J.T. Colby & Company, Inc. et al v. Apple, Inc.

Filing 140

DECLARATION of Claudia T. Bogdanos in Opposition re: 114 MOTION in Limine to Exclude any Testimony, Argument or Evidence Regarding the Expert Reports and Opinions of Mike Shatzkin.. Document filed by Ipicturebooks LLC, J.Boyston & Company, J.T. Colby & Company, Inc., Publishers LLC. (Attachments: # 1 Exhibit A, # 2 Exhibit B, # 3 Exhibit C, # 4 Exhibit D, # 5 Exhibit E, # 6 Exhibit F, # 7 Exhibit G, # 8 Exhibit H)(Chattoraj, Partha)

EXHIBIT B

Page 1

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
-------------------------------------X
JT COLBY AND COMPANY, INC., D/B/A
BRICK TOWER PRESS, J. BOYLESTON AND
COMPANY PUBLISHERS, LLC, AND
IPICTUREBOOKS, LLC,
Plaintiffs,
-against-

Index No.
11-CV-4060(DLC)

APPLE, INC.,
Defendant.
-------------------------------------X

VIDEOTAPED DEPOSITION OF
MIKE SHATZKIN
New York, New York
December 4, 2012, 9:35 a.m.

Reported By:
Nicole Sesta
Ref: 8575

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2

court reporter.

3

A

Okay.

4

Q

Also note that we have a court

5

order in place today.

So that the objections

6

will simply consist of the word objection.

7

your counsel is going to instruct you not to

8

answer I'm sure he'll do that.

If

9

A

Okay.

10

Q

Can you think of any reason why

11

you're not able to testify today, is there any

12

medication that you're on that might affect you?

13

A

No, no.

14

Q

Is it correct that you're here

15

today to testify as an expert witness on behalf

16

of the plaintiffs in the lawsuit between JT

17

Colby and Apple?

18

A

Yes.

19

Q

What did you do to prepare for

20

this deposition?

21

A

I read a bunch of material, the

22

complaint, depositions by Rich Freese and John

23

Colby, I think.

24

testimony, the expert report and then the

25

deposition from the branding, I'm sorry, the

And I read the expert

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name jumped out of my mind, the branding expert

3

from Apple.

4

Q

Would that be Professor Carpenter?

5

A

Yes, Professor Carpenter.

And I

6

had my staff help me massage some numbers to

7

analyze some of the data out of the sales

8

records of iBooks.

9

much what I did to prepare for this, prepare to

10

write the report that you have and prepare for

11

this testimony.

12

Q

I would say that's pretty

You mentioned the expert report of

13

Professor Carpenter, was that just one report or

14

was there more than one?

15

A

I'm recalling one.

16

Q

You also mentioned deposition

17

transcripts of Mr. Freese and Professor

18

Carpenter, are those the only deposition

19

transcripts that you reviewed, and excuse me Mr.

20

Colby?

21
22
23

A
Colby.

Think I read something from Mr.
But those would be the only ones.

Q

You mentioned having your staff

24

help you with numbers.

25

Who on your staff helped

you with that?

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A

Yes, sure.

3
4

MR. RASKOPF:
A

Yes.

Objection.

Wait a minute.

Plaintiffs,

5

no, actually if iBooks is a plaintiff I had

6

heard of iBooks.

7

Q

8

Company?

9

A

No.

10

Q

Before this case?

11

A

No.

12

Q

Had you heard of Brick Tower Press

13

I had not heard of Mr. Colby.

Had you heard of JT Colby and

before this case?

14

A

No.

15

Q

Had you heard of J. Boyleston and

16

Company before this case?

17

A

No.

18

Q

Had you heard of iPicturebooks?

19

A

Yes.

20

Q

And in what context did you hear

21
22

of iPicturebooks?
A

Very aware of it.

I'm in the

23

business and I'm aware of what goes on in the

24

business, and I knew Byron Preiss and I knew

25

what Byron Preiss did.

So I was aware of iBooks

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and I was aware of iPicturebooks when they were

3

new.

4

Q

Do you recall roughly when that

6

A

Late 1990s.

7

Q

Had you ever met Mr. Raskopf

5

8

was?

before this case?

9

A

No.

10

Q

Had you ever worked with his law

11

firm before this case?

12

A

No.

13

Q

Have you heard of Allegaert Berger

14

& Vogel?

15

A

No, I haven't heard them.

16

Q

You said you had heard of iBooks

17

and iPicturebooks before.

Have you ever done

18

any work for either of those entities?

19

A

No.

20

Q

Had you ever done any work for Mr.

22

A

No.

23

Q

Have you ever heard of a company

21

24
25

Preiss?

called Byron Preiss Visual Publications?
A

Yes.

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Q

So a publishing company would

3

create a book and come to Two Continents for

4

distribution to retailers?

5

A

That's right.

6

Q

You mentioned your consulting work

7

that you've been doing.

8

1979, correct?

9

A

That's right.

10

Q

Is there a particular area in

11

That's been since early

which you consult?

12

MR. RASKOPF:

13

Objection to

the form.

14

You may answer.

15

A

Well, essentially, I'm an expert

16

in book publishing.

So I consult to book

17

publishers and their trading partners.

18

their trading partners are both upstream and

19

downstream, right, so their trading partners are

20

agents and printers and bookstores and other

21

publishers and marketing firms.

22

nature of my practice is it changed over time as

23

circumstances in the industry have changed over

24

time.

25

distribution deals because that's what I knew.

And

The precise

So in the beginning, it was largely about

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So there were -- when I stopped working at Two

3

Continents, it was already true that lots of

4

small publishers were distributed by large

5

publishers.

6

the years where I would help them get more out

7

of their distributor because I had seen that

8

from both sides.

9

And I had a number of clients over

Then, in the last 20 years, it's

10

really been about digital change.

11

work has been around digital change.

12

exclusively.

13

pieces are digital change and the supply chain.

14
15
16

Q

A lot of my
Not

I'd say that the two biggest

When you say "digital change,"

what do you mean by that?
A

What I mean is that we are in the

17

midst of a transition from everything being read

18

on paper, just about, to everything being read

19

on screens, just about.

20

which we are no where near done with, royals the

21

publishing industry because it changes the

22

economics and it changes the value propositions.

23

And therefore, it presents a combination of

24

threats and opportunities to anybody who's in

25

the business.

And that transition,

And understanding those dynamics

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and how they impact particular players or

3

particular propositions is what I think I've got

4

a reputation for doing well.

5
6

Q

Have you ever worked directly for

any publishers as a full-time employee?

7

A

No, except for Two Continents, no.

8

Q

You have worked for publishers as

9

a consultant, correct?

10

A

Oh, yes.

11

Q

What publishers have you worked

A

All of them, literally.

12

for?

13

Random

14

House, Simon & Schuster, Harper Collins,

15

Hachette, Penguin.

16

big ones now, right.

17

ones.

18

retained by them or I've sold them projects or

19

that is to say sold them books to publish.

I mean, I'm just naming the
Many small ones, foreign

I mean, in one way or another, I've been

20

I've interacted on a professional

21

basis with most of the significant publishers in

22

the English-speaking world.

23
24
25

Q

Have you ever done any work for

Harlequin?
A

I spoke at Harlequin's global

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Q

It says, "I have reviewed and

3

considered the amended and supplemental

4

complaint and jury demand, answer and

5

affirmative defenses, the plaintiffs iBooks

6

sales figures and examples of the plaintiffs'

7

print and electronic books."

Do you see that?

8

A

Yes.

9

Q

What sales figures did you look

A

We looked at a spreadsheet that, I

10

at?

11
12

believe, was the sales reporting or compilation

13

of the sales reporting by Simon & Schuster for

14

the several-year period during which they

15

distributed iBooks.

16

Q

Do you know what period that was?

17

A

Off the top of my head, like

18

around 2000 to 2004, something like that.

19
20

Q

Did you look at any other sales

figures other than the ones you just mentioned?

21

A

Not that I remember, no.

22

Q

You also mentioned in your report

23

examples of the plaintiffs print and electronic

24

books.

25

Do you recall what books you looked at?
A

Exactly which titles, no.

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people, is that also the gatekeepers?

3

A

No, the bookstore buyers, the

4

reviewers and the librarians and the people who

5

are making professional judgments about the

6

books.

7

Q

So is it fair to say that you're

8

expressing that brands matter to the gatekeepers

9

but not to the end consumers?

10

A

That's exactly right.

11

MR. RASKOPF:

12

Note my

objection to the form.

13

A

That's exactly right.

14

Q

And then in the next paragraph you

15

say, "As all brand experts know the key for

16

brands to deliver a consistent experience to

17

their users."

18

A

Uh-huh.

19

Q

What's your basis for saying that?

20

A

Well, despite the fact that I've

21

had no formal education in branding or taken any

22

courses in branding, I have been exposed to a

23

lot of dialogue about branding and marketing

24

conversations for many, many, many, many years.

25

And there are ways to describe -- there are

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certain things about brands that are sort of

3

like branding 101 and one of them, which I

4

believe Mr. Carpenter emphasized and stressed,

5

was that brands have to deliver a consistent

6

experience or they undercut themselves.

7

The way I've always described it,

8

and I have not seen it written this way, is a

9

brand is a shortcut.

A brand is a way of

10

knowing something about a branded product from

11

just a description of a brand.

12

says, Hilton Hotels versus Holiday Inns, that

13

tells the consumer something based on a general

14

understanding of what a Hilton is and what a

15

Holiday Inn is based on the fact that they are

16

reasonably consistent in what they deliver.

17

So if someone

So that's what I meant.

And that

18

was based on conversations with people that know

19

a lot.

20

branding company called Siegel and Gale that an

21

ex-employee of mine worked for for a while.

22

They were brand experts.

23

whether I actually -- I didn't work for them.

24

did some work with them.

25

exposed to a sophisticated thinking about

I've interacted with there was a

I can't remember

I mean, I've been

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branding over a long period of time.

3

Q

And two lines below that it says,

4

"To a consumer it would undercut a brand's value

5

to see a cookbook, a memoir, and a novel stamped

6

the same way."

What did you mean by that?

7

A

What I mean by that is that a

8

consumer would -- if a consumer looked for

9

meaning in a publishing brand, it would be

10

looked -- the consumer would most likely be

11

looking for consistency of topic or subject or

12

presentation of some kind.

13

So Dummies is a brand where the

14

topics are not the same, but the way of

15

presenting the topics, if you bought a book, a

16

Dummies book, on needlework and you need to know

17

how to fry an egg and there's a Dummies book on

18

how to fry an egg, you would have expectations

19

and knowledge about what that book would deliver

20

to you.

21

consistency is more about topic or genre.

22

you're buying a Harlequin book, you know you're

23

not getting a spy novel.

24

romance book.

25

consumers -- it's the only way that most

But generally speaking, brand
So if

You're getting a

And so that is the way that most

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Q

What are those dozen places?

3

A

I don't know them all.

4

science fiction reader.

5
6

I'm not a

Q

Do you have any particular ones in

A

Well, Orbit is the Hachette

mind?

7
8

division that does science fiction.

I don't

9

remember what Random House calls their science

10

fiction imprint.

11

that's part of Random House.

12

with Ballantine, but the big houses mostly do

13

science fiction.

14

may not still exist, but which was a big science

15

fiction imprint would now be owned by Penguin, I

16

think.

17

specialists and they don't exist.

18

may exist in the hundreds because they're going

19

to be small publishers that do three titles and

20

then go away, but I'm not thinking about those.

21

I'm thinking about the ones that are providing a

22

lot of content into the marketplace.

23

aren't hundreds of those.

24
25

There was Del Ray Books, well
Del Rey Books was

And there's Daw, which may or

In these niche areas there are

Q

I mean they

There

You mentioned Tor and Baen as

making active efforts to communicate with their

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Crowell-Collier bought the Free Press of

3

Glencoe, Illinois, which is where the Free Press

4

started, the man who started the Free Press was

5

a man named Jeremiah Kaplan, who became a bit of

6

a legend in the business, moved from Glencoe,

7

Illinois to New York because his company was

8

bought.

9

My dad was the vice president of

10

Crowell-Collier at the time and Jerry Kaplan

11

stayed at our house for the first two weeks he

12

was in New York.

13

Press since I was 15.

14

they started out as a much more academic

15

publisher back in those days.

16

high quality political and social science.

17

have for years and years and years and years.

18

So I've been aware of the Free
They've always done --

They did sort of

So I followed them.

They

I'm aware of

19

them.

Book publishing companies I would say

20

with 99.9 percent certainty and accuracy do not

21

advertise their brands, period.

22

their books, only their books, and they mention

23

their brand within the advertising of their

24

books but brand recognition is based on the

25

cumulative book recognition.

They advertise

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published books or whether it was some originals

3

or not.

4
5

I don't know.
Q

Do you know how many new titles

iBooks publishes each year?

6

A

No.

7

Q

Do you know how many iBooks has

8
9

published overall?
A

I know in these documents that I

10

know what their output was for a period of time

11

that I examined, which was approximately 2000 to

12

2004 that we talked about earlier.

13

period we did tally titles, and so I know in a

14

general sense.

15

known and expressed opinions about but I don't

16

remember the numbers at the moment.

17

Q

I cannot recall.

For that

But I have

I believe you said that you had

18

reviewed a report by Professor Carpenter,

19

correct?

20

A

Yes.

21

Q

Was it just one report by him?

22

MR. RASKOPF:

23

Asked and answered.

24
25

A

I recall one.

was a second one.

Objection.

Oh no, no, there

That's right.

I did see a

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second one where he responded in some ways to

3

what I had said.

4

Q

5

So yes, I have seen two.

Did you review the exhibits to

Professor Carpenter's reports?

6

A

The exhibits were part of the

7

report.

8

not being conscious about distinguishing between

9

report and exhibits.

10

I certainly would have looked at them

Q

I'll give you what we'll mark as

11

Exhibit 8, which I'll represent was Exhibit 18

12

to Professor Carpenter's first report.

13

(Exhibit 8, Exhibit 18 to

14

Professor Carpenter's report,

15

marked for identification, as of

16

this date.)

17
18

Q

Take a look at this and let me

know when you're ready.

19

A

Okay.

20

Q

If you turn to the page that in

21

the lower left is number A-76.

22

A

Yes.

23

Q

On the right-hand side there

24

appears to be a listing for Book Confessions of

25

a Romantic Pornographer.

Do you see that?

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A

Yes.

3

Q

It's possible though that there

4

could be overlap between genres?

5

MR. RASKOPF:

6

Objection to

the form.

7

A

Of course, yes.

8

Q

Further down in the same paragraph

9

you say, "It is thus reasonable to surmise that

10

were there no distractions suggesting that the

11

iBooks brand meant something else, namely Apple

12

and/or Apple's iBooks/iBooks store it is likely

13

the publishers of iBooks would have had the

14

opportunity to build on that awareness."

15

see that?

16

A

Yes.

17

Q

Do you

What is the basis for that

18

statement?

19

MR. RASKOPF:

20
21

the form.
A

Objection to

You may answer.

The basis for the statement, the

22

basis for the statement is expertise and logic.

23

The basis of the statement is not in a book or a

24

rule book.

25

romance, and other genre readers tend to read

Because I know that science fiction,

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many books in the same genre and repeat what

3

they do, and because I know that iBooks had a

4

lot of very, very highly branded authors, I

5

intuit, I believe as an expert that the

6

likelihood is that fans of science fiction

7

having discovered an iBook, however it is they

8

found it shopping in a store that carried it,

9

would easily find others and be attracted to

10

others.

11

something that I can point to a survey to

12

demonstrate.

13

So it's an expert opinion.

Q

It's not

Do you know whether any of the

14

things you've talked about is likely to happen

15

had happened prior to 2010?

16

MR. RASKOPF:

17

the form of the question.

18

Objection to

Q

Customers discovering their books

20

A

I'm sorry?

21

Q

Do you know whether prior to 2010

19

and --

22

customers had discovered books published under

23

the iBooks imprint?

24

MR. RASKOPF:

Objection to

25

the form of the question.

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Q

And come to recognize it?

3

MR. RASKOPF:

4

the form of the question.

5

answer.

6

A

Objection to
You may

That was actually the point to

7

this paragraph, which was one, approximately 2

8

million units of iBooks science fiction were

9

sold to an unknown number of people.

And I am

10

positing that a significant number of those

11

people had several, and those people would know

12

iBooks and would have from the sales that took

13

place in the time period that I was analyzing

14

it.

That's the basis of the opinion.

15

Q

And that time period was 2000 to

16

2004, correct?

17

A

Approximately, yes.

18

Q

But you don't know for a fact

19

whether there were repeat customers who had two

20

or three or more iBooks science fiction books?

21

MR. RASKOPF:

22

the form.

Objection to

Asked and answered.

23

A

No.

24

Q

We're going to go off the record

25

for a minute while we set up a spreadsheet for

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that as you recall was from 2000 to 2004?

3

A

Yes, I believe it is.

4

Q

Did anyone explain this

5

spreadsheet to you in terms of what data it

6

contained or how it worked?

7

A

I don't think so, no.

We didn't

8

have any need to understand every column.

We

9

were looking for very, very specific information

10

and we were able to -- actually Katherine was

11

able to find what I asked her to find without

12

much help from me or anybody else.

13

Q

Looking at the spreadsheet it

14

looks like there's an initial column that was

15

numbers; is that correct?

16
17

A
left, yes.

18
19

Okay, yes, the numbers on the far

Q

It looks like there's a next

heading that says ISBN?

20

A

ISBN, yes.

21

Q

What does ISBN stand for?

22

A

International standard book

Q

Is that the unique number assigned

23
24
25

number.

to a book?

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3

A

It's a unique number assigned to

each publication, yes.

4

Q

It looks like then if you continue

5

moving to the right looking at the spreadsheet

6

there's a column that says title?

7

A

Yes.

8

Q

And that's followed by author,

9

correct?

10

A

That's right.

11

Q

Now it looks like there's retail

12

price is a column?

13

A

That's right.

14

Q

Then it looks like if you go over

15

four columns there's a column headed TTD pound

16

symbol out.

17

A

Do you see that?
Yes, and I don't really remember

18

what each of those columns means.

Katherine

19

sorted that at the time but I don't really

20

remember.

21

out.

22

copies shipped, in other words.

Oh, yes, it's probably units shipped

That's what I would imagine, number of

23

MR. RASKOPF:

24

the Excel sheet, counsel.

25

Q

We can't see

If you can feel free to scroll

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the information I needed so she could extract

3

what I wanted to extract.

4

over the spreadsheets themselves myself.

5

I didn't really pour

MS. RAY:

Counsel, our

6

understanding is that there was

7

only one spreadsheet produced to

8

us as material the witness

9

considered.

10

MS. BOGDANOS:

11

That's

correct.

12

MS. RAY:

If there was

13

another spreadsheet -- so our

14

understanding is correct, there

15

was no other spreadsheet?

16
17

MS. BOGDANOS:
Q

Correct.

In directing your colleague to

18

tally numbers of science fiction units sold, did

19

you do any independent investigation to confirm

20

the numbers that you derived from the

21

spreadsheet?

22

A

No.

Under both meanings of that

23

question, that I can conjure, the answer would

24

be no to both of them.

25

Q

You testified that your

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understanding is that the sales data covered the

3

period 2000 to 2004, correct?

4

A

Approximately.

5

Q

Approximately.

To the best of

6

your knowledge have you reviewed any sales data

7

for any time period after 2004?

8
9

A

I can't recall.

I seem to know

anecdotally that the numbers have not been

10

nearly -- were not nearly as robust after the

11

Simon & Schuster period.

12

seeing numbers or whether I know that by asking

13

questions and being told that I can't really

14

recall, but I didn't try to analyze it.

15

Q

Whether I know that by

Looking at this spreadsheet of

16

sales data do you know whether these sales were

17

made to distributors or to end customers?

18

A

Well, there were two components

19

and don't ask me to find them because I won't be

20

able to, which were shipments out and returns.

21

So the shipments out and returns were all

22

transactions conducted with intermediaries.

23

number that I just gave you, the 1,900,000, or

24

whatever, was a net number.

25

shipments out with returns subtracted.

The

That is it was the

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So the presumption is that the

3

difference between gross and the net constitute

4

sales that were made to consumers by the

5

intermediaries.

6

Q

So I understand, you would have a

7

gross sales number, correct, and a net sales

8

number, is that right, and the difference

9

between those represent?

10

A

Returns.

11

Q

Returns?

12

A

There was a gross sales number.

13

What we got as raw data was a gross sales number

14

and a returns number.

15

net sales number and that's the number I was

16

reporting.

17

was designed to accomplish.

18
19

Q

We from that calculated a

That was part of what the exercise

So the 1.9 was the net number, the

number shipped out net of returns?

20

A

That's right.

21

Q

Other than looking at the net

22

sales number do you have any way of knowing how

23

many of any of the 1.9 million books or the

24

total 5.6 million books were actually sold into

25

the hands of consumers?

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is I assume this is a recently recent search.

3

don't know about how much of the original iBooks

4

output was cleared for distribution at the

5

moment or even whether that process is an

6

ongoing process.

7

the same search three months from now would it

8

yield the same numbers or would more books come

9

back into play.

10
11

I

So in other words, if you ran

So no, it doesn't really change

my opinion about anything.
Q

And as you said the spreadsheet

12

you looked at, your understanding was it covered

13

2000 to 2004, correct?

14

A

Yes, approximately.

15

Q

So you wouldn't know what the

16

numbers would reflect, for example, for 2008,

17

correct?

18

A

That's right, I would not know.

19

Q

You wouldn't know what the numbers

20

would reflect for 2009?

21

A

That's right.

22

Q

Or for 2010?

23

A

Yes.

24

Q

Or for 2012?

25

A

Right.

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3

Q

that either of these tables was inaccurate?

4
5
6
7

Do you have any reason to believe

A

No, I have no reason to believe

Q

Do you know what the origin of the

that.

name iBooks for an imprint is?

8

A

No.

9

Q

Have you made any inquiry as to

10

what the origin of the name is?

11

A

No.

12

Q

Were you aware that iBooks Inc.

13

filed for bankruptcy in February 2006?

14

MR. RASKOPF:

15
16

the form.
A

Objection to

You may answer.

I was not aware that they filed

17

for bankruptcy in February 2006, but I think I

18

was aware that they filed for bankruptcy.

19
20

Q

Does the bankruptcy filing affect

your opinion at all?

21

A

No.

22

Q

Why not?

23

A

Because it does nothing to reduce

24

the awareness that was built during the period

25

that I examined and looked at.

The things that

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happened, nothing reduces the number of readers

3

of science fiction under the iBooks brand.

4

subsequent hard times of iBooks did not reduce

5

those numbers.

6

Q

The

It doesn't affect my opinion.
When you say awareness, that's

7

brand awareness that you surmise was generated

8

based on the number of units of science fiction

9

books?

10

MR. RASKOPF:

Objection to

11

the form of the question.

12

A

That's accurate.

13

Q

Turning back to your report, which

14

is Exhibit 3.

15

A

Got it.

16

Q

On the first page of your report,

17

second full paragraph starts Mr. Carpenter

18

demonstrates.

19

you say, "The publishing ecosystem does not

20

primarily recognize a corporate branding

21

source."

22

A

Yes.

23

Q

What did you mean by that?

24

A

What I meant was that the name of

25

In the middle of the paragraph

Do you see that?

the corporate owner is not a primary, of primary

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consumer brand.

3

consumer brand on which some commercial value

4

can be built.

5

about it, it would be pretty hard.

6

thousands of people that would know about it it

7

would be somewhat easier.

8

people that know about it then you're Harlequin

9

and you build a world scale enterprise on it.

10

The question is whether it's a

If there are six people that know
If there are

If there millions of

It is my opinion that iBooks was

11

recognized as a legitimate science fiction

12

publisher by a substantial number of science

13

fiction book consumers, and that that created a

14

foundation on which can be built upon.

15

Q

That again is based on the sales

16

numbers?

17

A

Yes.

18

Q

In paragraph three where you say

19

how the iBooks brand could have capitalized on

20

its legacy, do you see that, to build a valuable

21

consumer franchise?

22

ever did capitalize on that legacy?

Is it your opinion that it

23

MR. RASKOPF:

24

the form of the question.

25

A

Objection to

I'm not aware of any specific

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a lot of opinions and so whether there's an

3

opinion that -- whether I can conjure up several

4

more opinions if I look at that again, probably

5

I could.

6

Q

Looking at page six of your report

7

in the second paragraph you say in the second

8

line, "That is not true in publishing where

9

almost no money is spent or has been spent

10

creating consumer awareness in recognition of

11

brands."

12

A

Uh-huh.

13

Q

What is your basis of that

14

Do you see that?

statement?

15

MR. RASKOPF:

Objection.

16

A

50 years in business.

17

Q

Is your testimony that publishers

18

do not spend any money creating consumer

19

awareness?

20

MR. RASKOPF:

21

the form of the question.

22

A

Objection to

No, it is my contention that

23

publishers spend no money creating consumer

24

awareness of brands.

25

creating consumer awareness of titles they're

Publishers spend money

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publishing, of content, not of the names of

3

brands.

4

Q

Is it your understanding that

5

publishers do not promote individual imprints or

6

brands?

7

MR. RASKOPF:

8

the form of the question.

9

answer.

10

A

Objection to
You may

Unless the imprint or brand has an

11

audience centric component like Dummies the

12

answer is yes, it is my understanding that they

13

never do.

14

Q

But there might be some publishers

15

for whom there is an audience centric component,

16

correct?

17

MR. RASKOPF:

18
19

Objection to

the form.
A

Even -- yes, and even when that is

20

true, such as Harlequin, we don't often find

21

Harlequin pushing the name Harlequin.

22

don't need to do it.

23

books with Harlequin's name on them.

24
25

Q

They

They do it by publishing

I think you said that you have not

visited Harlequin's web site, correct?

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A

What?

3

Q

You said you read about ebooks.

4

What materials have you read?

5

A

I read mostly it's online

6

material.

There's a whole bunch of entities

7

that report to the publishing world, and then

8

there are some blogs like Digital Reader is a

9

really good one that track the ebook world

10

specifically.

11

eight or ten days of conference programming a

12

year that are around this subject.

13

And then of course, I'm running

As a result I'm talking to people

14

all the time sometimes about propriety data

15

where there are companies that do surveys of

16

ebook consumers and they often present at my

17

conferences so I'm talking to them on a regular

18

basis.

19

information.

20
21

It's a pretty regular flow of

Q

You said that you had looked at

Professor Carpenter's second report, correct?

22

A

Yes.

23

Q

Sitting here today do you have any

24
25

opinions related to that report?
A

I think my opinion is pretty much

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the same as it was in the first report, which is

3

that he is obviously an intelligent man with a

4

strong command of conventional wisdom and

5

knowledge about branding.

6

outside publishing coming into publishing and

7

failing to understand it for 50 years.

8
9

I've seen people from

In the 1960s it was IT & T
acquiring a publishing house and making fools of

10

themselves and RCA acquiring Random House and

11

not knowing what to do with it.

12

theme that has played out for years and years

13

and years that people who are experts -- Borders

14

killed themselves because they started in 1999

15

hiring management that knew how to run pet

16

stores and knew how to run all kinds of things

17

but didn't know anything about books.

18

It's a common

It's not only a common thing that

19

experts in other fields fail to understand

20

publishing, the failures are generally of a

21

category which is they don't get the granularity

22

of it.

23

get.

24

Schuster, there's six major companies and they

25

can't even establish a brand.

That's exactly what Carpenter failed to
He looked at Random House, Simon &

So how is a

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little guy going to establish a brand.

Well,

3

we're not trying to establish a brand with the

4

universe.

5

to establish a brand with science fiction

6

readers.

7

the people in the country or nine percent of the

8

people in the country, but it's not 50 percent

9

of the people in the country.

Science fiction publishers just want

I don't know if it's four percent of

You're not going

10

to get the kind of brand recognition that you

11

get from Pepsi Cola or the New York Yankees out

12

of a publishing shopper.

13

targeted thing.

14

It's a much more

Publishing companies, the big

15

ones, are built on a very, very wide assembly of

16

audiences which each and each book is a separate

17

project to build a market for it.

18

coming into publishing from the outside just

19

their jaw drops.

20

cope with it.

21

most part.

22

Carpenter didn't from his view of the publishing

23

business say these guys are nuts.

24
25

Anybody

They don't really know how to

It looks crazy to them for the

I'd be surprised if Professor

But that's, as I say, this is not
a failure of understanding that is unique to him

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or that in any way, in my opinion, denigrates

3

his abilities.

4

the publishing business are stymied by the

5

massive number of very, very small commercial

6

projects that we in the publishing business

7

handle as a routine of our day-to-day lives.

8
9

Q

It is normal that people outside

You talked earlier about niche

imprints.

Is it fair to say that iBooks, that

10

the iBooks imprint to the extent it has a brand

11

is a niche imprint?

12

MR. RASKOPF:

13

the form of the question.

14

A

Objection to

I would say it is fair to say that

15

iBooks has the foundation to capitalize on brand

16

equity within the science fiction fantasy niche.

17

When you cross the line of having something that

18

qualifies as a niche imprint or a strong brand

19

is a separate question, but since my premise is

20

that publishing brands are built on the

21

knowledge of consumers who have purchased and

22

read something that gives the brand identity, I

23

think that iBooks did enough to qualify on that

24

basis and if the right strategies were employed

25

they would have -- employed and able to use the

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brand -- they would have a real opportunity to

3

turn that into something that would be a long

4

way from being Harlequin, but would be on its

5

way to being something like Harlequin or Baen or

6

Tor or Orbit.

7

Q

You talked about crossing the line

8

to having a brand.

9

iBooks at any point crossed that line?

10

MR. RASKOPF:

11
12

Is it your opinion that

Objection to

the form.
A

You're asking me to generate a

13

characterization.

14

comfortable saying when the lines got drawn.

15

go back to what I said, which is that they have

16

a foundation of knowledgeable people in what

17

strikes me as sufficient number to make a real

18

play for a science fiction brand.

19

I'm just simply not

It's not a dozen people.

I

It's

20

probably thousands and it may be tens of

21

thousands of people who consumed enough books so

22

if -- remember if it was 50,000 people, we're

23

living in a country of 300 million people.

24

whether it be 50,000 of them and you and I may

25

never meet one with those odds, but if we could

So

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meet those 50,000 people and say do you know

3

iBooks they'd say I read an Arthur Clarke book,

4

and then I read something by someone I didn't

5

know because these people who read 5, 10, 20, 40

6

science fiction books a year, as I said earlier,

7

are not reading them from 500 publishers.

8

They're coming from a dozen publishers.

9

would remember iBooks.

10

Q

They

Is it your opinion that iBooks has

11

made a play to capitalize on those people who

12

have bought books in the past?

13

MR. RASKOPF:

14

the form of the question.

15
16
17

Objection to

A

I have not seen the evidence of

Q

I'd like to show you what we've

it.

18

marked to save time as Exhibit 14, a book called

19

Plantepedia by Maggie Stuckey.

20

Exhibit 15 Glide Path by Arthur C. Clarke.

21

We've marked as Exhibit 16 Arthur C. Clark's

22

Venus Prime 5.

23

book called Voodoo Moon Trilogy by Cheri Scotch.

24

We've marked as Exhibit 18 the Dawn of Amber by

25

Robert Zelazny.

We've marked as

We've marked as Exhibit 17 a

We've mark as Exhibit 19 Dorian

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