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Will books be ‘Napsterized’?

By Randall Stross
NY TIMES NEWS SERVICE
Monday, Oct 05, 2009, Page 9

You can buy The Lost Symbol, by Dan Brown, as an e-book for US$9.99 at Amazon.com. Or you can don a pirate’s cap and snatch a free copy from another online user at RapidShare, Megaupload, Hotfile and other file-storage sites.

Until now, few readers have preferred e-books to printed or audible versions, so the public availability of free-for-the-taking copies did not much matter. But e-books won’t stay on the periphery of book publishing much longer. E-book hardware is on the verge of going mainstream. More dedicated e-readers are coming, with ever larger screens. So, too, are computer tablets that can serve as giant e-readers and hardware that will not be very hard at all: a thin display flexible enough to roll up into a tube.

With the new devices in hand, will book buyers avert their eyes from the free copies only a few clicks away that have been uploaded without the copyright holder’s permission? Mindful of what happened to the music industry at a similar transitional juncture, book publishers are about to discover whether their industry is different enough to be spared a similarly dismal fate.

The book industry has not received cheery news for a while. Publishers and authors alike have relied upon sales of general-interest hardcover books as the foundation of the business. The Association of American Publishers estimated that these hardcover sales in the US declined 13 percent year-on-year last year. This year, these sales were down 15.5 percent through July, versus the same period of last year. Total e-book sales, though up considerably this year, remained small, at US$81.5 million, or 1.6 percent of total book sales through July.

“We are seeing lots of online piracy activities across all kinds of books — pretty much every category is turning up,” said Ed McCoyd, an executive director at the association. “What happens when 20 to 30 percent of book readers use digital as the primary mode of reading books? Piracy’s a big concern.”

Adam Rothberg, vice president for corporate communications at Simon & Schuster, said: “Everybody in the industry considers piracy a significant issue, but it’s been difficult to quantify the magnitude of the problem. We know people post things, but we don’t know how many people take them.”

We do know that people have been helping themselves to digital music without paying. When the music industry was “Napsterized” by free file-sharing, it suffered a blow from which it hasn’t recovered. Since music sales peaked in 1999, the value of the industry’s inflation-adjusted sales in the US, even including sales from Apple’s highly successful iTunes Music Store, has dropped by more than half, the Recording Industry Association of America says.

A report earlier this year by the International Federation of the Phonographic Industry, based on multiple studies in 16 countries covering three years, estimated that 95 percent of music downloads “are unauthorized, with no payment to artists and producers.”

Free file-sharing of e-books will most likely come to be associated with RapidShare, a file-hosting company based in Switzerland. It says its customers have uploaded onto its servers more than 10 petabytes of files — that’s more than 10 million gigabytes — and can handle up to 3 million users simultaneously. Anyone can upload and anyone can download; for light users, the service is free. RapidShare does not list the files — a user must know the impossible-to-guess URL in order to download one.

But anyone who wants to make a file widely available simply publishes the URL and a description somewhere online, like a blog or a discussion forum, and Google and other search engines notice. No passwords protect the files.

“As far as we can tell, RapidShare is the largest host site of pirated material,” McCoyd said. “Some publishers are saying half of all infringements are linked to it.”

When I asked Katharina Scheid, a spokeswoman for RapidShare, if the company had a general sense of what kinds of material were most often placed on its servers — music? videos? other kinds of content? — she said she could not say because “for us, everything is just a file, no matter what.”

At my request, Attributor, a company based in Redwood City, California, that offers publishers anti-piracy services, did a search last week to see how many e-book copies of The Lost Symbol were available free on the Web. After verifying that each file claiming to be the book actually was, Attributor reported that 166 copies of the e-book were available on 11 sites. RapidShare accounted for 102.

Scheid said her company complied with publishers’ take-down requests. But the request must refer to a particular file and use the specific URL; it’s left to the publishers to find all instances of a given book title on RapidShare’s servers.

I can report that RapidShare acted promptly last month when my publisher, Simon & Schuster, asked it to remove an audiobook version of one of my own books and provided the URL for the file.

Scheid said the company gets requests to remove about 1 percent to 2 percent of the files that are uploaded daily.

To protect users’ privacy, however, she said RapidShare does not attempt to block the uploading of infringing material in the first place.

“We don’t do content filtering; we don’t look into uploaded files,” she said.

Once a file is removed, the company tries to keep perfectly identical files from being uploaded again, but she listed various ways that determined users can alter the files just enough to effectively circumvent these measures.

My book reappeared on RapidShare a few days after it was taken down.

Hotfile and Megaupload did not respond to requests for comment.

RapidShare and fellow online storage services say that their services help users share large files easily or store personal data without having to carry around a memory stick. On the FAQs page of its Web site, Megaupload depicts its customers as the most ordinary of citizens: “Students, professional business people, moms, dads, doctors, plumbers, insurance salesmen, mortgage brokers, you name it.”

Publishers and authors are about the only groups that go unmentioned.

Scheid, of RapidShare, has advice for them if they are unhappy that her company’s users are distributing e-books without paying the copyright holders: Learn from the band Nine Inch Nails. It marketed itself “by giving away most of their content for free.”

I will forward the suggestion along — as soon as authors can pack arenas full of fans and pirated e-books can serve as concert fliers.



Randall Stross is an author based in Silicon Valley and a professor of business at San Jose State University.
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