Publishers, DRM, unauthorized sharing, and the NPR example

We’ve heard a lot of people arguing that publishers should fight Amazon by dropping DRM. However, in The Scholarly Kitchen, Joseph Esposito has written a long and thoughtful piece looking at the possible drawbacks of this approach.

Esposito first looks at the question of whether unauthorized sharing of e-books increases the market for them. His own guess is that infringement helps sales when there is sufficient friction—i.e. the free copy is harder or more annoying to use for some reason—but hinders them when friction approaches zero. And since free e-books are getting easier and easier to find, publishers are turning to other methods of trying to restore friction, such as lawsuits.

More and more people are advocating that publishers should remove DRM, but is it really likely to help sales? It would have no effect on the big file-sharing sites, Esposito notes, because for the most part their users laugh at DRM already. What it would do is remove the speed bump on casual sharing, so that groups of people who might otherwise have bought individual copies (for example, college students in a class studying one particular book) instead only have to buy one. In those cases, it would actually decrease sales.

And Esposito counters the argument that these free copies would have a promotional value that offsets the additional sharing by pointing to the example of NPR’s pledge drives. Only 10% of NPR listeners ever pledge any money, which suggests most people are not inclined to pay for things they don’t have to.

He also doubts dropping DRM will do much to hinder Amazon’s market dominance. Amazon is already dominant, he points out—the horse has already left the barn. Once people are used to sticking with Amazon, they’ll by and large probably keep sticking. He suggests that most of the arguments in favor of dropping it come from people who simply hate DRM and have been looking for any arguments that could bolster their position.

With this analysis, one might assume that I am in favor of DRM. I am not. I am simply being realistic. A publishing strategy to move away from DRM requires a great deal of thought and contingency planning. Can we afford to lose our course adoption sales? How do we monetize reading groups? And what about the used-book market, from which we currently derive no revenue? Can we come up with new ways to monetize books so that we can recapture some of that lost revenue? The issue concerning DRM is falsely thought to be a technological one. It is not; it is a marketing issue. What is the best way to reach markets, and does DRM help or hinder that goal?

Esposito suggests several broad strategies publishers can use to try to counter infringement. They can try to increase friction by suing everything in sight, they can be more selective about who they sue and just accept that some piracy will happen, they can try to engage with their readers to create more buying loyalty, or they can try to create new products and ways of selling them that won’t be as vulnerable to piracy.

While I still think DRM is annoying and would be better off gone, Esposito makes some good points. I have already reported stories about people who will pirate games even if they could have them legitimately just for one cent, so I can see where he’s coming from with his NPR example.

Of course, Esposito doesn’t address the people who would have paid for the work if it had been available in a form they could use (or convert to one they could use, thanks to an absence of DRM) but go ahead and pirate it instead. It would seem like those should make up for the ones who would have paid for it with DRM but won’t if they can get it free, at least to some extent.

I would also point out that, even if NPR only gets pledges from 10% of its audience, that’s still enough to let it survive year after year. Perhaps publishers should figure out how to adapt so they can also survive on minority revenue.

In any event, I will agree that the issues surrounding piracy and DRM are more complicated than simply removing it. One of the most successful publishers at going DRM-free, Baen, has few incidences of piracy to deal with not because it was kind and thoughtful enough to go DRM-free, but because it constantly engages with its most devoted fans, who in turn will never engage in wide-scale piracy and will help put pressure on those who do. Other publishers are trying to engage with fans (such as Tor) but are a bit handicapped by being beholden to multinational corporations that call the shots (by, for example, insisting on plastering an obnoxious corporate tract at the top of the blog for a week).

It’s not a perfect world, and there are probably no easy answers. But I’m sure there are answers that will let writers keep writing, publishers keep publishing, and readers keep reading. They just have to figure out how to find them.

(Found via PaidContent.)

13 Comments on Publishers, DRM, unauthorized sharing, and the NPR example

  1. The biggest problem with DRM is timing. If DRM-less products (of any sort, be it ebooks, music, or films) had come ten years ago (by which I mean, if the publishers had made it absurdly easy for me to buy the stuff – let me pay for it via SMS, let me go to a supermarket and buy a voucher for ten songs from your collection, make it so that I can just click a button and everything gets downloaded), there would have been a lot of people willing to pay for it. Nowadays, why should I pay for something that’s not worth my money? Even if (somehow) “piracy” disappeared overnight, I would not buy ~90% of the stuff I download. Because it wouldn’t be worth the money. And, I believe, there are many people with similar opinions.

    So no, dropping the DRM nowadays is not going to be very productive. Sorry, publishers, but you had your chance. You could have swindled us into believing you’re still useful, but you missed it. That’s not saying that DRM should stay. Just be prepared that you will have to work for a long-term profit, rather than a short-term quick cash. We are no longer the stupid peasants, listening to the proclamations from on high from our lords and masters. We are active participants in this dialogue, equal to you. Get used to it. Or else we will go elsewhere, where getting your product is as easy as clicking a button.

  2. The consumer commodity, in print and screen books, is the device. Print books sell a device for each title. Screen books sell a device for each display option and each technical enhancement. The diminished device market for screen books is somewhat compensated by a higher device cost and a more avid interest in device up-grade. There is also the charming aspect that an obsolete screen device is easily discarded.

    Just ask yourself, “How many devices have I used to read books?”

    Discussion of DRM as a sales factor distracts from consideration of the device commodity as the consumable. The paper book provides the most restrictive rights management with device limited to display of a single title and yet it has enjoyed a wide market.

  3. The author makes a few good points, but misses the boat entirely. DRM causes friction. The only way that DRM could not cause friction is if the scheme were transparent and universal across all devices and platforms. Problem is, the only way that could be frictionless is if it were all provided and controlled by one entity, that would then have control of the entire book industry (like Amazon, for example.)

    Alternatively, as long as publishers insist on adding friction to the aquisition of authorized books, unauthorized sources are even more attractive. After all, the goal should be to make unauthorized copying more difficult, while authorized (and paid) aquisition more convenient and universal. DRM works in exact oposition to this simple concept.

    How can publishers, with a straight face, petition the public to prevent Amazon from monopolizing the e-book market, while at the same time, refuse to let any competitors enter it? After all, if DRM wasn’t a requirement, any would be bookseller can sell books for the Kindle. And indeed, the publishers themselves would no longer be at mercy of Amazon delisting. In fact, I would say, if a publisher had a well developed direct, or alternative, e-book selling platform for Kindle owners, any attempts Amazon would make at de-listing would be self-defeating, since the publicity would help drive Kindle owners to the alternative. Instead you have IPG pleading for all their customers to buy books from B&N instead, requiring a change of reading device, and trading one walled DRM garden for another.

    The best example I ever saw of frictionless purchase of digital content was the Louis CK comedy special. All would be digital publishers should pay very careful attention to that experiment. Send $5, enter my e-mail address, and click one link, done. The only friction was having to enter my CC details, but that’s only because I don’t already have a Paypal account. I can, and do, download lots of unauthorized video material, but that was by far the path of least resistance.

  4. MarylandBill // April 23, 2012 at 3:53 pm //

    I certainly think certain types of casual sharing have great potential to harm a book’s sales (the particular examples the Mr. Esposito has of a class bulletin board and a book group are good examples), but I think it ignores other ways it can help the sale of the author’s books (if not necessarily the particular book in question).

    Lets say I read a book by an author I have never read before. I get so excited by it, I send copies to my 10 closest friends. Now, nine of them probably will never read it, but 1 does. Now, lets say 9 other people do the same thing I have done. Ok, so 10 people read the book that might never have discovered it before. Of those one or two might be as excited by the author as I was… and they not only read that novel, but go out and buy every other novel the author has ever written or they will pre-order the next novel so they don’t have to wait for a friend to send it to them.


  5. “Discussion of DRM as a sales factor distracts from consideration of the device commodity as the consumable. The paper book provides the most restrictive rights management with device limited to display of a single title and yet it has enjoyed a wide market.”


    The first person on teleread to see the forest for the trees.

  6. rashkae is correct. Right now, the fact that DRM is included on legitimately-acquired media is the actual CAUSE of difficulty using that media.

    If DRM was made seamless, and the locked media was easily used by consumers, the story would be different.

    My guess: if consumers can legitimately purchase media that is as easily used (and easily used in the manner that the consumer wants to use it), they will. Right now, they’re paying money to limit how they can do what they want to do.

    Why would a sane person pay money for a big pain in the keester, when easy is free?

  7. One question on this whole subject:

    Does anyone else find the “drop DRM to stop an Amazon monopoly” argument disingenuous?

    I mean, a willingness to support epub is one of the few things Amazon’s competitors actually have going in their favor.

    How does taking that away help them?

    DRM is annoying, and dropping it is a consumer-friendly move. Just don’t pretend like that would do anything but make Amazon even stronger than they already are.

  8. Peter – a willingness to support an Adobe monopoly != a willingness to support open formats. AdobePub is just as much a proprietary format as AZW is. ePub is a bad joke, since none of the major players actually support it.

  9. Peter,

    I need a little more than “dropping DRM would make Amazon even stronger.” How? Give me some details, because as a Kindle owner, I don’t see it. If the DRM issue were gone, I’d be one of the first to start shopping elsewhere for new titles, especially if “elsewhere” happened to be smaller independent bookstores, which I would really like to thrive. So, details, links, reasoning, please!

  10. Peter- an Adobe monopoly is not something the publishers or consumers should fear because Adobe does not sell directly to the consumer, and they do not deal directly with the publishers.

    Amazon WILL use their monopoly status to force suppliers to lower wholesale prices and accept absurd payment terms- we know this because they already do so with their click-and-wait business.

    E-book distributors should fear an Adobe monopoly.

  11. “Baen, has few incidences of piracy to deal with”

    Citation needed! (And it better not be year-old anecdata from cstross :).

    Maybe the number of downloads are _lower_ (relative to purchases), but that’s not what you said. Here’s my citation:

    1. Visit Baen home page
    2. Chose recent release at random
    3. Enter into Google

    [Full disclosure: firstly I tried this with “Armored”. I did get relevant results, but then I realized it was a paperback-only release, which makes for a slightly different argument].

    Under the current regime, pirate supply of popular media is simply a done deal. How you choose to handle that fact is another matter, but it’s always best to check your facts.

  12. An Adobe monopoly is *absolutely* something consumers should fear, for the simple reason that the next time Adobe decides to switch their DRM scheme and take down the authentication servers for the old one, your entire library becomes inaccessible on future devices. (This is true of any DRM system, of course, but Adobe has a track record.)

  13. That’s great, Peter, but you still haven’t answered my question. Exactly HOW does an end to DRM benefit Amazon?

The TeleRead community values your civil and thoughtful comments. We use a cache, so expect a delay. Problems? E-mail

wordpress analytics