The Shatzkin Files


Some thoughts about piracy


As part of the program-creation process for Digital Book World, I had a round of conversations with the top executives of the Big Six companies to discuss the agenda, mostly with the CEOs. The purpose of the check-ins was to find out what topics the CEOs wanted their companies to speak about and, of course, which they wanted to avoid for reasons of diplomacy, commercial politics, or legality.

One topic I had left out of our program initially was “piracy”. Some of the executives I met with found this a very troubling omission. My first reaction was “what’s there to discuss? We’re all against piracy and there isn’t much we can do about it. So what else do we say?” Although there are two of the big houses where that view is, to some extent, shared, most of the others disagree, some vehemently. In fact, Macmillan has a “seven point program” to confront and combat piracy, which will now be the topic of a presentation by Macmillan president Brian Napack on the first morning of Digital Book World.

The topic of piracy is a part of the conversation about “digital rights management”, software that manages how a file can be used. DRM is a pretty standard aspect of software and DVD distribution but it comes in for a lot of complaint and criticism from very knowledgeable observers and participants in the ebook scene.

There is a “first sale” doctrine in copyright law that gives the purchaser of a book (or sound recording or DVD) the right to give away or re-sell that good. It does not give the right to sell or give away a copy, but it does allow you to “share” your book or CD or DVD with your mother, your sister, and your aunt and then to sell the used copy on eBay. Those rights have never really extended to software, which often knows if you’re trying to load it onto a second computer and won’t let you. Attempts to control sharing of music through DRM are commonly blamed for the piracy that became rampant in that sphere (although I don’t buy that; there are other explanations I find more compelling.)

The question of DRM-or-not in the ebook world is a very complicated one, although opponents of DRM often paint it as very simple. O’Reilly Media sells its ebooks “DRM-free”, as do some upstart ebook first publishers. The ebook self-publishing site, Smashwords, also sells only DRM free from their own site, although Smashwords-originated files might have DRM added by intermediary resellers, with which it is making more and more deals.

The opponents of DRM point to the incontrovertible fact that its existence does not stamp out piracy, which is transparent at a time when you can type just about any book title into Google with the word “file” after it and be directed to sites that offer you a free pirated download. In fact, even not publishing the book digitally is insufficent DRM to keep it from pirate distribution.

Mark Coker of Smashwords, despite the fact that he sells onlyDRM-free ebooks from his site, is an avowed opponent of piracy, and even of sharing. He suggests a boilerplate notice in his ebooks that tell you that you should go buy another copy of this book you’re about to read if you didn’t buy this one, or else you’re cheating the author. Mark believes the key to combating piracy is education; he admits to an unusually strong faith in consumer integrity.

But despite the lengthy introduction, this post is not about DRM; it’s to propose what is the ultimate defense against piracy: ebooks that aren’t static; ebooks that change.

The secret sauce behind O’Reilly’s DRM-free policy is that when you buy an ebook from them, you are entitled to the updates to that ebook…forever. The implicit message there is there will be updates.

There is no better antidote to piracy than this. If the pirated or peer-to-peer edition of a book is yesterday’s, or last week’s, and the book is changing, then it’s yesterday’s paper (which the Rolling Stones noted long ago, “nobody in the world” wants.)

This is beyond wrenching to publishers; it completely changes the workflow and it completely changes the business model. The rhythm of a publishing house is based on the fact that books are, at some point, finished. There is a Henry Ford assembly line aspect to how things have always worked. Whether you’re an editor, a marketer, or a sales person, new books have a pretty reliable “cycle” for you: their existence in your life has a beginning, a middle, and an end. The conveyor belt moves the book away from you so you can’t spend too much time on it and can move on to the next one. Having authors not stop adding to or changing a book, even after it’s published, is totally disruptive. And what would we do about the ISBN numbers?

Yet, the possibility for ebooks to be totally up-to-date is one publishers can’t ignore. The Little, Brown division at Hachette has just announced that on December 1 it is publishing a 2,000 word update on the H1N1 (swine flu) virus in the ebook edition of “The Vaccine Book”, which was originally published in 2007. If something startling happened that should change that text on February 1, wouldn’t it make sense for them to update the book again? In October, Wiley published, as an ebook only, “The Swine Flu: The New Pandemic” because they wanted to get the most up-to-date information out quickly. By that logic, wouldn’t they also want to update their ebook if what was up-to-date in October isn’t in March?

And if they did that, what possible value would a pirated edition of yesterday’s ebook have?

Of course, swine flu is a dynamic subject. It isn’t a novel; it isn’t history. It isn’t even programming or software development or technology, the subjects O’Reilly publishes (and often updates.) But every editor knows plenty of authors of non-fiction books that wanted to keep writing and changing and adding past every deadline the house presented. Let the new process start with those; there will be plenty of candidates.

Furthermore, the biggest threat from pirated ebooks is to the most established franchise authors. I believe Tim O’Reilly is responsible for two cogent and pithy observations about piracy: that obscurity is a greater threat to most authors than piracy, and that piracy is “progressive taxation.” Both express the reality that the marketing for most books fails to reach most of the book’s potential audience. That Henry Ford assembly line conveys the book away from the marketers before the task of informing the entire potentially-interested public is anywhere near complete. So piracy, or file-sharing that may fall short of actual piracy, can serve the purpose of spreading the word about a book and triggering more sales. Except there are some authors, and those are the ones that sell the most books for the biggest publishers, who don’t need marketing to inform their audience; their audience, in effect, informs their audience! And those are the ones who would surely lose sales if there were no DRM and books could be freely shared or are made available through illicit channels.

But those authors are also the ones who have the biggest personal followings. They are the most capable of adding material: notes about what they’re working on, correspondence with fans or critics, even observations about other people’s books, that would add some value for many of the readers of their stories. In fact, a regular “update to my readers” from a top-flight author that is available only in their ebooks, or to purchasers of their ebooks, would be an attraction to many and could serve as a constant reminder that downloading their books from illegitimate sources is cheating them.

I’m not against DRM in principle and I’m all for combating piracy any way we can (and I have a couple of thoughts on that subject I’ll save for a subsequent post.) But I am far from certain that piracy represents the same existential threat to book publishers that it did to record companies, although we have others: the music business isn’t nearly so threatened by the shift to vertical.

One of my favorite people in the digital book business, who once worked in the music business said to me: “I don’t worry about piracy. I did in the music business because music was bought by kids. My customers are 53-year old ladies. They don’t go to pirate sites. They’d be afraid of getting a virus!” She’s right about that, at least for today. But for those who are concerned about piracy, I am not sure this problem can be attacked with toughness and muscle as effectively as it would be with creativity and delivering to the market something the pirates just can’t keep up with.

We have observed previously that the day will likely come when Big Authors will go straight to electronic distribution for some ebooks, bypassing the publishers to collect bigger royalties. What could be the first shot of that battle, and a reflection of the ideas in this post as well, may have been fired in the UK where Sony has announced a special edition James Patterson ebook which will contain the new book, “Cross Country”, a month before its general release plus other excerpts and a special letter from James Patterson. Of course, that deal was probably made by the publisher with Patterson’s cooperation, but it points to possibilities that should make publishers nervous.

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  • http://www.vintagegingerpeaches.com/ Courtney

    I have to wonder in what crowds piracy is okay? I don't know anyone who buys pirated books, music, etc. Or do I? Is it something you don't talk about if you do? I just wonder how much of a problem it is in our culture and what the demographics are? It would just be interesting to know.
    I like the idea of novels updating– if I'm really devoted to something, I'll take more in the form of just about anything from the author– and having it right away is worth paying for.

    • /blog Mike Shatzkin

      Courtney, I know a LOT of 18- 20- and 22-year olds who have never paid for
      music and think that's perfectly okay. And they wouldn't take five dollars
      that they knew belonged to you if they found it in their own pocket. I am
      actually amazed at the *lack* of PR from music and movie stars to ask their
      fans and audiences not to steal from them.

      In the grown-up world, frankly, the only people I have heard defend the
      notion of piracy are some (often quite respectable) digerati who mix the
      spectre of sort-of “understandable” piracy into their rants against DRM or
      high ebook prices. (You know who you are.) As far as metrics about piracy in
      the book business, they are startlingly sparse. We hear publishers talk
      about how many takedown notices they've issued, but nobody seems to have a
      handle on how many times these books are being downloaded, let alone whether
      a) anybody's reading them from those files and b) how many of those people
      might have bought the ebook if they hadn't found the download.

      I am delighted to hear that you see updationg as an attractive idea for
      fiction. Some will be attracted to this kind of thing, some won't. What
      works as a business depends on how those “somes” work out as “sums”.

      Mike

  • Robotech_Master

    Why no love for Baen? They've been publishing every book they published as DRM-free, reasonably-priced e-books for over ten years. They've been giving some of them away for free that long, too, including binding CDs into the first printings of selected novels giving away those and more.

    They're not a “small press”, either, except maybe compared to behemoths like Macmillan; they're a fantasy/SF imprint with a long history and a lot of well-known books and authors to their name. Yet for some reason, whenever anyone writes an article about publishers who have started doing one of the things Baen is doing—for instance, Amazon giving away first books in a series for free for its Kindle—people are all gosh-wow-look-at-that and Baen, who's been doing the same thing for years, doesn't merit a mention.

    • /blog Mike Shatzkin

      Robotech, you're absolutely right. Baen's been a pioneer with ebooks. You
      can tell I don't read any science fiction…

      Mike

      • Troy

        Mike

        Speaking of Science Fiction you should check out the book “Cyberbooks” that was published in 1990 and was written by Ben Bova. (ISBN: 0749301317) The book is a science fiction look at what would happen when ebooks became a reality. The book is a satire and has biting commentary about the publishing industry.

      • /blog Mike Shatzkin

        Troy, I just checked and “Cyberbooks” doesn't return an ebook match with
        Kindle or Barnes & Noble. I last read a paper book almost two years ago.
        I'll read it — as soon as the ebook comes out.

        Mike

  • Robotech_Master

    Another interesting thing: this updating strategy you propose seems to work well for video games, too.

    http://arstechnica.com/gaming/news/2009/11/valv

    • /blog Mike Shatzkin

      Thanks for this. I have long suspected (a gut instinct, not based on much
      knowledge) that there's a lot in common between the book business –
      development and marketing — and the games business.

      Mike

  • http://go-to-hellman.blogspot.com/ Eric Hellman

    It turns out that [title]+”file” is not a very discriminating way to find pirate copies of a book. A method that works better is to take advantage of the uniqueness of sentences.

    DRM does not address piracy except in the fantasies of publishers. Given the ease of detecting piracy, however, enforcement against priate sites is likely to be a good option for deterring and thus reducing piracy.

    • /blog Mike Shatzkin

      Eric,

      Looking for a unique sentence would require more knowledge of the book than
      most people just looking for a copy to download would have.

      And DRM does address piracy; it just doesn't address pirate *sites*. If
      there were no DRM of major works, they would be passed around as attached
      files like crazy. And I'm not an expert on this, but I thought “enforcement”
      was a problem for some pirate sites because they were located out of the
      reach of enforcement. But I guess we'll learn more about this at Digital
      Book World from Brian Napack.

      Mike

      • http://go-to-hellman.blogspot.com/ Eric Hellman

        I wasn't suggesting that searching for unique sentences was a good way for the public to find free books, I was suggesting that it was a good way for content owners to find and detect pirates.

        I meant to qualify my statement about DRM to say that it doesn't address piracy of mass-market books. In the case of ..the Deathly Hallows, has the availability of DRM-free pdf copies on the internet resulted in people passing it around “like crazy”? On the other hand, DRM might be effective against “casual misuse”.

        A variety of enforcement stategies can be effective even against sites located in piracy havens. These would include targeting users and connection peers.

      • /blog Mike Shatzkin

        Eric, I think — just a personal hunch — the threat of books being passed
        around is much greater if DRM-free copies are legitimate ones. Obviously, we
        have no way to know for sure. (Heck: we don't even know how many copies of
        Deathly Hollows have been delivered to consumers, let alone passed around.)
        What I'm talking about is what I would call “casual misuse”; sharing among
        friends, for example (but how many of those do people have on Facebook?

        Mike

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  • http://www.manfredmacx.com/ Jon Renaut

    I think this is the right direction – trying to figure out how offer customers something that can't be pirated – but I don't think this particular idea will work. You won't be able to stay ahead of people who are determined to pirate. Every update you make will be on P2P networks as soon as you've released it. And even if you could, a book is not like a newspaper. Yesterdays news may be pretty worthless, but I don't think you'll be able to add enough to a book to give it compelling value over the original.

    Watching the music industry is a good idea, but we have to remember that the cd or the MP3 isn't the primary source of revenue for the musician. It's the performance that's really important, and the music serves mostly as promotion for the performance. Since most authors aren't going to perform like that, we have to start thinking about alternatives. If we do it right, authors can start putting the ebooks on file-sharing sites themselves.

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

    McMillan going to the explain the 'we don't believe in selling books' strategy you think?

    • /blog Mike Shatzkin

      Hnh?

      Mike

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