)

Meanwhile, Barnes & Noble, Inc. asserts in its annual report that it will “seize our future on all fronts: retail, online and digital,” and sister, iUniverse, says that in the not too distant future it will offer digital versions of “virtually every book in print.”

“We have one million titles in our distribution center today,” said Riggio. “Annual unit sales of many titles prevent traditional publishers from publishing them. Yet, the larger our stores, the more customers expect. Barnes & Noble.com sees an opportunity to economically deliver more titles. Digital publishing will make the words ‘out of print’ obsolete. Keeping the property available means more revenue for us and for the writers.

“Just as the mass market book revolutionized publishing in the 1940s, digital publishing will revolutionize publishing as we know it today."

Will people actually read eBooks on a device?

“We think people will download books, and that the market will build,” said Riggio. “Just as the mass market book revolutionized publishing in the 1940s, digital publishing will revolutionize publishing as we know it today. People will buy books that have more value. Within the next three to five years, books will evolve beyond simple physical content to include sound and video.

“Different aspects of the industry will evolve over different trajectories. Digital content in the professional world is only about three years away from reality. College students are already downloading textbooks.

“In two to three years you can walk anywhere around the world, buy an eBook and download it into a device. Once the content is there, the revolution will happen,” he concluded.

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This post was written by Doris Booth