DRM vs. piracy, and the future of e-books

Opinions on DRM vs. piracy are like noses: everyone has one, and they all smell. Lately, I ran across a fairly interesting piece containing the opinions of Roland Denning, a London-based writer and filmmaker, on Self Publishing Review. I can’t entirely agree with it, but it does offer a good basis for discussion.

Denning sees problems with both the anti-DRM and anti-piracy arguments, finding that both sides harbor “some surprisingly naïve notions”, such as the idea that “we can stop people downloading, just like we can ‘win’ the ‘war on drugs’,” or that “people will pay for something they can get easily for nothing.”

He finds the Kindle’s proprietary e-book system to be very good at getting the average reader to buy e-books rather than pirate them, though at the same time it increases the competition any given book faces for readers by opening up a vast self-publishing market. He notes that the DRM restricts what readers can do with the e-book in terms of lending or reselling, but that on the other hand the infinite copyability of a digital file without DRM would pose a considerable risk to the publishing business. He is concerned about corporate sponsorship, product placement, and advertising taking over and driving out artistic integrity and other interests.

He makes a number of suggestions that, from a compromise perspective, make at least some sense:

We will never eliminate file sharing, but we can make buying ebooks as appealing as possible. Part of this I believe involves maintaining DRM to make the alternative less palatable,  a hassle for all but the geeks, but the positives for the ‘legitimate’ route are crucial. Ebooks need to be available quickly, easily and cheaply.  As much of the cover price as possible needs to be returned to the author, in fact in many cases the author will be the publisher, and the book industry will function mostly as a marketing service. There should be a finite way of ‘gifting’ an ebook to others so we can share our read and a system that would fit a new form of public library. The process of buying an ebook should also connect to a stream of further information about the work and the author and other readers. Beyond that there needs to be a filtering system to supersede the old model of agent/publisher/newspaper critic/bookseller. There needs to be a new form of adventurous publisher, with an astute sense of both what is good and what people might want, who can build up trust on both sides. And, crucially, we must maintain the sense of value of a book, a value not based on status, fashion or brand, but on the ideas within it.

Of course, like many people with ideas (including, admittedly, myself from time to time), he throws them out there without any clear explanation of how such things are to be accomplished. When you have publishers pitching a fit over the one-time-ever lending ability both the Kindle and Nook now have, how do you expect there to be some kind of way of “gifting” it? (Unless you’re talking about a Steam style ability to pay money for the e-book to be sent to another person, rather than transferring ownership of the e-book you have.)

And I have trouble figuring out how “maintaining DRM” will “make the alternative less palatable, a hassle for all but the geeks.” You don’t have to be much of a geek to type “twilight epub torrent” into Google. BitTorrent is just an application like any other, and while I’ll grant that a lot of people are not going to be able to figure it out (heck, as part of my day job I talk to dozens of people every day who can’t figure out how to set up their TVs), it hardly requires being a “geek” to do it, any more than it requires being a “geek” to know how to operate a web browser or word processor. (The real “geeks” are the ones who figure out how to crack the DRM or scan the printed books and upload them in the first place.)

The ones DRM creates “hassles” for are the ones who want to be able to back up their e-books or read them on unapproved platforms. (Or, yes, “lend” them to friends and family.) Some might be geeky enough to figure out how to crack it. Others might download cracked versions from peer-to-peer. The ones who get fed up enough over it might even decide just to skip the purchase and go right to step 2. But really, there’s not much to gain by rehashing the same arguments here.

One thing Denning covers earlier in the article is the concern that publishing might go the way of the music industry. “Look what happened to the music industry” he points out, suggesting that “a whole generation has grown up expecting music to be free.” But I don’t see that. For one thing, a study cited by Ars Technica pointed out that only 10 out of 1,000 random peer-to-peer files it examined were music, suggesting that the amount of music piracy has actually declined over time.

For another, the digital music business is booming. iTunes has sold scads of music at 99 cents per track. If the belief that digital music should be free were that common, you would expect it to be cutting into digital sales, but they seem to be in no danger of faltering. Just the other day, Amazon reduced the price of some of its music from 89 to 69 cents per track—a move you’d expect from a competitor in a tight market.

And yet, later in the article, Denning himself even notes that “what’s left of the music industry still makes the majority of its money from CD’s, not downloads.” So clearly CDs are not only still selling, they’re selling more than digital music is. People still want them as backups, or to have better control over music quality, or whatever. If they wanted digital music badly enough to steal it in such quantity, why would they still be buying physical artifacts?

If the music industry has contracted, it at least still seems to be remaining afloat. We’re not hearing about record labels teetering on the edge of bankruptcy—and I’d think that would make the news. Publishers are undergoing contractions as well, though I don’t know how much of that I would lay at the feet of piracy. Some of it, sure, but not nearly all of it. Some of it could be due to the down economy in general—and why look to piracy when you’ve got an industry riddled with wasteful shipping-storage-reshipping-pulping practices dating back to the Great Depression?

Regardless, as Heinlein said, no business has the moral right to continue making money in a particular way just because it’s been able to do so that way in the past. Society changes over time, and so does the willingness of people to buy particular forms of media. If publishers want to stay afloat, they’re going to need to make some changes. Hopefully sooner or later they can figure out what those changes are.

12 Comments on DRM vs. piracy, and the future of e-books

  1. DRM just makes it difficult for regular people to back up their legally purchased ebooks, music or whatever. The hackers and technogeeks can all figure a way around DRM, and generally do.

    That said, sometimes DRM is useful. “Loaning” and ebook can spin out of control, if there are no controls. That is, it’s not bound by physical lending physics. It’s an electronic file that can be shared instantly with, well, everyone at once. So in that way, DRM is kind of a useful thing.

    And as far as I can tell, most average people wouldn’t want to think of themselves as thieves, so paying a few cents to have something on their Nook or Kindle or iPad, isn’t really a big deal.

    Buddy – http://wordspicturesweb.com/?p=1689

  2. I personally think that DRM is no longer an obstacle for anyone. What used to involve installing python and running a series of scripts in a certain order to strip the DRM has now been condensed into calibre plugins. Open calibre, add the plugins, then just drag your B&N/Sony/Google/Kindle/mobi ebook and the DRM is automatically removed with no extra work on the part of the consumer. The hardest part has become adding the plugin!

    Amazingly, I’ve sent people instructions on how to do this so they can share more ebooks with their family and they still do not want to do it!

  3. The whole Myth about DRM has been swallowed by the publishing and media industry to such an extent that they have lost all ability to rationalise it with any kind of serious arguments. They have absorbed it into their DNA it seems. The silliness of it is so transparently apparent.

    This guy Denning says only the geeks can break the DNA. This is so so so crazily inaccurate. I have been stripping every one of my own eBook purchases immediately I purchase them for a year now. My web site has the full instructions on it and links to DRM free Indie sites. Many of my friends here, and in the UK, who are the most non geeky people have used my instructions to do the same (after all it is only a drag and drop process, done in 2 – 3 seconds). Some of them are people in their 60s who can only barely write a letter on their PC ! Now and again I get asked to drop by and strip a dozen that they have saved up. The whole thing is a farce. It only creates a useless but irritating barrier for readers and pushes them toward non DRM titles.

    The use of the shrinkage of the Music Industry as an example is also another case of this Myth making.
    ” . . what’s left of the music industry still makes the majority of its money from CD’s, not downloads.”
    Apart from the fact that this is totally untrue, the Music Business has been hit by a whole generation of PC gaming, online gaming, hand held gaming as well as a host of other distracting leisure activities. These were always going to reduce the size of the business! It is just plain dumb to continue blaming piracy for it’s troubles. In fact the Music business is still thriving and making very healthy profits.

    My last comment is that these industry insiders are consistently being allowed to sprinkle every single argument they have with this blaming of piracy for their troubles, without ever providing any evidence for the scale of piracy in their or other industries. Every single one of the claims that the Music or the Publishing industry has made about the scale of Piracy in the last 15 years has been comprehensively debunked. The claims are riddled with spurious assumptions and estimations and speculation and guesses. They hype up their claims with scare stories of how many pirate sites there are but are clueless about how many actual files are downloaded, how many are downloaded by people with the remotest intention of using the files or the number who had or have any intention of purchasing the titles if they could not download them. In contrast, many totally independent studies have claimed that piracy actually helps sales. I am not that convinced by these either. I am personally sure that piracy loses some sales, but a tiny tiny minuscule number when compared with the outrageous claims by the Industry.

  4. What Howard said.

    By coincidence, I returned to the piracy theme last week, though I’m not sure I broke any ground that the comments (above) haven’t already covered: http://bit.ly/lQ2R3g

  5. I would like to be able to loan an ebook just as I can a physical book. By that I mean that whoever I loan it to can keep it for as long as they need to for them to finish the book. I would also like to be able to loan it out to as many people as I would like. I don’t have a problem not having access to the book when I loan it out because when I loan out a paper book, I certainly don’t have access to it until it is returned. One nice thing about loaning an ebook is that it is always returned in the same condition that it was given.

  6. I have been looking for the Calibre plug-ins. Thank you! If I own it, I want to read it, watch it, listen to it, where I want, when I want.

  7. “But I don’t see that. For one thing, a study cited by Ars Technica pointed out that only 10 out of 1,000 random peer-to-peer files it examined were music, suggesting that the amount of music piracy has actually declined over time.”

    It is entirely possible for music to make up an decreasingly small percentage of all Torrents while music piracy is nonetheless increasing. The mistake here is the same as the Wired infamous graph about the declining percentage of web traffic as a total of all IP-based traffic.

    “And yet, later in the article, Denning himself even notes that “what’s left of the music industry still makes the majority of its money from CD’s, not downloads.” So clearly CDs are not only still selling, they’re selling more than digital music is. People still want them as backups, or to have better control over music quality, or whatever. ”

    In 2001, there were 730 million CDs sold in the U.S. In 2010, there were 326 million CDs sold. The CD is dying.

    OTOH, there were only 1.1 billion tracks sold in 2010. Clearly the entire market for music sales has dramatically shrunk in the last 10 years.

    “For another, the digital music business is booming. iTunes has sold scads of music at 99 cents per track.”

    In 2010, digital sales increased 1 percent over 2009. I would hardly call that a boom. (http://new.music.yahoo.com/blogs/amplifier/70991/2010-album-sales-way-worse-than-2009-album-sales/)

    As for the bigger claims, I think you’re right that there are a lot of things that contributed to Big Music’s downfall.

    “And I have trouble figuring out how “maintaining DRM” will “make the alternative less palatable, a hassle for all but the geeks.” You don’t have to be much of a geek to type “twilight epub torrent” into Google. ”

    Exactly. And all you need is 1 or 2 people who do know how to crack the DRM and then the jig is up. My friend doesn’t know how to copy the commercial DVD he just bought, but I do. I don’t care to track down how to remove the DRM from a Mobipocket file I’ve had sitting on my hard drive, but I know people who can do it.

    The record companies and publishers have to make sure none of its millions of customers can break the DRM — I only need one person along the way to figure it out, and I’ve got the file.

  8. Oops…that didn’t include total digital albums sale which was up 13% in 2010 to 86.3 million albums purchased on iTunes, Amazon, etc. plus 1.1 billion individually purchase tracks.

  9. Which ever way you look at it, and there is a huge variety of stats out there that are extremely dubious (coming from an industry that has lied for 15 years about it’s operations and the impact on privacy), the music industry has been making plenty of money through the last decade. Whether it’s overall turnover is up or down, it is also clear that the gaming industry has hit it hard and it would be no surprise if it suffering a fall in income and profitability. Constantly blaming piracy is a knee jerk reaction that has sucked in governments everywhere, while anyone with an independent brain knows otherwise.

  10. I’ve suggested several times that there should be a way for people to “loan” eBooks by either the parties paying a small fee for a one time unlock code so the eBook can be transferred. If there is a second transfer, it calls for another fee for a new unlock code. All the fees could be done by a PayPal or like program. From this, both the author and publisher would get a part of that fee.

  11. I am not a fan of the whole lending principle to be honest, as a user experience or as a business model. In my view if the Big Publishers had any vision, and imagination, they would grasp that the urge to lend would be enormously reduced with lower prices.

    I feel no urge to lend any of my indie eBooks. The reason is that the prices were low and great value and the barrier is therefore so low I prefer to say to my friends, via email, that they should go and buy this eBook or that eBook. The only eBooks that I lend are those very few I have bought at higher prices, before I recovered my senses.

    By offering eBooks at prices between approximately 1.99 and 4.99, I believe a huge swathe of readers would behave like me (though not all, I suppose) leading to yet another sales boost from reasonable prices.

  12. I’m the guy who wrote the original article, and thanks for reading and commenting on it. The point about not needing to be a geek to crack DRM is fair, but I’m not convinced that ruling out DRM is the way to go, nor that it is inherently evil. I just don’t think you can guilt trip people into paying for stuff they can get for free, certainly not in this country. And while people still buy CD’s, they are in decline. Most people I know get most of their music for free.

    Music companies are in big trouble (look at EMI in the UK) unless they are making money from live shows, and although I shed no tears for the woes of multi-national corporations, increasingly we get a few big stars who make a lot of money and the rest work for very little. My real concern (which wasn’t quoted by Chris above) is that, ultimately, as sales diminish, income will come from product placement, sponsorship and advertising. This, I believe, will be bad for the art forms and bad for all of us. Not that I know the way out of it, nor any crystal ball.

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