Google Book Settlement: The Revenue Models
The point of the Google Book Settlement is to make money. There are some that argue that it is designed to provide more access to literature than is currently being provided, but money is involved here otherwise there wouldn’t be lawsuits.
Google Book Settlement has authorized four different revenue models and contemplates others. The four approved revenue models are as follows:
Through the GBKS, Google is given the right to display advertisements on "Preview Use pages and other Online Book Pages." Ads that appear on a general search results page are not considered "Advertising Use" and that money, then, is kept by Google. Revenues generated through ads within the pages of the books themselves (or ads that appear on searches within a particular book) will be shared with publishers and authors at a rate of 63% less BRR administrative fee.
Per Section 3.10(c)(iii) Google is not permitted to use "any pop-up, pop-under, or any other types of advertisements or content of any kind" and the Registry may restrict Google’s advertising for non Registered Rightsholders if Google is using animated, audio or video ads.
Institutional Subscriptions is subscription access to a database of scanned books sold to institutions. The pricing will be set by Google and the BRR. It is likely that subscriptions will be offered in full access and smaller discipline-based collection but Google intends to price the different versions so that there is an incentive to purchase the access to the entire database. Section 4.1(a)(v)
To provide an incentive for institutions to subscribe to the entire Institutional Subscription Database, Google shall design the pricing of the different versions of the Institutional Subscription such that the price for access to the entire Institutional Subscription Database will be less than the sum of the prices for access to the discipline-based collections.
Google and the BRR will consider "the pricing of similar products and services available from third parties, the scope of Books available, the quality of the scan and the features offered as part of the Institutional Subscription." 4.1(a)(ii)
The Uses contemplated by the agreement include "view, copy/paste up to 4 pages in a single command, and print pages of a Book (no greater than 20 pages in one command), and may enable Book Annotations." All printed pages will include a visible watermark. Section 4.1(d)
The agreement confers consumers the same use rights and restrictions as under Institutional Subscriptions including view, copy/paste, print & annotation if the latter has been permitted. Section 4.2(a).
Pricing is determined by Google & the BRR by default. The Rightsholder (and remember that could be any number of people with any disputes headed for arbitration) can notify Google of the price she wants the access to be sold. Failure to notify Google results in the Settlement Price being used. Section 4.2(b). Pricing Algorithm will be based on comparable sales data. Section 4.2(c)(ii)(2). Books are not individually priced but rather allotted placement in a Pricing Bin.
Initial pricing bins are allotted as follows: 5% ($1.99), 10% ($2.99), 13% ($3.99), 13% ($4.99), 10% ($5.99), 8% ($6.99), 6% ($7.99), 5% ($8.99), 11% ($9.99), 8% ($14.99), 6% ($19.99) and 5% ($29.99). Section 4.2(c)(ii)(1).
My guess is that the pricing bins will be subject to length of book and type of book given that comparable sales data will be used to set pricing.
Google will design Public Access to the database so that users can print pages for a fee that the Registry shall set. Per page printing is allowed for not for profit Higher Education Institutions and Public Library users. Section 4.8(a)(ii).
Google has reserved the right to discount List Prices "from time to time at its sole discretion." The revenue paid to the BRR (and to be passed to the Rightsholders) will be off the List Price. However, the Registry can authorize Google to discount the books up to 40% and those revenues will be paid off the discounted price. A Rightsholder can object to such discount.
Google intends to have an affiliate program whereby third parties like blogs and other websites can link directly to a Google Book page. Any books that are purchased through an Affiliate Program are subject to a deduction of up to 3.75% of the List Price. Section 4.5(b)(v).
New Revenue Models.
The Registry and Google may agree to new revenue models. (Google is clearly considering POD for retail fulfillment according to the quotes by Dan Clancy in this article). A Rightsholder will have an opportunity to object to these uses. Section 4.7
- Print on Demand ("POD") – POD copies of Books distributed by third parties. A Book’s availability through such POD program would not, in and of itself, result in the Book being classified as Commercially Available.
- Custom Publishing – Per-page pricing of Books, or portions thereof, for course materials, and other forms of custom publishing for the educational and professional markets.
- PDF Download – Downloadable PDF versions of Books.
- Consumer Subscription Models – An individual version of an Institutional Subscription ("Consumer Subscription").
- Summaries, Abstracts and/or Compilations of Books.
Definitions for terms used in this document:
Section 1.106. “Preview Uses” means uses that may display Protected material from a Book to users of Google Products and Services in addition to material that is allowed to be displayed in Snippet Display or Front Matter Display, as specified in and subject to Section 4.3 (Preview Uses).
Section 1.97 “Online Book Page” means any page in Google Products and Services dedicated to a single Book, including any Preview Use page, any Snippet Display page, any page of a Book displayed in Google Products and Services, and search results pages resulting from a search within a single Book. Any general search results page in which the search is performed over multiple Books and/or over other content such as web pages in response to a user query is not considered to be a page dedicated to a single Book, even if a single Book is the sole search result of a given search on the search results page.
Section 1.17 “Book Annotation" means user-generated text that is both (a) associated with the content on the page of a Book and (b) displayed on or over any web page on which a page of a Book appears.
Section 1.115 “Public Access Service" means a service provided by Google to each Public Library and each not-for-profit Higher Education Institution that allows users to search and view the entire then-current Institutional Subscription Database, as specifiedin and subject to Section 4.8 (Public Access Service).
Section 1.84 “List Price” means the then-current price for Institutional Subscriptions and Consumer Purchases determined in accordance with Sections 4.1 (Institutional Subscriptions) and 4.2 (Consumer Purchases), respectively.