“Twenty years ago, if somebody had shown you an iPod, you would not have known what that sucker was,” Dorothy Allison told a crowd of writers gathered recently in San Francisco. The poet and memoirist went on: “You wouldn’t have known how it worked.  You wouldn’t have known how vital it would be to your getting’ on that treadmill and runnin’ at the gym every day.”

Actually, the only things that keep me on a cardio machine are breaking news, baseball, or trash TV, but I love my iPod for long walks. (I’ve also been using it to escape from manuscript hell: I put on sweet slack-key guitar, play with colorful magic markers and easel-sized Post-Its, and draft my chapter outlines. Sort of like fingerpainting for grownups. Slapping a teal-colored outline up on the big white wall in my office is makes me forget how freaked out I am about my deadline.)

Allison continued her rhapsody, turning to the thrilling new life the iPad gives the written word. “Your world can be reshaped, redefined by what other people have accomplished, what they have fantasized, what they have dreamed about and made a reality,” she said. That was once the promise of traditional books; now it’s the promise of e-books.

I confess, I don’t yet have an iPad. (Nor an iPhone, although my husband and I share what we call the “WeTouch”—an iTouch for two.) I’m gonna buy an iPad with the second installment of my advance. (In addition to fingerpainting, promises like this keep me going.)

iPad or not, we all need to stay on top of the fast-and-furious changes in the book biz. Check out these three new essays in the Sin and Syntax Salon:

• In Heather Ross’s e-book update you’ll get answers to questions like “How big is the e-book market?” and “What should I expect in e-book royalties?”
• In another essay, literary agent Michael Larsen shares his thoughts on the Google Books Search court case.
• Finally, in a third salvo, Bill Petrocelli explains why he’s welcoming Google Books at his Bay Area bookstore.

BTW, the Google Books Search case (here’s a collection of New York Times updates) has nothing to do with Google e-books. Many authors like me “opted out” of the company’s $125 million class-action settlement with the Author’s Guild and a collection of publishers.” No way I wanted to cede my copyright to Google! In March 2011, a federal judge in New York agreed with us doubters, saying the deal went too far in granting Google rights to exploit books without permission from copyright owners. We’ll all have to stay tuned on developments in the Grand Google Scan. (Does that last word sound like scam?)

Of course, we all use Google Books to take a peek at pages. But there’s nothing like owning your own copy. Which do you prefer, bound books or digital? Kindle or Nook Cloud or iPad?

The iPad may sometimes seem like a boondoggle for authors (Yet another must-have device? Now I need an app for my memoir?), but it has been a bona-fide boon for e-book vendors. Caught in the middle are agents and traditional publishers, trying to carve out new territory for themselves and their clients. In April 2010, Sarah Baker explained the finer points of the chaotic electronic book market, informing authors of the state of e-rights, royalties, piracy, and pricing in this competitive (and lucrative) landscape. Let’s trace the zigs and zags of the e-book industry in the year since.

How large is the e-book market?

According to a press release from the Association of American Publishers, e-book net sales leapt 115.8 percent between January 2010 and January 2011, comprising approximately 9 percent of the consumer book market. American readers spent $263 million on e-books in the first eight months of 2010 alone, and in October 2010, Amazon released a statement boasting that during the previous three months, it had sold 143 Kindle books for every 100 hardcover ones.

Who buys e-books?

In January 2011, Digital Book World—a forum for the digital publishing industry—posted a slideshow detailing the results of a customer survey on e-reading. Results indicated that typical e-book consumers are employed 30- to 44-year-olds in cities and suburbs, followed by 45- to 54-year-olds and then 18- to 29-year-olds. The survey also revealed that sharing the literary love is good marketing strategy: nearly 40 percent of respondents reported purchasing an e-book after receiving a free sample chapter, and almost 30 percent reported buying an e-book after receiving a free one from the same author.

What should I be aware of in my contract?

According to an article by the Author’s Guild, publishers typically request broad grants of electronic rights in their contracts. However, because digital copies of a book can easily be sold long after physical printing has ended, the time limit on e-rights retention by publishers may remain open-ended. “Typically, rights revert to the author when [a book] goes out of print, but everything changed with print-on-demand and e-books,” said Paul Aiken, executive director of the Author’s Guild. Aiken advises authors to modify the out-of-print reversion of rights clauses in their contracts to stipulate that if digital book sales don’t hit a certain number in a 12-month period, e-rights revert to the author.

Literary agent Ted Weinstein says that contract modifications like these are the goal of many literary agents fighting to establish new industry standards. But Weinstein cautions authors to let experienced agents take the lead in contract negotiations. “Authors can work themselves into a neurotic frenzy, but I say worry only about the stuff that is in your realm,” Weinstein said. And, he adds, get a good agent. (Start with the Association of Author’s Representatives.)

What royalties should I expect?

E-book royalties for authors have coalesced at 25 percent of the publisher’s receipts. This a higher royalty than is standard for hardcovers (12 to 15 percent) or paperbacks (7.5 percent); however, the sale price of e-books tends to be much lower than that of bound books, so in absolute terms an author is likely to earn less in royalties on e-books—unless the digital format allows for the sale of many more volumes.

In an online article, the Author’s Guild argues that publishers will reap far greater profits on e-books, and that this could distort publishers’ incentives and ultimately hurt authors. The Guild did the math on authors’ royalties and publishers’ gross profits for several popular hardcover titles using industry-standard contract terms (15 percent royalty for hardcover sales and 25 percent for e-book sales). For example, Kathryn Stockett, author of The Help, earns $3.75 in hardcover royalties, while her publisher earns $4.75 in profit. However, Stockett earns $2.28 in e-book royalties, while her publisher nets $6.32—a 39 percent loss per book for the author and a 33 percent e-gain for the house.

Some writers, including Terrill Lee Lankford, author of Blonde Lightning, have balked at the 75/25 royalty split. Lankford, in a blog for Publisher’s Weekly, aired his decision to walk away from a publishing contract altogether in protest. Yet, Lankford and the Guild are hopeful that as authors demand better rates, and digital sales begin to overtake print sales, the playing field will level. The current royalty rate “runs against a long-standing tradition of essentially splitting net proceeds from book sales,” Aiken said. When big-name authors—and even authors who are not at the top of the food chain—say, “‘my market is now 50 percent digital and I’m not going to be a junior partner,’” publishers will take notice. Once one publisher begins to sign known authors at a higher rate, Aiken added, other publishers will have to follow suit or risk losing business.

How are e-books priced?

On March 1, the New York Times reported that Random House became the last of the six largest U.S. publishers to switch to the “agency model” for the pricing of e-books, in order to sell its 17,000 e-titles through Apple’s iBookstore. Under this model, publishers set the list price for their e-books and online booksellers return 70 percent of this amount to the publishers for each sale, taking a 30 percent commission per book. Under the “wholesale model,” preferred by Amazon, publishers sell e-books to Amazon at about half the list price and Amazon sets the Kindle price.

The move from “wholesale” to “agency” pricing has finally broken the mega-retailer’s hold on the largest share of the e-book market: Amazon can no longer artificially lower the price of e-books in order to attract more online business. “You need competition not just among authors and publishers, but also on the distribution end,” Aiken said. “Without the agency model you’re in a winner-take-all situation, and the winner is Amazon.”

Predictably, the “agency model” has led to an overall increase in e-book prices from the “standard” 2009 Amazon listing of $9.99, spurring some e-reader owners to leave hostile comments and one-star ratings on vendors’ websites. According to a New York Times article, under new publisher agreements with Apple and Amazon, the prices for newly released e-books will rise to between $12.99 and $14.99 in the coming months. Aiken says that we are likely to see additional price fluctuation because publishers must now measure how incremental increases or decreases in price affect their volume of digital sales.

Do books ever go straight to e-book?

Some trade publishers have been experimenting with releasing titles straight to e-book—typically timely digital releases followed shortly by print editions. But in a tight publishing market, the Author’s Guild reports that midlist and maverick authors are being wooed by the prospect of self-publishing. Agent Weinstein asks: What are publishers really doing for authors when anyone can publish an e-book through Amazon in minutes and receive 70 percent of the proceeds?

The answer, of course, is that publishing houses offer advances, edit manuscripts, and market the finished product. Yet niche outlets, including Self-Publishing Boot Camp, provide opportunities for those capable of aggressive self-promotion. The rag-to-riches story of young-adult fantasy author Amanda Hocking, who sold more than 400,000 e-books in January 2011, is a testament to the power of social networking and the equalizing potential of the digital-book format.

What is the state of e-book piracy?

E-book piracy has been slow to take hold, but a study by Attributor—an online content-monitoring firm—indicates that authors and publishers may yet face the challenges recording artists and record labels did with the introduction of the iPod. “All the same mechanisms that have made music and movies stealable online are there for e-books now,” Aiken said. “It can hit overnight and decimate an industry.” In January 2010, the Attributor blog claimed that e-book piracy costs the publishing industry nearly $3 billion annually, or roughly 10 percent of U.S. book sales.

E-book files are small, and several thousand titles can be easily packaged into a single torrent requiring less than 4GB of memory. Author and C-Net blogger David Carnoy realized in February 2011 that the digital version of his novel Knife Music was being pirated in just such a package. Carnoy believes that a rise in the popularity of the Kindle e-reader and the spectacular success of the iPad have “supercharged” e-book piracy. Still, the variety of e-book file formats and the relative novelty of the technology mean that piracy has not yet had the same devastating effect on the publishing industry as it has on other sectors.

Check back with us next year for a report on the swordfights over that subject.

A San Francisco literary agent on the digitization of books

In 2002, Google initiated a secret project with a noble goal: to make the knowledge in the world’s 130 million books available to anyone connected to the Web. Thanks to the exploding smartphone market, by the end of the decade, this will include most of the people on the planet. But some feel that the project, now public and known as Google Book Search, has flown in the face of Google’s noble motto: “Don’t be evil.”

Indeed, the very idea of digitizing books in copyright without permission was viewed as pernicious by the writing and publishing community, which created a firestorm of protest and took various tacks to block Google’s attempt to commandeer our literary heritage.

Remember: Power corrupts. Far too much power these days rests in the hands of fewer and fewer people—or fewer corporations. After all, corporations like Google, Amazon, or the not as menacing Barnes & Noble, exist for one purpose and one purpose only, as noted by Former Secretary of Labor Robert Reich in a recent San Francisco Chronicle column:  “to make as much money as possible.”

Unless stopped, technology companies like Google and Amazon, the leading online bookseller, will control the culture for which they are now the gatekeepers. Access to books is far more important than quarterly dividends. Allowing books to become victims of the corporate imperative will lead to evil being done to readers, writers, students, libraries, and publishers.

Consider this three-part solution:

1. Google should seize the opportunity created when U.S. Circuit Judge Denny Chin ruled against its plan, citing concerns about copyright, privacy, and monopoly. Google should turn to the publishing community to make decisions about how the corporation provides access to books. Google might finance a nonprofit governing board, which would decide how best to balance access and profit in the public interest. The board would include a representative from Google, the Association of American Publishers, the American Booksellers Association, the American Library Association, the Library of Congress, the Author’s Guild, the Association of Authors’ Representatives, the American Board of Higher Education, the Electronic Frontier Foundation, the World Intellectual Property Organization, and perhaps other organizations.
2. These organizations can elect a member to serve a single two-year term for the part-time position in return for the income the member presently earns plus expenses. The ideal candidates will have integrity, creativity, and a passionate dedication to the public’s right to access books.
3. The board’s monthly meetings should be made transparent: Televise them, show who votes for what, and post the text of its meetings on the Web.

After two setbacks, let us hope that Google will see the wisdom in surrendering control to assure profits. If it does, the courts and the international book community will look more kindly on its efforts.

History has proven Napoleon right: “Humanity is only limited by its imagination.” All that separates conception and achievement are time and resources.  Creativity and collaboration across media, disciplines, and borders will continue to unleash a growing torrent of wonders.

{Michael Larsen is a partner in Larsen-Pomada Literary Agents, author or coauthor of eleven books, including How to Write a Book Proposal, and co-director of the San Francisco Writers Conference.}

E-books arrived at America’s bookstores on December 6, 2010, with the announcement that Google eBooks would be sold through independent bookstores, including my own, Book Passage in Northern California. Bibliophiles like me greeted the news with a mixture of excitement and trepidation.

Google eBooks are stored “in the cloud,” so you can read them on your computer, iPhone, iPad, and other devices. We liked this flexibility, as well as Google’s willingness to support bookstores like ours, and you can now buy e-books from our Web site. (There is a full FAQ at the Book Passage Web site to acquaint you with Google eBooks.)

Many breathless digerati have been heralding the arrival of e-books as a sign that the reign of the printed word is over. Soon, they claim, everyone will be reading digital type on backlit screens. Not so fast, booksellers say. We are generally happy to have an array of electronic books to offer to our customers, but few of us are tearing down our bookshelves.

Hardware-store owners may rave over a favorite screwdriver, and kitchen-store owners may fall in love with a set of pottery, but there’s nothing to match the bookseller’s love for a well-crafted book. Go to any meeting of independent booksellers, and you’ll find them swarming over authors, ogling brilliant cover designs, and passionately debating this passage or that. Booksellers consider themselves the inheritors of a 600-year-old tradition. We will do almost anything to maintain the quality of the books we offer our customers, and we bristle at the thought of anything that might undermine us.

The Luster of Books

Part of that “quality of books” is the printed page itself. The sheer physicality of books is part of their strength. I’m not just talking here about luscious paper, tasteful font, or smart design. Books on a library shelf or bookstore table support each other in a myriad of ways, one leading to another. Pick any book off the shelf, and your attention may be drawn to the ones next to it. “Touch me,” they seem to say. “I have something you want to know.” When you pass shelves of books—some of them familiar, others new and intriguing—their presence can reset your mind and give you purpose. By the time you reach the book you want, your mood may have changed from when you entered the door. You’re ready to read, and the book is ready to do its work.

For my wife, Elaine, and I, books “do their work” in a number of ways. Among our houseful of books is a large collection about food. These books are truly visceral in their impact. Sure, the recipes might be found on the Epicureus app, and some photos have probably wandered into the bowels of Flickr. But, for us, it is these books that inspire the inner chef.

The same is true of the children’s books that are scattered around our house. I can still see the pictures of the first book I had as a child—and feel the weight of it on my lap. (Can I remember the first Web page I ever saw? Hardly.) And the warmth that comes in curling up on the couch and reading with one of my grandchildren will never be replaced by leaning over a screen.

The Lust for an E-Book

As a kid I was known to carry a book with me everywhere. Decades later, being caught somewhere without a book to read is one of my worst nightmares. That’s why a recent experience with Tony Judt’s Postwar: A History of Europe Since 1945 was so maddening. I was about 50 pages into this riveting work when I lost it in the Heathrow Airport lounge—at the start to a three-week vacation. Damn! I groused about it for days, knowing that I’d have a hard time finding another copy in a small town in Italy. I can see why travelers might want to have e-books on hand to get around the restrictions on airplane luggage. And if my vision were impaired, I would welcome the opportunity for an e-book with adjustable print-size.

Yes, electronic books have their place. As it has become clear that electronic books are part of the literary landscape, it has also become clear that independent bookstores are an ideal place to buy them. Why? Because independent bookstores reflect the sensibility of the booksellers who work there.

No two stores are alike. But once you are in such a store, book selection becomes a two-way street: You are no longer just heading towards a book, because the books are seeking you out. Bookstores do this in many different ways. Some emphasize their careful selection of books, the manner in which they are displayed, and the shelf-talkers with staff recommendations. Others cultivate the person-to-person relationships, with booksellers making recommendations, hosting book clubs, encouraging customers to arguing in the aisles over the merits of a book. Many of us also invite authors to read from their work and take questions from our most avid customers. Some of this is serendipity, but it arises from a setting in which books and book lovers find themselves at home.

Giving Google a home

Book Passage will now bring this same sensibility to Google eBooks, which means that we will feature the best selection of electronic books in the market. It’s a pleasure to be working with a company of Google’s size, expertise, and reputation. This assures us that we can offer the finest electronic books and keep pace with new developments in the e-books field. And we believe that Google sees our role as helping it to reach the most dedicated and sophisticated readers in America.

Books have outlived some of new technologies and learned to live with others. There’s every reason to believe that books and e-books will learn to accommodate each other and find their proper place in any reader’s collection. And as lovers of printed books we welcome our new electronic cousins into the household. We’ll learn to love and respect each other —just as long as they don’t barge into the kitchen and start trying to run things.

{Bill Petrocelli is an author, a bookseller, and a former attorney. For the past three decades he has been the co-owner with his wife Elaine of Book Passage, a retail bookstore in San Francisco and Corte Madera.}