The Shatzkin Files


DRM may not prevent piracy, but it might still protect sales

Posted by Mike Shatzkin on January 13, 2011 at 6:25 pm · Under eBooks, General Trade Publishing, New Models, Publishing, Supply-Chain


There is a lot of disagreement about piracy and DRM (digital rights management) among thinkers in the publishing space. This post will express a few thoughts about both but, mainly, this post is a plea not to conflate the two into the same discussion. In fact, whether they are part of the same discussion appears to be as contentious a point as whether piracy is a threat to publishers and whether DRM should be employed at all.

First, let’s define some terms. I make a distinction (which is not universally accepted) between piracy — which I would define as making a copyrighted file available for free access to anybody who comes along — and “casual sharing”. Casual sharing takes place between people who know each other; piracy takes place among strangers.

It has been observed by many for a long time that DRM does very little to prevent piracy, which is usually executed through web sites that host unprotected versions of content. It has been frequently demonstrated that DRM can readily be “broken” (I have two friends who routinely break it for sport: one in the US who isn’t in the publishing business and one in Brazil who is. Neither of them ever sell or transfer the jailbroken files, but they peel off the protection just to prove they can. And they say they always can.) In fact, books which had never existed in digital editions, like the Harry Potter series, are served up on pirate web sites.

You can scan a printed book and create a digital file pretty readily. There’s recently been a gadget introduced that provides a little automation for that capability. But you can buy content conversion commercially that will give you an ebook file from a printed book for low hundreds of dollars per title. So I would emphatically agree that DRM would do little or nothing to deter a pirate who has a minimum of determination to deliver a pirated ebook file, whether there was DRM or not; whether there was an ebook at all or not!

But casual sharing is another matter, or so it seems to me. People share published material all the time through email, usually by forwarding a link to something they want somebody else to see but sometimes by attaching a file or embedding text or images in the body of an email. Some people (my wife among them) maintain mailing lists of people whom they alert about one thing or another. This kind of person-to-person curation is the new automation-assisted word-of-mouth, and it is a critical component of modern communication.

So here’s what I think. I have no idea whether piracy helps sales or hurts them but, whatever it does, I can’t see how DRM prevents it. But I do think DRM prevents “casual sharing” (it sure stops me; and I think most people are more like me than they are like my friends who break DRM for sport) and I believe — based on faith, not on data — that enabling casual sharing would do real damage to ebook sales with the greatest damage to the biggest books.

Big general publishers survive based on the performance of their biggest books. Agents survive based on the sales of their biggest authors. So the biggest publishers and the biggest agents, if they see it the way I do, would be in favor of DRM even if does nothing at all to prevent the kind of piracy they attempt to cure with take-down notices.

There are a lot of good reasons to dislike DRM. It can make purchasing or consuming something harder. It is apparently responsible for the lion’s share of customer service costs for all ebook vendors. It can foil legitimate use by a legitimate purchaser. And it costs money and adds complications. In general, the more comfortable you are with technology, the more likely you are to be annoyed by DRM.

But it drives me a bit nuts when people attribute the belief that DRM protects against piracy to everybody who accepts the sense of using it.

So with this as background, I picked up a link earlier this week to an interview on O’Reilly Radar with my office-mate (but a man who very much runs his own business) Brian O’Leary entitled “What’s the current impact of piracy on the book publishing industry?” Brian has been trying for almost three years to measure the real effect of pirated editions (not casual sharing) on sales. His method is to watch the pirate sites for the appearance of books and then to measure the sales for the weeks before the pirated edition appears and the weeks after. If piracy is cannibalizing sales, one would expect to see a decline following the appearance of the pirate edition. If piracy is stimulating sales through additional word of mouth, one would expect to see sales rise.

Of course, the data to do this analysis can only come from the publishers and publishers, despite their often-professed concern about piracy (and their apparent willingness to spend a lot of money to track and combat it), have mostly not been willing to participate in Brian’s efforts to measure its impact. But what Brian did see (mostly through O’Reilly data, and O’Reilly is a DRM-free publisher) suggested that piracy might lift sales more often than it hurts them.

In the interview, Brian makes some very good points but then I get to this:

“I’m pretty adamant on DRM: It has no impact whatsoever on piracy. Any good pirate can strip DRM in a matter of seconds to minutes. A pirate can scan a print copy easily as well.” (I agree about the “good pirates”, but is the “no impact” statement data-driven? I doubt it.) But then:

“DRM is really only useful for keeping people who otherwise might have shared a copy of a book from doing so.” So, he’s against DRM even though he agrees it prevents casual sharing. And I’m not aware that anybody, including Brian, has ever attempted to measure the impact of casual sharing.

This is interesting, because he and I have exactly the same opinion about what DRM can and can’t do, but we don’t have the same opinion about whether it should be applied or not!

The point that Brian makes which I take to heart, though, is about trying to base opinions on data whenever possible rather than on conjecture. Many of his colleagues-in-arms against DRM attribute its continuance with ignorant and wrong-headed thinking: publishers and agents who somehow are deluded into thinking that by using DRM they restrain piracy. At the same time, concern about casual sharing is either ignored or elided.

And while gathering data about the true effect of piracy is difficult and gathering data about the potential true effect of unfettered sharing of commercial books is impossible, I am in a good position to gather data about what senior publishing executives and powerful agents believe about piracy, casual sharing, and DRM. So I created an informal survey to find out.

I asked three questions.

1. Do you think DRM is necessary to protect the sales of ebooks for popular titles?

2. Do you think DRM is an effective check against piracy?

3. Do you think the main benefit of DRM is that it prevents casual sharing?

I asked top executives in major houses and agents who handle major authors.

Nine executives and four agents (more than half the number I asked) were kind enough to come back to me with answers (so far). I’ll report on the findings in my next post.

  Back to blog

  • http://freesf.strandedinoz.com Blue Tyson

    So what's the answer to this question, then :-

    Have 'commercial' paper sales of public domain books gone up or down
    Have 'commercial' sales of public domain ebooks gone up or down

    Unfettered casual sharing of those abounds….

    Then compare those to what is going on with your garden variety 'top-sellers' currently

    • /blog Mike Shatzkin

      As straightforward as your question might seem, the answer to it is a)

      complicated and b) as far as I know, unknown to any living person.

      And then if we had the data, I'm not sure I'd buy extrapolating from what

      happened with public domain to predict what would happen with new

      bestsellers.

      Mike

      • Bill

        Conversley, why not provide a tool that follows the content and provides instant online licensing.
        If hackers can hack any DRM, then at least make it easy for law abiding people to be so.
        Such tools exist and provide instant licensing, payment,and reporting back to the publishers.

      • /blog Mike Shatzkin

        Sounds like what we used to call a “super-distribution” model. I don't know

        what the barriers are or anything about the tech capabilities that offer

        this. I tend to think it all goes away as a problem when we get fully

        committed to the cloud.

        Mike

      • ERG

        I'm not an agent or an executive. I am a freelance writer with more than a dozen ebooks published. If you're interested, here are my answers to your questions:

        1. Do you think DRM is necessary to protect the sales of ebooks for popular titles?

        Yes- in regard to casual sharing. I've done my own research on these points(DRM as it relates to piracy, casual sharing). From my own data, DRM does not protect against piracy, but it can, and does, impact casual sharing. Despite what the Business states, I have *never* believed DRM was created to prevent piracy. It was created to prevent casual sharing. Generally speaking, law abiding people follow the law(duh) and if they can't legally share an ebook, they won't. Pirates(so to speak) are not law abiding and so the law is no barrier or burden for them, thus neither is DRM.

        2. Do you think DRM is an effective check against piracy?

        Absolutely not. See above for more detail.

        3. Do you think the main benefit of DRM is that it prevents casual sharing?

        Yes. Also, yes to your assertion that part of the problem with DRM's negative image is that, in general, Americans have a real difficulty understanding that a digital file is NOT the same thing as a PHYSICAL property. We(generally) believe if we buy something, it is ours to do with as we please. However, as digital files become more mainstream thanks to their (often) lower price and convenience, Americans are not shifting their understanding of the limitations, some necessary, on digital content. In other words, Americans want the cheap and quick, but they don't want to give up what they consider their 'rights' on things they believe they 'own'.

        Now, all of that said, I couldn't disagree more with what I perceive as your 'thumbs up' for DRM in regard to casual sharing. I know, I know, wouldn't that make my opinion on it go against what most would perceive as my 'best interests”? Perhaps, but I don't believe so. I was delighted when I read that Amazon was going to institute a lending policy for ebooks. I thought, “it's beyond time for that”. Here's why:

        Despite being published strictly in the digital realm, I fully understand that casual sharing is part of what continues to help the print sector stay afloat and profitable. Libraries purchasing titles in bulk, people selling their used books to be bought by a new reader – who(if they like the book) are likely to purchase *new* from said author, etc, etc, etc. Without the ability to share, legally, the ebook market will continue to grow- I'm not for a moment suggesting otherwise- but without making a truly significant impact on the print world. Yes, more and more ebooks are selling every day, but digital share of the market is still less than ten percent of sales (http://www.usatoday.com/life/b… – this article from 5 Jan 2011).

        To put a dot on the point, DRM significantly trims casual sharing, which in turn slows the growth of the digital share of the market due to consumer refusal to accept that they don't 'own' digital or because they don't have easy access to trying the products so there's slower word of mouth. And being that this country has proven over and over that the rich and powerful aren't exactly quick to give up either money or power, DRM will remain until those Deep Print Pockets are significantly impacted by digital sales. At which point, I believe the Business will finally switch the profit center from print to digital, and slowly, but surely, due to consumer demand, DRM will disappear and casual sharing will again be seen as a way to boost word of mouth and sales.

      • /blog Mike Shatzkin

        Boy, I was right with you there until the last couple of paragraphs. If I

        understand you right, you say that DRM saves you digital sales by preventing

        casual sharing but it costs you print sales because it dampens word of

        mouth. But then you conclude by saying that when the sales are all digital,

        THAT'S when publishers will give up DRM.

        Interesting theory. Can't say I buy it.

        But I'm glad to have your contribution of fact, which, I take it, is that

        you've tried to analyze your sales and you think DRM doesn't stop piracy but

        does stop casual sharing.

        I'd rather we agree on the facts than on the speculation, frankly.

        Mike

      • ERG

        LOL, no, that wasn't what I thought I said. Gah, someone really needs to invent a voice capture for replies…

        DRM doesn't save me digital sales. I sell digital with or without because my audience is digital. In fact, my entire market is digital. I have no print. DRM does NOT stop piracy in any way. And piracy, and this was a really hard thing for me to finally understand, does NOT impact my digital sales in any significant way.

        Let me give you a bit of background, which will help when I give my data. I write Spec Fic with erotic elements. This is an extremely *hot*(no pun intended) market in the digital realm, and in fact is quite profitable in print(though typically books in this niche would be called paranormal romance or urban fantasy romance).

        When I first found a copy of my work on a pirate site, I was enraged. OMG, these people were taking food off my table!(so melodramatic, lol). That said, I'm highly logical(it's a wonder I can write fiction at all) so I actually joined pirate sites, got to know both piraters and downloaders and got hard numbers. As another commenter posted, most pirates aren't interested in product, specifically, but in quantity. These folks weren't reading my book they 'stole', they didn't even care. No lost sales there. Then I looked at downloaders, how many of them were getting just to get, how many might buy, how many had bought.

        Hold on to your seat. By and large, the vast majority were getting just to get, which supports your claim that the American consumer will take anything(whether they need/want/will use it or not) they can get for free. Out of the significantly smaller percentages that might buy or had, well, those are the folks that DRM impacts. What I mean is these small groups(less than twenty percent in total) wanted to read an unfamiliar author, but since digital doesn't have a 'share with friends' option, they got an illegal copy. And some of them DID go and buy my books afterward. THOSE are the people DRM lost me, not print buyers. The why is simple. First, most people are law-abiding, so if they are interested in my work, want to try it, but can't, they'll simply move on and send me emails off and on asking when I'll be available in print. Second, there are a lot of Americans who are simply not internet savvy and have no idea how to illegally download anything.

        There were other factors to buying or not, which considering the subject matter of my work I had to incorporate into the data, but which doesn't have *much* of an effect overall.

        When total digital sales overcome total print sales, the consumer will demand the ability to 'share' and likely authors will as well. At which point, publishers will either allow it or find themselves scrambling to stop 'piracy', like the music industry tried – and failed – to do.

      • /blog Mike Shatzkin

        You still seem to be conflating “sharing” with “piracy” and nothing you have

        written here tells me that either of us is doing anything but speculating

        about what the sales impact of unfettered sharing would be on highly

        commercial work, whether it occurs before digital reaches 50% or after.

        Mike

      • ERG

        There's no conflating. Sharing, in the digital sense, is piracy, since the only thing buyers actually buy, digitally, is a license to view a product themselves, the individual buyer. They do not buy the rights to do with the object as they see fit. Which is exactly why DRM could never have been created with the object of stopping 'piracy' in the strict sense of pirating. It was created to stop casual sharing of a product. I thought I'd covered that point. It isn't conjecture. As for proof, one only has to look at the plethora of torrent sites happily offering up DRM'd product, look to the majority answer of your questionnaire. It's clear DRM does not stop pirates. It does stop law abiding citizens from sharing.

        And pardon me since I mean no insult, but of course we are both speculating. Isn't that what these last pieces of yours are all about? To be blunt, of course we won't know what the impact of unfettered sharing might have on highly commercial work, be it before digital reaches half the market share or not. We can't know now since there is no clean control on which to attempt to collect data. However, we can infer, using the music industry as a similar data set, about the most likely possibilities for the eventual outcome. And the most likely outcomes are either a)sharing will be an eventuality, b) the price of licensing will become so small that as long as the buyer can move the licensed product from one digital platform to another(in their possession) they will overlook the desire to share, or c) a mix of both.

      • /blog Mike Shatzkin

        I don't consider the music business an “equivalent data set” for reasons

        I've written about over the years but don't want to repeat now.

        I think we agree on a lot. Thanks for saying your piece.

        Mike

  • TheGreenReader

    Interesting questions, but you've discussed this as if DRM is one thing. As far as I can tell, it is not, or at least, technically, does not need to be. I'm not sure of this – can someone technical jump in here? Is it possible to separate the different aspects of “DRM?”

    For instance, you've not specifically mentioned two current uses/aspects of DRM, one of which is the primary cause of piracy of e-books or of scanned p-books. And that is DRM-based geographical restrictions. The piracy of any entertainment product, and most readers the world over see most books in that light, is primarily driven by lack of availability/denial of supply. Which is why all of the book pirate sites are not in the US. The drive to piracy doesn't come from within the US (although it may end up having an effect on US sales).

    The second aspect of DRM that you've not mentioned is the restriction that prevents a legitimate owner shifting an e-book from a Kindle to a Nook, or to iBooks. And when you extend that list to include the already far too many e-reader platforms springing up all around the world, it should come as no surprise that readers gripe about DRM, yet in many cases it's this aspect of DRM they are complaining about, especially in the US where readers who were very early adopters are now discovering they cannot transfer their legitimately owned libraries of e-books to newer devices.

    As far as I can see, DRM currently does three distinctly different things:
    - limits geographical availability (driving piracy)
    - limits copying of file (and therefore unlimited sharing)
    - limits portability of file (not movable between different platforms and owners, which limits single-copy sharing)

    If publishers wanted to seriously reduce piracy, they would drop the geographical restrictions. But the other two aspects are different, and have no impact on piracy.

    I can understand publishers' reasons for keeping the DRM-limitation on the copying of a file, and so preventing unlimited sharing. But the other two aspects?

    Driving international would-be e-book buyers to pirate sites, and therefore ensuring the existence and spread of these sites, and consequently their availability to US readers, plus irritating long-time e-book buyers, would not seem a sensible route to success.

    Incidentally, I agree entirely that DRM is not having any effect on book piracy. How could it when the first step in book piracy is to rip off the DRM, and there's untold millions out there who already know exactly how to do this in…oh, two seconds?

    However, that's just commonsense talking. Getting data–not sure how you could. The bestsellers that would give you sufficiently large data numbers to be statistically significant are the ones the publishers have companies like Attributor policing – so who's to say it's not Attributor et al who are limiting the piracy of those books, not the DRM?

    • /blog Mike Shatzkin

      The territorial restrictions come from the authors, ultimately. Publishers

      are contractually obliged to sell only where they've been granted the rights

      to sell. Most publishers would be delighted to lift the geographical

      limitations on where their ebooks can be sold, but they'd be sued if they

      did.

      Mike

  • Rick G

    As far as I know, Apple's FairPlay DRM for iBooks has still not been cracked, though recipes for cracking Kindle and Adobe DRM abound. Do you know differently?

    • /blog Mike Shatzkin

      No, I don't. But since the iBookstore is selling fewer ebooks at the moment

      than either Kindle or Nook and, I predict will soon be selling fewer ebooks

      than Google, if it has effective DRM it is only protecting a small minority

      of the files sold.

      Mike

  • Peter Scheyen

    I can think of some ways that DRM hurts sales, all related to the market fragmentation DRM causes.

    1. I have an iPad but the book I want is available only on Amazon. I can't purchase that book unless I get a Kindle. [Substitute the eReader and site names of your choice.]

    2. The book I want is in a niche market and is protected via a 2nd tier DRM solution that I can only use on my PC (and not any eReader device).

    3. If I purchase a book from Amazon for my Kindle I'll be forever locked into that ecosystem. If I later choose to buy an iPad or an Android tablet I won't be able to bring my library with me.

    All of these push the consumer to use pirated content. In the end, the customer really wants to read their books in the manner that is best suited for them. Perhaps the publishing industry should reinvent how books are sold. Apple has demonstrated that people are very willing to make micro-payments for content (apps, individual songs, individual TV shows). It's not hard to think of parallels in the book publishing world.

    • /blog Mike Shatzkin

      Changing the way books are sold is very complicated and can possibly require

      permissions back up the line all the way to the author.

      Although I would question how powerful the effects are that you enumerate, I

      don't question that you've found some ways that DRM could reduce sales. The

      question a publisher (agent) would have to guess at is whether those

      reductions are greater than the reductions that would occur through casual

      sharing if DRM were widely removed. My guess is that they aren't, but we're

      all guessing here.

      Mike

      • Peter Ginna

        Peter's scenarios 1 and 3 are contrary to fact. You can buy and read Amazon Kindle titles on numerous devices, including the iPad. Many of the other e-book formats (BN, Kobo) work across devices thanks to apps for those devices. So you can buy a book in the Kindle store on your iPad and read it on your Kindle, or your Blackberry, or your PC–I frequently switch devices in midbook. You are “locked into” the Kindle system if you buy a Kindle title, but it's not really a problem as long as Kindle titles are readable on so many devices. So only his scenario 2 provides a clear case of DRM harming sales, and I don't know how often it will arise.

        Thanks for another smart post. DRM is one of the prime examples of an issue where people love to bash publishers for their fuddy-duddy thinking without either having much data or trying to see it from the publishers' point of view.

      • /blog Mike Shatzkin

        Thanks for providing part of the answer that I might have, but didn't. It is

        actually an irony seldom remarked upon that the combination of a system

        partially “closed” and the big brother affect of the seller tracking your

        reading allowed Amazon to facilitate cross-device sharing first and to

        deliver it more seamlessly than anybody else has so far. People who hate DRM

        also hate closed systems with a similar ideological fervor. Sometimes they

        work. Ask Apple.

        Mike

      • Anke Wehner

        This reminds me of when I stopped buying CDs, after one insisted on installing its own personal player/spyware, and being non-rippable so I could only listen to the CD, not add single songs to my playlist, and being non-playable in my radio-with-cd…

        Having to install dedicated programs to read books depending on where they were bought, instead of being allowed to chose the reader software based on the merits of the software itself, does put off some people. (I admit that I don't know how much impact that has, but wanted to mention the principle.)

  • http://twitter.com/queridapatricia Patricia Arancibia

    Thanks Mike for the only reasonable thing I have read about this topic by anybody who writes about it the digital publishing universe.

    For the naysayers, it would be good to consider that:

    1. Piracy hurts sales. DRM so far, hasn't. Most publishers wouldn't put their content out there if booksellers did not have DRM. They wouldn't because they protect their right to be profitable, and because most authors would not sign a contract that doesn't guarantee that protection.

    2. Geography and other restrictions are not a DRM thing. Those restrictions are part of the metadata that publishers create based on the rights that authors give them or not.

    It has become fancy to blame “publishers” for offenses such as charging for content and trying to protect it. Before getting agitated, it is worth considering that most of the customers who buy millions of eBooks barely complain about DRM, and hardly care about the topic. For me, this is an important consideration because I do sincerely believe that the costumer is right, has the right to be right, and must be looked at for clues with more emphasis than anybody else.

    No doubt the piracy paranoia has in cases been hardly justified by reality. But the opposite argument that piracy is cool doesn’t make sense either. Piracy hurts. It is not a myth or a marketing tool. You may try to make to the best of it, but good for publishing is not. It hurts. And not because people in publishing are so obtuse or find technology as abstruse as some opinionators repeat 24/7 in twitter and blogs.

    Most of the pro-piracy/anti DRM clichés don't bode well confronted with reality. It is true that many titles that are not available in Latin America, or that are available at impossible prices (30 dollars in a place where a middle class salary is 2000 dollars a month to feed the family for instance) may be pirated for more or less justifiable reasons. Sadly, this hurts the small, independent publishers trying to sell in one country from another and facing the costs of exporting and exchanging currencies. Multinational groups don’t face these hassles.

    But, paradoxically, piracy in Latin America hurts more titles that are available there and at a reasonable price. In poorer countries piracy hurts more the local, independent publisher who cannot stop illegal copies from being sold even in bookstores that don't know that those copies don't come from where they are supposed to. This is not a myth. It is reported by national newspapers every time a pirate warehouse with hundreds of thousands of illegal copies is found. You will hardly find Latin Americans with publishing experience defending piracy (actual experience, not being paid as a speaker in international conferences to talk as if.) I invite you to go to a Latin American book fair and talk with the very many publishers who can give you ISBN numbers of titles that have sold over 10,000 copies of which the publisher has been paid 2000, if lucky.

    Maybe the publishing industry has not yet found the right way to protect its content. But maybe in the forums where we are supposed to find better ways to do what we do, we can have more constructive conversations than blaming publishers and booksellers for using DRM or for their supposed inability to understand the world they built and navigate making a bigger effort and a riskier bet than anybody else.

    I have the pleasure of dealing with publishers from all over the world for a living. I also have the enormous responsibility of having to be attuned with millions of Americans who buy billions of books every year. I have never met the “publisher” who rejects data (sales come to mind) and have never heard from hordes of customers outraged by DRM, as one might be lead to believe browsing twitter, reading blogs, or going to conferences.

    Thanks Mike and happy DBW everybody!
    Patricia

  • http://twitter.com/emmittc emmittc

    Good point – seems clear that DRM doesn't prevent piracy…..but still wonder whether it helps or hurts sales….shocked to see how easy it is to obtain pirated ebooks (autobio of mark twain, unbroken, just kids) and it really makes me wonder where we could be headed with this….I wonder if the difference in audience between books and music might be a factor in the prevalence of pirated ebooks – and the damage it will ultimately wreak on book business…..

    • /blog Mike Shatzkin

      Where we're headed? We're headed to The Cloud where a lot of these problems

      will go away. But it will still be a little while before we get there.

      Mike

      • http://twitter.com/emmittc emmittc

        how does piracy go away in “The Cloud”?

      • /blog Mike Shatzkin

        I'm working on describing that for the next post. To come.

        Mike

  • kwn2196

    A little off topic, but not entirely– why have so many publishers limited the sharing feature on Kindle (and presumably Nook) books? It is ridiculous! That feature lets you lend a title ONCE– one single time– to one other person for two weeks, no extensions. I would guess 70 to 80% of new (i.e., non-public domain) books are marked not to lend. Publishers need to think about why people buy books. The most common reason is they know and love the “brand” (the author). Most readers pay no attention to the publisher's name but they know the author. When someone loves an author's work and wants to share it with a friend, that is a real opportunity to get a new reader. A real strength of ebooks is the free sample that potential buyers can download for free. But sometimes a free sample chunk isn't enough; people need to read the whole book to see if they want to invest their money as well as their time in that author.

    Publishers who won't even lend a title once will never give up DRM. If they insist on keeping it, they need to find a way to accommodate the social needs to readers who are not pirates.

    • /blog Mike Shatzkin

      Don't know the answer to your question about why publishers haven't all

      given their permission but here are two possibilities: bureaucracy and

      getting permission from agents. I wonder whether those publishers who have

      given permission have done it for all books or just some. I think it would

      be pretty hard to tell from the outside.

      Mike

      • http://twitter.com/queridapatricia Patricia Arancibia

        Lending is great for marketing and sales—people often buy the eBook that someone has lend them. Publishers like it. The problem wit US content is that many authors and agents do not like it and do not allow publishers to do it. It gets even more complicated with international content. In many EU copyright laws for instance, lending is illegal unless in libraries.

      • /blog Mike Shatzkin

        Patricia, do you have actual data or just anecdotal observation to support

        the contention that lending stimulates sales?

        Thanks for the insight that countries outside the US have laws that might

        prevent lending so people understand it isn't just what publishers think and

        what agents think that is at issue here. At least on a global level.

        Mike

      • http://twitter.com/queridapatricia Patricia Arancibia

        We have data, as many publishers do. Part of the reason why most publishers don't want to extend the lending period beyond 14 days is that is time enough for people to get engaged or not, but usually not enough to finish reading. A high percentage of the people who read a chunk of a book lend to them, end up buying it. Maybe people in the marketing departments of some of the big groups can give you figures. I just cannot share it a single figure without losing my job, which I love! But, definitely based on data.

      • /blog Mike Shatzkin

        If true, solves the library problem doesn't it? Let them lend for 14 days

        with a buy option at the end that gives the library a referral cut! Or is

        somebody already doing that?

        Mike

  • http://www.writersandeditors.com Pat McNees

    Why would you want to prevent casual sharing of books? I've been casually sharing purchased printed books all my life and my mother and her friends were my model. In a working class environment, Mom and her fellow romance readers would buy the newest romance novels when they came out, but they would keep tabs on who bought what (so they didn't duplicate purchases) and when they'd finished the ones they bought they would lend them to each other– and each would write her name in the front of the book — partly so they would know they had read it, and didn't read it again (this being the nature of romance novels: that they were kind of hard to tell apart). They would also write notes about the books (such as “too much cussing”). I think this may have happened a lot and it sure meant a lot of romance novels were bought. The sharing was part of what kept the reading fever up. Multiply that kind of book lust by all the women like my mom and aunts and you got a healthy romance market.
    – Pat McNees, Writers and Editors
    http://www.writersandeditors.c…

    • /blog Mike Shatzkin

      Why? Because casual sharing of unprotected files would have none of the

      limitations that your mother and her friends find true with printed books.

      Each book could be read by as many people at one time as wanted to, not just

      one person at a time. The books would never wear out. The friends could send

      the same file to other friends outside the circle of regular sharers.

      Trying to draw precise parallels between what “works” with printed, physical

      objects and what will work with files is a difficult thing to do. In this

      case, it is very easy to see (if you want to) how what is no problem and

      stimulative of sales in print could be a big problem and a killer of sales

      in digital form.

      Mike

  • http://www.robynbradley.com Robyn Bradley

    Thanks for this post, Mike. It got me thinking, and it helped me see all sides. I've been reading your blog for a while, and I usually lurk, but I wanted to add my perspective as an indie author. I'm actually all for casual sharing because I see it as a way to help build my brand. I kind of liken it to when a friend reads a (physical) book and says, “You HAVE to read this,” and then lends me the book (casual sharing). If I read it and love the author, I'm much more likely to buy his or her books on my own (either future books or the back list). This has happened to me countless times, as I imagine it has for many readers. Does that casual sharing hurt the author's sales? What if I don't like the book and, as a result, refuse to buy any titles by that person? I guess the author has lost a sale in that sense, but for every sale lost that way, I wonder if there is a sale (or two or three) that's won? And would it then even out the losses? As you said, this is all hard to measure, so it's hard to know for sure. But I guess I see casual sharing as a loss leader of sorts. If it gets me a fan who will end up buying past titles and future titles, then I'm all for it, figuring it will pay for the casual user who decides never to read me again. I realize this is not scientific AT ALL, but it's the reasoning I've been using for not DRM-ing my titles. Thanks again for the thought-provoking post.

    • /blog Mike Shatzkin

      Robyn, I agree that the word-of-mouth generated by sharing has value. I

      agree that casual sharing can stimulate sales. The question is whether it

      will stimulate more sales than it will cost. I believe that with a big name

      branded writer, the risk of lost sales is substantial and real. And I can

      see that for somebody trying to build an audience, the equation right now

      would be different. But right now, half the sales or more for just about all

      successful writers are print and for many it is 70 or 80 percent. When the

      lion's share of sales are digital for all writers, and that day is not far

      off, the situation will be quite different.

      I wish we didn't live in a world (and in a country) where so much pride is

      taken by so many people in getting things cheap or free. But that's where we

      are. If I know that any book a friend has could be given to me for free

      without the friend giving up her owhn copy, I'd never buy one the friend has

      and expect them never to have to buy one I have. I could see little groups

      forming that just forwarded every ebook purchase to everybody else in the

      group.

      It *might not* be a total disaster, I agree. But I find it difficult to see

      how anybody can assure me that it won't be.

      Mike

      • http://www.robynbradley.com Robyn Bradley

        You make good points and definitely provide food for thought. I might feel a lot differently if I were King, Grisham, or Picoult. Sadly, I'm not. Yet. ;)

      • /blog Mike Shatzkin

        Robyn, I don't doubt that you have a better chance of getting there by

        taking off the DRM right now and making your books as cheap as possible. The

        interests of aspirants are not identical to the interests of the

        already-rich-and-famous.

        Mike

      • http://www.robynbradley.com Robyn Bradley

        Which is exactly why I need a sugar daddy. ;)

  • Aeprovost

    Has anyone considered that this is why consumers demand lower prices for ebooks. Consider the life of a paperback. It's sold to a library where a hundred people check it out. Later it hits the secondary book market where I can buy it for 50 cents at a thrift store, read it then resell or trade it online. If ebooks cost a buck or two, no one would care if they couldn't loan them, resell them, trade them or move them to a different device. They'd buy the book a second time if they want to read it again ten years down the road and have a new ereader. The convenience would outweigh the cost. I don't have to ask a friend, look for it online, wait for it to be shipped, scan cluttered shelves in a thrift store or pay fines at the library. If you want to increase ebook sales drop the price and forget the DRM.

    • http://www.robynbradley.com Robyn Bradley

      I totally agree with your reasoning. My shorts are 99 cents. I'm releasing a novel in May and will probably be pricing it at $2.99 (or around there), maybe even $1.99.

      • /blog Mike Shatzkin

        I agree with this strategy for an author. Low prices really do drive sales.

        That scares the hell out of the commercial publishing business, as it

        should. Trying to counteract and contain that was the foundation of the big

        publishers move to the agency model. It is ultimately a losing battle

        (prices will continue to come down and authors selling direct will continue

        to lead that process) but slowing down the decline will be (and is) worth a

        fortune to big publishers and big authors in the meantime.

        Mike

    • /blog Mike Shatzkin

      Let's remember that a publisher's job is to generate* revenue, *not just *unit

      sales*. It's not news that anything will sell more at a lower price. See my

      note above about the country and world we live in.

      Hey, if you *paid *people to read the books, then you *really* wouldn't have

      to worry about DRM!

      Mike

  • Tshuttleworth

    We are trying to answer these questions hopefully more so with the facts. Our position has always been to use DRM, but last fall we went DRM-free with a major customer. We are tracking piracy incidents and sales data since that single change on about 100 titles, many our bestsellers. It is too early to tell, but am curious to see if any correlations can be drawn. It seems too much of this debate is what people think, and there is not enough science to support anyone's opinions. Not sure our work will get us any closer, but we will see.

    • /blog Mike Shatzkin

      Tod, trying to develop on this is admirable and typically Thomas Nelson.

      We'll be interested to hear what you learn.

      But I think you'll find it very difficult to measure the impact of casual

      sharing or even to know how much of it there is. And if you have books

      without a track record, I don't know how you'll know whether sales have been

      helped or hurt.

      Mike

  • http://twitter.com/brianoleary Brian O'Leary

    The way that you parsed what I said in the interview is not accurate. Jenn and I were talking about piracy on file-sharing sites (that's what I studied), and I said that DRM has no impact on the ability of people who want to pirate content to put books on those sites. I went on to say that DRM does prevent casual sharing. It's unknown whether efforts to keep people from lending digital content help or hinder sales. The default position among publishers appears to be that it hurts and that they need DRM in place to protect them from it. Whether that's true or not, I don't know. But that's not what I was interviewed about.

    • /blog Mike Shatzkin

      Pardon me if I did any violence to what you said or what you meant, but my

      understanding from the words in the interview was that you agreed that DRM

      would prevent casual sharing but also that you were against the use of DRM.

      That's the point that I found to be a paradox. I agree with your main

      contentions: that DRM probably does little to prevent piracy and that nobody

      really knows what the commercial impact of piracy actually is. I think we'd

      agree that nobody knows what the commercial impact of casual sharing is

      either.

      What I don't understand is, that being the case, how anybody can be sure

      that DRM could be removed without enormous risk to major commercial

      properties.

      I'm always prepared to accept that I might be missing something or having my

      own failure of understanding, but I'm deep into this discussion and nobody's

      cleared this up for me yet.

      Mike

      • http://twitter.com/brianoleary Brian O'Leary

        The way that you characterize the words in the interview is not accurate. You can search everything I have written about piracy and DRM, and you'll find that I have taken no position on the value of or the use of DRM as a tool to limit casual file sharing. All of my work has centered on the sharing of book content on file-sharing sites, where I do feel DRM is of limited value.

        Your question is worth exploring, but I am not an example of the paradox you write about here.

      • /blog Mike Shatzkin

        Thanks for the clarification that suggests that we actually agree. I thought

        I was interpreting strictly within what I was reading, to which I linked. I

        apologize for any misunderstanding I may have created about your position.

        Mike

  • http://twitter.com/mastertwisted Dave Newton

    I buy ebooks, music and videos without DRM. Add DRM and I automatically avoid it.

    • /blog Mike Shatzkin

      Dave, you're not unique, but you're apparently not a majority. The mammoth

      ebook bestsellers — like Stieg Larsson — are all DRMd. If you want to

      choose from less popular ebooks, there are plenty of choices without it. If

      a publisher wants to maximize its sales to *you*, they have to take the DRM

      off. If they want to maximize their revenue, that may or may not be the

      right answer.

      Mike

  • http://mistiwolanski.com Carradee

    The inability to loan ebooks is why I'm sticking to the print book bandwagon, and I'm overflowing with print books. I want an e-reader. I want e-books.

    But when I buy a book, I want to be able to loan it to a friend who will likewise enjoy it, or to give it to somebody who'll like it if I didn't. I've had more than one friend enjoy a book I loaned them enough to go buy it, themselves, but we're all reluctant to buy books if we don't already know we like them (or their authors).

    I want to be able to do that with e-books. :'(

    • http://mistiwolanski.com Carradee

      Oh, and a note: it's possible to check e-books from the library, if your library is part of the website that does such a thing. I'm sure programmers could figure out a way to produce DRM that left e-books readable if they actually wanted to.

      And please forgive my inconsistent spelling of “e-book” in the post above.

    • /blog Mike Shatzkin

      Now, a model that would make sense might be this. Print book is $30. Ebook

      is $14. You want to “lend it” to somebody else? Costs you another dollar.

      You know, this notion that print and digital are the same thing is really

      something people have to get out of their minds. They're not. Physical

      things come with physical limitations. Digital things don't.

      Word-of-mouth, person-to-person recommendations, are the most powerful

      marketing tool that exists. Effortless casual sharing will turn the

      marketer's greatest weapon into a commercial nightmare. (“That reminds me of

      something in 'Outliers', Oh, you haven't read it? Let me flip it to you!”)

      As for sticking with print, I'll never talk you out of it. You might be

      helping keep some bookstores open. One of society's great institutions is

      vanishing and people who don't switch prolong their ability to grace our

      world.

      Mike

  • http://www.literating.wordpress.com lancelot

    interesting and helpful, thanks.

  • Maxalexander

    Thanks for the post, Mike. Most authors I know, myself included, are very much in favor of DRM. I have spent the past two years of my life and tens of thousands of dollars traveling back and forth to Africa writing my next book. When the book comes out, I expect people who want to read it will pay for it, just like I pay for other people's e-books. (I buy at least one per week.) And when the NY Times starts charging for its online content (later this year, I believe), I will pay for that–just like I used to before they went free. And when the plumber comes to replace my water heater next week, I will pay for that too. It just doesn't seem like rocket science to me.

    I do give away some of my content, in my blog. The model often cited is that of some popular musicians who provide free downloads of songs. But there is a key difference that prevents an author from giving away ALL of his content: performing artists can make money by performing (and by selling merchandise at those performances). Only a very few writers have a performance revenue stream (and even fewer have a merchandise revenue stream), and the ones who do are arguably “performers” themselves, like Sedaris who is an NPR radio voice. You are absolutely right that we can't keep comparing the inherent pass-along rights in a p-book with the very different rights in an e-book. It's a brave new world; I personally love it–I love e-books, I love not filling my house with shelves of dusty p-books anymore, I love reading the same book as my wife at the same time on our dual Kindles, and I love downloading Keith Richards's book in a village in Ghana, which may be one of the few countries in the world even he hasn't been. And I can do all this for less, often considerably less, than the fusty old print version. What's not to like? What's not to pay for?

    • /blog Mike Shatzkin

      Max, the authors are instinctively in favor of protection the way the

      digerati are instinctively opposed to it, but let's remember that neither

      side has much evidence to support their view. Data from O'Reilly and Brian

      O'Leary suggest that sharing fostered by piracy actually can increase a

      book's sales. In the post I'm about to publish, you'll hear that theme again

      from a leading literary agent.

      On the other hand, I buy your logic and your morality 100%. I just think we

      need to have the humility to accept the fact that our belief that DRM

      actually protects sales is based on faith, logic, and intuition, not on

      data.

      Your point about what book authors do not have in common with recording

      artists is one I've made many times in the past, but it bears repeating.

      Much of the world never seems to get it.

      Mike

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  • Nicholasweirwilliams

    The problem is – following on from Pat's comment – that to the consumer, what you accurately designate as 'casual sharing' seems identical to lending a book to a friend or relative. I suspect that an average reader would agree that piracy is bad, but would feel that blocking casual sharing means they have acquired less 'rights' in their ebook acquisition than in a printed book acquisition. I think that is a significant issue moving forward for the industry to come to terms with in terms of increasing ebook adopters.

    Nick W-W

    • /blog Mike Shatzkin

      I think they *do* acquire fewer “rights” with an ebook than they do with a

      print book. I think that to give them what would apparently be the

      *same* rights

      would, because a file can be infinitely replicated, amount to giving them *

      more* rights.

      Ebook prices are already cheaper than print most of the time and for

      hardcovers are substantially cheaper than print.

      Mike

      • http://ankewehner.de Anke Wehner

        The problem I see here is that fewer rights should cost less.

        Those ebooks that I am interested in buying often cost *more* than their paperback counterparts, at least for me. (Amazon adds something like $2,30 to most digital sales in Germany to finance offering “free” 3g download for the people who have 3g. Some publishers just set the ebook price high.)

        If $8 buys me a paper book I can hand to my mother to read, and mail to my pal in Finland when we're both finished, and $11 buy me a digital copy which only I personally may read, the ebook price feels like a ripoff.

      • /blog Mike Shatzkin

        I am learning that a combination of price-maintenance and VAT in Europe can

        really drive up the price of digital books. The quarrel may be with

        government, not publishers.

        Mike

  • http://www.literaturcafe.de Wolfgang Tischer

    I would say that DRM does not prevent people from “casual sharing”, but from “casual reading”.

    If you have ever struggled with additional DRM-software and managed the process of installing and the registration of that software, you will love the benefits of an illegal drm-free copy, which runs on every device with no hassle.

    I would day, that “casual sharing” is the reason, why most bestsellers became bestsellers. But not in the world of ebooks, but in the world of printed books. Nothing has more impactl than a personal recommendation. In some genres lending and giving away read books is a normal thing.

    “Here, read this, it's great!”
    “Could you lend me that?”
    “Yes, take it. I already read it.”
    “I read a great book, which Carol gave me…”

    We all know these sentences.
    What people talk about, is not only passed down but also bought! If E-Books would be cheap products, your theory might be true. But in Germany such I dialog might end like the following:

    “I read a great book.”
    “Would you lend it to me?”
    “I can't it's a drm-protected ebook. Download is 18,99 Euros!”
    “Oh, know, that’s too expensive for me.”

    • /blog Mike Shatzkin

      Wolfgang,

      Your struggle would not be familiar to millions of American consumers who

      download ebooks from Kindle, Nook, Kobo, Google, and the iBookstore (and

      others) every single day. I am not sure what path to content you're

      following but there are others that would give you a lot less trouble than

      you seem to be experiencing.

      Mike

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  • Marcos Marado

    No, I'm sorry, DRM doesn't prevent even casual sharing. Casual “wantz!” are answered with casual google searches that always end with the casual “here's the content you want, DRM-free and cost-free, even if not legal, in less than one minute”. Want more casual than that?

    • /blog Mike Shatzkin

      Marcos, nowhere did I say that DRM prevents *all* casual sharing. But it

      prevents a lot. Your googling solution, simple as it sounds, isn't such a

      hot answer. First of all, you'll often get a crappy file. Secondly, it has

      nothing to do with the big concern, which is somebody emailing the attached

      file to all their family and friends because it's a book “you really should

      read!”

      Mike

  • Troy

    I really wish people would stop peeing on our legs and telling us it’s raining. It’s mainly the thieves who seem to be spreading this idea that free “shared” copies generate more money for the publisher. After a “shared” copy starts circulating (high on search results) sales suddenly start tanking. That’s not a coincidence, that’s real dollars and cents.

    • http://idealog.com/blog Mike Shatzkin

      Troy, if you possess data that backs up what you say — that you can document the link between piracy and sales nosediving, you’ve pulled together something I’ve always wanted publishers to demonstrate but none ever has. I don’t disbelieve it, but I have never seen it actually proven.
      Mike

  • Nina

    Although I don’t support all DRM policies, I understand why companies ban the sharing of purchased products.

    It’s because sharing in the digital change is dangerous. With physical media, sharing a book is easy. You simply hand it to a friend, no questions asked. The key idea is that when you do, you give up ownership temporarily. That’s why sharing has always been safe; unlimited uses don’t harm a company since it is just one copy of a product and the scope is fairly contained.

    In the digital age, sharing is Ctrl + C, Ctrl + V. Temporary ownership transfers like with physical goods don’t exist in
    e-commerce. Instead of sharing one book, another or maybe even multiple copies have been created. The Copyright law of the United States entitles anyone distribute their purchase as they please without the authority of the copyright holder (17 U.S.C., 1976). However, it only protects the distribution of the original copy; anything else is a violation of copyright infringement. (“1854 Copyright Infringement—first sale,” n.d). This is how sharing has evolved—it has turned into giving.

    Personally, I am someone who doesn’t believe that the ownership of intangible products gives you the same gratification as touching and using your senses to feel the connection to a
    physical product. That’s probably why DRM doesn’t bother me too much. If I buy content digitally, it’s simply to use it for the purposes it provides for. For ownership and sharing I will always prefer and choose the physical form—that is, if they’re still around in the future.



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