Analyzing Amazon's E-Book Loan Agreement

conel writes "The Economist has a knowledgeable mainstream take on the restrictions publishers are forcing on e-books. From the article: 'They wish you to engage in two separate hallucinations. First, that their limited license to read a work on a device or within software of their choosing is equivalent to the purchase of a physical item. Second, that the vast majority of e-books are persistent objects rather than disposable culture. ... Just as with music, DRM will be cracked. As more people possess portable reading devices, the demand and availability for pirated content will also rise. (Many popular e-books can now be found easily on file-sharing sites, something that was not the case even a few months ago, as Adrian Hon recently pointed out.)"

Comments

Re:I hope it's the beginning of a good thing...

[Bigjeff5]

Are you kidding? The ability to lend a book once for 14 days if the publisher allows it? How is that a good thing?

It's so ridiculously restricted it's essentially useless.

old school piracy.

[SuricouRaven]

Ebook piracy has been around since before ebooks were commercially available. Even many years ago there existed a usenet board I used to frequent where a constant stream of books were distributed - painstakeingly scanned, OCRed and (hopefully) proof-read by enthusiasts. The selection was surprisingly comprehensive.
It's been a long time since I was witness to the ebook piracy scene, but from what rumors I have heard the real action there now resides on a few DC++ hubs.

Re:old school piracy.

[hitmark]

What i find most interesting in all this was the news that when the last book of the harry potter series was released, it took german fans 48 hours to scan, translate and distribute a german ebook version.

What's wrong?

[brit74]

I don't find anything wrong with the lend program. I realize Slashdot has a certain "information should be free" ethos, but it doesn't make much sense to build in the ability to give unlimited copies to everyone and think that it won't undermine the business. While the publishers "wish you to engage in two separate hallucinations", it seems like lots of other people want us to engage in another hallucination: that giving out unlimited copies won't turn into a financial problem for booksellers. For example, how many students are really going to buy their own digital copies of their textbooks, as opposed to passing around one copy for everyone? (Not that I really agree with the current economic model of expensive, often-updated textbooks, but I also can't agree with the pirates desire for unlimited free copies for everyone - as if that has no economic consequences, either.)

Re:What's wrong?

[LordNimon]

I realize Slashdot has a certain "information should be free" ethos

I think you are mistaken. There may be a few people who believe this, but my observation has been that the vast majority of Slashdotters are much more concerned about the right of first sale, which DRM-encumbered digital downloads do not currently allow. There's no way I'm going to spend $10 or $20 on an e-book if I can't sell it to someone when I'm done with it.

Re:What's wrong?

[cynyr]

or gift it to a friend, or let my kid take it to college, or... any number of other things i may do with a physical book involving lending.

Re:What's wrong?

[grcumb]

I realize Slashdot has a certain "information should be free" ethos, but it doesn't make much sense to build in the ability to give unlimited copies to everyone and think that it won't undermine the business. While the publishers "wish you to engage in two separate hallucinations", it seems like lots of other people want us to engage in another hallucination: that giving out unlimited copies won't turn into a financial problem for booksellers.

Just for the sake of argument, let's accept that assertion of yours as truth: Infinite distribution necessarily causes financial problems for publishers. That doesn't explain why they would choose to give fewer lending rights to possessors of digital copies than to those who buy the paper object. Nor does it explain why they charge pretty much the same price for this reduced capability.

We seem to be dealing (yet again) with anti-features: The publishers are actually adding to the consumer's burden in exchange for nominally lowering the cost and 'allowing' them the convenience of reading an electronic copy of a given book.

As the Economist rightly notes, this won't stand. Anti-features (including DRM) only need to be removed once. Argue however much you like about the rights of the author. As a writer, I'm pretty damn sympathetic. But realistically, writers have to adjust to the world as it is. People will share things that delight them. They do so with photos, with posters, books, music, TV shows and movies... in short, with everything they can.

Yes, it puts creators in a quandary. Yes, it threatens livelihoods and, potentially, might even prevent the next great opus. But to attempt to remodel the world to fit an outdated vision? That's just insane. I don't mean stupid -it actually requires a fair amount of imagination to get there- I mean insane - nuts, cuckoo. The idea is premised on the fact that all of society (save the poor, beleaguered author) is wrong, and must change. Even if the first clause is correct, the second does not follow. And even if we accept it logically, we still have no hope of effecting that change through technical means.

I suppose it is possible that we could change society. It's happened before. But we will not do it with DRM and anti-features.

Re:What's wrong?

[PCM2]

it doesn't make much sense to build in the ability to give unlimited copies to everyone

What you don't seem to understand is that B&N's lending policy doesn't come remotely close to this -- in fact, it doesn't remotely come close to what you can do with a printed book. If I give the book to you, you can keep it as long as it takes you to finish reading it -- no need to return it in 14 days. If you want to borrow it again next year, you can ask me and I'll probably let you. In fact, I might just tell you to keep it, in which case you own it now, and you could loan it to other people or pass it along, too. I could also loan it to someone other than you, if I chose to keep it.

None of this is possible with the B&N e-reader loan policy. With a Nook, I can loan the book to you once. You can only have it for 14 days, after which it disappears from your Nook and reappears on mine. And from that moment forward, I can never lend it to anyone ever again. Not to you, not to anyone else. And that's that. That is a far, far cry from what people expect when they purchase a book.

Re:What's wrong?

[Anonymous Coward]

I've seen that suggestion several times. And it sounds just as stupid every time. You're not lending a READER when you let someone borrow your kindle/nook/whatever, you're lending your ENTIRE LIBRARY. If I buy a book, I can lend the book. That's the end of the story. I am perfectly fine with the fact that book lent out can't be read by me - that's fine. What I don't appreciate being told is how long the loan is, who is "allowed" to be lent the book, and "if" I'm allowed to lend the book.

Re:What's wrong?

[PopeRatzo]

I'm really starting to believe that we could completely do away with copyrights and things would change very little. Musicians would still sell music, authors would still sell books. Lawyers would be the big losers, as would a few of the conglomerates that have divisions with the sole purpose of owning other peoples' intellectual property. Other than that, the world would go on pretty much as before.

I'm still waiting to see any real data that shows the damages from widespread file sharing of copyrighted materials.

Re:What's wrong?

[dwillden]

This gives me an idea, perhaps someone should start a campaign with a site where you can print out Book lending agreements.

Each agreement will state in appropriately scary legalese that it authorizes the purchaser of the book to lend the book once, for a period of 14 days to one individual of their choice. Upon completion of the 14 day period the lender is legally obligated to recover the book from the lendee, even if their not done reading it yet, and that they are legally prohibited from ever lending that book again.

Then place these lending agreements, one (and one only) per book at every book store they can get them into.

We can complain about it all we want here in cyberspace, but the only way to really point out how flawed these "Lending programs" really are is to let hard copy buyers feel the same frustration at such ridiculous rules which totally violate the right of first sale.

If you figure out how to make a profit off this idea, I want a can of Mt. Dew as payment for use of my intellectual property of the idea. ;) I know, the idea really isn't worth that much, but ya gotta think big.

Re:What's wrong?

[vikarti]

There are other cases except your 2,for example: There is a good SciFi series of 4 books. Except that it is impossible to buy ANY electronic version of 4rd one(it is in kindle store - but limited to USA only). Other electronic versions are available...in USA only again. (previous parts were sold via Baen's Webscription,and bought by me for example) What I should do?I was ready to pay.except they don't want to get money. Tried,honestly find ways.after 2 hours give up and fired up eMule,after some time problem solved(for me)

Re:What's wrong?

[sjames]

It's drifted quite a bit. At one time the implication of "information wants to be free" was related to "water wants to flow downhill" or "a gas wants to expand to fill it's container". It's just the natural order of things that if a single control on information fails anywhere just once, it's free. That's all. The Free Software movement pointed that out simply to show that Free Software is information in it's natural state.

Another sense of the phrase is economic. The marginal cost of copying information is practically zero, so from an economic standpoint, that's what it should cost in a free market.

Of course, producing the very first copy is not nearly free. From an economic standpoint, the market SHOULD be coming up with a way for people to pay for that first copy to be created directly rather than greatly overcharging for the copying but paying nothing for the part that is actually worth something. That process is being delayed as distributors cling desperately to the old now broken model using increasingly draconian laws and ever more complex and expensive DRM to create an artificial scarcity their model needs.

Interestingly, most of the rabid free market crowd carefully avoids recognizing copyright as a HUGE manipulation of the market.

Doing it wrong

[Arancaytar]

- It's often more expensive than a hard copy
- Its purchase does not affect the cost of getting a hard copy later (nor vice versa!)
- It is intangible and can (and will) be remote-deleted for the flimsiest of excuses.

Why are we supposed to buy this again instead of getting something made of paper?

Re:Doing it wrong

[hedwards]

Convenience. Just like with convenience foods typically costing more than doing it yourself. Of course, that's more the rationale than the reasoning. The reason is that they can get away with it.

Personally, I like ebooks, but I do expect to be able to use them as I please. I like the way that O'reilly media handles their ebooks. The specifics depends a bit on the book, but most of the recent books are available via several different formats, including epub. My main complaint is that if you buy the book through their store rather than the android market that there seems to be no way of converting between the two.

Treat Digital Copies Like Books

[Bigjeff5]

We need to start treating digital copies like books. We don't own the content, but we should own the copy we purchased, and we should be able to do with them what we want.

Obviously there are some natural limitations that apply to books that would need to artificially applied to ebooks, but we can already apply them, as this piddly excuse for a loan policy proves.

The concept is easy: a function in the software that ties an ebook to the device and only allows transfer to another device if it successfully ties it to another device, and then disables the ebook on the original device. That would make ebooks behave exactly like regular books. Then you wouldn't need a stupid loan policy, you'd just give your friend your copy of the ebook, just like you would a physical book.

I seriously do not understand why this has not been done yet, or why they insist on these stupid "loan" functions. Just move the ebook off the old machine and onto the new! Leave it up to the owner of the book to get their copy back, just like physical books. We've been able to "move" (copy then delete) digital media for ages.

Seriously, it's not that hard. Why the hell are they making it so complicated?

Re:Treat Digital Copies Like Books

[Anonymous Coward]

It's a bit harder than you might think..
If my personal vault of ebooks dies, how do I transfer them to someone? Or, is that the logical equivalent of my house burning down with all the contents?

Frankly, the probability of my ebook reader dying/getting lost/stolen/destroyed is MUCH higher than my house, not to mention that paper books have a fairly decent lifetime. I've got books that are 100 years old and still perfectly usable. Yes, I also have paperback trash that is falling apart after a decade or so. However, reading my 20 year old emedia (5 1/4" floppies anyone?) might be a bit of a chore, and reading eMedia from 1980 (8" floppies) would be a real chore.

The lifetime of media/reader thing could be easy to deal with if you let me freely make copies onto new formats as they become available (e.g. burn all those 5 1/4" floppy images onto CDROM, along with the software to read them), but it's really hard to make it easy for me to make copies but not easy for me to give free copies to my friends.

Re:Treat Digital Copies Like Books

[EdIII]

Your way way way off.

From the very beginning we needed to treat books like digital copies. Hundreds of years ago I would have bought the argument that the act of creating the book took as much or more effort than writing it. The printing press forever changed that.

Where you have already gone down the wrong path is a fundamental misunderstanding, or complete disregard, for copyright law.

1) All intellectual property at the moment of creation belongs The People . This is to ensure that we always possess a rich culture of art, literature, and technology. After all, everything is created by building on the works of others. Perhaps the very first cave dude that invented fire might be able to claim true originality, but I am sure there was some cave dude before that who figured out that living in caves was better.

2) In our current society, at the moment of creation, We The People grant a number of limited and specific rights to the creator. This is copyright law, and in some cases, patent law. As a people, we decided it was in our best interests to temporarily allow the creators control over their works. Distribution, profits, etc. It was never meant to be permanent.

Your idea involves, quite simplistically, technology and law that should not exist. The only way to implement your idea is to lock down so-called cyberspace into a totalitarian regime of complete and utter control. For without this complete and utter control, DRM is doomed to failure. We can shake our fists against the Pirates, but they are simply representing the true behavior of our society; we love to share information. For good or bad, this behavior will persist and continue despite our constant ethical debates in various forums.

Furthermore, it is absolutely evident that these controls (often DRM), grant the creator effective rights and control beyond the scope and intent of copyright law .

The vast majority of the populace simply lives in ignorance. That is simply a state of being, and not a character flaw. Few understand the true implications of the cyberspace we created. Society created an additional dimension. It has its own topology, its own space, and very clearly interacts with the physical world we live in. Consider SCADA systems that are supposedly protected, personal and confidential data held in various spaces, e-commerce, virtual online worlds, etc. It goes on and on. Cyberspace can clearly be affected by our actions here, and actions in Cyberspace can profoundly affect us, regardless of whether we initiated them or were even aware of them.

We would need to completely dominate that space in order to ensure that governments could control it. Cyberspace could not exist according to the ideals of Freedom, Privacy, and Anonymity in order to control it on a large scale.

THAT is what people are missing. You are growing up, living out your life, and people are still yet to be born, in our new world with little practical knowledge of this new dimension of our existence. In the name of Fear, Uncertainty, Doubt, Ignorance, and Greed we are handing over the keys, and the very control, over this critical dimension of our lives with barely an acknowledgment.

I know, it sounds crazy and intense, and how much tin foil do I have on my head right? It can't really be that complicated right? You would be so wrong.

You need to choose which is more important. Locking down Cyberspace in order to effect these controls on it, or making sure that we will remain free.

*******

Your idea is not treating digital copies like books either. You simply misunderstand what a book really is. It is, quite simply, a physical medium in which the copyrighted material can be enjoyed. That enjoyment is entitled by rights given to you from the copyright holder. One could say, the book is proof of your rights.

What we really need is for all copyrighted material to be sold with what am

E-books more expensive than paper

[hawguy]

I was moments away from ordering a Kindle - I had added it to my Amazon shopping cart and had started to add some e-book titles. Then I noticed the used book prices. Every one of the 5 e-books I had picked out were priced at $9.99, while used books with shipping came out to prices ranging from $4.50 to $9.99 including shipping.

While I understand that people that travel a lot may prefer an e-book for the convenience, I do 90% of my reading in my living room. Why would I pay $139 for a device plus a premium price on each book just to have a fancy gadget? I'm not one to run out and buy the latest bestseller and I have enough books on hand to not find it hard to wait a couple weeks for a used book to arrive.

I could even resell the books after I'm done and make the effective cost even cheaper (printing a priority mail label takes a couple minutes, so there's hardly any inconvenience). Though in reality, I donate my books to a local charity.

I don't expect the publisers to allow e-book resales, but unless they cut their book prices significantly, they are going to have a hard time competing against paper.

eBook piracy

[modmans2ndcoming]

I avoid eBook piracy by simply by reading the classics

Re:eBook piracy

[jank1887]

or listening to the classics.

One publisher seems to have a clue...

[Decker-Mage]

Baen Books has been posting e-books, several formats available, for several years now. And, curiously enough, it's the authors that make the choice. I have a solid library of their titles that are loaded on all my machines to read during down-time (waiting on something) and all of them, including ones that I initially wouldn't have bought in book form normally, are here in the pulp as well. So, it's a good deal for the author, give me a book that may have me buy the series, rather than miss a potential sale.

A rather radical thing that I recently encountered was a hardback Baen Book ("Rats, Bats, & Vats") that had a CD with several dozen titles from Baen on it that encouraged you to make a copy and give them out.

As for the e-book community, yes, they are alive and well in the newsgroups last time I looked (August I believe) and you can get what you want in almost any format. Then again, that's been true of anything that can be presented in electronic form pretty much since newsgroups (NNTP) came to be. Just as with the cracking community (hell Apple should know what with rooting the iPhone) you'll always see them out there. Keep the price point low enouigh and frankly most people won't go to the effort of finding, downloading, etc., since you never going to know what you get (unusable/, malware, and lawsuit, oh my!).

And before anyone professes that this is incorrect, go back and take microeconomics again, specifically opportunity costs. The beautiful thing about iTunes, iPhone Apps, NetFlix, downloadable software, and e-book marketplaces is that they have been an ecometrician's wet dream for statistical market behavior. I don't think that this was the intent of the providers of music, apps, and video, but there you have it. Saved us a ton of research grant money. Thank you!

Re:One publisher seems to have a clue...

[Bigjeff5]

Their free ebook program has pretty conclusively proven that books that are past their peak sales mark (usually 2-6 months after first publish) see a substantial increase in sales after publishing the ebook for free.

Don't hide it, promote it!

The prime palaver section really details why this works, but the lengthy introduction on the front page is good enough for it to make sense to most people.

This quote really sums up the real problem quite nicely:

Income doesn't derive from preventing theft, it comes from making sales. A certain amount of loss due to theft is simply one of the overhead costs. Obviously, taking simple measures to eliminate as much theft as possible is sensible. But at a certain point -- and much sooner than you might think -- the measures you take to prevent theft can start cutting your income.

A few months ago was before the Publishers F'd up!

[BLKMGK]

A "few months ago" I wouldn't have thought about pirating a book. I could get my favorite books for under $10 and I was reading them like crazy. Then here comes iPad and the bullshit deal Apple setup with the publishers to let THEM set the price and break Amazon's lock on E-books. Publishers, led by Macmillan, put the hurt on Amazon, and now they too are forced to let Publishers set book prices. Damn near overnight my buying of books came to a screeching halt as nothing I was interested in reading could be had for what I felt was a reasonable price. Some of the books I looked up were CHEAPER in hard copy! Books that have been out 6-7 YEARS for $12++?!

So I too looked towards Torrent sites and elsewhere and sure enough there was tons of books available. I haven't bought a single book from Amazon, hard or soft copy, since this change in pricing went into effect. the sad thing is that E-books are so small no one ever just shares one, it's ineffective. Instead you see huge collections thrown together in order to make the file size decent.

Thankfully some authors are getting a clue! Hopefully more will follow this guy's lead -> http://jakonrath.blogspot.com/

Re:I hope it's the beginning of a good thing...

[icebike]

You are exactly right. Its almost insulting that the offer it, probably doing so only to deflect regulator attention for violating consumer's rights.

Its the same deal offered by the publishers to Barnes & Noble for Nook users. (Not Amazon's doing, in other words).

They have found a way to end run the First Sale Doctrine, by controlling right after the purchase. Non infringing resale is essentially impossible, and even loans or gifts are not possible.

The problem is no consumer group exists which can fight all the way to the Supreme Court, which is probably what it will take.

Harry fake potter...

[js_sebastian]

A friend of mine some time ago downloaded book four of harry potter as an e-book off some website, and read it. He then proceeded to download and read book five, only to find out that the story was completely inconsistent with the plot of book four... It turns out the book he had read was a fan-made harry potter spin-off, probably written before book four actually came out, but it was good enough that, while a few parts seemed strange, he did not notice it was a fake until he saw the inconsistencies to the following tome...