Brian Stauffer, founder of 1999 digital music startup Listen.com (better known by the name of its music service, Rhapsody), had an interesting piece in the Wall Street Journal a few days ago comparing and contrasting the response of record labels and publishers to the digital changeover of their respective media, and the piracy issues these engendered.
He begins by noting that e-book sales have largely made up the shortfall digital books took away from paper ones—but the music industry refused to sell digital music for years, depriving themselves of a stream of revenue and contributing to piracy. In their attempt to shut down mp3 player sales in the courts, record labels insisted that the only reason for the appeal of mp3 players was the “thousands and thousands” of illicit songs available on the Internet. However, Stauffer holds, the real appeal was the billions of dollars of eminently-rippable CDs that consumers had already bought and wanted to make more portable.
Of course, after they’d ripped everything, and as mp3 player capacities got bigger and bigger thanks to Moore’s Law, consumers did start turning to piracy for digital music—because it was the only game in town until 2003, when the labels finally did license downloadable music sales.
Licensing expanded quickly after that. But the damage was already done. The labels had granted piracy a half-decade monopoly on awesomeness, and consumers had grown technically adept at illegal downloads—and morally comfortable with them, in the absence of any legal alternative. Piracy’s momentum was so great that music sales kept falling until last year.
While Stauffer does admit there were “small-time forerunners,” he points out the Kindle is what really launched the era of the e-book mass-market—and it did so with content licenses from the get-go, rather than five years of hoping it all went away. (Though there’s also an element of publishing learning from music’s mistakes.) And while there is digital book piracy, it doesn’t seem to have the force or threat level of Napster—it seems likely from sales figures that most pirated books don’t represent foregone purchases.
On TechCrunch, where I learned about the article, John Biggs suggests that the sheer ease of downloading books may nonetheless make it more appealing the more people get into e-books—especially the bestsellers that represent publishers’ bread and butter. He suggests publishers need to find a way to “explain the value of the book to a plugged-in audience” and convince readers that there are tangible benefits to buying rather than pirating.
I would also suggest that the difference in perceived threat levels between music and book piracy might have more to do with the fact that a lot fewer people seem to read than listen to music, and also that paper books are nowhere near as easy to “rip” as CDs so the supply of pirated content will be smaller. (Though, on the other hand, DRM’d e-books can be cracked easily and are often distributed that way out of spite.)
It’s also kind of amusing that Stauffer paints the licensing of e-books to Amazon as a wise decision given publishers felt like they’d been suckered when they saw exactly how Amazon planned to discount those e-books they’d licensed—and their reaction to that has resulted, a few years later, in accusations of antitrust violations and lawsuits from the Justice Department and class actions.
It would also have been interesting for him to compare the parallels between Amazon and iTunes dropping DRM from their music and various publishers starting to drop it from their e-books. But I expect there will be plenty of time for that comparison to be made by others.