As for Netflix, the model works like this (and i have to be careful to say too much, though, hmm, nobody made me sign an NDA ): Netflix buys DVDs at a negotiated wholesale rate (residuals and participations are paid on this amount). After a certain threshold, Netflix then pays the studio via a revenue sharing model (again, residuals and participations are paid on these amounts). After a certain amount of time (defined by contract), Netflix is free to sell excess DVDs, with no additional money flowing to studio. So bonuses: Netflix buys more copies of DVDs, particularly for hot titles, there’s an ongoing revenue stream (which is why studios prefer this model over the old school rental model, or the current Redbox model, which does not, to the best of my knowledge, have this kind of revenue share), and library/catalog titles are seeing new life.

We’ve been selling DRM-free PDFs from our site (as well as ebooks on Fictionwise, the Kindle, and a few other sites) for a couple of years — and have also released a few titles under Creative Commons. So far we have had a pretty good experience and (knock on wood) no real problems with piracy.

We’re going to soft launch a new DRM-free ebook site at some point this winter. Will keep reading and keep you updated.

Cheers,

Gavin

1) Most people buy books, read them once and shelve them…forever. After a certain length of time they find their way to used bookstores, swap meets and flea markets. Books, like most other media entertainment, are disposable. Like music, people’s tastes change and they move on. How many movies still get sold at Salvation Army in VHS? File sharing then becomes a question of shelf life. Like movies at the theatre, after a few weeks no one watches them or waits until they roll around on HBO, a pay to view form of service. This leads to the Netflix model…

2) What if you rented a book, mostly because it was cheaper, and when you finished it your Kindle confirms the “delete” and the book is “returned” so to speak. Thus Amazon could buy 100,000 licenses, rent and trade them as they see fit and everyone gets paid. Since we don’t keep the books we read the model works well and encourages more reading, keeping the bookcase full.

The only issue I have with ebooks is more Orwellian. They can be changed. Physical books remain as they are. You can’t go back and edit a printed book. There is a sense of permanency there. The ebook can be edited, thus the writer can fix things, instead of working to write well from the beginning. A publisher can remove something that may offend some small group of people because of pressure imposed on them, thus leading writers to worry more about whatever perceived offenses they may commit rather than seeking truth in their writing. Fear should be something the reader experiences as part of their experience with a story line, not because of a publisher or a writer cause them to be scared.

Now if they could get a Kindle below $60, maybe I would buy one. Oh yeah, did we forget the reader costs so much that you don’t save money on books until you have read fifty books. If you read ten books a year it would take you three years before you start to get on the plus side of the ledger, and then the technology will change.

I’ll go back to quietly being dragged further into the digital age despite my Luddite tendencies. (Got my first and only mp3 player a year ago).

Thanks,

Derek

During Bookcamp Vancouver I directed 2 presentations: one on DRM/Free Content and another strictly on rethinking Free Content. lots of fruitful discussion there.

I had some discussions that day with published writers who were concerned about their work and piracy. Fair enough, no question about it. We had a good discussion about it and I think that we all came away with new ways of looking at the question. I know that I did.

Then I went and performed some research myself. I wanted to see for myself how these writers were presenting themselves online, how they were marketing and selling their digital books and where the cause for concern might be and I found something that surprised me.

One writer in question was pretty far out front of the pack. Not only was her book published by a major press but she was leveraging the work online with seminars, paid discussions, other ancillary revenue generators and a .pdf available for sale from her site for $32.95. I was/am beyond impressed.

The high price point for the digital file in her case works for a few reasons… 1) highly specific content 2) natural readership respects the authors copyright 3) natural readership doesn’t possess technical know how to upload to torrent sites 4) natural readership doesn’t download torrents for same reason 5) writer has created a unique readership community that understands and respects the price of admission and is happy to spend the money on something that they consider valuable…

All of this is excellent and I applaud her for the work that she has done.

She is obviously not Stephen King or other writers whose books are rampantly shared online. And that is fine, too, because I believe that there’s increasing evidence to support the notion that heavy downloaders are also the biggest consumers of the ‘real thing’.

I have pointed to some of these ideas in my slides on DRM. Specifically the screen captures of file sharing activity on Pirate Bay that shows communities of passionate fans share digital files and also purchase the physical versions.

Taking a closer look at how these file sharers communicate with each other would go a long way to recognizing that they’re fans with money who just happen to understand the technology.