Re: Economic Thoughts on the Google Book Settlement

[Eric Hellman <eric@hellman.net>]

Here is the relevant provision  from the settlement agreement:

4.1 (a) (v)
Versions of Institutional Subscriptions.  When Google offers any 
tutional Subscription, Google will offer a version of the 
Institutional   Subscription that provides access to all Books 
available for Institutional Subscriptions pursuant to this 
Settlement Agreement (the "Institutional Subscription Database") 
for a fee.  In addition, Google may identify  Institutional 
Subscriptions for a small number of discipline-based collections 
of Books that  Google would offer as an alternative to the 
version of the Institutional Subscription that provides access to 
the entire Institutional Subscription Database. To provide an 
incentive for institutions to subscribe to the entire 
Institutional Subscription Database, Google shall design the 
pricing of the different versions of the Institutional 
Subscription such that the price for access to the entire 
Institutional Subscription Database will be less than the sum of 
the prices for access to the discipline-based collections.

Eric Hellman
President, Gluejar, Inc.


On Aug 15, 2009, at 3:20 PM, Ahmed Hindawi wrote:
> Something that is clear to me is that Google must be planning to
> use the current Book archive it has in order to tap into the book
> sales market in general (meaning that it will be selling the
> newly published books as well). They are coming from a different
> angle than Amazon.com, but they will most certainly have their
> eye on a market that is currently worth tens of billions of
> dollars. Especially that it is not clear that online advertising
> money will continue to increase and even if it does, the horizon
> of this market might be in sight. Google can double its current
> revenue if it became the world "Book Distributor" to individuals
> and organizations.
>
> First, I have two questions that I hope someone can answer them
> for me (or tell me that there is no such answer at the moment).
> Then, I would like to share some thoughts about the economic
> problems and consequences of a particular scenario that might
> actually take place. First the two questions:
>
> (1) Will Google have the right to creating sub-collections and
> licensing them to different organizations (households?,
> individuals?)? Does the settlement give this right of slicing the
> collection it sub-collections? Can Google create the "Google
> Mathematics Book Collection" or the "Google Social Science
> Collection" or the "Google Science Fiction Collection" and
> license them to libraries, or is Google bound by selling only
> licenses to its whole collection.
>
> (2) Who will determine how the revenue of licenses will be
> divided between the rights holders (after Google takes its cut
> according to the settlement)? This question is always faced by
> aggregators selling cross-publisher content to libraries (e.g.,
> ALPSP Learned Journal Collection or the O'Reilly's Safari book
> collection). Most of time, the solution relies on using the
> "current" market price of the items within the collection
> (subscription rates for journals or cover price of books) and/or
> usage levels by the subscribing library. Google will have hard
> time doing either of these, as I will explain below.
>

<snip>

>
> Ahmed Hindawi
>