The Shatzkin Files


What the powers-that-be think about DRM, and an explanation of the cloud


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My last post stemmed from a single catalyst: my frustration with what I feel is the tendency of those opposed to the use of DRM to promote the straw horse that people who defend its use must believe that DRM prevents, or even largely discourages, piracy. I know that isn’t true of me and I suspected that it wasn’t true of most of the powers-that-be in commercial publishing, on the publisher side or the agent side.

I agree with the contention from opponents of DRM that support for it doesn’t have much basis in meaningful data although, in fact, there’s not really much meaningful data on either side on the books for which this debate matters most. For some reason, it feels like the anti-DRM side thinks you need convincing evidence to justify support for keeping DRM, but it isn’t a requirement to advocate removing it. But it is clear that my proposition — that it is wildly inaccurate to accuse DRM supporters of universally believing that they’re stopping piracy by employing it — is researchable. So I took a poll.

Nine very high-level executives in seven different top dozen publishing houses, plus four literary agents with extremely powerful client lists (one of whom has experience on the publishing side as well), kindly responded with answers through email to 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 was transparent: I told people that my own opinion was “yes”, “no”, “yes”. I am quite certain that whatever I think doesn’t influence any of these people one iota.

Eleven of the 13 agreed with me that DRM is necessary to protect sales. Ten of the 13 agreed with me that DRM is not an effective deterrent to piracy. And 12 of the 13 agreed with me that DRM’s main benefit is to prevent casual sharing!

I don’t know how many DRM opponents have the interest or patience to read this blog, but please take note. It is either disingenuous or unsophisticated (or both) to use “it does nothing to deter piracy” as an argument against DRM. Most of the people supporting the use of DRM know that and agree with you. The news is “dog bites man”. You might as well try to persuade the other side by proving that DRM doesn’t cure cancer. We agree on that as well.

There was one big surprise for me in the data. Two of the four agents said they don’t believe DRM is necessary (at all, or hardly at all) to protect the sales of ebooks. (None of the publishers voted that way.) Four is too small a sample to leap to any conclusions, but it could be that my supposition that publishers promote the universal use of DRM because agents make them do it might be overblown.

Many of the respondents volunteered some additional thoughts and detail which also contained some interesting information. One top executive at a Big Six house who is an analytical person and who is a very fact- and data-based thinker reported that “of the key titles of ours that have been pirated, all have been scans or electronic copies of MS, none have been DRM protected eBooks.” (I find this rather startling. It undermines the frequent contention — which I’ve always tended to accept — that DRM is a futile barrier to piracy because it is so easily broken. If that’s true, why wouldn’t the pirated versions publishers are finding not come from jailbroken ebooks? Something’s not adding up here…)

And another executive, probably echoing the same observation from the evidence in his publishing house, said he thought I was wrong and that DRM did deter piracy, but he added “the DRM has to start much further up the chain to be effective.”

Of course, these observations beg for more research of the kind Brian O’Leary advocates. Pirated versions made from manuscripts can’t possibly be as satisfying reads as a jailbroken copy of a prepped ebook from the final copyedited version would be. Might some of the people who start reading a book with one of those switch over to buying the legitimate ebook? Might those posted copies be sales spurs that the publisher would be wiser not to take down? I don’t think we know.

One of the two agents who would throw out DRM and answered “no” across the board, had this to say (which would actually put him closer to my position, although we interpreted him to have answered the scorecarded questions differently).

“Let’s also realize that casual sharing has always been the practice with physical books. The only titles that might be worth DRMing would be huge bestsellers where there could be some erosion in sales. (My parenthetical note: We agree that casual sharing would be most damaging on the biggest books.) Everything else — especially smaller titles — would actually benefit from casual sharing because they need a larger base of readers to build a decent pyramid of sales. On the smaller titles, I doubt that the “casual sharers” would go out and buy the title but they might recommend it if they had sampled it. I know that many publishers are now giving away (or down-pricing) backlist titles of authors they hope to build. If there’s one lesson in all of this, it’s that the digital medium can be used in a variety of ways and we shouldn’t hamstring ourselves with DRM, except for the major authors as noted above.”

I got my most colorful answer from a publishing executive who believes, as I do, that the problems of piracy and the need for DRM will diminish as we move increasingly to cloud-based ebooks and away from downloadable. In a most provocative turn of phrase, this executive said that he supported DRM for downloadable ebook sales because “if you put The Da Vinci Code out there sans DRM it would be passed around like a 5 dollar whore at a frat party!” But his explanation of the cloud was more suitable for a family audience.

“There isn’t really a piracy problem but there isn’t really an alternative to DRM except for the cloud. The cloud means that you buy a product (NB: I personally would say you “license some content”, not you “buy a product”) and you get to access it on every device that you own — so long as you provide your ownership credentials. The cloud effectively means that you work only within a platform and that platform requires your credentials to access your works — so it is, in effect, DRM — but it really isn’t. That said, in order for this to work, it does need to protect files when they are downloaded — and that is true DRM.

“The whole world is moving away from download and own, so DRM is a moot point — only the library fanatics and the digerati care. The library folks are freaked out by the fact that they have no place in a world that makes all content accessible to single users anywhere, anytime — and they think that DRM is the enemy of the good. The digerati hate DRM because, well, they believe it is hindering their utopian digital realm.”

So the cloud takes us away from “download and possess”. Can it work? Well, if you use gmail and you think it works, that’s your answer. Why wouldn’t it work for you to access the content you have licensed the very same way? And why wouldn’t it work to protect copyright if giving another person access to what you had purchased rights to see was equivalent to giving them access to your email? Based on experience, that would be enough protection to satisfy me. Any sharing that took place under those conditions would surely not be casual.

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  • Eric

    I, emphatically, do not want to be connected while I read. Books in the cloud is a non-starter for me.

  • kwn2196

    Email and books are not the same thing! I don't read my email for hours. If I need access to mail, either a current message or an old one, I can get to it via my phone and read it in seconds, without needing to worry about data plans and how many megabytes it will take. With ebooks, the cloud is a great place to archive my library, but that's not how I want to read.

    • I'm not sure that you always know when you're reading from the cloud. People

      reading Kobo and Google ebooks now are doing it. The plan is that part gets

      embedded in your browser so youc an read it offline. And being connected

      gets easier, cheaper, and more ubiquitous every day.

      Mike

      • Unless of course when 'everyone' – which, realistically is only going to be the USA/UK and the small, wealthier Asian countries – has mobile access that the infrastructure gets so overloaded that prices go up – which is happening already with removal of your unlimited deals, etc?

      • And Europe, I suppose you meant to include. In other words, all the places

        which spend most of the money on books now. Right?

        Mike

      • Yes, European mobile networks will get overloaded too, and are. One of the major providers in Australia is failing so badly at the moment they are facing a class action lawsuit.

      • I would imagine that there are more critical commercial endeavors than

        e-reading which will be putting shoulders to the wheel to solve that

        problem.

        Let's remember that a huge percentage of email is in the cloud and every web

        site requires bandwidth to be reached.

        Mike

  • I'm not sure moving to the cloud will make a blind bit of difference, at least as long as the product (book) is still available in physical form. Those who do not want to pay will just go and find a scanned PDF and read that on their eReader. The publishing world will spend a bucket load of money on setting up the cloud, but if they think it will reduce piracy they'll be sorely disappointed.

    • Nobody's going to the cloud with the purpose of preventing piracy. Going to

      the cloud is for efficiency and to improve the user experience. We're all

      going to laugh a few years from now that we didn't have our data if we

      weren't our *own* computer and our *own* hard drive. We'll expect everything

      we control to be available from any computer, and that means through the

      cloud.

      Mike

      • Robin

        Mike, I think you miss an important point here. Depending on the cloud means you are at all times dependent on the connection to the relevant servers, over which you have no control (like tailbacks and so on). The same with your emails archive if you are using webmail. For that reason I don’t use webmail and instead have all my years of email archives safely backed up hereabouts, with no dependence on connection (let alone failing to keep paying for it) or server crashes. For same reason I would want my access to read a book not to depend on the connection. Ditto everything else about the cloud. Plus also I’d rather have all my stuff here behind my firewall rather than on some other’s server where they can “NSA” it all year with no means of my stopping them or even knowing. But horses for courses of course. Hopefully we cloud refuseniks can keep our independence for a while yet.

      • Simple answer for me on this front, Robin: cost-benefit ratio. Or perhaps a balance between risk and reward. I use Google. If they somehow screw up so badly that they no longer exist without warning, the world as I know it has blown up and it wouldn’t MATTER if I had all my correspondence otherwise backed up or not. You know, economic castastrophe could strike so that major insurance companies, which are currently considered the safest thing this side of government bonds, collapse. I myself am aware of the scenarios by which that could happen. But I don’t think it makes sense to keep my life savings in gold. What one person might label prudence another might consider to be trying to control the uncontrollable.

  • Howard

    ( I do like love blogs Mike ! … I just disagree on some of them …LOL) Apols for the long post.

    I really do not know how Mike and his publishing colleagues can continue to hold these views at this stage of the game. It really beggars belief for me. I am a member of Teleread.com web site where these subjects are explored regularly. On many occasions authors appear and commonly state, in an appalled fashion usually, that their title was pirated within 36 hours of it's appearance ! They also quote the stats on the pirate sites claiming thousands if not millions of downloads.

    There is a fundamental difference between being pirated and being downloaded. Pirates (those who create the illegal copy and post it for downloading) can trawl for new titles on the web with automatic web trawlers and basically pirate everything and anything they chose. DRM is then removed by drag'n drop scripts and this is often built into their web site processes.

    Downloading is a completely separate process, carried out by ordinary users who visit Pirate sites and download the illegal copy.
    And as someone who managed an SME Web Design business for several years I can say categorically that chances that the the download numbers quoted on these sites are correct is less than the chances of winning the 100M dollar lottery. These download numbers are totally fictional and created by the Pirates to create the impression that they are successful and millions of people are downloading their pirated copies!

    In addition DRM can now be removed by easily obtained apps on our desktops. All a reader has to do is purchase the eBook legitimately, make a backup to their computer and drag each one onto a DRM-remover app icon. Bingo. Done. The outcome is that any averagely computer competent customer can have all of their eBooks DRM free in seconds to with whatever the chose.

    So lets revisit the 3 questions.

    Let me tackle Q 2 first. It is, I hope, self evident that DRM is NO barrier to Pirates who can effortlessly crack the DRM in seconds, uploading illegal copies of titles to be downloaded free to anyone. I am relieved that Mike and his colleagues agree. That three senior people in Publishing disagree is however quite shocking.

    Now that we have agreed that DRM is no barrier to having the eBooks Pirated and up on the web for ANYONE to download after a 5 second search on Google, let's look at Q1 again. And in doing so I am interpreting the concept 'protect against sales', reasonably I believe, to suggest that it in some way it inhibits free, unpaid for, illegal copies being obtained by readers who would otherwise have to pay for them.

    Saying YES to Q1 infers that the person believes that readers/customers who do not have possession of the titles in question, are now less likely to either download these pirated copies because they were originally DRM'd, or that they are now less likely to acquire them from friends who have already done the dirty deed because they were DRM'd.

    I would seriously question the rationality of that point of view.

    Moving on to Q3. I believe this is a slightly more arguable point, but it is highly subjective to know what exactly 'casual' sharing means.

    What I would say is this – What is the significance of sharing as opposed to downloading when it comes to sales ? and why is it a distinction that matters ?
    After all if downloading illegal copies is so totally painless and if essentially EVERY paper book published in recent times will, within a very short time, be available on pirate sites – then why is sharing even necessary or a separate threat to sales ? This makes no sense to me at all and when I read statements like the frat party one which purports to come from an 'executive' in a publishing company my brain goes into meltdown. I am in the wrong business … I need to get into the Publishing business management!

    The ONLY people that DRM influences, and whom DRM 'hurts', are the computer illiterate reader and the reader who is so morally strict with himself that he feels bound by the DRM protection and the License condition. If anyone believes this is a significant portion of the population then god bless their sweet innocence is all I can say.

    • Sorry, Howard. I know it was wordy and I know you don't agree with me and I

      know you have contempt for the people who run publishing businesses today,

      but otherwise it was just too long and convoluted for me to work my way

      through. I'll leave it up for any visitors to the blog who have more

      patience and be sympathetic with your point of view.

      Mike

      • Howard

        Mike I think your statement about me having contempt is unfair and inaccurate. I won't wast your time with any more posts on your blog, though I did take the time to read your article. Sorry.

      • Apologies. Long day of football. Not enough bandwidth for a long rejoinder.

        Probably my fault. Sorry.

        Mike

      • Having DRM doesn't prevent piracy. I know this, because NOT having DRM doesn't prevent piracy. Pirates don't care one way or another about sales or authors or anything because their entire reason for being is their perceived belief they're “sticking it to The Man,” i.e., corporate whatever. Ditto for a percentage of their followers.

        The rest of those who download from pirate sites have all manner of justifications, from “I can't afford to buy it” to “I can't get it any other way.” The fact is, those who create and utilize these sites do so out of a sense of entitlement–that the world owes them whatever it is they want whenever it is they want it. So, IMO, the entire DRM/piracy discussion is pointless.

        Nor is it any secret that the main purpose of DRM is and always has been to prevent ebook owners from treating their books like books. The problem, however, is that instead of making an effort to educate consumers that sharing an ebook means making a copy whereas lending someone a paperback doesn't, the mainstream publishers opted to treat all their customers like thieves.

        Both Barnes & Noble and Amazon now provide the capability for ebook owners to lend their library. Or rather, those parts of it that aren't locked up like the gold at Fort Knox. Which is, apparently, just about everything from the major publishers that's not so far on the backlist it's probably one available because the publisher hopes the ebook craze will stimulate a few more sales.

        So, let's be honest. DRM has one purpose: protecting the bottom line. In other words, ironically, the mainstream industry is making a case for those pirates by clinging so hard to every copy they end up punishing their legitimate consumers, thus perpetuating their image as greedy monsters whose only concern is their revenue stream.

      • I'm getting the feeling that you feel it is immoral for publishers to

        “defend their bottom line.”

        Would you feel better about it if what the publishers were doing was

        “defending the revenue of their authors”?

        You're right about why they do it; it's for commercial reasons. If you

        commercial motivations as a violation of morality, you're entitled to your

        opinion but surely you understand why people trying to make a living as

        writers or publishers might not share it.

        Mike

      • ERG

        Wow, that's kind of harsh. Being defensive of any Business whose only worry is how much *more* profit they can make, regardless of who or what gets caught in the crossfire isn't exactly the moral high ground.

        Are commercial motivations a violation of morality? Sure, sometimes they are. Making money off people being sick and dying isn't exactly morally righteous, though I'm sure some would argue that comparing Big Publishing to Big Medicine/Pharma is unfair – apples to oranges, as it were. If it helps one sleep at night. But I digress…

        By pretending, at least on the face of things, that DRM protects against vile, evil, Pirates, Big Publishing instead appears to act as though ALL consumers are vile, evil Pirates, which of course gets folks dander up, which of course gets a few hollering about 'stealing my rights', which of course leads to 'getting my rights back', etc, etc, ad nauseum.

        And really,spare me the 'making a living' rhetoric. For the vast majority of published writers, they don't make enough to 'make a living'. They still work day jobs. Those making a living are top executives and mega-bestsellers. I personally know three NYT/USA Today Bestselling novelists(in the most popular sales category for books) and they are – at any given time- on the verge of going out and looking for a 9-5. 30-40K a year – off advances – is barely enough to support a single person in the USA, let alone a family. Even if they make more, and at least one of them does, said author still has to supply their own health insurance and pay taxes quarterly and considering payments from publishers aren't exactly timely(quite often publishers may wait weeks to send out the check after said author has met whatever deadline was met to cause issuance of payment), said author is often down to the last pennies waiting for the next payment.

        Segue. I have very little hope that the cloud would work in the long run. Besides the fact that American consumers are constantly bombarded by the notion that divulging any kind of personal information on the net is akin to giving away ones identity and good credit, yet again, they wouldn't actually own the product they are paying for. Trying to get the American collective to understand spending money doesn't mean owning would take longer than a hundred years to change.

        And before someone cites renting movies as an example of Americans understanding just because they paid for it, it doesn't mean they own it…The only reason 'renting' films works is because the option to buy is immediately available. If I like a movie I rented, I can go straight to whatever Big Box Retailer I like and purchase, for my own use however I see fit, a copy.

        The same cannot be said for ebooks. In many cases, especially with smaller houses, the digital copy may be available long before the physical. Further, not all Big Box Retailers carry a large selection of books. If they have any, it's generally just the bestsellers. So now, said consumer has to try and find a physical copy of a book at a, sadly disappearing, book store or order it offline and wait for it to arrive. Remember, America is an impatient buying public. We want what we want when we want it, and we want it yesterday. Moreover, from everything I've been able to find, American consumers seem to associate cost with ownership. If ebooks were .99 or 1.99, they'd be more likely to apply the concept of 'renting' and probably be okay with it. But when they are shelling out 9.99-15.99 or more, well, it feels a lot less like renting and a heck of a lot more like buying. I mean, we can buy a movie for 15 bucks. If we spent that on an ebook, well we figure it should be ours to do with as we please. *note, all “we's” are generalization*

      • You lost me on the “spare me the 'making a living'” rhetoric which was

        immediately followed by your personal knowledge of people who write books

        that are successful and can't quite make a living doing it. I have trouble

        following your logic. Those are among the people whose revenues I want to

        protect (or enhance) and for whom you're dismissing my concern very

        cavalierly. Apparently because it just doesn't fit into your paradigm.

        And comparing the motivation of publishers to preserve income — when most

        of them are, frankly, in a medium-term battle for survival — to various

        kinds of greed and immorality just shows that the world you're seeing

        doesn't bear much resemblance to the one I'm seeing.

        Mike

      • ERG

        After reading so many of your posts, I kind of expected more than deflection. I'm not dismissing your concern. I haven't in any way. In fact, I thought I'd clearly agreed that DRM *does* prevent casual sharing, which does in fact, protect digital sales on power product. Yes, I clearly said yes, DRM protects sales as my answer to your questionnaire. I think what you're affronted by is my lack of interest in Big Publishing's whining about loss of market share – which has little to do with losses to piracy or even to casual sharing – and everything to do with losing ground against the rapidly growing consumer demand for digital content. Print doesn't have 98% of the market on books any longer and bottom lines are being impacted. This causes panic and an attempt to stymie the changing tide. I'd think you would believe your readers are smart enough to intuit this themselves. If you'd rather I believe that somehow DRM is equally beneficial for all in the print world – authors, agents, publishers, and all the little people involved – well, that simply isn't going to happen.

        I'm telling you, from personal experience, DRM helps as much as it hinders. It helps protect those big sellers, the big ticket returners, because it forces anyone who wants to read that next blockbuster in digital to either buy their own or steal one. As I pointed out, *most* people follow the law, thus *most* buyers will actually buy their own digital copy instead of illegally downloading a file.

        Conversely, for those new authors, midlisters, etc. DRM prevents the word of mouth and physical sharing that happens in the real world, which exposes said authors to new readers and new buyers. So, DRM helps preserve sales on the big guys who already make big bucks, but it can and does impact digital sales for the rest of most publishers' lists by hindering product penetration into new markets. It isn't rocket science. By using DRM, Big Publishing slows the growth of traditional(by this I mean traditional print going electronic) digital, keeping most of the profits in print.

        Really, the best way to make everyone happy and for Print to really generate the kind of profit potentially available from digital, is to allow sharing. Two weeks, maybe three, for every ebook sold. The file terminates itself after that time period, erasing it from the borrowers hard drive, jump drive, whatever. Such an easy fix, relatively inexpensive and easy. Again, not rocket science, though I suspect such a fix will likely take a couple more years to come to fruition.

        Perhaps the reason we see two different worlds is because I'm looking to a future where everyone is equally satisfied with their returns from digital and the market is balanced for all parties. Where authors see a better share of royalties(I make 35-50% per cover price of ebooks, my Big Six friends don't even come close and their take is after net and returns), Big Publishing makes a little less profit, and buyers can try new authors and share new things without having to jump through hoops or break the law.

        Apparently, you don't agree?

      • kat

        After reading Shatkin's rather deflecting and arrogant responses, I quickly realized he sounds a lot like one of those pro-corporate, pro-big business MBA “managers” who probably gives a ton of donations to the Chamber of Commerce and the RNC, watches too much of Glenn Beck, and attends Tea Bagger rallies.

      • Well, you got my politics wrong. Dead wrong. I'm a dyed-in-the-wool Yellow

        Dog Democrat; spent two full years on the McGovern campaign and the only

        free weekend I had in October of 2008 pulling votes for Obama in Ohio.

        Does finding that out make you rethink anything? Or do you just ignore that

        and keep moving on. I usually delete ad hominem comments, but yours is so

        far off the mark that anybody who knows me in the slightest will have a good

        laugh seeing it here.

        I clearly missed the ERG comment and didn't respond to it. Sometimes that

        happens.

        As for big publishing's loss of market share, I've been saying that is

        inevitable for quite some time. See “The End of General Trade Publishing

        Houses” speech on my web site from May 2007. I agree that big houses are

        severely threatened by the reduction in bookstore shelf space. Not their

        fault, but certainly their reality to deal with. Right now the problem isn't

        really that the reduction of print to 85 or 90 percent of sales is affecting

        bottom lines adversely (it might not be), but it IS affecting the power

        position of the big houses whose principal proposition, as I have written

        frequently, is “to put books on shelves.”

        If you read the comments here, you'll read one from an author who says “hey,

        DRM stopping casual sharing is for ME.” It isn't just about big publishing

        houses.

        Mike

      • But maybe starting out reading this is what did it. You said:

        “I really do not know how Mike and his publishing colleagues can continue to

        hold these views at this stage of the game. It really beggars belief for

        me.”

        Sure felt like an insult. Maybe I'm too sensitive.

        Mike

  • Pingback: Mike Shatzkin: DRM soll nicht Piraterie verhindern, sondern “casual sharing” | Leander Wattig()

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  • Mike, the comment about casual sharing hurting top titles while helping lesser known titles was exactly the point of my 2002 essay, Piracy is Progressive Taxation. The title of the essay says it all. If anyone wants to read it, its easily googleable.

    • Tim, I quote you to the effect that “piracy is progressive taxation” and

      also your line that “the problem for most authors is obscurity, not piracy”

      with great frequency.

      Mike

  • You can of course download all your gmail if you want, there is no 'lock' stopping you from doing it, so there's the difference.

    An interesting question for your publishing honchos is this :-

    Honcho : People, you can only access and not own their purchases

    Customer: Renting? I'm ok with that, will be much cheaper, or I can pay you a monthly fee and access whatever I want, whenever or want, or a few titles and then return them?

    Honcho : No, no, no, no. In fact, we're keeping that 40% across the board price rise we instituted a while ago, too.

    Customer : Looks like I'm watching a movie, then…

    If the “big, 'casual'” titles are the most important, it is an interesting (perhaps in the Chinese sense) strategy to put the most barriers in the way of purchasing those

    So, people who don't like DRM won't buy, people who want an actual file won't buy, people who don't want to have to have always connected mobile internet to read on the bus won't buy, the people that have hardware that they will never support, the people that have operating systems they will never support, obsoleted versions of the latter, etc. etc. etc.

    These titles of course are the most common and visible free downloads, and are also the ones that will still have lots of used paper versions out there.

    As you mention in the buy/licence terminology – you think in the land of lawyers that wanna have fun they'll get sued and be forced to change the language to make it clear what people get, if no downloads allowed? Or sued after the inevitable collapse and downtime which means no reading possible?

    Not to mention the fun corporate infighting scenario – where if the cloud provider/retailers are only 'agents' – what happens in the case of another pricing dispute, and said provider turns the whole cloud off, or disables it…(or goes broke) ? 🙂

    Your dystopian publisher still lacks a clue or two – good old fashioned capitalist digerati hate DRM for economic reasons – it doesn't work, it makes products more expensive and wastes enormous amounts of labour. It makes the market less efficient. So maybe ask him if he is a communist. 😉

    • All of this would read very much better if the market for paid and DRMed

      ebooks wasn't rising at the rate of double, triple, or quadruple per year.

      In other words, a good theory about the impact of high prices and DRM, but

      it suffers a bit by exposure to facts.

      Mike

      • Sure, balanced somewhat by your declining print sales.

        However, pretty sure that the publisher group reported flat september-october sales – basically no growth at all – and they have increased now because of more devices, not because people love high prices. Switching, because people like the hardware.

        That is, sales were leaking to other places – which have lower prices and no=-DMR?

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  • Iucounu

    Why would I care if someone else had access to my library? It is not nearly so sensitive as access to email. It is a completely false equivalence.

    • Depends on what you'd be sharing along with your books if you gave away the

      key to the lock.

      Mike

  • Iucounu

    Also, this:

    . One top executive at a Big Six house who is an analytical person and who is a very fact- and data-based thinker reported that “of the key titles of ours that have been pirated, all have been scans or electronic copies of MS, none have been DRM protected eBooks.” (I find this rather startling. It undermines the frequent contention — which I’ve always tended to accept — that DRM is a futile barrier to piracy because it is so easily broken. If that’s true, why wouldn’t the pirated versions publishers are finding not come from jailbroken ebooks? Something’s not adding up here…)

    It doesn't add up, and that certainly isn't my experience. I would say the pirate versions of our ebooks I see in the wild are 80% DRM-stripped versions. But then most other publishers I know are simply looking in the wrong places.

    • Thanks for the data. I don't know how this publisher identifies what was

      reported to me and I agree that it doesn't make sense.

      Mike

  • Libraryfanatic

    The library folks are freaked out by the fact that they have no place in a world that makes all content accessible to single users anywhere, anytime

    But how many of those single users are willing or able to pay for that?

    • A reasonable question. This is one of the really hard parts about what we're

      dealing with here. Libraries disproportionately serve those without the

      means to buy books or devices on which to read ebooks.

      Mike

  • willem

    To the digerati it is holy writ that DRM is bad. Facts are irrelevant and contrary opininion is heresy. That said I'm rather skeptical of the long term sustainability of any content based industry in the digital era. The economic price logic of digital – the lack of scarcity above all – suggests that prices will fall inexorably to zero, or so close as to make no difference.

    Publishers are trying to wean customers away from treating ebooks as physical goods, no doubt hoping to stamp out any idea of lending, resale and a 'used' ebook market. The corollary of this is that prices will have to be lower than paper books – much lower I suspect.

    Looking at my young friends, all of whom treat the idea of paying for music with incredulity, suggests that this will be a struggle, above all in the non western world amongst the affluent youth. The habit of piracy once acquired becomes a way of treating all digital goods as free.

    • Our opinions are pretty close. I have been saying for quite some time

      (you'll find this in my 2007 BEA speech called “The End of General Trade

      Publishing Houses”) that the laws of supply and demand pretty much require

      the price of content to fall for quite some time. I think it will be

      increasingly difficult to have a business model built primarily around

      selling content. That's why I think publishers need to get audience-centric

      and figure out how to monetize eyeballs, while there is still time.

      And there is still time. But not forever.

      Mike

      • willem

        Yes, and then there is the strong sense of entitlement and groupthink that dominates these discussions. Just peruse the thread on teleread about your two articles – what an impressive unanimity of opinion! This despite the fact that real empirical data is pretty much absent on both sides.

        You might find this of interest: http://ireaderreview.com/2011/
        The writer can be verbose but is one of the few ebook advocates to realise that everything is not moonshine and roses with the arrival of digital and that DRM might just possibly not be an instrument of satan.

      • I don't like to generalize, but the Teleread audience tends to know very

        little about the commercial realities of publishing and they seem to care

        less than they know. I have a publisher-centric view of the world; I don't

        expect to be very popular over there.

        Mike

  • Mike

    One of my anonymous responders added this commentary which s/he told me to feel free to share. The following is written by him/her; not by me.

    One thing that has been skipped by both sides of the debate is simply accepting that, whatever ideological biases one has on the subject of DRM, it turns out that consumers are perfectly content to buy DRM ebooks. The only real question for me was if DRM was going to limit the marketplace; early indications are not at all, given that Kindle, the most DRM-heavy ebook format around (not only encrypted but tied to a proprietary format), is dominating the ebook landscape. So, if consumers are happy enough to buy DRM ebooks, why the hell should we take the risk of putting unencrypted ebooks out there in the world? If there was ANY friction to the growth of the business on this issue, I'd be more eager to join the anti-DRM crowd. But, other than amongst the hardcore digerati, there does not seem to be any resistance among average consumers.

    There also doesn't seem to be price resistance to $12.99 hardcover-period ebooks, despite all claims (by Amazon and others) that this price would and does destroy the business. Another example of a position held by many people BEFORE the business took shape, which only shows why so many of us have been hesitant to take longterm positions on anything from price to royalties to anything else before the realities of the consumer experience start to become clearer and more defined …

  • David Derrico

    Good post (along with the previous one). This may help shape the DRM discussion in a more accurate and useful way.

    One point: I don't know if cloud-based models will solve the DRM dilemma. I don't want cloud-based e-books (and neither do many people I know) – I want ebooks I can read wherever I want (including on a plane or somewhere without Internet access), without leaving wireless on (cutting my Kindle's battery life from a month to 10 days), and without worrying if some server goes down somewhere.

    • My understand of cloud ebook delivery is that there is a cache buried in the

      browser. The way that it is cached make it very difficult to re-assemble for

      piracy or pass-along, but it does enable you to read while you're

      untethered. There is no doubt that it can't work unless it works for you

      untethered and the concept is that it does. Both Kobo and Google consider

      themselves cloud ebook sources now, and both work untethered although I know

      we're not to full-blown HTML5 yet.

      Perhaps I should have clarified some more of that but I do try to police

      myself on length and complexity. No matter where you draw the line, there

      are legitimate questions that I could have cleared up and this is surely one

      of them.

      Mike

  • Barbara Fister

    Library folks don't exist to preserve libraries, they exist to acquire and make available to the people a wide variety of materials because not everyone can buy everything they might want to explore and because having information and ideas available (not just for sale but to all) is important for democracy. At the moment, public libraries are very busy places.

    • I think there are many librarians who believe many different things. From my

      perspective — not as a librarian — the future gives us less need for

      *libraries

      *(physical places where content is housed) but more need than ever for *

      librarians* and *librarianship*, because the more content resources are

      available to us all, the more we can use professional help at sorting

      through them and getting to what we need.

      It will be interesting to me to see whether business models develop to

      enable librarians to sell their curation services independent of a building

      housing a collection.

      Mike

      • Fister

        It would have to be for a different kind of librarian. Most of us are public servants and are not selling anything. And the fact that libraries – physical ones – attract more people every year does not, to me, spell The End.

      • Regardless of the need for libraries (evident in rising use, I know) they

        will progressively be defunded. (In that they will join other things for

        which there is a need but which face the current political and economic

        climate.) Somebody trained as a librarian and unable to find a library might

        find it more appealing to offer their expertise up in a commercial context

        than to do something else entirely.

        Please remember that I don't predict what I *want* to happen. Desires and

        expectations are kept separate here, as a matter of professionalism.

        Mike

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  • Susan Ruszala

    Hi Mike, just two quick points:
    • Our experiences at NetGalley support your view that DRM prevents casual sharing, not that it prevents all piracy. (We provide protected digital galleys to professional readers, for pre-pub marketing.)
    • There’s a intangible benefit of DRM, too: it suggests to the user that the content is of value.

    • Thanks for that information, Susan. I think the point that DRM suggests

      value is an important one. It is intuitively true, but very difficult to

      measure.

      Mike

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  • Downbythebeach

    Don't think anyone believes that DRM is a barrier against determined piracy. The point which swung it for us was that light DRM was something which would 'keep honest people honest'.

    • There actually are people who believe DRM blocks “determined piracy”

      although I'm not one of them.

      Mike

  • Elfwreck

    Why wouldn’t it work for you to access the content you have licensed the very same way?

    I regularly download gmail threads by printing to PDF and throwing them on my portable reader so I can read them when I'm not online. And I can print them out individually, share them with one or two friends, without giving out access to my entire emiail archive.

    I wouldn't mind cloud-access ebooks, but my entire reading life isn't going to be online. I read a lot on public transit, and my husband reads a lot on the coast away from cellphone access. I don't want to only be able to read a novel when I'm connected to the web. And that's aside from the issues of corporate control and sideloaded books; how much fanfic is Google's cloud going to provide access to?

    • This has come up earlier in the comments string but my apologies for not

      having put it in the body of the piece.

      Cloud ebook access presumes downloading and caching in the browser to cover

      the times when you're not connected. HTML5 apparently has the capability to

      do that in such a way that the data is sprinkled all over the browser in

      pieces that are very hard to reassemble into a coherent digital file for

      passing along. So it works as DRM.

      You're quite right that the cloud for ebook wouldn't work if you had to have

      persistent connectivity to read a book.

      Mike

  • MaryK

    I'm anti DRM. And it's not because I'm just dying to pass around The Da Vinci Code. It's because I don't trust publishers or content providers to protect my content once they have my money. I've lost DRMed books because the publisher went out of business. Heck, I've lost DRMed books because I couldn't remember what software they ran on or what my software password was. It doesn't even have to be as dramatic as a company going out of business. All it takes is for a content provider to change systems and not bother migrating the existing data or to just decide to free up some server space.

    Yeah, I use gmail but if I lose my email content I haven't lost anything I've paid money for. If it's important, I save it to my harddrive where I can back it up. I wouldn't be willing to lose a library I'd paid several thousand dollars for. The general public likes the Kindle because it's effortless and works so seamlessly it's like magic. I doubt most Kindle users realize how impermanent their books actually are. Maybe some view books as disposable entertainment and wouldn't care anyway. I keep books and want to still have them in ten or twenty years. So I don't buy DRMed ebooks. I will not buy books that live in the cloud.

    BTW, Barnes & Noble has started turning off the lending feature for ebooks that have already been purchased.

    • I think anybody who wants to own a book for 20 years should absolutely

      either have a paper copy or have it archived on several hard drives.

      However, I don't believe that the total market for books for which that

      constitutes the expected timeline when it is purchased is more than a

      miniscule percentage of the total. So, unfortunately, I wouldn't expect the

      industry or any individual publisher to be building a strategy around

      addressing those concerns.

      Mike

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  • Zeke

    E-books in the cloud will only work when the cloud is available everywhere. This is practically impossible. When I'm in a location without network connectivity (which isn't uncommon, currently) I'll still want to be able to read the books I bought. In fact, when I'm in such places I'm *more* likely to want books with me.

    • Zeke: the comment string has numerous references to this. I am sorry I

      didn't include it in the original post.

      The book is cached in the browser. You don't need a persistent connection to

      read a book that's held in the cloud.

      Mike

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  • Michael Weinberg

    Thanks for the post Mike, and sorry I'm a bit late to the game with the comment. I actually work for one of those groups that generally oppose DRM, but it is always exciting to find a thoughtful discussion of the issue. Reading the post I was frustrated by one thing. You and the folks you spoke with clearly recognize that DRM does little to impact “piracy.” At the same time, you still support DRM because you think it advances other goals such as protecting the sales of ebooks and reducing casual sharing. However, most of the rhetoric from the content owner side surrounding DRM debates focuses on “preventing piracy.” That rhetoric can prevent a discussion about what appear to be your real concerns regarding sales protection and casual sharing reduction. I would love to move the discussion about DRM away from a comparatively uninteresting discussion about “piracy” and towards a much more interesting one about sales protection and the impacts/legitimacy of casual sharing.

    • I don't feel like I have a “side”, in that I don't find my own view

      reflected very often in this conversation (although I do find, anecdotally,

      that many people see it like I do.) And I think there is rampant idiocy on

      what might generally be considered the “two sides” to the argument.

      If there are “sides” here, frankly, one places the higher value on sharing

      and diseminating and the other places a higher value on making sure authors

      and creators can get paid for their work. I think any reasonable person

      would acknowledge that there are a range of tolerable conclusions to come to

      when trying to strike that balance. However, there are extremists in both

      camps, and there are knee-jerk respondents in both camps some of whom, if

      pushed back on, will refine their position. This is an evolving

      conversation. The people to be suspicious of are those who declare a

      universal and permanent policy which roughly is “everything should be

      unprotected forever” on one side and “we must do everything we have to do to

      stamp out unauthorized use” on the other.

      Mike

      • Michael Weinberg

        Sorry, I didn't mean to assign you to a team on this one. I agree that there is a lot of, to borrow your words, rampant idiocy infecting conversations about DRM. I also agree that there are uninteresting extremists to be wary of in both camps of this evolving conversation.
        I disagree, however, that there is always a dichotomy between believing in sharing and disseminating on one hand and making sure authors get paid on the other. In my mind some of the most interesting discussions involve ways of harnessing the power of sharing and dissemination in order to find ways to get authors and creators paid. There are certainly people who see it as an either/or, but hopefully the discussion is evolving away from that.
        What I was originally trying to express was a frustration with the way that the specter of “piracy” infects the conversation. It is more of a barrier than a conduit to a solution. That is why I appreciated the post – it helped me to focus on some of the “real” concerns instead of being distracted by heated rhetoric.

      • Thanks, Michael. I think we agree that the obsession with piracy

        (illegitimate sharing among strangers) is not very productive. It often is

        more help than hindrance and, anyway, there's not much publishers can do to

        combat it effectively.

        Mike

  • Jeroen Hellingman

    I am clearly in the camp that believes that DRM is an oxymoron, just as the idea that casual sharing — which was never a right reserved by copyright anyway — hurts sales unfairly. I know from newspapers that they actually tell their advertisers that copies sold are read more than once, and that this justifies a higher rate than their circulation figure would suggest…

    So, while I wouldn't buy a DRM-ed book (or movie, etc.), unless the DRM is so utterly broken I can legally remove it (that is, a judge agrees that it is no longer an “effective technical means”, as has happened in Finland with CSS for DVD's), I like your approach of “let the market decide,” and in that case it would be fair to do research that goes beyond asking the opinion of a couple of key people in the business. Such research — which I believe cannot be rightly done only when publisher are willing to try various models, will ultimately show what model will offer the best benefit in a changed (and still changing) digital landscape… Just to show how dramatically the world is changed: a couple of days ago, I noted a 5000 epubs in a single download, and would take less than half an hour to grab for somebody knowing how to use a search engine, and having broadband at home. About 10 percent of these where repacked Project Gutenberg files and other legitimate stuff, but the remainder were mostly in-copyright DRM-ripped epubs from various publishers. I noticed only a few self-scanned OCR-ed works. But as you already state, that this can be downloaded so easily doesn't mean the public at large does this.

    It has been said that if automobiles would have dropped in cost as dramatically as computers over the last few decades, you could buy a Rolls-Royce, a dozen for the penny, and it would 10000 miles an hour… Now for cars there are strong physical reasons the price can't drop that much, but for block-buster books and movies, the reasons to maintain a pre-digital revolution price are even less obvious than for computers. Yes, you have the initial investment in authorship and redaction, but as sales goes up, those can be spread-out over more people, and, with a free and fair market, the sales price thus can (and will) also drop to a much lower level, unless cartels and other anti-competitive behavior stand in the way. The real costly works will be those in a niche…

    I believe that the world will more and more turn to a subscription model, where you simply pay a relatively low flat-fee for the convenience of easy access in the cloud, where you can share what you read as easily as pressing a like button on facebook, and where the people who run the system do not really care about whether you download a copy for local reading or casual sharing, as that way you loose all the additional usability features of their platform, similar to the way people often don't download their mail from gmail.

    It is my believe that DRM is a passing phase/craze. For music it is already passed, for books it will.

    • Thanks for a very thoughtful piece. I agree most with your ultimate

      conclusion, which is that subscription models will ultimately prevail over

      individual “purchases” of content (or, more accurately in the digital

      context, over purchases of *rights* to access content.)

      But I disagree about some of the rest. You have expressed things very well

      from a consumer point of view, and, actually, from a pretty *unusual* consumer

      point of view, since a) most consumers wouldn't even know how to begin

      choosing from only non-DRMed files, and, more importanly, b) largely don't

      care. That's just not a big factor in their content choices (think about

      author, subject, price, degree of interest, willingness to spend X hours

      engaging with the content…)

      Although the overall mix and character of consumer opinion (which changes)

      is of interest to the publisher, it is only a component of their decisions

      about their commercial behavior. The author wants to maxmiize some

      combination of money, eyeballs, and respect. The publisher is “hired” to

      help the author get them and therefore has a responsibility to maximize the

      author's ability to get them.

      I will admit to a publisher- and author-centric view of the world. I don't

      generalize about individual consumer points of view, including my own. If I

      were an entreprenurial author starting out without the backing of a

      publisher, I'd price my books cheap (99 cents is fine), post them complete

      on the web for anybody who wanted to avoid paying the 99 cents to read them

      that way, and make them DRM-free. I think that would be the fastest and most

      likely way to build an audience and a following.

      But if I were an author that already had a following that was used to paying

      $10, $20, $30 for the privilege of reading me, or I had access to a subject

      or had done the research to do a work of non-fiction that had that kind of

      appeal, I'd be trying to maintain the perceived value of the content, even

      though I know we're heading for the day that I won't have a hefty print tome

      stacked up in diverse retail places to support the idea that it is worth

      that much.

      I think DRM is “passing” but perhaps not for the same reason or on the same

      timescale as you do. I think we will end up n a cloud world where access

      will be controlled because *we will all want it to be. *When your cloud

      locker holds your tax records and your love emails and your business plans,

      you will want to be damn sure that I can't just break a code and look at

      them. So it will be with your content. That's why we'll have subscription

      models. The idea of “possessing” or “owning” the content will be the

      oxymoron. So we won't have DRM anymore, but not because it serves no purpose

      now. It will be because it will no longer serve any purpose then.

      Mike

      • Jeroen Hellingman

        Thanks for your response. I agree I am not the usual consumer, but one of the rather “nerdy” type, who mostly reads non-fiction. However, in my household I also people who better match the profile you give above, and really don't care about DRM (as long is it doesn't get in their way – which might happen if she follows her customary pattern of buying a DVD, and then sharing it with a couple friends.)

        The reason I believe we'll move to the cloud is simply because it is so convenient. Just as it is convenient to share your pictures with friends, and have your email on a server… which doesn't stop me from keeping multiple back-ups of everything locally (and I realize I am the exception too). I have actually been looking into ways to organize the cloud to become less centralized, but, although the technology is feasible, the biggest problem is trying to explain non-nerdy types why they should use such a system.

        I don't think the fact that you also have your tax-returns and private mail in the cloud would enable publishers to link access to that with access to their subscriptions. Identities are also cheap on the net, and unless we'll get some kind of government enforced net identity, customers will not get into that.

        The cloud also enables a lot more people to enter the publishing arena. Not that they will necessarily produce quality work – it will be like YouTube, where 99% of the material is of interest only to a very small inner circle of friends, but it will certainly increase the amount of materials available for free. I'm a long time volunteer for Project Gutenberg, where people have build up a collection of over 30000 books, including many classics, that can be had for free – more than an average person can read in a lifetime. This will certainly put the customer's perception of value under pressure, and make life harder for authors of “premium content”

        In fact, I believe the various extensions to copyright terms have been lobbied for, not just to extend the revenue stream from classics near the end of their term, but also to reduce the need to compete with “free”.

        On the other hand, I see that countless low-quality copies of Project Gutenberg productions appear as paid-for downloads on Amazon, etc., at prices between 99 cents and 10 dollars, which seems to indicate that those portals are so valuable, that you can actually use them to monetize material that is also available for free.

      • There's a pattern here. Once again I agree most with your conclusions near

        the end and find points of disagreement before you get there.

        Yes, there's going to be a lot more content available (as there has been,

        frankly) and that will keep driving the prices one can charge for content

        down (also, as it has been.)

        But I don't think much persuasion will be necessary to convert most people

        — who tend to follow the technological path of least resistance — to the

        cloud. Many people already do their email that way. And as devices come with

        more and more access and less and less storage, people will be nudged to the

        cloud model for everything very naturally.

        And I don't agree that most people find it troubling that they can't pass

        their licensed (or, as it is often mistakenly called, purchased) content

        around. I don't think most people think about it or think it is peculiar at

        all. They accept it. DRM for branded content is the norm, not the exception.

        Why would most people think about it at all?

        It is, as you call them, the “nerdy” types who even have an opinion about

        DRM, let alone take a strong position about it. Most people just consider it

        part of the landscape but know that the $10 or $13 or $20 ebook they bought

        is limited pretty much to their personal use. Since that ebook normally was

        associated with a $20 or $30 or $40 print book, and they do often know that,

        they still think they got an okay deal. Publishers want to keep it that way

        as long as they can, which will certainly not be forever.

        But that doesn't mean it doesn't make sense *now*.

        Mike

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