Google Gets Great Deal in Book Search Settlement

 
 
By Clint Boulton  |  Posted 2008-10-29 Print this article Print
 
 
 
 
 
 
 

Google's Book Search agreement, in which Google agreed to pay $125 million to settle claims from authors and publishers for its earlier digital scanning and establish a Book Rights Registry to make sure the right parties get compensated, is a great play for all involved.

I tried to find some negatives and failed, so obviously I couldn't disagree more with those who say Google caved and portray it as a loss for publishing.

Copyright Alliance Executive Director Patrick Ross noted in a blog post yesterday:

"Voluntary arrangements like this, where copyright owners have flexibility, are far superior, and frankly can't be compared to a compulsory model. Here the rightsholder still can largely determine his or her own fate. I hope this system works as anticipated, and can be a model for future litigation involving massive infringement of creators' rights, noting that rightsholders have every right to push litigation to a court verdict if they feel that is the best approach."

Roy Blount Jr., president of the Author's Guild, the concern with whom Google is legally settling with in this deal, was similarly effusive with his praise in this blog post. The post is a must-read; it presents the deal terms with clarity.

As good as Ross and Blount Jr. say this play is for rightsholders, authors and publishers, I think this is a great play by Google from a financial standpoint. Here's why.

Of the $125 million, some $34.5 million is going to fund the Registry Google that will also pay $60 per work to rightsholders for the 7 millions or so copyrighted books already scanned. Google will also reimburse the Authors Guild and American Association of Publishers for legal fees after they sued Google more than two years ago for copyright infringement.

Any book sales, subscription and advertisement revenue generated by the Google Book Search will be divvied up by the Book Rights Registry, which will give Google 37 percent and rightsholders 63 percent.

$125 million to put millions of books online, with the ability to make money from online advertising and book licensing revenues? Are you kidding me?

That's a one-time payment for a lifetime assurance that books Google wants to get online can get there without Google getting slapped with a Smith vs. Google or a class-action lawsuit every time it scans a book.

Consider the 16,500 libraries in the United States and the millions of books that can funnel through them digitally for a per-page fee.

Through this e-commerce play and its classic search advertising revenues, Google can begin to make billions of dollars over the next several years, easily offsetting the alleged billion dollars it will cost to digitize the books (Google is hush-hush about the cost and its book scanning method).

That return rate on a $125 million piece-of-mind investment is staggering to me. If only a settlement with Viacom over the YouTube copyright issue could be this beneficial to everyone involved.

Anyone disagree? I'm no copyright expert, but the potential fruits of the deal seem clear. Am I missing something here? Drop me a line.

 
 
 
 
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