By Emily Williams

MADRID & BARCELONA: Spain has not been on the leading edge of the digital revolution up to this point. Now, after years of observing how the market has developed in other countries, the biggest publishing groups in Spain have decided the moment has come to take a big step forward – and they will do it together. Planeta, Random House Mondadori, and Santillana, which together make up some 70% of the market, are joining forces to set up a digital distribution company for ebooks. This initiative will go hand in hand with a major marketing effort starting with a splashy launch of e-books and e-readers this holiday season through at least one major retailer. They have set a goal of having every frontlist title able to be published simultaneously in both print and ebook form by mid 2011.

In addition, given the strength of cell-phone penetration in Spain, the plan calls for making ebooks available through smartphone apps, starting with the most popular devices from Apple and Nokia.

In negotiations with the Association of Spanish Literary Agencies (ADAL), the publishers have agreed to price ebooks at 80% of a printed books cover price, with a standard 25% royalty rate. Booksellers will be offered a maximum discount of 50%. The two groups hope to sign an agreement soon.

At this point, the publishers do plan to apply DRM to all titles, although consumers will have the right to download any ebook they purchase to multiple devices. All of these conditions will be set out in riders to be negotiated individually with each author and set to expire at the end of 2011. The idea is to establish a robust market and see how it plays out, with the option to renegotiate within two years depending on how things develop. “We hope to capture a set of readers who perhaps don’t read on paper, as well as a new generation who will grow up reading and writing on computer screens in school and will have different reading habits,” said Maru de Montserrat, agent at International Editors Co. and president of ADAL, “It’s important to meet that demand, rather than waiting for readers to take matters into their own hands and create a black market of scanned books.” The agents also have high hopes that the move to digital might reinvigorate interest backlist and out-of-print titles.

This “long tail effect” has not yet had much of an impact on the Spanish book market, which has not embraced online book retailing to the same extent as other countries. Spain reliance on fixed book prices has kept away powerful online discounters like Amazon.com. This gives publishers much more leeway to experiment with pricing on their own terms, and will also determine how Spanish ebooks will be sold internationally. In most cases Spanish publishers control the worldwide Spanish language rights to the books they publish (both native and translated authors) and will be able to sell their ebooks to consumers anywhere in the world. However, because of price controls those purchases will have to go through Spanish booksellers or other sites that respect the terms set by the Spanish market. This would likely exclude Amazon, who will not only be unable to sell books in Spain, but will not have access to the vast majority of Spanish language titles for either the US or Latin American market.

Not everyone is in agreement with the project, however. The most significant dissenter is the Carmen Balcells Agency, Spain’s most powerful literary agency with a list of clients that includes Gabriel García Márquez and Isabel Allende. Balcells has already begun a limited collaboration with ebook publisher and distributor Leer-e and has not signed on to the agreement between ADAL and the major publishers. Managing director Javier Martín explained that Balcells has a large enough list of authors that they have the ability to negotiate independently with any partner they choose, and believes the royalties for ebooks should be higher than the agreed rate, closer to 40%. “We are open to other projects,” Martín said, “as long as they conform to the terms we consider to be fair.” Balcells has retained digital rights to all of their books up to this point, putting them in a strong position to negotiate with publishers on their own terms.

Others are concerned that the Big Three already have too much power, and that in joining forces they will create a monopoly. Juan Díaz, international coordinator for Random House Mondadori and head of the digital distribution project, dismisses the accusation. “Everyone is welcome to participate,” he said. “This is just a distributor, publishers will still set their own prices and compete with each other in the marketplace.”

Indeed, the Big Three have invited other publishers to participate as well, either as partners or as distribution clients. As part of their agreement with agents, the publishers will not sell ebooks direct to consumers and the newly formed distributor will instead act as a white box company, partnering with retailers and booksellers to sell ebooks through their websites.

VISIT: Spanish e-book retailer Leer-e

Explore Spain’s Big Three:

PLANETA , RANDOM HOUSE MONDADORI, and SANTILLANA (Spanish only) .