Nashville’s story is not unique. When Borders declared bankruptcy in February, more than 200 of its 400 outlets were still “highly profitable,” says its final chief executive officer, Mike Edwards. There’s no question that the book industry is in flux, with digital sales last year making up about $900 million of the $28 billion-a-year market and increasing fast. But a sizable portion of the book business is still taking place in actual stores. Barnes & Noble (BKS), the nation’s largest book retailer, hasn’t been forced to close its 700 locations. Thus, it wasn’t Amazon (AMZN) —or Amazon alone—that sank Borders. “When there’s a massive transition in an industry, the strong players make it through to the other side,” explains David A. Schick, a retail analyst who covers booksellers for Stifel Nicolaus Equity Research (SF). “What gets caught up in the change are the weaker players.”

Many third-party developers are choosing one route or the other without any public fuss. Canadian e-book purveyor Kobo is being a tad more prickly. It’s updated its iOS app with a new version that meets the new rules–it lets you read books you’ve purchased, but provides no way to buy them or register for a Kobo account, nor any explanation of how to do so. But it’s also announcing plans to build an HTML5 e-reading app which will work in the iOS browser–and which it’ll control itself, with no requirement that it follow Apple’s rules. And the company’s chief iOS architect is detailing the Byzantine approval process which the Kobo app had to go through before Apple would finally approve it. (The essentially similar Borders app wasn’t forced to jump through as many hoops, a reminder of the biggest problem with App Store rules: they’re sometimes applied in an inconsistent, apparently arbitrary fashion.)

Going HTML5 doesn’t solve Kobo’s problems: It isn’t possible to write a Safari app that’s as slick and fluid as a native iOS app. I’m glad the company is giving it a try, though. (I wonder if you’ll be able to read books when you aren’t connected to the Internet?)

On one level, Apple’s new rules aren’t a huge deal. Nobody’s being deprived of any content here: If you’re smart enough to be reading digital books on an iPhone or iPad, you’re probably smart enough to find the e-reader app’s online store even if it’s not mentioned in the app. You just have to click around on your own.

But since it is reasonably obvious that those stores exist, why is Apple forbidding mention of them in the apps? As far as I can tell, the two end results of the new policy are (A) more money in Apple’s pocket if an app developer chooses to go through the In-App Purchase system; and (B) minor-but-completely-unnecessary inconvenience for Apple customers if an app developer spurns In-App Purchases. Neither scenario makes iPhone and iPad owners any happier or healthier. It feels like pointless bureaucracy.

Seems to me that Apple could fix this in a jiffy by simply permitting developers to include a link to their own Web stores in iOS apps. In-App Purchases would still be the most seamless way to purchase content; nobody would be forced to maintain an utter code of silence about the fact that there are alternative ways to buy stuff, too.

Looking on the bright side: again and again, Apple has shown that it’s willing to adjust its App Store policies on the fly as circumstances require. If it changes them once more to allow Web store links, nobody will complain–and some of us Apple customers will feel better about this whole affair.

Today, B&N announced another new Nook–and this one, it appears, is meant to take the Kindle on more squarely than either of its predecessors.It’s $139 (matching the price of the Wi-Fi Kindle, but not the ad-supported one). It looks like a Kindle, with a gray case and 6″ E Ink screen (and no color touchscreen strip, the most striking feature of the original Nook). It stresses great battery life–in fact, Barnes & Noble is claiming two months on a charge, vs. one month for the Kindle.

Unlike the Kindle, the new Nook has a touch-enabled screen, which lets it shrink the size of the keyboard by ditching the Kindle’s physical keyboard. B&N says it weighs under 8 ounces, compared to 8.5 ounces for the Kindle. And the company says that the E Ink display has 80 percent smoother page turns and less of the annoying flashing effect when you flip a page compared to  ”other eReaders”–which, I suspect, includes the Kindle.

The new Nook has some of the features of its pricier color brother, including the Nook Friends social-networking and book-sharing tools. But it doesn’t appear to have an app store (and it runs Android 2.1, an old version of the OS–Android is presumably just plumbing on this reader, not a point in its favor).

Barnes & Noble is calling this Nook “The Simple Touch Reader,” which stresses one Kindle-like feature (simplicity) and one potential advantage over the Kindle (touch). Until now, the biggest single advantage the Kindle has had over the Nooks has been that simplicity–the degree to which the device, in Jeff Bezos’s words, disappears in your hands. Matching it will be no cakewalk–as evidenced by the earlier Nooks and all the other non-Amazon e-readers that aren’t as pleasingly minimalist–so I’m really curious to try the new Nook and see how B&N did.

The reader ships on June 10th, and is available for preorder now.

Amazon quotes founder and CEO Jeff Bezos in its press release:

Customers are now choosing Kindle books more often than print books.  We had high hopes that this would happen eventually, but we never imagined it would happen this quickly — we’ve been selling print books for 15 years and Kindle books for less than four years.

I’m startled, too–as interesting as the Kindle obviously was when it shipped in November of 2007, I would have guessed that books for it would become a healthy minority of Amazon’s business within a few years, not the majority in terms of unit sales. (Then again, Amazon has marketed the Kindle far more aggressively than I would have predicted, more or less turning over its home page to Kindle promotion.)

I’m doing my part to help the company make the big transition–generally speaking, if I’m buying a book from Amazon and it’s available for the Kindle, that’s the version I get. Then again, I still buy plenty of paper books, although I try to buy them from local independent bookstores who need the dough rather than from Amazon.

And I have a few questions related to today’s landmark:

• When will Amazon make more profit from e-books than from paper ones?
• Will Amazon exist someday as an outfit that sells e-books but doesn’t offer print books at all?
• When will every new print book be available in electronic form?
• How is Barnes & Noble, who’s more dependent on books than Amazon is and whose Nook was a late-arriving answer to the Kindle, doing with e-books?
• When will e-book sales surpass print book sales not just for Amazon, but period?

BeamItDown’s iFlow Reader, a digital reading app for iOS, relied on e-book sales for revenue. But because Apple takes a 30 percent cut of anything purchased within an app, and e-book publishers only give 30 percent their revenue to the book seller, iFlow Reader would actually lose money on every book sold.

“We put our faith in Apple and they screwed us,” BeamItDown’s blog post says.

BeamItDown may not be the last victim, either, because the policy that caused this small company to go out of business may soon be unavoidable for major e-book players like Barnes & Noble and Amazon.

It’s no secret that Apple takes a 30 percent cut of all in-app purchases, but as of now, big e-book sellers sneak around the rule by launching their book stores through the Safari browser and billing customers directly.

Back in February, Apple made it clear that this workaround is not allowed. “We are now requiring that if an app offers customers the ability to purchase books outside of the app, that the same option is also available to customers from within the app with in-app purchase,” spokeswoman Trudy Miller told All Things Digital. In other words, Amazon will have to create a bookstore within the Kindle app, opening the door to a 30 percent cut for Apple.

For now, Amazon and Barnes & Noble continue to sell books through the web, but BeamItDown’s Phil Huber thinks this won’t last. In an e-mail, he said app makers will have to comply with Apple’s new guidelines by June 30, the same date that Apple’s in-app subscription policy goes into effect. I can’t confirm this, but it seems plausible.

At that point, E-book sellers have a few choices: walk out of the App Store, hope for special treatment or suck up the iOS losses and make money on other platforms. If you own a lot of Kindle or Nook books, mark the date.

The offering is part of a partnership with OverDrive, which already offers digital content solutions for libraries (and which has had a similar relationship with Sony for the latter’s Reader e-readers since 2009). Head to OverDrive’s website to see if your local library may be one of them — mine is!

Unlike regular library books, you’ll be able to annotate titles just like you can with purchased Kindle books. The notes will not appear to the next person checking out the book. But if you check it out again or even purchase the title from Amazon, your notes will still be there.

Amazon doesn’t have a solid release date for this, only saying in a press release that it would be available “later this year.” We’ll keep an eye on this and let you know when its available.

It looks like Google’s attempt to bury the hatchet with authors and publishers in its bid to digitize a world’s worth of books may be in jeopardy after a New York federal judge on Tuesday rejected a $125 million settlement reached in October 2008.

Google promotes that settlement on its Google Books page as “with a broad class of authors and publishers to make the world’s books even more accessible online,” but Judge Denny Chin was having none of it. Chin said the deal would “arguably give Google control over the search market,” and that its terms went too far. Specifically: That the settlement would give Google a “de facto monopoly” on digitized content.

You may have heard that Google wants to scan and convert to text every book in the known universe. You may have heard that notion sold by politicians like John Conyers as possibly “the greatest innovation in book publishing since the Gutenberg press.” You may also have heard it called “a disaster for scholars,” or as UC Berkeley language professor and longtime NPR contributor Geoffrey Nunberg puts it, “a mishmash wrapped in a muddle wrapped in a mess.”

Google’s argues it just wants to let you search the full text of any book scanned and digitally tucked away in its online database. Also: That it wants to “democratize knowledge” by scanning essentially everything textual created since, well, ever (precisely 129,864,880 books at last count, according to Google, of which its scanned about 12 million so far). That worried pretty much everyone in the publishing industry when Google made its plans public in 2004–enough to trigger several domestic and international lawsuits.

In 2008, Google settled with the Authors Guild and Association of American Publishers, agreeing to pay $125 million upfront and make it possible for authors and publishers to get paid any time their books are viewed online, all in trade for the right to publish millions of books online. The settlement’s been knocking around the legal system since, finally landing in the Second Circuit Court of Appeals on Tuesday.

Google called the ruling “disappointing,” no surprise, but Chin left the door open for an amended settlement by rejecting the current one “without prejudice.” What’s to amend? Chin wants the settlement switched to “opt in,” preventing Google from using copyrighted material by default if copyright owners fail to “opt out.”

Does all of human knowledge registered as text “want to be free”? It’s probably the wrong question. The right one is: Do we want a single strictly commercial entity holding the e-library door and key to every novel, history, treatise, and manual ever written, including how it’s indexed, presented, and shared?

You might think Borders was the first major casualty of the digital book boom, but the store’s problems may actually be tied up in the previous digital revolution. An Engadget commenter who claims to be a former Borders employee makes a good point to that end:

“Borders made a big commitment to selling CDs & DVDs — large sections of the stores were devoted to this content in the 90s and early 00s. new stores were designed and built in an effort to give multimedia a large segment of the store space.

“In the end, Borders has failed because [its] stores got too big and the demand for CDs and DVDs dropped — there was just no way to pay the bills.”

Even Best Buy is cutting back on CD and DVD space these days, but while the electronics retailer has plenty of other hot products to populate its shelves, such as video games, computers, smartphones and tablets, Borders can only fall back on books. And that’s going to get trickier as e-books become more popular.

If Borders wants to survive now, it will need a better digital book strategy than the one it has.The couple stores I visited recently kept their Kobo and Cruz e-readers locked away, with no area for hands-on demos. By comparison, my local Barnes & Noble has a Nook kiosk at the front of the store, with an employee standing by to answer questions. I don’t expect Borders to develop its own e-reader now, but it should at least try harder to sell its partners’ hardware.

Not that it necessarily matters; Kobo, whose digital book store powered Borders’ e-book service, is taking the news in stride. Kobo Chief Executive Michael Serbinis wrote in a blog post that “Kobo is an independent, financially secure company,” and that Borders’ e-book sales represented “a minority of Kobo’s worldwide sales.” I get the sense that Borders needs Kobo a lot more than vice versa.

And then it dawned on me: With the recent development that Apple is going to require creators of e-reader apps to sell books using its in-app purchasing feature, it’s not the least bit clear what the fate of Kindle books on Apple devices will be. (Apple says that as long as e-readers support in-app purchases, they’ll be able to retain access to digital books bought elsewhere–even though this violates the App Store approval guidelines.)

I’ve spent several hundred dollars on Kindle books over the past few years. Nowadays, I do about 80 percent of my reading of them on an iPhone and an iPad. An e-book I can’t read on Apple gizmos would be dramatically less valuable. And it’s not clear what’s going to happen to the Apple-compatible e-reader apps offered by Amazon, Barnes & Noble, Google, and Kobo.

At the moment, Apple charges third-party sellers a thirty percent commission on content offered through the App Store’s in-app purchasing option. But as Reuters’ Aaron Pressman noted in a comment on an earlier post here, the “agency pricing” system used for e-books only gives Amazon and its competitors thirty percent of the book’s price. In other words, if Apple insists on getting a thirty percent cut, it’s demanding all the profit. That’s not going to work.

It’s possible that Apple has a tenable plan here–which would presumably involve charging Amazon and other e-book sellers a fee of a lot less than thirty percent of the book price. (At this week’s unveiling of News Corp.’s The Daily iPad newspaper, Apple Internet services honcho Eddy Cue made reference to an upcoming announcement involving content subscriptions; maybe single-copy sales will also be part of the news.)

Maybe Apple has even shared its plans with Amazon and other e-booksellers; maybe they even had a say in figuring it all out. Or maybe Amazon and others have a strategy for opting out of Apple’s new stipulation without leaving Apple devices behind–presumably something along the lines of the proposal floated by Slate’s Farhad Manjoo, who thinks that e-book sellers should build entirely Web-based readers. We just don’t know. And thanks to the opaque nature of Apple’s explanation of such things, it’s not clear when we will know.

I’m also unclear what’s going to happen to the existing versions of e-reading apps such as the iPhone and iPad Kindle apps. My guess is that if I never upgrade them, I’ll be able to use the current versions indefinitely and get access to my Kindle tomes. But I’m not positive.

Best case scenario, this all works out in a way that Apple, Amazon, and consumers can live with. Worst case scenario, Kindle e-books become the equivalent of music locked up with Microsoft’s ill-fated PlaysForSure technology: They’ll work on just about every gizmo out there…except the Apple devices that dominate the market.

In any event, this Amazon “Buy once, read everywhere” ad from a couple of months ago–which involves a lady taking her “vast Kindle library” with her when she dumps her iPhone for an Android handset–suddenly has a whole new meaning…

In the end, I snapped up the Kindle edition of the book I decided to buy today. But I’m still fretting that my “vast Kindle library” may be about to get less useful. One nice thing about dead-tree books, even though they cost more than electronic ones and take up more space: Once you own one, its capabilities aren’t subject to change…