Although HarperCollins executives downplayed the commercial aspects of last week's announcement that HC is creating a digital warehouse for its book files, the move puts the company closer to being able to sell content in any form online when conditions warrant. In that regard, HC is in step with such competitors as Random House and Simon & Schuster, both of which already have begun creating digital databases that could be adapted to sell content to consumers.
S&S began putting its Digital Asset Bank together in 2002, and the database now holds digital files for all of its adult frontlist titles and most children's books. Random House's digital archive includes several thousand files of its frontlist works. And both S&S and Random are selectively adding backlist books to their archives. In the U.K., Holtzbrinck's Macmillan subsidiary announced earlier this year that it was building a searchable repository of digital books in a database called the BookStore. The effort is being launched overseas, but it is expected to eventually include books from Holtzbrinck's U.S. publishing houses.
S&S spokesperson Adam Rothberg said that, as that publisher's Digital Asset Bank grows, it gives S&S a better chance to evaluate its e-commerce options. S&S is in "very early talks with other CBS companies that are looking to monetize their assets online," Rothberg said. When Random introduced its online terms-of-sale program last month, it said that at some point it, too, could begin selling online content itself. And even though the focus of the HC announcement was not on monetizing its content, it was clear making money from digital editions of its books is on HC's agenda.
Creating the digital warehouse is the first step in a long process that will enable the company to sell content online, HC CEO Jane Friedman said, though how that will happen is still not clear. As HC president Brian Murray observed, a lot can happen in the digital world between now and mid-2006, the time when the first of HC's digital files will be available from its own database. The important aspect of building the archive, Murray said, is that it will give HC the opportunity to watch what is happening in the digital space and "move with the other players or go our own way if we don't like what is happening." He said HC has become "frustrated that Amazon and Google could move faster than us to develop new business models." Controlling its own files, Murray believes, will give HC a better chance to explore online commercial possibilities.
To some publishers, file storage is less important than how files are delivered. No matter who serves the files, said one executive who asked not to be identified, "The key is that business rules apply" that allow publishers and authors to be compensated for online use.
