58 : The Global eBook Market: Current Conditions & Future Projections the beginning the adaptation of existing textbooks from major educational publishers, notably Pearson, Houghton Mi in Harcourt, and McGraw-Hill, making all these materials directly accessible and purchasable through the iBookstore. Over the course of 2012, content—and the condi- tions of how to bring it to market and how to price it— became the focus of a truly fundamental controversy between large publishers and Apple on the one side and regulatory government authorities in the other. The initial case is currently being fought in the US, but the EU is likely to become an extension of the battle eld. In April, the United States DoJ decided to sue Apple along with ve of the US Big Six publishers, claiming that by insisting on pricing for ebooks, rather than leaving it to the retailers, the defendants were implicated in “ongo- ing conspiracy and agreement have caused e-book consumers to pay tens of millions of dollars more for e-books than they otherwise would have paid” (quoted in Publishers Lunch, April 11, 2012). Several of the tar- geted publishers settled with the DoJ, but Apple, Macmillan (of the German Holtzbrinck group), and Penguin (of the British Pearson group) resisted, claiming that there had been no wrongdoing. On September 6, 2012, judge Denise Cote approved the DoJ’s settlement with Hachette, HarperCollins, and Simon & Schuster. (For a more detailed account of the controversy, see the earlier discussion of the US.) Barnes & Noble Barnes & Noble, Inc. (NYSE: BKS) describes itself as “the world’s largest bookseller and the leading retailer of content, digital media, and educational products” (state- ment for this report). The company’s businesses include the operation of approximately 700 specialty retail stores and more than 600 college bookstores in all 50 states in the US online retailing through its agship website BN. com and a marketplace leader in the digital industry through its exploding NOOK brand of eReaders, reader’s tablets, and digital content. countries where purchases can be made from a local billing address or with a prepaid gift card, and the exact available services through iTunes vary widely from country to country. For instance, in much of Asia (includ- ing the People’s Republic of China and India), Russia, and large parts of sub-Saharan Africa, the iTunes store is available but with restricted functionality. With regard to digital books, this situation is a disadvantage compared to more broadly available media formats, notably iTunes’ highly popular music o erings. In the ranking of paidContent of the world’s top 50 digital media companies, for which only revenue from digital content sales have been included, Apple has been ranked at number 5, with digital revenue (not including hardware sales) of $5.4 billion (http://bit.ly/T1EUu7) With regard to reading devices, evidence grew in 2012 that tablet computers had gained in popularity versus E Ink–based dedicated readers—to the advantage of Apple’s iPad, which was reported to have been a favorite gift in year-end holidays 2011 not just in the US and UK but also in many other markets (as an example, in France, see Livres Hebdo, February 6, 2012). However, by late summer 2012, with the rollout of the next gen- eration of low-cost ereaders as well as tablets, notably by Amazon, Barnes & Noble, and Kobo, a erce struggle for market share ensued. New reading devices will also deeply in uence the development of digital publishing. One segment of publishing where this will be leveraged is certainly textbook publishing, a sector famously singled out by Apple’s founder Steve Jobs as being “ripe for digital destruction.” The launch of iBooks Author, together with the iBooks 2 format, which is designed to allow authors to publish stories and notably more complex and multi- media content directly to the iBookstore—is a toolset that the Economist labeled a “breakthrough in transform- ing how textbooks are created and distributed” (The Economist, January 20, 2012). Apple’s initiative was not directed only at eventual authors—in any eld requiring “media-enriched” publications—but also included from
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