The Big Six publishers--Random, Hachette, Simon and Schuster, Penguin, HarperCollins, and Macmillan--were still the center of gravity, their booths the most crowded. They had advance copies everyone wanted and they had the snazzy tote bags. Hachette even brought beer and cake.

Given the slowly stabilizing state of digital publishing, we were intrigued to check out the demos staged yesterday by the researchers at the Book Industry Study Group. The guest list was largely potential buyers -- publishers with managerial titles and the occasional librarian. The seventeen demos were a mixed bag, ranging from the most wonky of enterprise solutions to the downright consumer facing, but we did notice that book tech doesn't seem to have escaped the cloud fad.

Barnes and Noble's flagship. (flickr.com/edenpictures)

Things have been looking awfully upbeat for Amazon lately, with the DOJ taking exception to the $9.99-price-point-busting agency pricing model,  which was designed in part to give publishers more leverage with the online bookseller. But for once, this morning brings some potentially positive news for a beleaguered competitor: Barnes & Noble will partner with Microsoft in the creation of a new subsidiary formed from its digital and College businesses. What's MSFT bringing to the table? Cash money, honey. 

Here’s how the deal works: The subsidiary (hilariously dubbed “Newco” in the press release) will take over Barnes & Noble's digital (i.e., Nook) and college businesses. Microsoft will plunk down $300 million (at a valuation of $1.7 billion) for a 17.6 percent equity stake. The subsidiary will “have an ongoing relationship with the company’s retail stores,” which Betabeat takes to mean that those great honking Nook displays aren’t going anywhere.

Barnes and Noble CEO William Lynch situated the move in terms of the bookseller’s current strategy:

The formation of Newco and our relationship with Microsoft are important parts of our strategy to capitalize on the rapid growth of the NOOK business, and to solidify our position as a leader in the exploding market for digital content in the consumer and education segments.

He also promised the investment will "allow us to significantly expand the business.”

Betabeat spoke to Jamie Iannone, President of Barnes & Noble's digital business, and he offered a little more insight into the deal. "I think [Microsoft has] seen the success of the Nook business, how customers have been attracted to what we're creating, and if you look at the innovations the Nook team had, combined with the great things that are happening at Microsoft, we see the collaboration between the two companies unlocking a lot of potential in the growth of digital content."

The deal gives the Nook a little financial breathing room in its ebook battle with the Kindle, which has the benefit of being backed by a rather profitable online retailer, perhaps you've heard of it? The move also sets up nicely for the potential spinout of the ebook business (though the bookseller isn't making any promises that's how this will play out). Operation Nook is already based out in Silicon Valley, far from Barnes and Noble HQ here in New York--and far from the traditional center of the publishing business. It's not clear where the new subsidiary will be based.

In a statement at the company blog, president and publisher Tom Doherty tipped his hat explicitly to future-enthused fans and authors:

They’re a technically sophisticated bunch, and DRM is a constant annoyance to them. It prevents them from using legitimately-purchased e-books in perfectly legal ways, like moving them from one kind of e-reader to another.

Of course, this is a trend that’s been gathering steam in the more technologically adventurous quarters of the publishing industry for some time. O’Reilly Media, Harlequin’s digital-only Carina Press, and Harry-Potter-fan-paradise-cum-ebookstore Pottermore all offer DRM-free downloads. But as long as the Big Six embraced the technology, it wasn’t going anywhere.

The Tor/Forge move is just the latest sign they're starting to shift, however. PaidContent draws attention to comments from industry vet Mike Shatzkin:

I heard a rumor from a very reliable source that two of the Big Six are considering going to DRM-free very soon. The rumor is from the UK side, but it is hard to see a global company doing this in a market silo. Another industry listener I know was hearing similar rumors from different sources.

Earlier this morning, PaidContent even featured a long letter from an anonymous publishing exec who actually breaks the DRM on his own ebooks. He said:

I don’t think DRM is good for the publisher, author or customer. Don’t pro-DRM publishers realize this is one of the key complaints from their customers? I’ve heard plenty of customers tell me that e-book prices need to be low because they’re only buying access to the content, not fully owning it. That needs to change.

Macmillan CEO John Sargent, is that you?

Laughing on the inside

Ever since the advent of the agency model for ebook pricing--the oh-so-valuable wedge publishers needed to fight Amazon’s $9.99 price point--it’s been the big question: Are they actually going to get away with this? Today we have our answer: Not if the Department of Justice has anything to say about it! Alleging collusion to fix prices the agency has filed an antitrust suit against Hachette, HarperCollins, Macmillan, Penguin, Simon & Schuster and Apple itself.

The allegations are awfully cloak-and-dagger. If true, they suggest the publishing industry has carried over a certain old-world stylishness into the digital age. From the filing (courtesy of the Verge):

Starting no later than September of 2008 and continuing for at least one year, the Publisher Defendants' CEOs (at times joined by one non-defendant publisher' s CEO) met privately as a group approximately once per quarter. These meetings took place in private dining rooms of upscale Manhattan restaurants and were used to discuss confidential business and competitive matters, including Amazon's e-book retailing practices.

Emphasis most definitely ours. We like to imagine these meetings looked a little something like this.

Cut to Cupertino:

On February 19, 2009, Apple Vice President of Internet Services Eddy Cue explained to Apple CEO Steve Jobs in an e-mail, "[a]t this point, it would be very easy for us to compete and I think trounce Amazon by opening up our own ebook store."

As of this moment, Hachette, HarperCollins, and Simon & Schuster have already settled. Apple and MacMillan, on the other hand, may well fight: Bloomberg reports they'll argue that, by pushing back against Amazon's overwhelming dominance, the agreements actually increased competition in the space.

Amazon, meanwhile, called the move a “big win for Kindle owners” and promised, “We look forward to being allowed to lower prices on more Kindle books."

Where’s a GIF of that laugh when we need it?

Mr. Cavnar (linkedin.com)

Hate to break it to you paper purists, but it looks like creating and publishing e-books just got a whole lot easier with Vook's new visual editor. Today, the e-book publisher launched a new platform that allows you to create, edit and publish your e-books across multiple devices, no code knowhow required.

Last month we reported that Vook hunkered down for three months with 500 engineers beta testers, transitioning their company from an e-book distributor to an all-in-one e-book publishing platform. Today's launch is the first official product to come from that pivot.

"Vook is a digital publishing house in a box," Vook's VP of business development Matt Cavnar told Betabeat via phone. "It's like a plugin for your business that automatically turns it into Sixth Avenue. Vook allows you to create an e-book and then style it with great granular precision, adjusting style templates, margins, dropcaps and headings. It gives you this extreme control over the content that no one else is giving you."

The platform also includes drag-and-drop multimedia placement, and an auto-distribute feature, which lets you send out your e-books to Barnes and Noble, iBook and Amazon with the click of a button, he said.

Mr. Cavnar believes that now that e-book creation is so easy, great publishers are going to become e-book publishers within the next six to eight months. "I think a lot of media companies are going to turn into e-book organizations, and Vook makes it easy to realize that vision. You're gonna see places like the New York Observer publishing e-books. You had the original 'Sex and the City' column, right? There's no reason to not start publishing some of this stuff in e-book form," he said. (We'll be sure to bring that up at the next editorial meeting.)

In case you're aching to create an e-book of your own, it's worth noting that Vook isn't just available to companies--individuals can also sign up to create and distribute e-books. This seems exciting at first, until you realize how many terrible publications are about to hit the Kindle store.

Vook's cost may also be an issue for e-book authors. Before you start digging through old blog posts to cobble together The Next Great American E-Book, you might want to check out pricing. A Vook membership for one user runs $79/month, or $849/year, which is a little hefty. "An interesting concept, but frankly, far too expensive for the average author to use on their own," noted one Publisher's Weekly commenter.

Mr. Cavnar said Vook learned firsthand the trials and tribulations associated with e-book creation. "We spent two and a half years publishing e-books. We made over 800 titles and that was an incredibly painful process. It was just difficult to make multimedia enhanced e-books, so we weaponized our suffering into this platform and put it at your disposal so you don't have to go through the hell we went through," he laughed. As someone who consistently fights with HTML snippets just to resize an image or start a new text line, we find this act incredibly noble.

"Why suffer if we can't share any enlightenment?" he added.