Home -> Law Blog Directory -> Intellectual Property Law Blogs -> ©ollectanea

Intellectual Property Law

: ©ollectanea

Settlement controlled pricing and tests on effects of openness

By Georgia Harper

I looked around this morning for discussion of one of the points about the Google Book Search settlement that I consider among the most important, but I just didn't turn up anything. Granted, I only did a Google search and I only went through the first page of links (it's Saturday, I've got lots of things on my to-do list today), but this is a very big deal from my perspective and it doesn't appear to be getting even so much as a mention from, I guess I should say, most observers. It's the part about pricing, specifically, the settlement controlled price and the testing that Google is entitled to do to demonstrate that more (or less) openness yields greater returns for copyright owners. These terms are contained in sections 4.2 and 4.3 of the deal respectively. In my search I came across a nice summary (actually I came across many nice summaries) of the 38 page notice (itself a summary of the deal) and it has links to the settlement, so I'll reference it here for the hearty souls that want to read the details for themselves. And as usual, there's 10 times more information in a paragraph in a contract than a discussion of one of the points can deal with. This deal could keep us busy for years. Here's the summary: Google Book Search Settlement: Reviewing the Notice of Settlement | Disruptive Library Technology Jester. So, the deal gives Google "bins" to put books in for settlement controlled pricing. Copyright owners can opt out and set their own prices. But for those who don't opt out and who "settle" for settlement pricing, and that would include all orphan works since by definition, there's no one there to opt out, Google sets the price at a level that gives the optimal revenue. Google can adjust the price in a number of ways, but the goal is to maximize or optimize revenue. Add to this the right Google has retained to conduct tests on books to see how much openness yields optimal revenue. Wow! Cool move. Finally, a right to test out the theories, to demonstrate for different types of books whether openness sells more or less. Wow again. Gentlemen, gentleladies, place your bets... I went on and on in May about my bet that open will win over closed in general, for many, maybe most types of books, in a marketplace where free overwhelms paid by orders of magnitude. So, no surprise, I'm betting more open will return more revenue. I won't get started on why I think that here -- there's a link in CIP's Newsletter to the paper I presented at the Annual Symposium on the subject -- but I firmly believe that for consumers, the price to view digital copies is headed to zero. I my opinion about it, these two provisions can really accelerate a push to zero pricing for digital view. But how, you might wonder, could zero price for digital view return optimal revenue? I'm assuming owners sell added value, not digital view. What can added value be? Who knows. But I'm betting that, again, the stage is set to find out. Let's see, print on demand, print at all, sophisticated digital functionality, networked interactivity, right to commercially exploit, right to build services on top of, oh, gee, what else might someone who actually has the potential to make some money off these ideas come up with? We *will* see. This contractual right to test, to move, to shift openness and price to optimize revenue really is phenomenal. It builds on the market experience of decades (centuries?) of pricing by the publishing industry in the analog world with the sophisticated hypotheses, testing, and data generation and analysis that Google is able to bring to bear on the question of how to better exploit the digital networked potential, how to adapt to new possibilities and new opportunities without undermining revenues. Google's interest in the outcome is just different enough from the publishers' and authors' but just similar enough, to make the deal work. It's both a tenuous alliance, and fortuitous. The data holds the key to a way forward for publishers and authors that isn't quite so hypothetical as the various paths they see today.

Full post as published by ©ollectanea on November 08, 2008 (boomark / email).