Shhhh.

Did you hear that?

I think there’s someone following us…

Oh God.

It’s Random House.

…

So, I’ve just been reading an interesting article in Business Week entitled ‘Random House: Digital is our destiny’. And it’s fascinating stuff….

‘ Unwilling to let a Google, Yahoo!, or Microsoft dictate terms in cyberspace, Random House Inc., the world’s largest trade publisher, is taking the industry lead. In early November it outlined ways it would begin to offer its books directly to consumers on a page-per-view basis. Random House will get at least 4 cents a page and split that roughly in half with authors for fiction and narrative nonfiction titles. Other types of books, such as cookbooks, will have different pricing models.’

Their reason?

‘Book publishers might be expected to be nostalgic and lament the past, but the tumult they witnessed in the music world sounded the alarm, says [Random House president of corporate development, Richard] Sarnoff. “The technology was adopted before there was a business model for legitimate sales,” he says. “That created a fertile ground for piracy, and it became ingrained in consumer behavior.” The urgency for a new business model in publishing was clear. Sarnoff figures that within 18 months, reading devices could be as easy to use for books as the Apple iPod is for music. “Screen technology is about to get much better very quickly,” he says.’

Yes! But there’s more!

Says a spokesperson from the authors’ guild…

‘By coming up with its own way to sell books digitally, Random House is declaring to the Googles and Yahoos “this is our job, not yours.’

Yes! Yes! Oh God, yes!

Random House is one of the first giga-publishers – after our friends at Macmillan, nach – to come to the same two conclusions that Clare and I came to – and I wrote about in the Guardian – a million years ago, while we were putting together the business plan for The Friday Project.

Firstly, that web and print are converging at an alarming rate and that the moment someone invents a decent hand-held e-book reader, publishers are going to have to go digital in a big way to avoid Napsterisation. Or is that Napsterization? Either way, print publishers are going to have to embrace e-publishing with both arms if they want to nip piracy in the bud. And that the publishing houses best placed to do that are the ones who turn themselves into (or in our case, create themselves from scratch as) hybrid web-print publishers.

And secondly that by far the best way to discourage Google, Yahoo, Amazon et al from scanning all of your intellectual property and storing it on their huge computers is to do it yourself and then licence it back to them.

So hurrah for Random House!

And yet. And yet. While I salute their courage in grabbing the digital bull by the e-horns – a bit like watching your dad announcing that he plans to go hang-gliding after one lesson – I think Random House might be overreaching themselves a tiny bit in their approach.

For a start, why on earth are they handling electronic sales themselves? Random House is not a technology company. They are a publishing house. Why would they even consider spending a fortune on digital rights management when a zillion better qualified companies – Google, Amazon, Lexis-Nexis… – have far, far better technology just waiting to be used.

Far better to hand over the digital content to a sales partner – Google or Amazon are the logical choices – on a commission basis. That’s certainly the avenue we’re going down at TFP. We’ll concentrate on the production, commissioning and development of great content that can be adapted for publication and distribution across an infinite variety of media and then we’ll work closely with other better qualified people – be they bookshops or Google – to physically sell the books. That’s how publishing works, isn’t it?

(Actually, it reminds me of when, during the dot com boom, Barclaycard set up a virtual shopping mall that died on its arse. The reason? Over-reaching. It wasn’t their area of expertise – and other people could do it far better. I mean, Jesus, Random House, why not go the whole hog and create a chain of bookshops?)

It also reminds me – more exactly – of when, back in June, Börsenverein, the German book trade association, had a similar idea. Or as a brilliant Guardian media columnist put it at the time…

‘Börsenverein is so worried by Google and Amazon’s dominance of book digitisation that last week it announced plans to set up its own rival mass-scanning scheme… There’s just one catch. They’re behaving ridiculously. Why spend millions of euros to beat Google when they could spend a few thousand euros to join it? All publishing companies in Germany, France, Britain and beyond need to do is to get together and say the following: “Hello Google and Amazon. Rather than granting you the rights to scan our books, we’ve decided to scan them ourselves and to make the information available to your technologically-superior database in exchange for a small fee to cover our costs. We’ll even let you sell print-on-demand and ebook versions of the books – providing you pay us a royalty for every copy sold, equal to the profit we’d make on a normal retail sale. You’ll get a great service for your users, no single company will own all of the scanned works, and we’ll all make a load more money.”‘

Oh, hang on, that was me again. Who knew I was so damn clever?

But it’s all well and good me being smug. I could be wrong about the sales and distribution thing. And Random House’s approach may well be absolutely right. It’s early days and only time will tell.

But I tell you where they’re absolutely, without question, 100% definitely wrong. Just read the conclusion of the Business Week article…

‘Just the same, digital sales won’t resolve the biggest problem in the industry, “the one upsetting the whole ecosystem,” says Paul Aiken, executive director of the Authors Guild. Authors and publishers are almost never compensated for used-book sales, which total about $2.2 billion a year. Still, Aiken is encouraged that at least one publisher is trying to keep that dynamic from being repeated online.’

No! No, no, no, NO! Yuck, yuck, yuck. If I buy a book, I own it. And I’ll sell it to anyone I damn well please. That’s the way it is. Droit de suite may work perfectly well if you’re reselling high-value artworks in France but I’ll be damned if I’m going to pay Random House – or anyone else – 20p for every unwanted book I sell on eBay.

One of the worst things about the digital revolution is that copyright owners think that they way to combat piracy is to irritate legitimate purchasers. Microsoft started it when they decided that no one could actually own their software – instead we could only ‘licence’ it for use. Then Sony did similar when they launched a film download service where just to make doubly sure that you can’t pass your legitimately purchased film on to your friends, the movie files automatically self-destructed after a couple of weeks leaving you with no evidence that they ever existed.

Or as some wag wrote at the time…

‘Frankly, it’s a wonder that traditional publishers haven’t adopted a similar model. I’d certainly be first in line to buy a book that could only be read through special tinted glasses and which spontaneously burst into flames if I didn’t read it quickly enough (although that would make reading No Logo a bit more interesting). And I’d be much more likely to put up with all this hassle if there was a vast alternative network of illegal bookshops offering free, non-flammable books just a mouse click away.’

Yep. Me again. Sorry. And that was back in 2003. Do try to keep up, guys. I mean I handed you this stuff on a paper plate.

So yes, Random House have discovered the future. And while they get 9/10 for effort, they only get 5/10 for execution. And possibly a ’see me’.

Lucky there are no right or wrong answers when you’re predicting the future of intellectual property.

…

All of which brings me neatly to the Google Debate that I’m moderating for the Publishers Association and which has just entered its twelfth week.

Later today I’ll be posting a great essay by Timo Hannay from Nature Publishing in which he takes Google and the publishers to task. You really shouldn’t miss it.

Right, I’m putting my clippings file away and going to bed. Busy day tomorr.. er .. today, starting in a few short hours with a meeting with the lawyers. Yick. Who’d be a publisher, eh?

Night night.