DRM Is Not A Binary Decision

Consumer rights with respect of ebooks continue to be up in the air.

Only last week, Sony, the prime driver for Adobe’s ACS4 adoption back in 2006 said that they were coming back into the Digital Rights Management (DRM) market.

This week the Electronic Frontier Foundation announced they have commissioned the vocal DRM opponent, Cory Doctorow, to take on DRM technologies that they believe threaten security, privacy, and undermine public rights and innovation. The objective of their Apollo 1201 Project, is claimed to be "a mission to eradicate DRM in our lifetime."

Named after the US Apollo space prograame which took some 10 years to achieve what on its creation was viewed by many as an impossible mission.

What is certain is that the DRM that today inhibits consumers ability to transfer files between the various ‘walled gardens’, is going to either change radically, or be unilaterally be removed. It is hard to envisage what we have today as being sustainable over the next decade. The EFF mission goes past ebooks and is aimed at games, apps, video and all cases when DRM inhibits interoperability.

EFF raise the issue of Section 1201 of the Digital Millennium Copyright Act (DMCA) which outlaws the circumvention of copy controls. They agrue, ‘That ban was meant to deter illegal copying of software, but many companies have misused the law to chill competition, free speech, and fair use. Software is in all kinds of devices, from cars to coffee-makers to alarm clocks. If that software is locked down by DRM, tinkering, repairing, and re-using those devices can lead to legal risk.’

However as we have argued many times DRM is not and should not be a binary decision, where DRM is either on or off. We should look hard at the whole issue not just one element and we look at opportunities as well as threats.

One issue that must be addressed is provenance of ownership. In ebook terms look at this as an’ex libris’ stamp that can be traced back to the sale. It doesn’t have to be invisible and it may be open to abuse but if validated could revolutionise the ownership versus licence position and enable the first sale doctrine and resale of ebooks. This may be apporant to many in the trade but if watermarking soft DRM is not adopted then this door shuts whilst the stable door of DRM is potentially flung wide open. Some would say a very stupid situation.

The resale of ebooks is currently being fought out in the Dutch courts where Tom Kabinet is being challenged by the Dutch trade. Tom Kabinet which to resell ebooks and offer a service similar to ReDigi is try to establish in the music market. The court has instructed Tom Kabinet to close temporarily as not all titles can be proven to have full provenance of ownership. So the courts may take a different position if such a position could be established. The door is half open to the trade to create an opportunity, or to blindly slam shut and rejoice in potentially a false victory.

Judith Mariën, a Tom Kabinet’s founder, said that she believes that despite the court verdict, it is ‘good news’ in that the court ruled that the site’s basic business model is essentially legal.

What is important that the trade start to think consumer, think service, think and avoid closed doctrine and protectionism for the sake of protectionism.

Steve Jobs Words To Feature in Apple Antitrust Case

Apple’s Dominance of the digital music market has declined as the market shifts to streaming on demand. As Apple attempts to win back lost ground with its recently acquired Beats music streaming services and embed the enabling app in its latest update to the iOS operating system used on iPhones and iPads, it once again faces many questions in court over its previous iTunes software practices within the digital music market.

The current Californian case, brought by Melanie Wilson and Marianna Rosen, is seeking $350 million and under its class action status, it is estimated that the lawsuit could award damages to as many as 8 million people who purchased an iPod between September 12, 2006, and March 31, 2009. The case has evolved significantly since the original 2005 filing and now alleges  Apple made a series of software updates to iTunes which were specifically designed to shut out competing music stores' ability to load their songs onto iPods.

The case centres around Apple’s use of its Fair Play DRM (Digital Rights Management) software and claims that by restricting ITunes tracks to iPods and others’ tracks from iPods, Apple forced buyers to use iPods instead of rival devices between 2006 and 2009. It is claimed that this in turn artificially inflated the price of iPods and resulted in harming consumers in the process.

Now a video of and emails by the late Steve Jobs are even being used in court as evidence against Apple.

Bonny Sweeney, the lead plaintiffs' lawyer stated that, "Apple made those changes to its software after top executives at Apple learned that competitors had figured out a way to have their songs played on the iPod." He also claims that the updates, "did not make the iPod faster, improve sound quality, did not make the iPod sleeker or smaller or cooler," but "prevented customers who had legally purchased songs from Apple's competitors from playing those songs on their iPod."

Apple counter stating that iPod prices were not set with reference to its rivals and that in 2006, rivals such as RealPlayer had less than 3% of the online music market and had little influence on their pricing. 

Apple's iTunes store sold DRM encoded music track which not only prevented unauthorised copying but also could not be played on competing devices such as Microsoft's Zune and that songs from rival online stores could not be played on Apple’s iPods. The code that would go so far as to force users to reset their iPods if they were loaded with unauthorized MP3 files, wiping the devices clean. The code was removed from iTunes in 2009 and now music and other licensed media purchased from other companies can now be played on Apple devices.

It’s interesting to note that there are many who would suggest that the DRM ‘walled gardens’ within the ebook market have many similarities and in some cases also support hardware offers and although they are subtly different defining what is right and wrong may be hard.

ADOBE Says Read The Small Print

Details about the extent of the Adobe security snoop into individual’s reading habits and harvesting of data is becoming clearer and the arrogance adopted by them over what is personal data would appear to many to raise the question as to whether they are fit to manage many services digital content.

There explanation of what they monitor conveys no remiss and some would say carries the usual ‘read the small print’ caveat and even more interestingly appears to blame publishers and others for asking for those controls even though many appear to be naïve to the fact that the controls are not only enforced locally but that the information about them is sent back to Adobe to harvest.

The information has been confirmed by a number of sources to be unencrypted and therefore open to potentially many parties to read or intercept which in this day and age beggars belief and is clearly any responsibility or care. Their privacy statement can be found at Adobe Privacy Policy  and interestingly under ‘Is my Personal Information Secure?’ states:

‘We understand that the security of your personal information is important. We provide reasonable administrative, technical, and physical security controls to protect your personal information. However, despite our efforts, no security controls are 100% effective and Adobe cannot ensure or warrant the security of your personal information’.  

We all understand that many services such as Kindle, Overdrive, etc synchronise our reading such to assist our being able to continue to start where we left off. We respect that there is a wealth of information that goes with that. But these transfers are secured and not open and remain within their walled gardens. Anything that resides in Adobe’s Digital Editions 4 library appears fair game to Adobe snooping and data harvesting, even documents and non DRM ebooks!

Adobe may now find itself under pressure from large library services and others to explain their approach and given their ACS4/5 history, the solid umbilical cord to ADE and their apparent approach to ‘act first think later’, some may now be prompted to look at alternative options. However that in itself is not an easy route. It is also clear that this is not an old data harvesting feature but only applicable to ADE4 and probably tied to the ACS5 features they are desperate to get adopted by all.

It is sobering to think that they know and send via an open stream;  

·         Unique User ID which aligns to registration

·         Device ID to restrict number of devices re DRM

·         Certified App ID to ensure only certified apps (licenced sales and rentals)

·         Device IP to determine geo-block

·         Duration of reading to meter reading against certain licences

·         Percentage of the Book Read to enable publishers to align to subscription models and determine if the book has been ‘read’

·         Date of Purchase/Download

·         Distributor ID and Adobe Content Server Operator URL

·         Metadata provided by Publisher (title, author, publisher list price, ISBN number etc)

It is also reasonable to ask why the new controls aren’t performed at a local level by ADE4 and why the data has to go back to the mothership at all. Surely if the publisher states x, y and z rules these can be enforced locally and the only validation required is at the offset to stamp the file as genuine? Perhaps that’s too simple and perhaps Abobe feel that would loosen their tight control and not give them that rich seam of data that they could………

Related Press

EFF: Adobe Spyware reveals (Again) the price of DRM: Your privacy and security

Ars Technica; Adobe’s e-book reader sends your reading logs back to Adobe—in plain text [Updated]

Digital Reader: Adobe Responds to Reports of Their Spying, Offers Half Truths and Misleading Statements

Adobe Digital Editions 3 Probably Safe From Adobe’s Spying, Experts Say

Statement from Bluefire

Go To Hellman : Correcting Information on the Adobe Privacy Gusher

Copyright and Technology: Adobe’s Latest E-Book Misstep: This Time, It’s Not the DRM 

ALA News: Adobe responds to ALA on Egregious Data Breach

Are Adobe Secretly Watching You Read Via DRM?

The question of privacy on the internet has once again raised its head with the posting by Digital Reader on Adobe’s ACS DRM system and what is claimed to be excessive data gathering of personal information from consumer’s elibraries.

We can’t comment on whether the facts as presented are true or false, but we are able to say that if true, they are a significant shift from where Adobe started from and seriously question the role of DRM and whether consumer privacy rights have been breeched.

Abobe DRM history goes back many years. ACS3 was widely used by retailers but effectively broken and open. The start of the latest ebook revolution was initiated with the introduction of the eInk readers and when Sony entered the fray they wanted a DRM system which would effectively give them a march on the rest. Adobe also wanted to regain control of a space they had clearly lost. Overdrive had also built a ACS4 beta that they were using to control their market. We remember Adobe’s introduction of ACS4 and their lack of market awareness and often rigid mind-set and coupled with Sony’s desire to rule the world, we had many often fraught conversations with the two of them but the rest of the market wasn’t ready and so they won the initial battle. Years later it’s a different story and many have either migrated to their own DRM. Amazon and Apple never did join and Kobo and Nook grew alternative offers and Overdrive stuck with their own variant.

Adobe then went into what can best described as the Dark Ages where they still championed interoperability, but where leaderless and gave up trying to manage micropayments and gave this up to a small handful of agents who managed the retail facing activity and collected the money. They then came up with ACS5 or a tighter model which was part born out of the fact that ACS4 could easily be broken by anyone who asked the right questions on the Internet and part by the fact that they were clearly being squeezed out by the big channels. Unfortunately ACS5 has some basic issues which forced Adobe to retract their initially statements and backtrack on their timelines to force full migration to the new platform.

So today we have the news that Abode appear to be data gathering consumer usage information at title level and also at library level. What was read when, what wasn’t read, and probably much more? Is this right or wrong?

Well Adobe provide a DRM locking service aimed at validating ownership and stamping this such that they can ensure rights are managed with respect to devices, etc. Why on earth do they want to gather data on usage other than to sell back to publishers, retailers and libraries. Did they offer and opt in, or opt out to consumers is a mute question and we would suggest that they had to in order to snoop.

They apparently doing this not through the standard interface with hosting sites but through a mole application in Digital Editions that they plant into the consumer library or device. We would like to see the snooper application flagged as unauthorised by the security systems and users being given at least the choice of allowing it in. Whether the Adobe service will work without the mole is an interesting question.

We have to accept that Amazon, Apple, Nook, Kobo and Overdrive all can gather information on their consumers and their walled gardens allow this, but they are walled gardens. Adobe promotes itself as open and interoperable and importantly does not have consumer customer relationships to build in the same way. Again it begs the question what do they intend to do with this information and is it being resold and if so to whom?

However, all this a new news and we await more information about Abode’s intent and what is behind the intrusion into consumer’s private libraries and reading habits.

Personally, if the facts bear up to what has been reported, then Adobe has single handily done more harm to DRM than all the articles every written about it. Consumers if made aware of it will probably shun and question the violation of their privacy.

Finally, we hope that the wider media picks this story up and fully investigates it and if collaborated exposes it to the consumer.  

Digital Reader : Adobe is Spying on Users, Collecting Data on Their eBook Libraries 

6th Oct 2014

History, Trends and Digital Changes in Media

Digital Music News have taken RIAA data and produced an interesting animated graphic of the changes in music purchases over the last 30 years. We strongly recommend that you view this as it shows how transient some technologies are and how it’s not just the technology that changes but how people buy and relate to media.

It would be great to be able to step forward and predict what will happen in the next twenty years but many of us would be struggling to see further than the next five years.

What is interesting is that the base content hasn’t radically changed, a song is a song and a recording is a recording and music made decades ago now lives comfortable alongside that made yesterday. In some cases the technology actually impeded the quality of the recording and forced the extremes to be toned down to fit.

The other interesting thing is that emerging music format technologies cannibalised their predecessors. 

Cassettes replaced vinyl, CD replaced cassettes, downloads replaced CDs and now streaming is replacing even downloads. We are moving to music on demand which is either paid for through other means, or is on subscription. This changes the question of ownership, collections, sharing and of course the reward earned by musicians, writers and producers. It also can change how we protect or identify usage rights and copyright ownership and some would suggest that the new technologies are more secure than all the belts and whistles of the early music DRM days.

If we produced a similar graphic for books, newsprint, film, tv they all would be different and we need to understand why and what similarities there are. Film and TV are probably the closest to music in the technology step changes, but differ in many other upstream ways. Interestingly the original formats of books and to a degree newsprint aren’t going away and it is easy to see books as the most resistant to technology.

However, all bar newsprint, show very similar patterns to the consumer trend from ‘buying to own’ to ‘subscribing to access’. Yes, the sectors are often moving at different speeds and even different directions but the trend is clear. DRM as we know it today is transient and past its sell by date and will become increasingly irrelevant in a streamed world where it happens albeit less obtrusively.

Therefore some would suggest that the challenge for book publishing is not the latest tablet, ereader, smartphone, app, enhanced ebook, but how we accommodate subscribing to access alongside the traditional buy to own, enabling both to flourish and appeal and importantly reward creators.

   

Five Digital Changes To Respond To

Battle lines are being drawn in the digital book arena and these are changing both in terms of goals and measures of success. The changes taking place may appear relatively small and tactical today, but their impact could be significant over time. How long they will take to deliver change is questionable, but that they will, is inevitable.

Although there is much noise in the market and many are merely shouting about what they are doing and it’s often hard to determine noise from substance and authority. It is also has to be recognised that different sectors have different issues and drivers and nowhere are there any silver bullets.

We would suggest that are five shifts taking place with the Trade environment. These are all at different stages of evolution and moving at different speeds, but will spawn more change.

Interestingly, as the overall digital market will be shaped by all of them, it may not be wise to simply cherry pick the ones you think apply to you and ignore the others.

Subscription

We are now starting to see the emergence of serious players and offers. Interesting, they have all pitched the consumer reading demand at the high end and made ‘one price fits all’ offer. 

Subscription offers need to be geared to individual needs and yet encourage members to read more. Just having the biggest library to choose from and expecting readers to consume 3 books a month is not the answer and niche genre offers are essential as well as recognising variable reading demand patterns which will keep members hooked. Today the churn rate is unknown and we suspect it will be quite high in the initial period and therefore these services need to develop secondary community draws to compliment and add subscription value and not merely appear as one trick pony’s. We would expect them to follow other media subscription services and align themselves to larger and complimentary subscription lists and this is essential as long term as subscription offers continue to consolidate their customer facing propositions.  

Ownership

The old and somewhat irrelevant buy to own model that prevailed in the physical market is fast becoming exposed. Although we have yet to see the ebook used market happen, with only the Dutch service Tom Kabinet is challenging the courts, it is inevitable in a highly restricted market.

However as used books, DRM, watermarking and on demand streaming services all overlap, maybe the emergence of on demand means that we no longer have to test the first sale doctrine and the used ebook market never happens. But unless on demand occurs, the used sale market potential for ebook is bound to be tested and found wanting and it is inevitable that the courts will eventually fall on the side of the consumer.

One of the challenges is about proving ownership, which with DRM should be easy, but with the current DRM walled gardens is almost impossible. Again with watermarking it should be also possible, but without a registry and standards conformity, is again almost impossible. With no DRM, no watermarking and no registry some would suggest that this is like closing the stable doors after the horse has bolted.

Self Publishing

We are firm believers in the democratisation of writing which is currently exploding in the digital market and will continue to grow for the foreseeable future.

Self publishing is no longer about the slushpile of aspiring writers all wanting to be the next EL James, but about the ability of anyone to bypass the intermediaries and express themselves and publish their works. It facilitates small publishing ventures as well as new and established writers. They may select to use outsourced services to polish and refine their work, or simply publish themselves.  

It challenges the ability of the intermediary to control what is being bought and read and can level the marketing playing field. The bestseller will still be a bestseller, but increasingly the backlist and midlist authors will now have to do more themselves to promote their works and in doing so find themselves head to head with others who have self published and earn a greater percentage of the revenue they have generated.

Can traditional publishers use the self publishing services to feed their lists, or have they now lost that opportunity? Maybe it’s down to the value they will offer the writers and that may have to be more than just a ‘safe home’ and a brand.

Author Care

As author earnings continue to be squeezed by net receipts, reduced advances and more competition, the publisher profits from digital have been seen to grow. Maybe the widening gap is down to bad PR and communication, but the writers are increasingly aware and continue to be the ones who create the initial value.

One area that is very visible to authors under the KDP and other self publishing services is their sales reporting and revenue payments. As the authors will demand greater transparency on earnings, speedier payments and an increased revenue share, there becomes less hiding place for publishers.

Publishers do add significant value, but now have to increasingly demonstrate this and one potential knock on effect will be a revision of digital rights to term based and separation of these from print. 

Content, Context and Community

In the main, the market continues, to merely pour the physical content into a digital container. 

Some would suggest that this is short slighted and ignores that it is just a transient step and some would even argue is the equivalent to performing self-harm. We don’t say that all ebooks must go down the multi media experience route, far from it, but that we should be thinking about the user experience and making the digital rendition complimentary and not just substitutional.

Digital also offers significant opportunities to grow author, genre, reading and writing communities. These may be devolved to others better suited or motivated to organise and curate. Digital also expands the ways in which works can be discovered, validated and valued which applies to both digital and physical renditions. It is no longer about describing books to place them on dry one dimensional shelves, but about enabling them to be found in many ways within a virtual environment. Standard bodies think library and bookshop shelving, but today’s buyers don’t.

Too many what we have said, is not relevant to their business today. They may wish to sit on the fence and wait for it to happen and expect that they can respond quickly. To others they see these changes happening, new opportunities and the ability to position themselves for tomorrow and not run the risk of being too late to the party. 

Getty Lifts Restrictions on 35 Million Images

When Getty Images, the world's largest photo agency, effectively opens its picture vaults to make them library free to use, you have to stand back and realise that access to use restricted stuff is radically changing.

Getty combating piracy not by locking up the images with restrictive watermarks or DRM but making 35 million images, including iconic images of Marilyn Monroe and famous ones of John F Kennedy and Barack Obama available without cost to blogs and social media sites. However Getty Images is not the most user friendly site and searching and establishing what is allowed is still often a mare.

The photos will be tagged through an embedding tool with a code that links back to Getty's website but they effectively have decided to combat abuse by bringing the offenders inside and encouraging the use of the images by all. Images cannot be resized and they will all incorporate a Getty Images logo, as well as a credit for the photographer.

There has been some backlash from photographers who are opposed to their images being given away but the reality is that they are all over the Internet anyway and currently there is no attribution or provenance. Trying to ascertain whether a picture is in the public domain or restricted and who owns its rights is like trying to chase down the rights to orphan work books – difficult.

Commercial users of Getty's library, which include TV, newspapers, publishers and advertisers will continue to be charged. Exactly how the Getty economic model now works remains unanswered today but this move is a significant one not just for images but for all media.

Kobo Takes Over Sony's North American eBook Business

Today, two days after Takahito Aiki, took over the reins as CEO of Kobo, he has announced the effective consolidation of the Sony ebook business under Kobo in North America. It is almost certain that this is the final and long overdue retreat of Sony from a market that they expected to win and sadly lost from beginning. It also sends a strong signal to the market that the dominance of Amazon in this sector is real and is giving even those with potential credentials and market presence a hard time.

Sony entered the market some 8 years ago with huge fanfare, fancy ebook readers based on eink and were the early adopter and major driver and influencer on Adobe’s ACS4 DRM service. I remember meeting their senior players once in San Deigo and listening to how they were going to dominate the academic and educational markets. But their offer and market understanding was always someway behind their words. It’s also somewhat ironic that this death knell has occurred at the same time that Adobe has also gone through the PR mangle and has had to retract so publicly on their ACS5 statements.

So we have Sony ready to preinstall Kobo on its smartphones , laptops and other devices and to hand over their customers and business to Rakuten  and its Canadian ebook subsidiary Kobo. It’s also interesting as it comes at a time when devices matter little and the platform is what counts. How smooth the takeover will be for those who backed Sony and bought their devices and ebooks remains to be seen, but transferring encrypted DRM licences is not always as easy as you would expect. All this is without considering how they are going to deal with those Sony BBeb licences.

Some accept that Sony has been facing many challenges across its business and they may still come back, but with many bases to cover this seems highly unlikely.

So we read the usual hype and words on what this means, and how it is going to make the difference, but the reality is that another door is shutting and real consolidation is happening. The obvious next candidate is Nook, which on the face of it would be destined for Microsoft, the discussion on this are already in play as Barnes and Noble grapple with the same issues and facts of life. Now if we just look at the North American market at a potential combination of Nook, Kobo and Sony that would certainly give Apple a challenge and wake them up from their apparent complacency. This sort of consolidation works best in the established and dominant North American market where it can be honed before it goes global.

So what’s the betting on Nook going somewhere soon?

Adobe Climb Down Over ACS5 Deadline

After the storms comes the calm and time to reflect.

Adobe have now climbed down from their ACS5 stance and have left the migration timetable in the hands of their customers. A statement posted on the Datalogics blog says:

As stated during our January 29th Datalogics and Adobe webinar announcing the release of the new hardened Digital Rights Management (DRM) for Reader Mobile SDK (RMSDK) 10 and Adobe Content Server (ACS) 5, Adobe revealed a July 2014 time table for migrating to RMSDK 10 and ACS 5.

After receiving feedback from customers and webinar attendees, Adobe has revised the migration timetable for customers.  “Adobe does not plan to stop support for ACS 4 or RMSDK 9.  ACS 5 books will be delivered to the older RMSDK 9 based readers”, according to Shameer Ayyappan, Senior Product Manager at Adobe.  “We will let our resellers and publishers decide when they wish to set the DRM flag on ACS 5, thus enforcing the need for RMSDK 10 based readers.”

In other words, ACS and RMSDK customers can migrate to the new hardened DRM that provides a higher degree of security to EPUB & PDF content and prevents unauthorized viewing of content now and in the future in a timeframe that makes sense for them.

As stated during our January 29th Datalogics and Adobe webinar announcing the release of the new hardened Digital Rights Management (DRM) for Reader Mobile SDK (RMSDK) 10 and Adobe Content Server (ACS) 5, Adobe revealed a July 2014 time table for migrating to RMSDK 10 and ACS 5.

After receiving feedback from customers and webinar attendees, Adobe has revised the migration timetable for customers.  “Adobe does not plan to stop support for ACS 4 or RMSDK 9.  ACS 5 books will be delivered to the older RMSDK 9 based readers”, according to Shameer Ayyappan, Senior Product Manager at Adobe.  “We will let our resellers and publishers decide when they wish to set the DRM flag on ACS 5, thus enforcing the need for RMSDK 10 based readers.”

In other words, ACS and RMSDK customers can migrate to the new hardened DRM that provides a higher degree of security to EPUB & PDF content and prevents unauthorized viewing of content now and in the future in a timeframe that makes sense for them.

We welcome the change of softening of the Adobe position but now question what really drove them to do it in the first place?

Does the ebook world really need a hardened DRM that will be broken before it’s widely adopted? Does this PR slip give us all a wake up call to seriously question the benefits of hard DRM, its costs and the fact that it actually can restrict business and as demonstrated by this PR slip put many’s business in the hands of someone who merely operates a toll booth and adds cost. 

Adobe Accept ACS4 Broken?

Adobe have long been associated with publishing and the development tools associated with the development of content and although they have successfully seen off the likes of Quark and established InDesign as the tool of choice to many, they have long floundered in the area of DRM.

Today we read of their latest step change to introduce ACS5, which is aimed at tightening the security and replacing the easily broken and much maligned ACS4. There is a question as to whether it will be widely adopted and also of whether how quickly it will be broken by those who wish to break it. There is also the question that if they accept that they are doing it to primarily address ACS4, what of the ACS4 licences being issues and charged for in the market today?

Some 8 years ago they dropped the then much broken ACS3 offer and with the backing of Sony and Overdrive delivered ACS4. The objective was to establish a cross platform ‘open’ service that could be used by all, on any device and at a small transaction licence fee to Adobe, which was centrally controlled with real time licence authentication. The problems started early. Much of the original specification was done with the help of a single party who mainly operated in a single market and whose input made it unfriendly and cumbersome in other sectors. The original restrictions on devices and the interface with Digital Editions was restrictive and confusing to users and although these have been greatly relaxed the basic process and controls remain. Eight years on it remains cumbersome and unfriendly.

A few years later they found that they were not geared to dealing with small accounts and collecting micropayments. So they outsourced this activity to a couple of partners who were more incentivised to dealing with customers. Prior to this move and after the departure of the main driver and movement of his successor within Adobe, it was almost impossible to find the person in Adobe who could make any commercial decisions or even knew much about it.

ACS4 had other problems. The model was based on a server licence plus transaction fee on each purchase download of some 25 cents and a reduced fee of 8 cents for each library loan up to 60 days. As the demand grew for ebooks and the prices dropped the transaction cost often became a thorn in the side of many. It is in effect a fixed sales tax that is imposed irrespective of the cost of the sale and is not include in the publication price. Today Amazon and Apple each have their own DRM which obviously are incompatible and others such as Kobo and Nook have understandably quietly started to go their own way. Sony remains an also ran and probably still has two DRM solutions one of which is ACS4. More importantly some 85% of all sales in all markets are driven by proprietorial DRM solutions and although ACS4 is still seen by some as ‘open’, to many ACS4 is in reality the same. However ACS4 is only one DRM service that directly charges the retailer and lives off their sales.

Perhaps Adobe should have adopted a more long term and integrated approach by embedding both encrypted and later watermarked solutions within InDesign and collected the money in the upstream development. They could have still offered the downstream licence operation but would have probably achieved greater control of the market. Files could have been automatically exported in multiple formats all offering the publisher multiple channels and retailers an incentive to do what they do best – price and sell. Also it should be noted that as Adobe move towards the subscription based licencing of all their tools, this simpler approach could have been bundled in as a value added incentive to publishers.

We have seen the emergence of streamed cloud based ebook services. Whether these are app or browser driven they do not need ACS4 or 5 and can effectively be far more secure in their offer and more transparent in how they achieve it. Maybe ACSx was built for a downloaded file world that may not be so relevant in the near future.

There remains questions about the cost of ACS5 migration and its associated family of change. There remain questions on how Adobe are going to stimulate the transition and whether, like in the ACS3 to 4 move, they will effectively force it to happen even though their hand is considerably weaker this time round. There remains questions on the backward compatibility of ACS5 and ACS4 licences. However, to many today there is still a bigger question over encrypted DRM and whether we should not migrate to a watermarking soft DRM with authentication of ownership , or be factored into an epub format and service, or whether we should just go no DRM?

Watermarking DRM Could Offer New Opportunities

Many see DRM as a glass half empty and also a barrier to interoperability, others see it as a means of restricting abuse, copyright infringement and piracy. The solution may not be as black and white as many believe.

Only a few years ago we would have advocated the wholesale dropping of DRM and a position similar to that adopted by MP3 music. Today however, there is potential for a softer approach to DRM to offer great opportunities for the marketplace. 

First we must accept that the current prevailing ‘unsocial’ or encrypted DRM serves few and in fact in many cases can be broken fairly easily. The major retail channels have walked away from a common standard and have created their own DRM ‘walled gardens’. There is little point in pointing a finger at Amazon, as Apple, Kobo, Nook all have their own DRM flavours and Adobe’s ACS4 is still locked into 2006 and apparently going nowhere fast. There are even some who are now actively pursuing the establishment of DRM on HTML5.

There is watermarking, which through the provision of a sort of an ‘ex libris’ stamp, offers a softer and more social form of DRM. Some would argue that watermarking can be removed, or abused, as easily as it can be applied. However, watermarking offers visible authentication and ownership. If it were coupled to a virtual registration database then removal, or alteration, would quickly identify the file as a rogue. So in principle we have the opportunity to establish an ownership model, but what is in it for the consumer and the author and how does such a stamp offer a market opportunity?

Today it is not possible to resell a used ebook. This applies loosely to all digital files and although this is being tested by the likes of ReDigi in both the music and book markets, we remain tethered to the first sale doctrine. However, why would we not want to resell ebooks? Some would suggest a used ebook market could kill off the front list market, others that the author would see no revenues for the supplemental sales.

However, others would suggest that a vibrant used ebook market could actually stimulate the market and that offer revenues against not just the second but third, forth, fifth, etc sale of the ebook. If coupled with an authentication and audit trail, watermarking could create additional revenue for all, social information and marketing opportunities and mirror the rights on physical books. Importantly it could act as a significant barrier to pirates who would have to establish a different value proposition.

Today’s DRM is restrictive, segmented and frankly a mess but that doesn’t mean that we need to flip and go DRM free which equally may be counterproductive as it would be difficult to put the horse back in the stable once it has bolted. Alternately, we lack any watermarking standards today and this itself could inhibit the adoption of the technology.

The question is, who is seriously looking and discussing this issue today? Stumbling blindly forward with unsocial DRM is not the answer, nether is a mass exodus to no DRM.

Do You Hoard Media You Can't Play?

Hands up if you have a collection of vinyl, or even cassettes and don’t have the decks and equipment to play them on. Maybe you have VHS tapes, but no VHS player, or even eight track tapes and no eight track player.

A survey by UK electronics retailer Maplin has found that UK men still have their collections of older media in their homes, even though they don’t have the equipment to play these disappearing media formats. Some 45% still have cassettes, but no cassette deck, 47% vinyl singles and LPs but no turntable. Again some 20% have photographic slides but no viewer or projector.

However, more interesting is that some 75% admitted to having collections of music they never play and photographs and files they never look at. Are we a nation of hoarders, or do we just see equipment as a disposable and content as something we must keep just in case? Is it just that we all spent huge sums and time building up these libraries that reflected our taste at the time and do not want to let go of those memories.

Maplin also found that over 66% of those surveyed would like to be able to transfer old stuff to an up-todate format but lacked the time or the know-how.

In a few years time will we be saying the same about those ebooks we bought and were tied to devices or heavily restricted by DRM? Colin Powell has openly admitted to buying more ebooks than he has read and again once read how many every reread the book?

Contrary to the survey, we are pleased we have a significant vinyl collection and the equipment to enjoy it on, we do have cassette decks but no longer have cassette tapes. We have ripped the vast majority of our CD music library to digital files, but now have a Laptop, which like many, came with no CD although we do have an external one. We own some VHS and DVD tapes but also have VHS and DVD players. We also have a significant library of physical books and some Kindle ebooks which can be played on many devices. However, the majority of our media library is rarely played. Only last night my wife spent time photographing old college photos so we could post them on facebook for a reunion.

This useful survey highlights a number of interesting points about all media and our usage and archive of it in a digital age.

The first point would seriously question why we continue buy digital media and why it’s not made available on-demand, on subscription or on a pay to play basis? This opportunity is why LoveFilm, Netflix, Spotify, Pandora and others have huge potential to change our culture.

Secondly, any file or media that is tied to a specific technology is destined to have a limited life. This is fact and the early media files that were tied to a service, or device, are now potentially dead files. However, whilst they are still current we should be able to resell the files through an authentication broker which not only creates further value but could also generate new revenues for artists.

Thirdly, although upgrade services and devices exist these need to be better promoted by retailers and the industry itself, who could benefit from the improved customer contact and after-sales service.

We live in a market which is geared to forcing us to re-invest in technology on a cyclical basis. To buy the latest, smartest and hippest technology and throw out the old. Many reinvested in their music when the CD replaced vinyl and their VHS videos when DVD arrived but that retail trick can only be done so many times and once media is capture digitally it’s often easier to transfer it to new formats. Perhaps the biggest threat to digital files being upward compatible today is not devices but DRM?

HTML5 To Be Put Under DRM?

Many see the emerging HTML5 web standard as the way forward to address many of today’s challenges. Irrespective of device, as long as you have access to the web HTML5 and a browser you are connected. But then we have the vested interest of Hollywood and others who are fixated on control and locking up access.

Today the body responsible for developing HTML5 standards, the World Wide Web Consortium (W3C), is locked in an ideological battle with bodies such as the Electronic Frontier Foundation (EFF). Should we care –Yes. Will the outcome impact us – Yes.

The EFF have stated publicly their case online, ‘Why the HTML5 Standard Fight Matters’

The battle is over the proposed Encrypted Media Extensions (EME) to HTML5, which may sound little but threaten to lock up media content under all browsers and effectively port the cumbersome and consumer un-centric world of DRM onto the World Wide Web, or as we all know it, the Internet. The EFF are far from alone in the battle and some 27 rights groups and others have written directly to Sir Berners-Lee stating their opposition.

Some have argued that far from an open interoperable web we could have images and pages that cannot be saved or searched, a situation where ads cannot be blocked, browsers become restricted and much of we enjoy today is effectively controlled under the big content companies. It would be like have DRM applied by many over all the internet.

In response, W3C chief executive Jeffrey Jaffe writing on the subject clearly recognises that  EME is contentious but says that the proposed EME specification ‘only defines Application Programming Interfaces (APIs) that would provide access to content decryption modules (CDMs), part of Digital Rights Management (DRM) systems.’ In other words they are merely creating the hooks into HTML5 and not the CDM /DRM technology that could be used by others to create their ‘walled gardens.’

It is clearly a battle between those who value interoperability, access and the principles under which the W3C have worked and the vested and of the major media companies who want to lock up access to material within the Internet.

We may not be able to influence the outcome but ultimately it is the consumer who will either enjoy the interoperable and openly available fruits of HTML5, or find they are inaccessible, or hidden, behind many walled gardens.

Digital Evolution: Part 1 Music

When we look at today’s digital revolution we often see disruptive change. Many shout, ‘out with the old and in with the new,’ but we have to often ask if the new is really ‘new’, or merely a reiteration of the past? What once worked, but became uneconomic, or inefficient, or was often constrained by the technology of the day, can often come back, without the baggage that once burdened it in its previous days. Suddenly we have a renaissance, a new opportunity, a new dawn.

Music is a classic example where the constraints of the technology inhibited or defined the form. What was once accepted as efficient soon was overtaken by technology that tackled that which limited its performance or capacity. The length of a single or an album was determined not by the content but originally by the constraints of Vinyl. When we were released from those constraints we often found other inhibitors with eight-track, cassettes and even CDs. When we went digital these constraints were no longer with the media, but the network and its capacity to transfer files. Now we have the cloud and super-fast connectivity and these has spawned streamed services such as Spotify and Pandora. 

We now have to question the definition of recorded music itself.

During the vinyl evolution the LP, or album, came into its own and moved its content from a collection of tracks to the concept album. Then digital allowed users to pick and mix their own playlists of tracks. No longer did they have to buy the whole album, or the unwanted ‘B’ side, they could just buy what they wanted and create their own mix playlists. The only time constraint was with the consumer. We often refer to this as the ‘iTunes moment’.

However many producers wanted to restrict sharing, copying and imposed unsociable DRM locks on the material. Thankfully, the threat of Napster, Kazaa and bit torrent made them see sense and music freed itself from proprietary formats and went MP3. MP3 wasn't the best format but it was the common one all could adopt.

The neutralization of the format has enabled us all to copy and share our music. We now question whether we have to even own all our musi, or build big repositories of music we hardly even listen to. Faster communications allows us now pull down the music on demand from the cloud and even enjoy it on or offline. This has changed not only how we collect our music, play it, but also the payment model itself. We are now moving from pay to own to pay to play and subscribe to as much as you want.

Unless you went to a live concert, music pre-digital could be described as ‘one dimensional’ and that dimension was pre-recorded audio. MTV was one of the pioneers that introduced us to the music video, but again it was initially constrained and supplied on a broadcast or CD/DVD format. You could buy music video and later CDs but the opportunity to recreate the concert and live music was heavily reliant on a film and sound crew, and limited it to the bigger and wealthier artists.

Digital cameras and video not only spawned YouTube, they smashed the ‘packaged’ music video and concert. YouTube  Myspace, Facebook etc have democratized the music video and made it possible for everyone to record and share live music. It is now claimed that more kids today watch their music than listen to it. No longer is the music video restricted to the ‘haves’ it is now available to anyone with a smartphone to create, record and share.

Musician and ex Talking Heads lead, David Byrne was one of the first artists to recognise this and open his concert performances by encouraging the audience to film it and post it on the net. In his book ‘How Music Works’ he says, ‘In the past, performers would at least try to limit amateur photographers and especially video cameras, but now that idea seemed simply ridiculous- hopeless. We realised there was a silver lining: they liked our show and their postings were functioning as free advertising. The thing we were supposed to be fighting against was actually something we should be encouraging. They were getting the word out, and it wasn’t costing me anything. I began to announce at the beginning of the shows that photography was welcome, but I suggested to please only post shots and videos where we look good.’

People’s music taste is probably more eclectic than ever and no longer restricted to what they hear on the radio or the top ten. The big artists still dominate the market but the music tail grows ever longer.

It’s often hard to accept that up until 1878, music was restricted to the live performance, be it in the home, on the streets, in bars and clubs or in concert halls. The original recorded format was restricted in both length and quality. Sousa feared, that we would see the recording as the master and the live performance as secondary and this has largely prevailed over the last century. However, today digital and communications have brought us full circle and the only constraint is often the ability to discover that something you had never heard before. Live, uncensored music can be created by anyone and delivered to potentially millions in real time.

Perhaps we will next address the 'dumming down' ,or restriction of the quality master tape by the format and await Neil Young’s Pono venture. What is interesting, is that in an emerging on demand world we will no longer have to replace our collection. It may be that MP3 becomes the free sub standard rendition whilst you pay for the quality one. Many will continue to search for the money but whatever happens this may be the case. 

So where is music going next? 

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.