Google or Apple have a sufficiently large cash pile that they could take out a majority stake in all of the Big Five – it would only take on the order of $10 billion. Also bear in mind that the paper publication side of these organizations could remain largely unaffected by this takeover, insofar as they could still be operated as profitable commercial business units. The focus of the takeover by Google would be on the electronic side of the industry. The purchaser would effectively have acquired the exclusive electronic rights to roughly 300,000 commercial-quality books per year in the US market space. They could provide free public access to these works in return for a royalty payment to authors based on a formula extrapolating from the known paper sales, or a flat fee per download; or they could even put the authors on payroll. The cost would be on the order of a few billion dollars per year – but the benefit would be a gigantic pool of high-quality content.
From an author’s point of view, the benefits should be obvious. Having your books given away free by FaceAppleGoogBook maximizes your potential readership, while retaining print royalties and some sort of licensing stipend from FaceAppleGoogBook should maintain your income stream. Win on both counts!
Such a buyout would amount to a wholesale shift to a promotion-supported model for book publishing. Google would presumably use free book downloads to drive targeted advertising and collect information about their users’ reading habits and interests. Apple might use the enormous free content pool as a lure for a shiny new proprietary iReader hardware device. Facebook could target the authors, wheedling them to pay for promotional placement in front of new readers. The real questions are: is there enough money in a new shiny iReader device or the AdWords market (indeed, the advertising industry as a whole) to support the publishing sector as a promotional loss-leader; and, would this get FaceAppleGoogBook something they don’t already have?
There is more here. I see Google as the natural purchaser here. By having exclusive rights to book content for its search service, it would cement its dominant position in search for a long time to come.
You should note, however, that Stross is only speculating and he sees a real barrier to his proposed solution, namely:
The dismal answer [as to why this doesn’t happen] probably lies in the mare’s tale of contracts and licensing agreements and legal boilerplate that underpins the publishing industry.
The pointer is from Ted Gioia.