Some thoughts on The Bu$iness of Digital Rights
I recent attended an Australian Publishers Association (APA) Industry Seminar on digital rights. The seminar was pitched at their members, publishers, but as a bookseller I was interested in publishers’ views on the issues of digital rights. It is also a very complex issue that many book readers struggle to understand so the more I can get my head around it the better I can try and explain things to people who want to buy eBooks from Pages & Pages.
There is a distinct divide amongst publishers on the issue of digital rights between educational publishers and trade publishers. The education side seems very determined to set up their own platforms or portals for customers without really engaging with existing booksellers. There are some affiliate programs for existing booksellers but affiliate programs are not in the best interests of any retailer. I think this strategy amongst educational publishers is probably the reason that textbooks haven’t exploded in the digital world like most pundits expected. Students and institutions want to purchase their texts from one place not from each publisher’s separate receptacle. Once this is resolved I think there will start growth in the digital education eBook sector.
Of course the big discussion was all about piracy. Unfortunately the debate centered on prevention. Henry Rosenbloom stated, quite rightly, that DRM (Digital Rights Management) ”isn’t worth the paper it’s printed on” but I do think it is a necessary evil. An author’s right to protect the copyright of their work is paramount. Nobody would ever tolerate something they have created being sold and profited on by someone else or given away for free when they were trying to sell it themselves. As Guy Gadney form The Project Factory put it “the best DRM is no DRM from a consumer perspective but not from a business perspective”.
Fighting piracy is impossible to battle to win. If you fight and punish the end user (and their immediate supplier) you get nowhere. It’s akin to the War on Drugs. But if you work out what motivates somebody to illegally download an eBook, MP3 file, TV show or movie you’re halfway to finding a solution the problem (i.e. work out why the user uses). During the piracy panel the first speaker asked publishers if they had legal departments and if they didn’t they should set one up or get a lawyer. Again Guy Gadney was more sensible and argued that those same publishers should have a marketing department and address the piracy issue from that perspective.
If you want to tackle piracy and illegal downloading I think the key issues are
1. Access to content: If you put up barriers like geo-restrictions that prevent people from accessing the content they want they will seek out an alternative
2. Convenience of content: If you make it hard for people to use the content they have purchased (e.g. restrict the devices they can use it on etc.) then they will try and break the restriction or seek out an alternative
3. Price of content: People value digital content differently. You cannot use the same pricing model that you would to physical content. If people perceive they are not getting value for their money they will vote with their wallet and seek out an alternative.
Address these issues first.
There is a false perception that illegal downloading is all about getting the content for free. I dispute this. Ask any illegal downloader how much they spend on their internet service and you will quickly learn that they certainly are prepared to pay for their content!
The other strategy to deal with piracy is to work with the so-called pirates. As stated at the seminar the internet is dominated by pornographers and pirates who are both streets ahead with technology they use which is convenient and innovative. One of the biggest selling books in 2011, GO THE F*CK TO SLEEP, used file sharing sites to distribute a free PDF of the book to create demand for the book which resulted in the author getting a considerably bigger deal with a publisher and the book still sold extremely well. Working with those that create the software that is used to share files and crack DRM would actually lead to a better result for the copyright holder and the consumer than fighting them ever will.
There was also another issue that came up yesterday at the end of a session that didn’t get a lot of time which was about the royalty rate for authors. Authors quite rightly don’t want to be disadvantaged as the emerging digital book market evolves. However the industry is still trying to find its feet and there needs to be balance. As a retailer I am already taking quite a considerable hit to margin with eBooks not to mention having to kickback to my eBook vendor. Lower selling prices also erodes the value of this margin.
The important factor is that we all (authors, publishers, vendors, booksellers) remain open and flexible because the eBook market is going to ebb and flow in may different directions in the coming years before it settles down and being tied down to unfair deals is only going to damage the industry.