More on DRM and ebooks

I'm surprised that he doesn't address the effect of DRM on Amazon's infamous $9.99 pricing strategy.

Part of the reason the government went after the publishers and Apple rather than Amazon, even though Amazon has a near-monopoly on ebook sales, is the they tend to believe that predatory pricing is inherently self-limiting, whereas cartels directly and immediately harm consumers. No one in the physical book retailing world would mark every hardcover in their store down to $9.99. Sure, it would drive a lot of customers into the store, but there would be no lasting value. Eventually they would be forced to raise prices and customers would go elsewhere.

Amazon is only interested in selling ebooks at a loss because it establishes a Kindle monopoly. Kindle can only have a monopoly because DRM represents a huge barrier to entry. When they eventually raise retail prices to a sustainable level, DRM ensures that anyone with an existing Kindle library won't be as price-sensitive as someone who can easily decamp to a competing platform. If the publishers drop DRM now they remove the incentive for Amazon to engage in predatory pricing.

I've been saying it for a while: the publishing industry right now is where the music industry was ~3 years ago. The cycle is going to be exactly the same. At one point big music figured out that removing DRM let them sell more songs, and they finally dropped it. It looks like publishers are starting to realize the same thing. About time, too--I have an ereader that I like to use but I refuse to buy DRM ebooks on principle, and the selection of unread Gutenberg books is growing rather slim :)

Eventually publishers will also bring down the prices of their books ($10-$15 for an ebook? Really?) and discover that they can bring in even more profit. But that discovery is a year or two down the line still.

Thanks Charlie for giving them an eloquent and firm nudge in the right direction!

This will definitely make me buy more Tor books.

I'm one of the "voracious" readers that Charlie mentions and while I really like the Kindle DX hardware, I'm increasingly concerned at being tied into an Amazon ecosystem long term.

Baen, O'Reilly , Pragmatic Programmers and Fictionwise are some of the places I look for new books for my Kindle before Amazon these days, as they have DRM free titles.

I hope publishers have begun to realize that proprietary DRM only furthers the lock-in of parties like Apple and Amazon, and makes it even harder to resist their bargaining power, because now millions of your customers have huge libraries that only are readable on $COMPANY_DEVICE, therefore they are much more likely to buy that device in the future, and you will be forced to sell through them.

As a publisher I am able to opt out of DRM with all the majors like Amazon and Apple, but there is no indication that my book is DRM-free, nor a way to search for DRM-free books on their stores. I wish there were.

I can imagine a scene in the next book about that kind of stuff...

"Here you go," said Count Modulo, "That is the lock, and that is the key."

"So the key opens the lock?" Lauren asked.

"Oh yes, but you can't open it."

"Why not?"

"Because it's locked, dear child. See?" [demonstrates.]

"But you also gave me the key!"

"Well, yes, technically you could use the key, but you mustn't do anything that silly..."

Be very interesting to see if this spreads to the rest of Macmillan after a trial period, as well as if the other publishers will react similarly.

No matter what, though, this is a good sign and motivates me to make sure I pick up more Tor books.

Of course -- in the comments on the tor.com article: "Worldwide distribution is a much harder problem. Most of our contracts with authors grant us rights only in certain territories; we can't just unilaterally rewrite existing agreements."

I'm really interested to see what they do with a Memory of Light (the final wheel of time book). Brandon Sanderson has been pushing for things like getting a free ebook when you purchase the hardcover, but when I saw him in melb a few weeks ago he was saying those kind of solutions where more for his own books. WoT was too big a deal for TOR to play around with.

Wow, that is a terriffic post, from the perspective of explaining the issue to a person who doesn't just intuitively get it why DRM encumberance is obviously bad for both consumer and publisher (e.g. 99% of readers here).

I wondered how long it would take the industry to get it that the only thing allowing Amazon to achieve its Herculean e-book dominance over book publishers was the DRM. The DRM obviously serves Amazon much more than the publishers -- and that would be the case even if the publishers' naive belief that DRM effectively prevents piracy were true.

Probably more publishers will start to get it after seeing the results of Tor's experiment.

Has anyone from Tor / Macmillan said anything about what will happen to past purchases? Ideally it would be as simple as re-downloading from Kindle/Nook/etc to get a DRM-free copy, but I worry it won't be.

I figure this is inevitable, since music downloads have largely gone DRM-free as well.