I agree DRM can have a downward effect on price, but I sometimes wonder (like the person quoted in Mike’s article) if we’re missing a big part of the ebook audience. We tend to assume a high level of tech savvy, but what about a 65-year-old Kindle user who simply doesn’t know she isn’t supposed to send the ebook to her whole email list? If college professors can decide that the rules are different with digital content than they were for paper content, why wouldn’t a consumer new to ebooks come to the same conclusion? DRM always seemed to me an effort to combat this kind of inadvertent “piracy” by people who don’t know the rules well enough to understand they might be breaking them than a serious attempt to foil the tech-savvy content-wants-to-be-free types who upload books to P2P sites.
Paying for what you get
In the 18 months that we have been studying the impact of piracy on paid content sales, I’ve tried to stay close to the data.
As the piracy debate has evolved, I’ve come to see our approach as too narrow. I want the research to be consumed and evaluated, and to have that happen, we have to meet people where they are.
Toward that end, I’ve written recently about an alternate view of what really happened to the music business and provided my take on how the book and music businesses compare.
Much as I have avoided direct evaluation of the music business, I have also pretty much sidestepped the extended debate about digital rights management (DRM) solutions, which many, perhaps most, publishers have used to restrict use of the digital book files they sell.
Wil Johnson, who has been gathering data on pirated titles since the start of our research project, recently posted his own perspective on DRM. In sum: most restrictions can be readily removed before seeding (uploading). The more complex DRM schemes present either a challenge to be solved or an opportunity to scan the printed book.
In announcing Macmillan’s anti-piracy plan, Brian Napack noted that their own research had found “substantial piracy” but no instances of DRM-restricted content posted on file-sharing sites. Napack saw this as evidence of the success of DRM. Wil Johnson sees it as proof that DRM has little or no impact on piracy.
So if DRM doesn’t stop piracy, what does it do? Mike Shatzkin has argued that it keeps people who might casually share digital books from easily doing so. Book publishers think that these restrictions will help preserve marginal sales for their books.
I’ve argued that using DRM to limit use among book publishing’s most frequent readers may also drive down retail price. That argument is not data-driven (yet).
But as publishers (led by Macmillan) fight with major retailing partners to preserve, protect and defend the retail price of e-books, I wonder how much thought they have given to the impact of DRM on the price readers are willing to pay.
A print book can be read, kept, loaned, given away or even resold. A DRM-restricted ebook offers few or none of those features. We pay for what we get, yes?
Comments
DRM may stop some forms of casual piracy. It also shapes the marketplace for digital content in a way that is ultimately bad for publishers.
Those casual pirates who might inadvertently steal/share a book are essentially locked into a single retail outlet by proprietary DRM. That doesn’t seem to bother publishers now, but only because they don’t fully grasp the implications. We simply won’t have a robust and open marketplace for digital books as long as DRM is a requirement (Apple and Amazon will see to that).
Consumers have a much better grasp of these issues than publisher. If for no other reason because consumers actually buy and use digital content.
Absolutely agree that locking readers into silos is bad for pubs and consumers. Is there any way to set technical limitations on files without making it proprietary to the retailer? Or do you just accept that a reader might buy a book and forward it to her 10 closest friends? Who may or may not have bought it, of course, I don’t mean to imply a direct relation to lost sales, but it does seem hard to build a word of mouth hit when a single purchased book can be shared simultaneously with 10 or 50 or 100 other readers. How do you build the next EAT PRAY LOVE or GUERNSEY LITERARY AND POTATO PEEL SOCIETY, for example, if you can only sell one or two copies per book club? And what about libraries? Hard to see the difference between lending a DRM-free ebook and just giving the book away. If you’re a publisher, does that mean you cut libaries out of the ebook market?
One helpful thing about your comments (both Emily and kirk) is that they focus on the business model questions. Amazon has done a good job of locking readers into a vendor and a device, and that is to Amazon’s advantage.
Increasingly, I do think that the inability to share digital content does effectively lower price. People share physical copies of book-club titles now (at least in my world). Asking people to pay the same price for more copies is a nice idea for publishers but ultimately seems an unlikely outcome.
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