Friday, February 22, 2013

Should We Condemn DRM to Room 101?

The latest lawsuit to surface in the US has been raised by three independent US book stores and is against Amazon and the major trade publishers. It is done in the name of all independent bookstore and although it would appear little more than a great PR stunt.

At the core of their claim they assert that Amazon has acted with publishers to effectively  create a monopoly in the marketplace and control prices through the use of their proprietary DRM (digital rights management). The logic begs the question as to whether the stores understand the marketplace, technology and also what outcome they are wishing to achieve?

They claim that if a consumer decides to switch to another company's ereading device, they would lose access to any already purchased ebooks. This is a fact no matter which ‘walled garden’ you buy from. Some would suggest that in signalling out Amazon their argument is in fact flawed.

Kobo has its own DRM and ePub render software but also supports ACS4. B&N has ‘passhash’ which it acquired from Fictionwise and can also support ACS4. Apple has Fairplay and the wholesalers in the main have deployed ACS4 and so has Overdrive. Moving from ACS4 to another ACS4 platform is not straightforward. Unless achieved through a cloud approach, moving downloaded files from one device to another often requires patience and a manual! But moving between and walled garden is often if not impossible. This is without the various DRM technologies that can apply to PDFs. The result is that today we have today some five different DRM technologies being used for both ebook  retail and library distribution market. The technologies often demands their own nuances, encrypted licences and even playing in its own environment can be far from user friendly to the novice. Amazon to its credit, has in the main, kept it simple.

We would love to see an end to DRM ebooks full stop but even today see others such as film and broadcasting entities running to try and get it extended to open and important environments such as HTML5.

But let’s wave the magic wand and condemn Amazon’s DRM to ‘Room 101’. What about the DRM environments that remain? ACS4 may be prevalent but is far from user friendly and Adobe has even outsourced its service as it was not capable of managing the payment collections effectively. Do each of the other DRM services also have to go and if not does the same augment and claims fail the test? You either unilaterally remove DRM, or you construct a better argument. This would appear to be as ill conceived as agency pricing and far less robust than that other legal money-spinner the Google Book Settlement.

Let’s envisage a world free of DRM.

Do we honestly believe that the consumers that have bought into the Kindle platform will suddenly say, ‘now I can buy from the local independent so let’s go there!’ Naivety is hard to rationalise with, but the reason consumers like Amazon is not about their DRM. It is about their platform, one click process, thought through download capabilities from literally anywhere, their secondary offers such as Prime, film, games, music, lending and innovations such as FreeTime. All this without the primary offer of next day service on the constantly often best priced physical books. Some would suggest that its not just about ebooks but books and the independents have not seen past the books in print and some the front list, but Amazon offers used, rare and a marketplace for affiliates to compete in.

Then the authors often now recognise that Amazon and their KDP programme offer the only real clean digital self publishing and importantly volume business. The independent bookstores, even put end to end, can’t make offer that today. 
Forget the legal claims and potential counter claims and court outcome and assume we suddenly have a DRM free world, much like the MP3 music world that prevails today. Will it make the playing field level? Will independent book store suddenly become digital centres of commerce and a must go to destination to buy ebooks? Are independent book store capable of presenting a compelling digital proposition? The reality is that they sat on their hands too long. Didn't respond to the early messages and often stumbled from one alternative to another and diluted their digital offer to being commissioned based within others walled gardens. Some would suggest that Waterstones are a classic case of a lack of digital strategy and execution and today could be argued are handing over their customers to Amazon. We must also recognise that Apple whose iTunes dominated the music download market before they moved to MP3 still dominate it today post MP3. Independent music stores and even chains are still sitting on their CDs. An MP3 level playing field did little to save HMV.

The other consideration has to be the current digital ‘honesty box.’ Will publishers want open files to be distributed to anyone to sell, or will they demand that distribution is contained and achieved through a limited number of trusted associates? After all you are highly unlikely to hand out open access ebooks to hundreds and thousands of resellers you can’t effectively audit or even monitor. It was a pity that some industry bodies felt it wasn't their business and beyond them to build book community services when, after all , others were only starting themselves. The independents have not collectively or independently invested in their own repositories and distribution environments and are now reliant on third parties such Overdrive, Ingram, Kobo and others. The chains, or B&N, have invested, but have seen that they by themselves struggled to compete and often any success was limited to their home turf. The point is that the independents today can sell through many options, but even if they do, everyone in the chain will want paying and the resultant price may be itself a non-starter with the consumer.

There are basically two parties that add real value the author who creates the initial value and the consumer who puts in the cash. Any market proposition has to recognise this.

We all want book stores to survive and compete. We all want libraries to survive and compete. But the money spent in futile and expensive legal gestures could be invested far better.

1 comment:

Inkling said...

Good points all. What these independent bookstores are suing about suggests that they don't really understand the ebook market or where it might go. DRM isn't that much of an issue with most consumers. Convenience and cost are.

Try as I might, I can't really come up with much of a role for a local bricks-and-motar bookstore in ebooks. Just like auto production has a economy of scale that makes local car production unprofitable, ebook distribution has an indifference to distance that benefits a few large retailers.

About the only niche in that market is for speciality websites that sell only one genre like mystery or scifi. Would there be a niche for a local ebook retailer specializing in local guides and local authors. Maybe, but I doubt it.

A couple of years ago, a new restaurant opened near me. Given that my neighborhood is filled with them, I wondered how it could survive. Actually, it's doing a booming business because it discovered a large niche in the market. It's kid-friendly and thus a place for young couples to dine without being glared at by other customers. It has a play area and anyone who dines there knows they'll have to contend with kid-noise.

Local bookstores need to find similar niches for themselves. They're not suited for ebook sales and never will.