Friday, June 20, 2008

The Future of Books, Book Piracy, and Digital Rights Management

There is a specter haunting the publishing industry, the specter of scarcity. Scarcity no longer exists. Electronic copies can be made and are being made quite rapidly. This wasn’t always the case with books. It used to be music and movies that were exposed to this threat. They were always electronic. One could easily pirate the works and share them. Someone somewhere had to purchase the CD or DVD then share it online. It is now starting to happen with books at a rapid pace.

As books become digital, the model needs to change. One fact to consider about the future of the book is the fact that books have been printed for 500 years. However, its creation has been electronic for the last 20 years. The industry is fully computerized just like any other. With the rise of e-reader devices, this electronic creation can now be read on devices easily. It can also be distributed just as easily as music and movies.

From this description, one could conclude that from the author’s computer to online as the easiest step. Two things get in the way, the majority of people still want a book in print, and placing something online creates a fear of piracy and lost sales. The e-reader is creating an increased level of piracy because one can purchase either device and then has to purchase additional content, often at the same price as a print book. Why would anyone want to do that? They begin to turn to sites like Gutenberg and, but there are only so many classics one can read. They soon turn to piracy.

Books are freely available online and they are good books that are only a few years old like The World is Flat, Freakonomics, and Never Let Me Go. Countries that do not have strict digital rights management laws can post this information and anyone in any country can download these books. Depending on what country you live in, this can be illegal. The publishing industry is facing what the recording industry and the motion picture industry have experienced. The reason why this is happening is the proliferation of e-reader devices like the Amazon Kindle, Sony Reader, and others. This will soon force publishers and authors to re-think their strategies.

How does the industry change?
How the Book Publishing Industry Should Reinvent Itself by Dave Balter
For publishing, it would work something like this:
• Authors self-package their book entirely on their own.
• Authors distribute digital copies of their books for free to attract readers and to identify a market. They use self-distribution tools to sell as many books as they can.
• Based on the response, the publisher determines which books to pick up, and pays a licensing and distribution right and uses their relationships to distribute a product that has developed an initial marketplace of buyers (note: great new potential business model for some plucky entrepreneur: track the ‘response’ of free book downloads as a data set for publishers to review opportunities).
• Publishers take the completed product, make tweaks as author and publisher feel necessary, print more and distribute them through the strength of their partners.


Balter suggests authors place their books online to see if there is any interest. If there is, then there is money to be made. Others have suggested that this model would work great for up and coming authors who need to have their works distributed. Even pirated work for a new author is great since someone cared enough to pirate it. If they are good enough for someone to steal, it is good enough for someone to purchase it.

Another suggestion:
Bits, Bands and BooksBy PAUL KRUGMAN
For example, she described how some software companies gave their product away but earned fees for installation and servicing. But her most compelling illustration of how you can make money by giving stuff away was that of the Grateful Dead, who encouraged people to tape live performances because “enough of the people who copy and listen to Grateful Dead tapes end up paying for hats, T-shirts and performance tickets. In the new era, the ancillary market is the market.”

Krugman states money can be made on ancillary items related to the book. As another author pointed out, the author doesn’t exactly reap the benefits of these extras. They get paid for the book and may get some royalties for someone alternative marketing. Again, this goes back to if the book is really popular it can make money on its own in many different ways. This model may work more for the established author who can make money off of their brand name.

How do authors change?

Some ideas for established authors:NYTIMES Pogue's Posts

The e-Book Test: Do Electronic Versions Deter Piracy?
What finally brought me around, though, was an e-mail from Kevin Kelly, a founding editor of Wired:....
“If you can’t retrieve the actual data, then I challenge you to complete the experiment. Take one of your books you have historical sales data for, release a viral PDF version and then measure what happens. Then either celebrate or curse the results — but at least it will be based on evidence.“My guess is that if you take the challenge to release one of your books in free PDF form, that even by using your column or blog as a platform to announce it, that (a) it won’t spread or duplicate as far as you might first imagine, and (b) it will elevate or at least not depress your sales.

This experiment should work. The idea that an established author can distribute a free copy of their book and it will only increase its sales. This is exactly what public libraries do. We provide a free copy of the book and this only enhances sales. I had a patron come in and I recommended a new author based on what she was looking for. She LOVED IT. She then bought the whole back catalog for that author and requested us to do the same. So if that author lost money on the first book, the author could have doubled or tripled its sales based on the free copy. Libraries do this now, why doesn’t it work online?

Engst furthers this idea:
No, David Pogue, Ebook Piracy is Not a Givenby Adam C. Engst
Supply and demand are inextricably linked, and if there's no supply for the demand Pogue freely acknowledges, it's easy to see how someone could feel relatively little guilt in downloading or sharing an illicitly acquired copy. I'm not justifying such behavior, but the harder you make it for someone to buy an easily replicated digital commodity, the more likely they are to share that commodity as a way of making things easier for others. Look at the parallels in the music industry. Apple made legitimate purchases of music both easy and inexpensive via the iTunes Store, and anyone who was on the fence about whether it was acceptable to share music suddenly had a viable alternative. Providing a legitimate purchase path for electronic versions not only generates revenue, but also reduces illicit copying.

So if you choose not to make a free copy and the book is popular, people will find a way to get it. The fact that the Kindle and the Sony Reader are so locked in on the formats that they can read, people will pirate online works to make it compatible for their devices. They want to use their devices and not look like schmucks that purchased an electronic device that has nothing on it. Furthermore, you CAN’T put anything on it unless you shell out the same amount of money you would have to purchase the print copy.

I can’t get what I want on my device

Pogue reviews the comments on his E-book test article:
NYTIMES Pogue's Posts Readers have their say about e-publishing debate
• “All you have proven is that there is pent-up demand for an electronic version of your book. Your conclusion is only valid IF you had a legitimate electronic version to sell, and people chose to get the free one instead of the paid one. You haven’t given them that choice. They used the pirated electronic version, because it is the only one.“The same principle was true in the pre-digital world. People could read the book for free from the library, but many of them would still choose buy a copy. Even if your book was on a pirated site, people (like me) would buy a legitimate non-DRM’d electronic version if you sold it. Until you do, you cannot make any claims about digital piracy from personal experience, because you haven’t done a valid test.”

From the comments:

Off-topic, but related to Kindle and ebooks. I’m intrigued by the Kindle, but having an expensive device that’s basically empty until I make purchases is a little off-putting. One of the joys of the Ipod has been to digitize my own CD’s and fill up the Ipod with my choice of music, at no further charge and with only a small expenditure of time. Is there anything new out there, or on the horizon, so I can digitize my own books. The book scanners I’ve searched for have been either very expensive or very slow.— Posted by Charles Slater

Again, it is frustrating to purchase an e-reader and then not being able to put your favorite books or books you want to read on it without buying the format. I can purchase an Ipod, burn a CD that I have ALREADY purchased and put the music on there. I can’t do that for books I already own. It would be silly to destroy your books to make an electronic copy for your reader so people turn to piracy.

Then there is the price issue. Seth Godin provides a random thought as to why the book prices are the same for electronic and print.

Seth's Blog: Random Thoughts About the Kindle
Once you have a device that lets you get any book in a few seconds, one that eliminates both paper and inventory (the two enemies of every publisher and bookstore) then the marginal cost of a book drops dramatically. And as we learned at the iTunes store, when something costs a buck, it's a fundamentally different purchase than when it costs $10 or $20.

Why does it then cost the same, or even close. Making digital copies cost near to nothing, which goes back to the problem of scarcity. The publishing industry had a problem when it produced too many book. This led to bookstores throwing perfectly good books away because they had more supply than demand. The electronic version would allow publishers to control that a bit more, but it certainly can’t argue that there isn’t enough or it costs too much to make more.
Non-compatible formats hurt sales and drm protection further hurt sales. I am not sure how much evidence is required to convince the publishing industry of this. The modern business model is provide it for free and if it is good enough, people will pay for it. Now we just get horror stories about how people cannot access their favorite books. People want to buy the book, the publisher wants to sell the book, but something seems to get in the way…

Teleread:How real people buy, read and use e-books—and how freebies can help By Ficbot
So, the tally for this batch of reads?-One sale that could have been two sales had publishers not been so protective of their book that they failed to make the sequel available in a format I could read on my device
-One sale that was regretted and will not be repeated because I could not transfer it to my device
-One freebie I opted not to purchase for myself but may in future purchase as a gift
-One gifted book which gained a sale for one of the author’s other works
One freebie I opted not to purchase but which put the author on my radar for future purchases
-So, freebies and borrowed or gifted books do pay off. And format stinginess does not pay. I would have finished the Roberts (and perhaps bought others) had I been able to read them on my eBookwise. And if that sequel was available, it would have been a sure sale.

There were several lost sales in this experiment. Publishers are beginning to get wise, but are they too small to make a dent, particularly against businesses like Amazon?

Blackstone Audio phases out audiobook DRMPosted by Cory Doctorow
All this raises the question: when will Audible -- the largest audiobook retailer in the world and the exclusive provider of downloadable audiobooks for iTunes and Amazon -- drop the DRM on its audiobooks? I was shocked a month ago to hear from Amazon that they would not carry the Random House Audio audiobook of my NYT-bestselling novel Little Brother because it was only available as an MP3. Official Amazon policy on audiobooks still seems to be no DRM = no dice.

Even though a business model works, they cannot be successful because Amazon blocks the door. That is a scary prospect since Amazon seems to want to corner the market on book publishing and sales. Then it becomes, do what we say or else. That’s very scary.
Are there rebels in our mists? Print on Demand books are becoming popular with the Espresso book machine. Overall, this machine doesn’t produce a lasting print copy, more like a cheap paperback. These are available in some libraries. This is a way someone can get a copy of any book they want and print it out. Think about working this with local authors trying to get attention, collaborate with this machine and put it in a library, and any local library can help local authors get the attention they deserve.

Blackwell's to launch 'clicks and bricks' book retailing
Lindesay Irvine
Blackwell's is to become the first high-street bookseller in the UK to offer print-on-demand books while customers wait. The innovation will be delivered by an "Espresso Book Machine" (EBM), which can print and bind any one of a million titles.Set to be piloted this autumn in a branch that is yet to be announced, the chain plans eventually to install EBM machines in all 60 of its shops across the UK. The machine can currently print about 40 pages per minute, but a newer model due later this year is expected to double that speed.

Are books worthless?
The above articles discuss how the publishing industry can transform, how authors can make money for themselves in a digital book world, and the simple reasons why the publishers and the authors are both losing money. There is another factor not discussed, the worth of the book over time.

Once a book is published and run its course, the book loses its value. All books lose steam. Working in a library I can see how many books we weed out because we need the space for the new. After about two to three years, the books lose a great deal of value and this creates an interesting situation. Some books are being placed online by book pirates after two to three years, but does this increase sales of a book that will only be dead without the piracy?

Sites like Bookyards can provide links to authors that have a major fan base. It isn't illegal for them to host or point to websites that provide free drm-free e-books online mostly because copyright varies from country to country. In a recent correspondence, I found that after two to three years, most books published can be found online. It is a scary revelation.
Furthermore, most books published today will not have a fan base after two to three years. I know I work in a library that weeds books. After so many years, the books are no longer read, the marketing fails, and unless the author is extremely popular, or continues to put out great work regularly, the author can fade away. In my weeding process, I surveyed different sites to resell the books to. We typically have a Friends of the library booksale in which books are sold at 25 cents for paperback and $1 for hardcover. Some of these books you can't give away. Many of the sites I visited priced the books I was weeding at 0. That's right, after a few years many books are worth NOTHING!!!

An author gets attention through controversy. If their book is banned, it only draws more people to try to get a copy. The less that the book is available, the more people will want it. The same goes for electronic books, if the format isn’t available, people will pirate it. If you don’t offer it for free, people will try to get a copy even more. By providing a free copy, it will generate interest that will lead to sales. After the book has passed its prime, providing a free copy will only continue the interest in the book and the author. That will only lead to a lifelong love of the book and the author and will provide funding for the industry for years to come. If the book is cut off, not published, and not available, the book and the author will fade into history. They go out with a whimper.