white house association. >> before talks with sarah weinman about recent publication news. held in new york city, about 25 minutes. from time to time we like to invite sarah weinman, the news directors of publishers marketplace to give us an update on the business of books. >> host: sarah wine morning thank you for coming on. >> guest: it's a pleasure, peter. >> host: start with the google settlement. where do we stand with that? what are the issues? >> guest: i think the best way to look at the current status of the google books case we're going right back where we started from seven years ago. so, denny chen recently agreed that the authors, who are one of

the plaintiffs, did have standing in making is a class action suit. what happened was everything was going along for several years and the judge got promoted to the appeals court but this is one of his last outstanding cases, and he decided that the original settlement was not good, so he threw it out and everybody had to start over, they had to refile the suit. the aap decided to file it in a different way from the author's guild. there will rumors there were going to be separate settlements. so now that the authors guild has standing, it will essentially keep chugging along and it's possible they may be moving towards a trial date in september but we just don't know. so, developments are slow. just as they were many years ago. so, at. >> host: at the end of all of this, who is it going to affect

and how? and how will consumers -- will they get better access to books? >> guest: it's hard to say because what is also happening is that google has become less of a player in the digital book space than it was in 2005. at the time publishers and authors feared that all this massive book scanning was going to lead to further piracy but in 2005 that was two years before amazon released a kindle device and now there are multiple kindle devices, barnes and nobel has the nook, apple with the ipod. sony, so the ebook system far -- it's far more veried and more multilayered than it ever was, and in the meantime what google has done is they themselves got into the ebook space and they were partners with independent booksellers for them to sell ebooks to the booksellers' sites. now google is getting out out of

that. they rebanned books as google play, which became more books, movies, films, everything from an entertainment standpoint. so because the entire landscape has changed, legally, even if chung chen decides there will be a trial or there will be a ruling, it may not matter in the same way it did years ago. >> host: sarah weinman, there is a fear among publishers that consumers will start to consider books free much as they do today music or movies? i mean, many ways a lot of people get their movies and music free. >> it's interesting you bring that up, peter. one of the big developments that has been happening in the past few weeks, and accelerated here, is that a number of publishers, even large houses, are experimenting with something called drm3. now, to backtrack a little bit,

when ebooks are produced and sold through retailers, they want to make sure that you can't pirate a book very easily. so they put certain types of code and rules under what's known as digital rights management. so it makes digital file, in this case ebooks, very difficult, if not impossible to copy. so what the downside is that -- let's say you want to transfer the ebook you legally own from one device to another that are not compatible, you can't do it and that makes it difficult for the consumer who are like, bought this book, i want to read it on any device i own or any software i have access to, and i'm not allowed to because of these digital rights management restrictions. so what a number of publishers have done, including macmillan owned -- they recently announced that as of, i believe, july, they will sell their books

drm-free. so customers will be able to buy books and do whatever they like with them. >> host: once you buy it once -- >> guest: buy once, read every, is mamson's marketing slogan. that's what publishers are experimenting with. so, just yesterday, smaller distribution arm, ipg, announced that publishers they work with will also make their ebooks available drm free. so the bottom line is while publishers fear piracy, they feel that drm is not necessarily the answer in terms of tackling piracy. it's more important to create awareness as to why people should be buying books legally. i'll give you one last example of this and it comes in the first of jk rowling's book. she had never sold a digital

rights to her main publishers,; always hung on the them, and last year she launched a multimedia platform and web site called paddermore, which is creating a larger world around the books. the other thing is padermor is the exclusive retailer for harry potter books, and customer can go to pottermoore or your favorite etailer, like amazon.com, and they'll redirect to pottermore, customers can buy it there and read on whatever device they choose. so they're drm-free. >> this is becoming a trend. >> guest: it appears to be. >> host: industry-wide. >> guest: that is hard to say. everybody is waiting on everybody else to see if it works and if piracy is unaffected i suspect we'll see more drm-free books but it may

not be a blanket thing. i can't see yet that mcmillan will suddenly make all their books drm-free, but because of science fiction and their fans are passionate and have been reading digital books early, that's a good test imprint. but will we see it nonfiction or literary fiction? too soon to tell. >> host: the background of the department of justice apple and the current status. >> guest: oh, my, what mine field. this has been in the works for a few mocks. the department ofity has been making noises they might be looking into and it were going into publishers offices and obtaining record. i think as far back as last fall. started with a civil suit from seattle where a number of customers claimed that because

publishers had unilaterally come together to form the agency model, and before digital books were sold and many of them still continue to be sold as a wholesale mod toll kind of conflate a whole bunch of complicated things into one. the agency model means the publisher sifts the price and the rile tear cannot change that but will get a 30% cut of the price. under the whole sale model the publisher makes a price and the rye -- retailer can discount. publishers feared that was a downward price that amazon was doing, and amazon in 2009-2010 were the dominant ebook retailer. once the agency model was implemented and apple with the ipad helped foster this -- barnes & noble jumped on board. other retailers moved towards the agency model, and as i

mention evidence earlier, we now have a much more and veried digital book space, many more retailers that is the publishers' argument. then in april the department of justice decided they thought they had a case so they sued those five big publishers, excluding random house. random house was not included because they did not implement the agency model for another year. so in theory, the irony is that by waiting they're not involved legally at all and they use the agency model. so the department of justice -- a number of states sued, and but aalso announced that harper collins, and simon & schuster settled, and as part of the settlement which in theory would go into effect later this summer, if proved by the court, they cannot use the agency model for at least two years. if they do it has to be under

very modified means. however, penguin and mcmillan did not settle so they're still being sued, and as a result since then, the judge who is presiding over both the department of justice and also the class action sued, she only foreshadowed she was going throw the book at publishers, and unless they make a very, very good case in court it doesn't look all that good for them right now. but as to where it stands, for the moment nothing is going to happen until the department of justice gets a number of letters from the public. so those are happening and there are a number of prominent people, like agents and industry insiders, and book publishers, and also readers on both sides of the issue, have been weighing in. they have until june 25th to commit letters to the doj, and i believe that by july 27th, the

judge is going to hear as to whether, one, the settlement has standing and, two, how to proceed with all of the suits. so it's very complicated, i know. >> host: how big of a deal? >> guest: a huge deal because what these suits are alleging is that publishers colluded, and publishing is a very social business so it's making things tougher. there was panel at a book conference which featured a number of publishing executives and he moderator said we cannot talk about anything to do with ebook price organize the department of justice in case it's feared to be collusion. of course the book side is that there are many collusion jokes making rounds on the internet but that gallows humor. publishers are fearful if the agency model goes away that amazon will be able to run amok and dictate even further, and the reason why this strikes

further fear is it's not just that amazon is a reel tailer but also a publisher. if you go on the floor here, amazon has a big booth for amazon publishing. they're giving away a lot of galeys. they have a sense of excitement around them, and it's not that the big publishers don't but it's an extra bit of tension that is added here at publishings' biggest trade show in america. >> host: you talked about the tension and the publishers who settled with doj, are they the outliars in are they looked down upon by the rest of the industry because they settled? >> guest: it's hard to say. there are very valid reason highs they settled. largely due to the expense of litigating. publishers may be beholden to their shareholders and larger corporate aim put they don't have the time and resources and money to spend millions of dollars litigating a case that will likely go on for years in

case, they may make the google book settlement, in terms of time and money, look like child's play. >> host: sarah weinman, we talked to several purchasers here at can book expo america, the industry convention, and we talked about ebooks, and where they sit when it comes to the revenue. overall, what percentage of revenues per publisher is from ebooks sniff you're looking at trade publishing hours -- use the term the big six, and other larger and mid-size publishing houses. ebooks are luge and -- huge and growing revenue. when the aap released numbers for february statistics, i believe that ebook sales in february were 92.5 million they tracked and that made up about 26% of overall trade sales. a number of the largest publishers are reporting well in excess of 20% of overall trade sales quarter after quarter.

the numbers fluctuate, depending on how things are doing. they're also books that i think add an artificial bump. for example, suzanne collins, the hunger games, because those books are selling phenomenally well, the movie doesn't hurt -- but it sold so well that scholastic had to issue a separate press release after the issued third quarterly numbers to say it's going to be even better because we have greater than anticipated sales of these three hunger games books. another publisher i expect to do very, very well is random house. why? because of the 50 shades of gray trilogy. when they picked up the self-published erotica trilogy in march and published in ebook and then print edition, at the time the books, written by a former british music -- they sold 250,000 copies in

ebook in a very tiny publishing house. it's started at a twilight but through word of mouth, these sales are growing and growing. but here's where the power of the large publisher kicks in. vintage, part of random house, gets all the rights to print ebook, audio, in north america and i believe the uk as well. they get the rights, and what has happened? in the first six weeks on sale the book sold 10 million copies. it's unheard of. >> oo 10 million. >> guest: 10 million. >> host: only. >> guest: no. half were ebook and half were principle. the print sales are through the roof. if you look at the bestseller lists, the tom three, 50 shades of gray, 50 shades darker, they're just a phenomenal -- like a davinci code level, and the da vinci code was a random

house book through doubleday so everytime knaupf has a juggernaut, their big thing what the millennium trilogy, those books did well now. that the three books-out and the movies are out and the american movie is out, they're kind of -- i wouldn't say gone by the wayside but they're talked about and not selling phenomenally. now they have the 50 shades of gray trilogy and i believe that will make their year. >> host: we have been talking about books and big sellers. how wouldeye describe the overall health of the publishing industry. >> guest: by and large all right. because you had outliers like hunger gamessed and 50 shades of gray trix it adds an extra level of sales and certainly excitement, i mean, for example, just -- i definitely sense there's an added level of excitement. there were lines out the door.

much more crowded than the last two or three years and it's largely because of, going back to what i said earlier, ebook sales keep climbing. so if ebook sales make up, say, 20-25% of all trade sales and still seem to be growing, maybe not as fast as 2011 but still growing fast -- publishers have to be excited, even as they also have a lot of trepidation thanks to our friends in washington,. >> host: publishers learn a lot from the music industry as far as publishing online. >> guest: absolutely. now, that isn't to say they still don't have a lot to learn. but i think it's also important to remember, even with the health issues of the music industry, and how they deal with piracy, that a lot of people still buy physical cds. they may be on the wayne, dvds may be on the wayne, but digital

isn't 100%, and what i think we're going to see is how this mature print/digital hybrid business shakes out development know how the digital i numbers will top out, 30%, 50%, high center does it depend on which category? is there a difference for genre fictions a opposed to literary nonfiction? i can say yes bought what readers want to read on their devices may be different than what they want to read in print. so i think the key word is hybrid, and i think we'll be hearing more how publishers look to whether they should publish a book in ebook first, should they bring out in hard cover, and then bring out the paperback a few months or a year from now? so perhaps there will be even more experimentation in terms of timing and format than right now. >> host: sarah weinman, when it cams to amazon, does amazon

change the publishing world in any way? >> guest: absolutely. for one thing, here is this huge retailer with an amazing ability to market directly to its customer. they always keep the customer in mind first. whenever there's a problem. a kindle device breaks or there's a problem with an ebook, or something didn't get shipped right, they're answer their customers needs right away, and also because they've been moving more aggressively into publishing, for example, one of the big publishing news out of amazon was when they acquired the digital rights, and i also believe the north american print rites to james bond novels and i believe those will be released in the next few weeks. so, originally penguin had a ten-year license, and that came up. and what the fleming estate's agents decided, they wanted to try something different in north

america and they went to amazon, where presumably they felt they got the best deal. so it will be interesting to see how these iconic books that have become the basis for these legendary classic movies, will they be revived? will amazon find a way to market enemy new, different, and potentially more exciting ways? that's just one example. another thing that it think people are going to be paying very close attention to is when amazon officially launches their new york-based publishing interest this fall there are galleys of some of the books available at the show this week but the become will not be published until the fall. amazon work out an interesting arrangement. the ebooks are under amazon publishing new york. but the print edition are going to be released through hauten -- harsort so essentially independent book stores or brick and motor torii tailer, if the

choose, could order print editions from hardcourt, but what happened is barnes & noble, they have come out and for the time being -- i don't believe there's been any change. they said they will not stock any of amazon's publishing titles because as long as they do not have any direct way of selling the ebooks, there's no point for them, they feel in selling the print editions in their brick and mortar stores. so i think mcmillan are declining to stock many, if not all of amazon's publishing titles. so, because these titles may not have the same access to physical retailers as their counterparts in, say, the big six, how will that affect sales? it will be very interesting to see. >> what about the addition of sarah nelson as the editorial director at amazon?

was that a coup. >> guest: that was an interesting move because it's unclear what her role is. looks like she will be working on the web site side in terms of revitalizing their online presence, their blog, perhaps changing the way that amazon editors pick works. so, as far as i can tell, she is not directly involved with the book publishing arm. but from what i can gather, they have hired sarah nelson to be her best sarah nelson, and her previous job was as books edit or of o, the open practice magazine. >> host: and publishers weekly. >> guest: before that editor in chief at publishers weekly. so that's always been a champion of books first and foremost and a great industry insider and one who has her pulse on what people are reading. so that i believe ills why amazon brought her in, so she

can be that great reading advocate. it's also interesting, she left o magazine behind because another big piece of news is how oprah win free has revised her book club, which was announced a few days ago. so, it's different than the way it used to be. the book club was shut down in 2010 when she moved away from broadcast syndication to her own network, and she bright it back with the momentum more wild -- momentum. moyer wild, which is a book about when walked the pacific coast trail all by herself. it's a thrilling book. i read it not long before publication and i couldn't put it down. so i totally see why oprah was enthusiastic to the point this is the book that revived her club. so what she is doing, there's not going to be a dedicated tv

segment like there was in the past but will tie in more closely with the magazine. twitter and facebook discussions, a much heavier online component. so, a lot of people in publishing are also watching and waiting to see, well, will the book club work just as well in this form? will there be a dip? so it's another thing everyone is waiting and seeing this summer. >> host: finally, books do nonfictionbooks add to publishers bottom line? do they sell nearly as well as the novembers you have been talking about? >> guest: it depends. from what i understand general laird's imagine, which was bat creative, that sold phenomenally well, largely helped when barnes & noble made at it recommends pick, and certainly coming up-maybe not so much this summer but this fall, it will bev very interesting to see how nonfiction does that are

election-related. so if nonfiction books do very well, they'll have some political or some history-related element that ties into the election. for example, i would be -- i would not be surprised in the slightest if the barack obama biography will not do will. there have been hints of what is to come with extras in vanity fair and other magazines. people are very, very curious to see what happens and it's a very big book. that's the first book that comes to my mind there are a number of other political books that should be dropping very soon. >> host: we've been talking with sarah weinman, new director or publishers marketplace. if your interested in following publishing news, the web site publishes mark plate.com and if you want to follow sarah on twitter, she is a constant twitterer, as sarah w, is that

correct. >> guest: , that. >> sarahw. i tried to keep it simple by getting on twitter early. so i was fortunate to have as few characters as possible so i could have 140 characters left to say what wanted to say. >> host: thank you for being on book tv. >> guest: thank you very much, peter, a pleasure as always. >> one of the most interesting aspects of the cell phone, some people solved the problems came from military work and one guy in particular i spent a lot of time talking to had done a lot of work on radar, discriminatory radar work in the south pacific, where bell had a lab, and at the time he came back from a tour of duty where

he worked on a sophisticated microwith a system, kim back to bell labs and they were going to discontinue what he was doing, somebody said, talk to these guys working on cellar, and it was part of the maybe serendipity of bell labs that he was the guy with the kind of knowledge that maybe very few people in the world had at that one time, and they drafted him into the project, and, yes, he had a van and he was going down to philadelphia, and had cleared out the van and ripped out the toilets and stuffed with a lot of electronic equipment, and they would test all the signals to try to make the working cell phone system go. >> john kennedy once met with harold mcmillan, the british

prime minister, and you read it in the newspapers, they discussed arms control or whatever issues between the two powers. they sure did. but only long afterwards did we ghetto notes on what they said exactly with each other in private. turned out that kennedy spent 0 lot of time complaining about bad press coverage. the press was being tough on jackie and other things, and mcmillan, who was a generation older, said, jack, why do you care? brush it off. doesn't matter. you have other things to worry about. and kennedy said, that's easy for you to say, hair. how would you like i the press said your wife was a drunk? and mcmillan replied, i would simply say, you should have seen her mother. [laughter] >> so it's the kind of thing that later on was a fun thing, gives you an idea what these people are like. you can't learn in real-time.

>> what are you reading this summer? book firefighter wants to go. >> i'm just bringing a book called bring up the bodies. i re-read the first of the trilogy on thomas cromwell. i know a lot about the tudors, an area i've always been interested in. she does a masterful job of telling a story that is oft told and yet telling it in a brand new way. in the summer i'm probably going to read a new novel called the age of wonders. that has been getting a lot of attention. and i haven't read the most recent lbjoo