eBooks, DRM, and the Market

I genuinely love eBooks, to the point that I will rarely even think of buying anything else. Some people may regard that as heresy, and I understand the lure of physical books. When I was a boy I used to fantasize about managing to get locked in to the Library overnight so that I had access to all of the books. I suppose that in point of fact I had access to a good many of them without all of the drama, but it was a fantasy, after all.

I also had a lot of bother associated with all of those physical books. I think every move I have ever made, beginning with moving out of my parents home, began with all of those books. And then finding places to put them all. When buying bookcases in bulk to cover all of your walls seems like a good idea, you are either obsessive or a college professor. And I was a college professor. All professors are like that. I used to joke that it was how we marked our territory.

eBooks have freed me from a lot of that (I still have a lot pf physical books, but I am not buying them like I used to.) I love the fact that I have a good 50 books in my pocket right now, residing on that astonishingly mobile personal computer known to the world as a cell phone. As part of a family of inveterate readers (and I married one too!), we used to constantly plan on having something available to read in case we ever found ourselves with time to kill. Now unless it is a long plane ride and I have a battery issue, I can pretty much forget about it. I always have books with me.

The one fly in the ointment here is DRM. I know why the publishers do it, though I think they are wrong. They are scared to death that rampant copying and piracy will destroy their industry. And I suspect their industry will be destroyed, but not for that reason. Neil Gaiman, a very successful author, noted that in the past we used to lend books to each other. And if you are a “reader”, by which mean someone who simply has to read to be alive, you know that sharing is essential to the joy. When you find a good book, you want to let everyone know about it. “You just have to read this book!” That is how our tribe works. and we are big part of the market, and for a lot of authors we are the ones that keep them in business. Steven King will sell a boatload of books no matter what, but for the authors who are not that popular it is people like us that that keep buying their books and putting food on their table. And Neil Gaiman noticed that we are creating a market where that cannot happen any longer.

The paradox is that by trying so hard to lock down everything, the publishers are probably signing their own death warrants. As Charlie Stross noted in this post, what the publishers have effectively done is turn control of the eBook market over the Amazon. This is particularly ironic given that not all that long ago they fought hard to wrest control away from Amazon over the issue of pricing. Yet they are giving them back even more control because of the insistence on DRM. The way this works is that Amazon’s books are in a particular format and locked down, just as the Publishers demand. And that means you cannot move your library to another device. So if you buy a few books on Amazon, or maybe even buy a Kindle, you effectively get locked in to this ecosystem. To go anywhere else you would need to either re-purchase all of your books, or start doing some Internet research on how to break DRM. I don’t see how either of these outcomes benefits Publishers, but the logic of the situation demands it. Now that Amazon controls 80% of the eBook market, they are starting to eliminate the Publishers altogether by striking deals directly with the authors. Amazon can pay the authors more than the Publishers can, and still make a very nice profit, because they are not trying to move around a bunch of physical product. Hence they have no production costs to speak of, no inventory and warehouse costs, or indeed any distribution costs.

All of this begins with DRM. If the Publishers would just move to open standards, the landscape starts to look very different. Freely movable books in an open format now allow much more competition. I suspect Amazon would still be the leading company if only because they excel at marketing and customer service, but other companies would stand a chance. Without that, Publishers face what economists call a “Monopsony” market. This is like monopoly, but instead of a single seller, it is a single buyer, and all of the market power problems are just as powerful on that side. Will Publishers wake up to this? My guess is not until it is too late, and in fact it may already be too late.

This entry was posted in Editorial and tagged , , . Bookmark the permalink.

Comments are closed.