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.

7 thoughts on “Some thoughts on The Bu$iness of Digital Rights

  1. DRM tends to assume that readers are inherently dishonest. Maybe that’s not the intent, but it’s certainly how many readers feel and, in practice, that’s pretty much how readers are treated. You’d have to lower the price of a DRM-ed ebook significantly for readers to get a value-cost ratio (I made that up) equivalent to that of a print book which can be lent, resold, flung against the wall, etc.

    One of the issues I have with publisher forums on ebooks is that it all feels a bit incestuous. I rarely hear innovative thinking from the tweets I see out of these talks. Many of the issues I hear have been raised ad infinitum in genre circles, particularly romance and sff.

    One of the biggest things publishers can do to help readers is to figure out a way–amongst themselves–around the issue of territorial copyright and geo-restrictions. But no, they impose barriers to purchasing books on one hand and then complain about piracy on the other. It’s frustrating.

  2. With respect, I don’t see how DRM is a necessary evil. I think you made the point quite eloquently later in your post that it is more likely to cause the very thing it is supposed to stop.
    DRM stripping and piracy are 2 different things. I get all my ebooks legitimately and I strip the DRM off any which have it so that I can convert file types to read on different devices and to ensure they STAY mine.
    I think your points about piracy are otherwise well made a.d like Kat

    1. My main reason for saying it is necessary is that I do think there does need to by someway to stop someone from mass distributing a work you have created without your permission but it needs to be in a way that doesn’t impede a legitimate user

  3. Sorry, on my phone and having trouble with tiny keys and autocorrect!
    I wanted to add that I thought Kat’s comment about lack of reader consultation is also spot on.

  4. I think you’re spot on Jon. The only times I have ever been tempted to pirate a book are when idiot device-makers wouldn’t let me transfer books I had already purchased with my own cash to a new computer after a hard drive fail and when I get fed up with geo-restrictions because I want to read the same books as my friends in America and England (this bein 2011 not 1953). I think my attitude is fairly representative of other readers, certainly in the book clubs and other reading-related forums I hang out in the attitude is much the same…we’re happy to pay for content when we can do so simply and have ‘fair use’ of the things we buy.

    Very sad that the forum you attended had no representation from readers, sellers…or pirates. I find in my work I don’t learn much if only talk to the same people all the time

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