Last week I linked to a New York Times article on the difficulty of knowing which books become best sellers and which books become dust-covered duds, and compared the book industry’s challenge to that of the movie industry’s. Kim has a great post today on last week’s verdict in the case that pitted movie production company Crusader against Clive Cussler, author of best-selling book “Sahara.” Sahara the movie turned out to be a disastrous failure at the box office, where it made only $68 million domestically. While $68 million is a big pile of money, the movie reportedly cost about a quarter-billion dollars to produce and promote.

The legal proceedings between famed author Clive Cussler and Phillip Anschutz’s Crusader Entertainment over the 2005 box office flop Sahara ended last week with the jury divided.

The Los Angeles Superior Court ordered the adventure author to pay Crusader $5 million in damages because of a breach in contract. Cussler reportedly inflated his book sales from 40 million copies to over 100 million during the film’s contract negotiation, a lie that motivated the company to pay the author $10 million apiece for the rights to two of his Dirk Pitt novels. Lawyers for Crusader stressed that the organization never would have agreed to pay Cussler that much had they known the actual number of books sold.

The jury also found that Crusader owed $8.5 million to Cussler for the rights to the second book (which would have been adapted into a screenplay for the proposed Pitt adventure film series). In terms of box office sales for the first film, which starred Matthew McConaughey and Penelope Cruz, the film opened at No. 1, but only grossed $68 million in the U.S., which resulted in an $80 million loss for Crusader. Because filming failed to begin on the second movie within the time constraints outlined in the original contract, the jury awarded Cussler the film rights to his books as well.

If Superior Court Judge John P. Shook upholds the jury’s verdict, Cussler will emerge from the dispute $3 million richer, which prompted the author’s lawyer, Bert Fields, to declare his client the winner.

Conversely, Crusader’s attorney Marvin Putnam interpreted the jury’s findings as a victory for the production company, and stated that: “It’s a massive vindication not only for Crusader and all the people who made the film, but also for the industry at large.”

Who the true victor is will depend on Judge Shook’s final decision, but neither side is at a loss to pay the potential damages. Cussler has penned over 30 novels, while Anschutz holds the title of one of the richest men in the country.

Dickens, Tolstoy, Austen, Descartes. We aren’t accustomed to seeing these names in our inboxes. But one innovative website that officially launched this month wants to change all that.

Hoping to cash in on an area of publishing that hasn’t yet been explored, www.dailylit.com offers to send its users installments of over 400 classic titles ranging from adventure novels to the The Communist Manifesto. The site breaks the books down into convenient segments that are designed to be read in just a few minutes, and sends these segments directly to your email account or any handheld device of your choice (i.e. your Blackberry, Sidekick, Treo, etc.).

The theory behind www.dailylit.com is that users can read something more substantial than spam on their way into work and during breaks throughout the day. The site explains that: “if you are like us, you spend hours each day reading email but don’t find the time to read books. DailyLit brings books right into your inbox in convenient small messages that take less than 5 minutes to read.”

The site has enjoyed some early success, with 50,000 people already registering to receive over 75,000 titles. My guess is that people are intrigued with the idea of reading books again, especially in the midst of a busy schedule. But how will someone fare after realizing that the book they signed up for has over 500 parts, translating into over a year of reading one installment per day? (Watch out for Dumas’ The Count of Monte Cristo; it has 581.)

Although the idea sounds promising, it may be a stretch to assume that masses of people will voluntarily choose to read classic novels like Crime and Punishment and A Tale of Two Cities in their downtime. Currently the site offers its services for free because all of the titles it holds are out of copyright. However, in hopes of expanding its membership and ensuring long-term success, DailyLit plans to begin offering newer titles within the next month or so.

So the real question is, are you willing to pay $5.00 for installments of the books you really want to read? And although the site can send several segments simultaneously, will you feel like contacting DailyLit every time you can fit more than 5 minutes of reading into your day?

I applaud the site’s creative efforts, seeing as reading books seems to be a lost art nowadays. But I also can’t say that their top 10 list of popular authors (including Herman Melville and James Joyce) really tickles my fancy. I’ll be waiting to see what new titles they unveil in the upcoming months, and will choose some books with fewer installments before diving into the classics.

Book sales in the United States fell by 0.3% in 2006 compared to 2005. Final net sales for 2006 was $24.2 billion according to The Association of American Publishers.

In a recent article posted on Media Bistro’s Galleycat, Sarah writes that Simon & Schuster’s unorthodox partnership with Media Predict, a venture that has the company wielding out book deals based on the popularity of proposals in an interactive trader’s market, confirms that “the publishing house execs must really have a high-quality crack pipe being passed around the office.”

Some criticize the publishing company for assembling yet another highly-publicized contest to gain insight into the minds of their readers. However, S&S hopes that by pairing up with Media Predict, which relies on prediction markets to guide companies in the media industries, they can better gauge the probability of a project’s failure or success. (Another popular Media Predict contest includes bands on MySpace vying for a record deal.)

For the purposes of S&S, the site gathered together a range of book proposals from various sources and posted them online. For example, agent Christy Fletcher submitted the novel Crown Chasers for consideration, which was penned by former Miss America Kate Shindle and offers an insider’s look at the hectic lives of pageant contestants. Other novels on the list include a children’s book co-authored by figure skater Dorothy Hamill, a book entitled You Are Your Own Gym detailing innovative bodyweight-only exercises, and Coming Up Short, which chronicles a slew of sports greats who failed to win championships in their careers.

With the list formulated, the fate of these potential books now transfers over into the hands of the traders on Media Predict, who use $5,000 in “fantasy cash” to buy shares and support the proposals they believe will either secure a book deal from the publishing mogul or become a finalist in Project Publish, a contest launched by S&S affiliate Touchstone Books. If either happens by late August (at which time the virtual “stock market” is closed), the value of the shares go to $100 apiece; if not, the share price falls to zero.

Media Predict’s online “game” clearly lacks any semblance of a logical approach to book publishing. Furthermore, the fact that S&S has sunk funds into this uncertain resource signals a lack of confidence in their own internal decision-making. Nevertheless, this may be just what S&S needs to rejuvenate their book sales and create products better geared toward their audiences. Compared to the intensive focus groups and private screenings set up by television and film producers, the book industry is little more than a well-orchestrated guessing game.

These “traders” represent an unbiased opinion of what will sell. And more importantly, what will not. Maybe S&S isn’t so misguided to look to an interactive game for guidance, seeing as it involves money, and most people cringe at that thought of losing any of that, even if it is fake. Whether it was a crack pipe or a plain lack of options that inspired the coalition between S&S and Media Predict, here’s to hoping that is breathes new life into an otherwise lackluster publishing process.

IT’S the way this business has run since 1640,” he says. That is when 1,700 copies of the Bay Psalm Book were published in the colonies. “It was a gamble, and they guessed right because it sold out of the print run. And ever since then, it has been a crap shoot,” Professor [Al] Greco [at Fordham University] said.

“This business” is of course the book industry, a huge but not particularly profitable industry whose producers - the publishers - go on little more than intution and rough sales figures to understand what books readers are clamoring for, as an article in the New York Times describes it.

It is of course somewhat similar to blockbuster movies. A studio can invest heavily in expensive sets and ground breaking special effects, and hire big name producers, directors, and actors, as well as spend lavishly on elaborate marketing campaigns, predicting exactly which movies are going to become hugely profitable or devastating busts remains elusive. Similarly, a publisher can the rights to a book believed tobe coveted and roll-out a grade-A marketing campaign, but at the end of the day it’s pretty much just guess work trying to figure out which book will become a bestseller and which one will collect dust in the clearance bin.

From a reader perspective, however, there’s no partuclar reason to wish for a more scientific approach to book publishing. The way to higher profits by increasing knowledge about customers is a road down predictability. There’s not much upside, to use a business term, for readers in that scenario. In fct, one could argue that the book industry’s poor profitability is a result of so much value being retained by readers rather than publishers. Since so many people dream of becoming writers, editors, or publishers, the low profitablity doesn’t pose much of threat to the availability of a wide range of books.

Business Week reports that German book publisher Bertelsmann is doing big business with its book clubs in Ukraine. Competitive pricing, a functioning postal system and a book-hugry market served by relatively few book stores have made Bertelsmann’s book clubs successful in the country that once was part of the Soviet Union.

Writes Business Week:

Optimism about the printed word is pretty rare these days. In fast-modernizing Ukraine, though, Bertelsmann is enjoying dot-com-like expansion for its book club, a category that’s a slow- or no-growth proposition in the U.S. and Western Europe. Family Leisure moved 12 million books last year—everything from cookbooks to local potboilers to Stephen King thrillers—while sales grew 55%, to $50 million. Today, Bertelsmann is Ukraine’s biggest bookseller, with 12% of the market. And the operation enjoys profit margins that are triple the 4% global average for similar Bertelsmann units, which include the Book-of-the-Month Club and Literary Guild in the U.S.

Last week Switzerland’s government decided to let stand the Alpine country’s Competition Commission’s decision to scrap the so-called net book agreement that allowed book publishers and book stores to jointly set prices for books in the German-speaking parts of the multilingual country.

The Swiss book industry had challenged the commission’s ruling, arguing that the NBA allowed independent bookstores to remain competitive and also helped prop up the market for German-language books in the country. The Italian and French speaking parts of Switzerland have already ditched price fixing.