Digital Publishing: An Open E-Book - Industry Trend or Event

Industry Standard, The, August 7, 2000 by Mark Frauenfelder

Two e-book standards are duking it out for dominance. Publishers don't much care which one wins, as long as one of them does.

IN EARLY JULY, LAURA NOLAN OF LITERary agency Sobel Weber auctioned the anthology rights to five magazine stories written by mystery author James Ellroy. Normally, such news would barely merit a mention in Publisher's Weekly. It wouldn't even be noticed by the mainstream press. But Nolan was selling the digital rights to Ellroy's GQ pieces, and that made all the difference. USA Today heralded the event as an "historic step" in the journey from tree books to e-books. (Contentville won the rights over four other bidders. Neither Contentville nor Sobel Weber would disclose the price.)

The Ellroy auction, along with Stephen King's recent forays into e-publishing, make it clear that online books are ready for prime time. But behind the stories of big-name authors and slick new e-book gadgets, there's competition between multibillion-dollar companies vying to control the way online books will be formatted, distributed and displayed. On one side, there's Adobe, pushing its widespread PDF, or portable document format, as the de facto e-book file standard; on the other side, there's Microsoft and Gemstar, the chief architects behind a new, open e-book formatting specification called OEB, or open e-book. The two groups are banging their drums, hoping to persuade everyone to march along to their particular technology. And publishers, software companies, device makers and consumers are warily following along, hoping they aren't going to end up in Betamax-land.

Even though e-book sales are just a drop in the bucket compared with the $22 billion traditional book market, that won't always be the case. And neither Adobe, Gemstar nor Microsoft wants to be left out of another digital revolution. For Adobe, if PDF beats OEB to remain the digital publication standard, e-books would be published using Adobe's proprietary format, and those books would be sold using Adobe's DRM, or digital-rights management, technology. The company would make money on the software it sells to create PDF files, and it would get a piece of every online book transaction. For Microsoft, an OEB victory would mean increased sales of its new Windows CE operating system, which features OEB reading software called Microsoft Reader. And for Gemstar, which in January bought SoftBook and NuvoMedia, currently the only dedicated e-book device companies, OEB's dominance would mean it made the right decision to use the file format in its device, which will be manufactured by Philips.

Publishers by and large don't care which format wins, as long as there's one clear winner so they don't have to double their efforts by publishing two or more versions of every e-book they release.

At first glance, Adobe seems to have a lot going for it. With its excellent reputation among designers for its high-quality type layout and illustration software, Adobe already has strong ties to the book and magazine publishing industry. Its PDF file format, which has been around since 1991, stores electronic documents in a way that closely mimics the look and feel of pages in a book. PDF files are self-contained: Text, images, and fonts are all combined in a single file. Whether read on screen or printed out, a PDF file is a pixel-perfect facsimile of the document's original design. Publishers typically store their book and magazine content in Adobe PostScript, which can be directly converted to Adobe PDF with a program called Adobe Acrobat. Translating a word processing or desktop publishing document to PDF is a push-button process.

Currently, Adobe has a huge head start over OEB. Over 110 million copies of Adobe Acrobat Reader have been downloaded, and an additional 100,000 copies are downloaded every day. Compare these numbers to the 20,000 or so dedicated reading devices that have been sold by Gemstar subsidiaries NuvoMedia and SoftBook -- both of which display GEB, not PDF, files.

Adobe also has an advantage when it comes to selling e-books. Since late 1999, the company has been bundling a "Web Buy" plug-in with the Acrobat Reader, allowing users to purchase and read locked documents from merchants who use Adobe's royalty-based PDF Merchant system.

With Adobe's dominance in design, production, market penetration and sales, what gives anyone -- even Microsoft -- the idea they can wrest control of the e-book from Adobe? The reason is simple, says David Ornstein, the OEB Forum president. As one of the primary writers of the OEB specification, Ornstein is betting that publishers will flock to a truly open standard. The OEB Forum currently has 59 members, including IBM, Palm, HarperCollins, McGraw Hill, Random House, Nokia and even Adobe.

The strength of the open e-book publication structure, according to Ornstein, is that it is a kind of "HTML for e-books," while "PDF is basically closed." It's true, he says, that Adobe publishes the specs for PDF, "but it is simply impossible for it to evolve and take advantage of the requirements as the market grows in a way that incorporates all the players."