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Sony Electronics and Google are teaming up to distribute e-book content to consumers, behind Amazon.com, the first mover in this field, which already has implemented its Kindle reading device. By partnering, Google can earn advertising and subscription revenue; Sony benefits from selling more reader devices.

Sony’s reader devices offer access to 500,000 public-domain books. Google will provide them free to all Sony Reader users, whereas previously, customers paid to consume e-book content. Public domain books include most titles found at the local library, exclusive of new books on best-seller lists. Thus far, textbooks are not in the public domain, so the fact that Sony and Google are offering only public domain books for free is not very useful to most people.. In comparison, Amazon offers 250,000 e-books, consisting mainly of new releases and best sellers.

Google currently has scanned seven million books with expired copyrights. The company has also gathered books with copyrights currently in place but lacks the authorization to release them. A class action lawsuit prevents full release of the titles; instead, Google poses an alluring snippet of each. A settlement options for the lawsuit may be offering authors 63 percent of potential sales, subscriptions, and ad revenues, plus a $60 fee for every title.

The Sony Reader, priced at $300–$350, is slightly less than the Amazon Kindle at $359. Each company sold roughly 400,000–500,000 devices last year. In partnering with Google, Sony hopes to penetrate the market and make its online book service mainstream, just as Apple’s iPod got the music listening public to adopt the now ubiquitous personal music player. The more content available for the device, the greater value it lends to consumers. Placing devices in consumers’ hands distributes the digital content more widely and ensures that the company realizes profits more expediently.

Discussion Questions:

  1. What is the goal for Sony, Google, and Amazon?

Geoffrey Fowler and Jessica Vascellaro, “Sony, Google Challenge Amazon,” The Wall Street Journal, March 17, 2009; Brad Stone, “Sony Reaches Deal to Share in Google’s E-Book Library,” The New York Times, March 19, 2009; Canadian Writers, “Publishers Gather to Consider Google Book Digitization,” CBC News, March 23, 2009.

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