The Digital Revolution Falters in Germany

On the old media/new media front, a couple of German on-line sources give us an update on how the landscape is evolving over there.

First there is a brief piece in Der Spiegel about the Frankfurter Allgemeine Zeitung or FAZ. The FAZ’s fortunes are worth tracking because, like the New York Times in the US, it is really Germany’s own “newspaper of record.” (You can even call it the Teutonic “Grey Lady” as well if you like, since it still publishes no illustrations of any kind on its front page, but always has instead two commentary articles over on the right side, with their headlines in the old Gothic script.) Of course, as with the Times it’s also true for the FAZ that it is currently suffering heavily from declining subscriptions and declining advertising revenues, to the point that it expects to suffer a financial loss this calendar-year “in the area of the high single-millions [of euros]” – the precise number will of course depend upon how things turn out over the holiday period rounding out the year. Still – and here’s a contrast with the Times – management has ruled out any lay-offs. Of course, they’ve also had a hiring-freeze in place for a year, and the “no lay-offs” stance is also dependent upon an anticipated upturn in the paper’s fortunes sometime in the second half of next year, so that it will be able to actually turn a profit through 2010. So maybe the difference here with American employment practice is not the German’s being more “compassionate” in holding on to employees, but merely being more deluded about the future.

Then there is Libreka!, the on-line bookstore of the Börsenverein des Deutschen Buchhandles – that is, of the German Association of Booksellers. Looks fairly OK, right? Like any other on-line bookstore you might already be familiar with. But look a little closer: depending when you click on the link you’ll likely see different works for sale than I do as I write this, but it’s highly probable that whatever you do see will have both the traditional bound book and the “E-Book” offered at the same price!

That’s a bit strange, no? Aren’t e-books supposed to be considerably cheaper? After all, for one thing there are none of the usual distribution costs to be paid to get the words from the seller’s electronic storehouse to your eyes, so that even with a cheaper price the author and publisher gain more money out of the deal than with physical books. For another, you’d sort of want the book to be cheaper if there was DRM – “digital rights management” – attached to what you were buying that kept you from copying it, letting others read it too, using it to prop up the shorter leg of a wobbly table, and all other things you’re used to being able to do with regular, physical books.

Make no mistake: there is certainly DRM involved in purchases from Libreka!, and in spades. That and the whole sad story is expounded in an entry on the German weblog Carta: Libreka! The e-book flop of the Booksellers Association. In fact, not only do the technical restrictions attached to any e-book you might buy keep you from printing or otherwise transferring it, but the whole process is technisch ungelenken – technically awkward – as it apparently requires the separate download of (and registration for) the Adobe Digital Editions program to lock your book into a tight electronic library located only on your computer.

A pretty rotten deal, then, wouldn’t you say? (To be fair, there are other instances where the site is willing to sell an e-book for less than a physical book – but never than for more than about 15% less.) It seems that many would agree with that assessment: the same Carta article cites a leaked report that Libreka! sold only 32 e-books in the entire month of September, and overall its e-book sales since it’s establishment back in April have been “on a stable basis just above zero.” That, while the yearly costs of the on-line bookstore to the Booksellers Association are around €1 million per year!

E-books At Our Price Only!

So what is going on here? A key fact here is the German Buchpreisbindung – the legal provision that (new) books in Germany can be sold for only one price throughout the entire country, so no price-undercutting allowed. Clearly, through their official on-line bookstore the members of the German Booksellers Association are in effect setting that price for e-books, and setting it way too high. As the Carta article puts it: “If there are to be e-books – then only on our conditions!”

They apparently consider that as worth the €1 million yearly cost they are collectively incurring, but Carta author Robin Meyer-Lucht thinks they are mistaken. In fact, he thinks they are headed down the same path recently pioneered by the music industry, which for too long ignored developments on the Internet, insisted instead on maintaining the old model of selling music on physical CDs, and so drove more and more people to simply get their music for free by illegally downloading files from the Internet.

As he points out here, the just-concluded 2009 Frankfurt Book Fair – besides struggling mightly with the question of free expression in this year’s “honored guest” country, the People’s Republic of China – had as its focus the theme of e-books, and specifically “What can book publishing learn from the music industry?” The answer seems to be “Plenty, but it is choosing to learn nothing” – at least in Germany. (And, even worse, the German booksellers are trying to have technical blocks erected by law on the Internet against downloading, to “civilize” it.) As Meyer-Lucht puts it, “Completely excessive prices, annoying [authors’ rights] protection-measures – this is exactly how the music industry drove its customers to the illegal offerings on the Net,” and “This e-book policy endangers not only the bookselling retail branch itself, but also will only escalate the entire debate about copyright.”

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