Managing Digital Rights, Part 2

November 11th, 2009 · 17 Comments
by Kassia Krozser

So last week, I attempted to jumpstart a new kind of discussion about managing digital rights, and, happily, many people were more than happy to participate. This week, I’m going to try to summarize and respond to what they said. Here’s a sneak preview: publishers, you’re doing it wrong, but not for reasons you think!

Let’s back up. Digital Rights Management (“DRM is not inherently evil, but it’s not winning friends or influencing readers. Any mechanism that keeps people from accessing their legally purchased books is a failure. The fact that there are no clear (or even standard!) guidelines related to how ebook purchases can be used in the real world — is it really up to the reader to figure this stuff out? — is frustrating.

Now for the comments, the thoughts, and more reaction!

  • Adobe Digital Editions — It’s not an experience people love, yet it’s also becoming an industry standard. I challenge all parties involve to talk to real readers about their frustrations and come up with a solution that makes people happy. As one person said:

    Oh, do I hear you on the ADE. The books I first got in ADE format were FREE and I was still so furious over the whole thing that I’d never go that route again.

  • Device Specific DRM — As more reading devices flood the market, the problems with using DRM to tie readers to devices and retailers will make news. News Flash: most people do not know that they’re being limited in their ability to transfer books between devices. Once the Nook is released in the wild, and based on pre-sales, it seems to be popular, mixed Kindle/Nook families are going to face some serious challenges. Is the industry prepared to take on this discussion? As noted:

    The other aspect of DRM that is super annoying is that, for the moment, it is far too device-specific. I couldn’t seriously consider a Sony when I was looking at eReaders, for example, because their library-management software doesn’t run on a Mac. Get real. This is a cross-platform world, folks, and I don’t mean just Mac vs. PC. If I buy a book, I want to be able to read it on my Kindle, my iPod, my Mac, my Sony (should I have one), my Nook (should I have one)…

  • Limited Scope Lending Is Attractive — The feature readers like most on the Nook is the ability to lend. For a limited term. To one person. Under very proscribed circumstances. This is a selling point, and allows readers to play their role in the word-of-mouth game. However,

    But, of course, Publisher’s Lunch let out the dirty secret that all the big publishers have no plans to participate in this feature right now, despite feigning excitement at the official unveiling. Sure, B&N didn’t have freebies for them, but that’s no reason to get snippy. Joking aside, though, if none of the big publishers will allow their books to be lent, what good does it do the reader. It DOES let smaller publishers get their name out, which I am grateful for, but it still doesn’t do the consumer much good.

    Another commenter added:

    I also agree–how bizarre to complain on the one hand that there are not enough people reading, then make it hard to access books. Or share them – word of mouth works a lot better if you can actually pass along the book and create a new fan. “I just read the best book. You’ll have to pay ten bucks to see if you agree with me” doesn’t work so well.

  • The Horse Has Left The Barn — DRM does not stop piracy. Anyone who believes this is deluded. The only effective way to prevent piracy is to never write the book in the first place. This is an unworkable scenario for many (obvious) reasons. In what might be the most radical — or perhaps it’s practical — of thoughts, it was suggested that the time has come to accept torrent-sharing as part of the digital process. As Sean Cranbury noted:

    Smart publishers already know this and are working to figure out how to work with the digital consumer flow – or, dare I say it, torrent – and are not wasting their time on ways to prevent their content from being read but rather working with the technologies, readers and other opportunities to keep themselves and their writers relevant going forward.

    Even from my safe location in Pasadena, I can hear the gasps. And Sean’s point may, eventually, have far less to do with DRM than it does business models.

  • The Netflix Model Resonates — I personally think there’s much potential in this approach, and I hope the publishing industry views the many (many!) schemes put before it in the near future with an eye toward experimentation instead of reacting in fear. When life gives you new revenue streams, go with the flow. Here’s one thought:

    I think you’re right about a “true Netflix-type model” having potential. I can imagine a book club/Netflix mix where there is a flat rate per month and access to differing numbers of e-books for a set amount of time.

  • Social DRM: It’s Something to Consider — While there are certainly legal issues with next commenter’s solution, social DRM is gaining traction (among DRM skeptics!) as a potential solution to one type of pirate:

    The only purpose to DRM is to prevent casual copying, since committed pirates have long since worked out how to break all the DRM schemes currently used. So why not switch to watermarking? Instead of using encryption to lock a book down and making life difficult for those who legitimately purchase books, use it to watermark the book with the purchaser’s name and credit-card (or SS) number.

  • DRM Restrictions Reduce Value to Consumers — This was mentioned in a few different ways. The first:

    In response to one argument I read, does DRM-free eBooks address the low price point argument? If we sell eBooks without DRM, can I sell them at a higher price because I’ve given the user total access? If not, then there’s something else at play.

    In this instance, I’d suggest to Allen, the commenter, that there is far more at play in the pricing game than just DRM. The restrictions (or challenges) caused by DRM are just part of the overall ebook pricing problem. I honestly believe the only way publishers can convince people to pay above $10 for ebooks — particularly narrative fiction — is to increase the value of the books.

    And by increasing the value, I don’t mean pricing the books higher. I mean adding value. Adding quality. Adding content. Cheap conversions without quality control undermine the value argument faster than anything else. Lack of understanding of consumer desires undermines the argument. Ebook prices can be higher, but the value of the ebook needs to match the price.

    And then:

    Sean, you might extend the “free to share” analysis (something you know I agree with) to consider how restricted content is actually worth less to the buyer. I’ve been thinking lately that DRM locks may be contributing to lower digital content prices.

    Which lead to some interesting commentary about value and community:

    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…

The comments above don’t change my views, though I am intrigued by Sean Cranbury’s thoughts on pricing (see full comment; I only pulled the bit I needed about DRM), because while I’ve shifted from the mental price point he states to one that is higher, I suspect his argument has traction in a large portion of the reading community.

So where I remain: people don’t mind DRM as much as they mind how it’s implemented. The argument that it keeps honest people honest is stupid. Most people aren’t inclined to engage in piracy; the effort and risks involved aren’t attractive to the average consumer. The future is smart DRM. The path to disaster is dumb DRM. That is all.

File Under: Square Pegs

17 responses so far ↓

  • Mark Evans // Nov 11, 2009 at 2:21 pm

    It seems you feel that the idea that certain forms of DRM do discourage (perhaps not eliminate) file sharing is an idea that is both “deluded” and “stupid”. However, I did actually think that the point of the last discussion was to move beyond this “good vs evil” topic and, I thought, accept that different publishers will want to market their titles in different ways. Perhaps “deluded and stupid” vs “reasonable point of view” is the next phase?

    I know lots of honest people that trade music and don’t pay a dime for it. I have a good friend – a nice guy – who lived in a $1m home and downloaded the entire Rolling Stones catalog from Napster (and much, much more.) He could easily have afforded to buy this music, but it was freely available. When others (friends, acquaintances) heard about what he got for free, do you think it affected their perception of the value of recorded music? Of course! I should note that he is by no means a technical wizard, but Napster met his threshold of useability.

    This kind of scenario just further encouraged file sharing (in the case of music) and the lack of any, even cursory, obstacles to freely sharing the content accelerated the trend and the public perception of the value of music.

    People who share music are not thieves or dishonest. Most young people today simply do not pay for recorded music. That is a fact, and I don’t consider them dishonest. It is the social norm and media environment they grew up in.

    Certain forms of media content have much lower rates of file sharing, such as DVDs and video games. There are multiple factors involved, one of which is DRM. Yes, the size of the content and the state of technology are also factors, but DRM is also one of them.

    As I said in my last comment, the Kindle is a good example of effective DRM that has almost certainly prevented e-books from being freely shared and read for free.

    When you convince me that my rich friend who downloaded weeks worth of free music would never dream of grabbing and reading free books, I will consider the argument that DRM does not discourage file sharing.

    The slippery slope that music skidded down is the one that worried publishers seek to avoid. That sad story was driven as much by value perception as anything else. The ability to freely copy and share content with nearly zero effort and cost puts downward pressure on public perception of the value of any digital work, much like a supply and demand curve.

    Where I absolutely agree with you is in the statement “The future is smart DRM”. I also think there is a clear role for DRM-free work, with many examples having been supplied.

    Thanks again for an interesting discussion.

  • Kassia Krozser // Nov 11, 2009 at 10:44 pm

    Mark — at the risk of sounding defensive, I think you’re misunderstanding me. I am not opposed to DRM (or, managing digital rights, which I think is the bigger question), but I honestly believe, after many, many years of observation, that anyone who thinks DRM stops piracy is deluded. It might — at best — delay piracy for a moment. But stop it? That’s bad money spent. Luckily for publishers, it’s money being spent largely by someone else.

    I say this a lot, but I’ll say it again: I don’t pirate. I don’t even buy used. I am the publishing industry’s dream customer. I rebuy books I already own because I can’t find them.

    Your Napster example made me think, but no matter what scenario I consider, DRM wouldn’t stop your friend. Even if Sony (Columbia) owned that iteration of the Rolling Stones catalog. Maybe especially, given the disaster their DRM strategy was. I’m not going to judge your friend (despite my “buy” bias), but I will ask this: did he own this catalog in any other format? Vinyl? CD? Did he download it download it, or did he desperately want the music in an era when no legal option (Napster=specific time and space) existed? Yeah, I believe in nuance, because I believe piracy and file sharing are nuanced.

    There are various levels of free, and various attitudes toward free. DRM is not part of that discussion, because, well, not only does it not stop piracy, but it’s irrelevant to the discussion — which is digital rights management. We are talking about managing digital rights — for people who pay for content. Let me say that another way: it’s about putting rules around the product I’ve paid money to access. That’s what DRM is. It’s not about stopping piracy, it’s not about keeping me honest, it’s about the rules surrounding the product I’ve paid for.

    The question is: what did I buy, what can I do with it, what can’t I do?

    Is there a publisher out there who is willing to answer that question?

  • Joseph // Nov 13, 2009 at 10:21 am

    Maybe we’re approaching this all wrong, conceptually. We are thinking about digital books as objects on e-readers, we are trying to think about them in the same terms as physical books.

    Instead, when we download e-books, they should be stored in a personal online library. Then, you link your reading device wirelessly to your personal library and access your books from any platform. You don’t need to fear losing your books with your device.

    Also, you could grant permission to other people to access your library to “borrow” your books, at any time, from anywhere, but they would not be able to copy/move the book to their own library.

    The personal library could have a limited number of permission slots, such as 50. This way, you can lend your books to all your friends and family, take them off, put them on. But the book file never moves, and unless someone hacks the library site, no one can download the books.

    Lastly, the book download must be dirt cheap, so if I access a book in your library and like it, I can easily think it reasonable to pay $2 to buy it for my own library.

    What do you think of that paradigm?

  • T. Moore // Nov 13, 2009 at 12:06 pm

    I make my living from books, so anything I can do to maximize the value of my content is of enormous benefit. The problem is that the perception people have of the ebook is that it is free content to share with whomever they want without compensation to the creator. I am NOT going to give them away for free. The author of any book has the option to offer the content for free, but the demand for free ebooks is killing my motivation to write at all, since once the ebook is downloaded, there is no incentive to buy the physical book. People tell me, and swear blind that people still buy the physical books, but until I see that actually happening with mine I will continue to be skeptical. “Dirt cheap” does not encourage me to fell good about writing either. If people are unwilling to pay me what I think my content is worth then I might as well stop producing ebooks and go back to selling the physical books alone. I see nothing wrong with charging half to a third of the retail price for a physical book for an ebook, but I have already lowered the prices of my ebooks twice and I don’t see any real or measurable improvement in sales. So you are not going to convince me that ebooks should be free just because you want them to be.

  • Mark Evans // Nov 13, 2009 at 3:12 pm


    Thanks for the reasonable response. At this point, I’m starting to feel like the one who just won’t let this go. I’ll try one more example and then, since we’re 90% on the same page, I’ll leave it be. Software vendors use purchased keys to control use of the software. For example, I own Camtasia, a popular video production package. I downloaded it for a free trial. If they had not forced me to buy a key, I’m going to admit that I very well may not have paid for it. Because they have reasonably good methods of knowing whether I own a key or not, I pulled out the credit card and paid for it. Can I find it free on some kind of pirate site and try to get away with continued use of a free version? Perhaps, but I didn’t. The DRM of the key purchase system created enough of an obstacle to me, a reasonably honest person, to cause me to pay for something I might not have otherwise.

    If even for this one case, DRM prevented “piracy” (or unauthorized use.) I believe it isn’t just this one case, but many, many people who are gently thwarted from paying.

    Anyway, have a great weekend!


  • Paul Oakes // Nov 13, 2009 at 4:50 pm

    I’m sitting on a series of unpublished novels hunting for a agent. I’ve been working on this series on and off for ten years (illustrations, maps, etc.) and I suspect it will:
    1: Never see the light of print.
    2: Never return a penny for my effort.
    So … bummer! Writing still fun.
    For me, DRM is a non-issue.

  • Eric Nielsen // Nov 14, 2009 at 10:27 am

    Let me say… with book owners, they tend to read a book and then eventually shove it in a box in the garage. Later a conversation with someone comes up that gets the book mentioned. The owner lends it out. Forgets where it has gone.

    Now, with this DRM thing. Let the book be lent with the original owner’s right to continue to read it be done with as it is with a physical book. Have the brains behind DRM figure out how the original owner can get the rights back, while leaving the borrows rights to read it stop with the return of the digital book version.

    There is no reason for five copies of a book be out there with only one book being purchased.

    Finally, piracy… I think a great example of piracy is the whole DRM topic. Humans, given the opportunity… will take anything of interest to them, and then share it with everyone else who’s interested, because it cost them nothing. Now, I ask… does that sound like what’s going on here?


  • Perry Brass // Nov 14, 2009 at 12:14 pm

    So basically, I gather, DRM is another term for the big dinosaurs still get to make all the money: they can play in these woods. Kindle still has the advantage of an early start, and amazing sales. They also discount books so deeply that as an author/publisher who sells on Kindle, I have no idea what a book will actually sell for, and how much “royalty” I’ll make on the book. Also, I had this strange idea that digital books would eventually lead to “real” book sales. That people would say,
    “Gee, I’d like to have this book in a real form so I can feel it, write in the margins, leaf through it in the john, etc.” That is an illusion. So what publishers will find is that digital books will make old-school publishing, a time and labor intensive operation, impossible, because their profit margins will be cut to hell. The only good thing is that it can keep a book “in print” forever, with no sweat on anyone’s brow. As long as Amazon and B & N and Smashwords can pay their server’s cost, your books will be out there, along with hieroglyphics.

  • Kassia Krozser // Nov 14, 2009 at 12:40 pm

    @joseph — I think you’re veering closer to the rental model than the purchase model, and there is room for both. Actually, the “slots” idea is how O’Reily’s Safari system works. We largely access the subscription side of the business, but they have a variety of access/purchase/print options. While I think $2 for a purchase is a bit low, it may not be the wrong price for short-term rental. I am waiting for new models to emerge. I know they’re coming.

  • Kassia Krozser // Nov 14, 2009 at 1:04 pm

    @t. moore — there is plenty of evidence that free leads to sales, but, as with any marketing model, “free” is an art form. Pricing, I suspect, will also be an art form. I do believe that the case for expensive ebooks is not being made well (or even at all) by publishers, and the lack of public discussion does harm the value perception. When a reader says something about “dirt cheap”, I’d wonder why that attitude/philosophy exists — what does @joseph mean by this? Why does he think this is the right price point?

    I’m not sure you, as an author, can make the all the business decisions you need to make without a clear understanding of what the consumer wants/needs/expects. Likewise, I’m not sure Joseph has full insight into your side of the story — there are many misconceptions about ebooks, including the trope that they’re “free” to produce (nope!), and a lot of the conversation about costs are industry directed, not outward directed.

  • Kassia Krozser // Nov 14, 2009 at 1:15 pm

    @Mark — You use a good example, but (because I have the soul of a contrarian) I see this a bit differently. Camtasia knows you need to test features on the software before making an investment (this is smart business, and I know I’ve made many purchases after testing…likewise, I’ve decided a product isn’t right for me). So they entrust you with the entire software package, but only allow you access a bit of it. Again, good. You decided it was worth buying and paid — though, as you acknowledge, finding a key online is (regretably) very easy. I think you reacted the way *most* people would. Not only was paying the easiest solution, it was your natural inclination.

    I am going to throw a wrench into this conversation after I respond to everyone — haven’t decided if it’s a new post entirely or just a comment. Thinking of new post…

  • Kassia Krozser // Nov 14, 2009 at 1:24 pm

    @eric — it’s not five copies, it’s five devices (or however many are defined by the publisher). I know this seems like a lot on the surface, but it’s really not. For example, I have a Kindle, an iPhone, and a laptop. I also allow my husband to access my Kindle purchases via his iPhone and laptop (I think we can agree that sharing books with spouses is a legal and fair use). That’s five devices. This allows me to read under varying circumstances — given that I travel a lot, this is a good thing for me — but should I upgrade or get a new device, I could lose access to some of the books I’ve purchased. Oh yes, I could try to contact Amazon and go through a lot of bureaucracy to get to my books, but, if we are buying into the myth that these books are purchased by me, why should I have to go through any hassle?

    The other issue here is that the DRM employed by Amazon ties me to the Kindle. Yes, there are ways to break it and port books, but that means I’ll end up breaking at least one law and wasting a lot of time. So if I choose to move to the Nook or Sony Reader, guess what? I have to rebuy my library.

  • Kassia Krozser // Nov 14, 2009 at 1:29 pm

    @perry — I’m not sure what “real book sales” are, and I’m not sure it ever followed that the purchase of an ebook would result in the purchase of a physical book. Though, to be honest, I see many scenarios where I would want two versions (I use the example of a cookbook quite often).

    What DRM often does is tie the book purchase to the retailer. That’s how Apple and iTunes have been so successful. Of course, they gave consumers a device and experience that matched the consumer needs. When Amazon introduced the Kindle, that was the model they emulated. Barnes & Noble appears to be going for a more open approach — and that very well might engender increased consumer loyalty, especially if they make smart decisions about decoupling the device and purchase. Many, many people are watching this space.

  • Stan Scott // Nov 14, 2009 at 5:57 pm

    Interesting points here. Kassia, I was thinking about the point you made about adding more value to a book. There are some interesting possibilities here:

    Books could come with some update period — for nonfiction, the “best” of anything, or statistics, go out of date once they’re printed.

    Some time after initial “publication”, something juicy (excerpt of upcoming work) could be added to the file. Owners could then update their copies, but not “loan-outs”.

    Since this is a hypertext medium, add links to places to get more information, or pictures, again updatable for…a year?

    @eric is right when he notes that people aren’t lending books around anymore. I read a book, stuff it somewhere, find it again when I’m looking for books to donate.

  • Mags // Nov 16, 2009 at 10:04 am

    @Kassia: @perry — I’m not sure what “real book sales” are, and I’m not sure it ever followed that the purchase of an ebook would result in the purchase of a physical book.

    I think he means the authors who give away free electronic copies of their books to drive sales of the physical copies of the book. It’s been successful for some authors but I think will be less so as readers begin to be more e-oriented, and prefer the electronic copy of the book to the physical copy. I’m already there. 🙂

  • Sean Cranbury // Nov 16, 2009 at 7:09 pm

    Hey Kassia

    Great summary of many of the treads in the DRM discussion. It’s plain to see that there’s many passionate view points here and there’s no ‘one size fits all’ solution.

    I am an advocate for every publishers/writer making the decision that best suits their wants/needs.

    Some readers have already made the switch to reading predominantly on electronic devices, some will never move in that directions, others will double dip.

    So long as people are making informed decisions and are aware of the risks of device lock-in, the leveraging power of P2P sites and the ineffectiveness of DRM then get out there and lock up your files, charge whatever price you want and maximize your investment.

    Nobody really cares what decision you make re: pricing or DRM.

    Well… that’s not 100% true. Let me put it another way.

    The informed customer cares. And the informed customer might just love your product so much that they’ll shrug off the DRM and pay full print cost price for your infinitely replicable superabundant digital file that you’ve tagged to the same pricing model as the finite 5000 copy print run edition of the same book.

    Hey, those customers have to exist somewhere, right? Anything is possible.

    But there’s also – just so that everyone’s aware of this – another kind of informed customer.

    The person who knows that you’re device specific proprietary ebook format DRM is repugnant and embarrassing to be associated with. Who knows that the economics of infinite replication make your digital file worth substantially less than its printed counterpart and who feels that any publisher who locks their content up is not really interested in unleashing the power of their writers and their writers’ ideas.

    That person also knows that if the writers’ ideas in question – the one’s locked up behind the flimsy wall of DRM solutions – are actually relevant to the time and worth sharing, then they’ll be available for free on file sharing sites.

    And the physical 3 dimensional versions of these books will continue to sell.

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