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How Publishers Are Cutting Their Own Throats With eBook DRM
An anonymous reader writes "Sci-fi author Charlie Stross has written a post about how the Big Six book publishing companies have painted themselves into a corner in the rapidly growing ebook industry. Between user-unfriendly DRM and the Amazon juggernaut, they're slowly pushing themselves out of business. Quoting: 'Until 2008, ebooks were a tiny market segment, under 1% and easily overlooked; but in 2009 ebook sales began to rise exponentially, and ebooks now account for over 20% of all fiction sales. In some areas ebooks are up to 40% of the market and rising rapidly. (I am not making that last figure up: I'm speaking from my own sales figures.) And Amazon have got 80% of the ebook retail market. ... the Big Six's pig-headed insistence on DRM on ebooks is handing Amazon a stick with which to beat them harder. DRM on ebooks gives Amazon a great tool for locking ebook customers into the Kindle platform.'"
DRM on ebooks gives Amazon a great tool for locking ebook customers into the Kindle platform.'"
Which is why I'm not buying books from Amazon or B&N at this point. Either it's without DRM, or I'm not buying it. Baen's Webscriptions for me, at least at the moment.
I don't read AC A human right
... pricing an e-book $13 when the paperback is $6 is a much more visible issue for the average e-book buyer, at least judging from the various comments on amazon's message boards.
-- the cake is a lie
Why does every aspect of the publishing industry seem to fail at grasping the advantages of limited or no DRM and digital products?
This pricing system is nothing new. All the modern Call of Duty games stay at $60 on Steam. The latest version rarely goes on sale, if so it's only like $10 off. Publishers of any sort only want to be paid what they think customers should pay.
Then, some indie mucky-muck makes something like Minecraft, Angry Birds, etc, charges so little, and sells millions. It's not fair!
"Here's a great book I just read. Let me lend it to you..."
in that case ebooks should cost 10% less than the paperback edition when it comes out, and 10% less than the hardcover before the paperback comes out.
And maybe they do "cost" 10% less. However, that's their cost. Their price to you, on the other hand, should be whatever they think you'll pay that gives them the most profit. It's how capitalism works: buy low, sell high. It really is that simple.
If they think you'll pay an extra $3 for the convenience of sitting on your butt while having the book whisked over the aether to your Kindle, then they'll happily collect it from you. If they think you'll pay an extra $5 for the smell of a dead tree, they'll be even more happy to collect that. And if they think you'll pay $79 for a Kindle today that will lock you into an investment of $15 DRM'd books, they're ecstatic.
The only part of the equation that matters is what the largest number of consumers are willing to pay in order to maximize profits to the stockholders. Nothing else, not fairness, not reasonableness, not public opinion, not whiny authors, not abusive commenters in the Amazon reviews, nor the public good, matters. Never forget that.
John
...except in Australia, where buying almost anything at all digitally/overseas and having it Fedex'd over here is still significantly cheaper than buying retail. I will definitely buy that $13 ebook since the paperback is $40+
- They emerged originally as a replacement for a national navy, keeping garbage from being dumped in Somali waters?
Irrelevant
- They generally let people go unharmed after receiving a ransom?
They kidnap innocent people at gunpoint for money. Fuck them.
Not just insanity. Immorality. Especially when they get laws passed as an end-run around your rights, making it illegal to space-shift what you already bought (something that's supposed to be legal).
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Let me correct you on this - Amazon does NOT want to do this. In fact you will note that almost all of their book prices specifically state that they were set by the PUBLISHER and not by Amazon. Why? Because Amazon WAS selling books at pretty reasonable prices aka under $9.99 for even new best sellers and then Apple released the iPad and gave the publishers the ability to set pricing - which they then demanded from Amazon. Amazon tried to fight this but in the end knuckled under and we have the Agency Pricing Model that we have now - and we have Amazon acting as a publisher for many smart writers. Amazon doesn't like this but they have no choice, in fact someone is suing Apple and the publishers for this now.
End result? I no longer buy many books and I think this industry will be learning a very hard lesson just as the music industry did. In fact it will be WAY worse since books are WAY smaller (say 4megs with multiple formats) and because books aren't read over and over quite like music is. A real shame too since I and many I know were buying books more and more frequently prior to this truly stupid move by the publishing industry.
P.S. MacMillen was one of the big publishers leading the charge and on their blog, I shit you not, they actually tried to defend their pricing by stating how expensive PRINTING presses were! The mind boggles - these dinosaurs aren't long for this world...
Build it, Drive it, Improve it! Hybridz.org
I work for a small publisher. I don't particularly agree with our pricing scheme nor DRM but that's not my department. If you want your books on the millions of Kindles out there then you had better have it available via Amazon. It's a simple as that. We will sell our books to practically any retailer and we have a growing number that sell ebooks. In terms of Amazon using their monopoly ... they already had one with physical books and all the arm twisting and discounts stuff applies equally there.
Not only that bust as many authors are finding out ebooks don't have limited shelf life. In the paper world a book is only on the shelf and then in print for shipping for a limited time. An ebook on the other hand need never leave the shelf - it's ALWAYS available for sale. Many authors are waking up to this and telling their old publishers to take a hike when they come calling asking for rights to the electronic copy and doing it themselves. I cannot find the blog now but there's a guy out there who's making huge bucks on books the paper publishers REJECTED and laughing his way to the bank using Amazon. The faster the old school paper guys go under the happier I will be, we need less greed in the world.
Build it, Drive it, Improve it! Hybridz.org
Because the correct price for a good has nothing, zero, zip, nada, to do with the cost of producing it. The correct price for a good is "all the market will bear". And claiming the price is too high is simply not moral justification for stealing a book, electronically or otherwise.
Socialism: a lie told by totalitarians and believed by fools.
"Industry standard DRM" is an oxymoron. If you can't implement it, then it's not a standard. You're locked into the sole supplier of the trade secret. When you mentioned that everyone has to run Wine just to be able to read the book, didn't that clue you into how ridiculous you must have sounded? How about the part when you mentioned a .. I don't know what to call it .. a "spec"(?!) that has one particular companies' name in it. Seriously, you might as well say the XBox is an industry standard; that wouldn't be any sillier.
You know what's an industry standard? You're reading it right now. HTML. (And that's a fragmented and contentious one!) You would never even be able to guess which browser I'm using because it doesn't matter. HTML just works, with more programs than you can shake a stick at. And if you don't like any of them, you can even write your own. Text. RTF. Even PDF -- it's hard to say this with a straight face -- but even PDF is standard compared to that other Adobe thing you just mention that nobody else in the world has ever heard of, which probably explains why nobody ever makes readers for it.
Along with paper and ink, shipping cartons, shipping costs, inventory management, retail floor space costs (IOW retail markup), damaged and unsold merchandise, etc. All essentially zero cost. Just like digital. That's why the pricing is the same.
Sure.
Reader: I'd like to buy your book please.
Publisher: Buy a Kindle first.
Reader: No, I don't want a Kindle. Sell me a book?
Publisher: Buy a Kindle.
Reader: If I buy a Kindle, can I read the book without it?
Publisher: No. But buy a Kindle. I don't even care if you buy my book. Just please, buy a Kindle.
Reader: What is this, a MLM scheme? Do you get paid for Kindle sales?
Publisher: No. I just want you to buy a Kindle.
Reader: Whatever. Anyway: money. Here is some money. Want my money? Sell me book. Book. File. No Kindle. Not any particular Kindle competitor. Data, not tool. Book. Sell me book. Money. Money. Here is some money. Money.
Publisher: Fuck off.
Reader: [blink] I think we had a misunderstanding. Let's try this one more time: money. Money. Here, please take my money.
Publisher: Fuck you and your fucking money. I don't want money.
Publisher Stockholders: la la la I am blissfully unaware. The management is trying to increase revenue. The management is trying to serve my interests. I will not sue them, or even fire them. la la la la.
Publisher: Fuck money. Money is bad. I hate stockholders. Die, stockholder. Die, author. Die, customer. Everybody die. Fuck you all! RAAAA! Buy Kindle. *drool* *ramble* *rant*
Reader: Hey, this torrent site is pretty nice. And everything just works!
Amazon: You know what else just works? Reading those pirated books on a Kindle.
Reader: ok. Here, have some money.
Amazon: Moooney! Woohoo! Here you go. Enjoy your Kindle. Wanna buy some books?
Reader: No thanks, but I gotta admit, this Kindle is actually pretty cool. And thanks for pointing me at those torrent sites.
B&N: Wanna buy some books?
Reader: I didn't know anyone was still trying to sell books. No thanks.
Borders: please, money .. i need money.
Publisher: Money baaaad!! No money.
That is what DRM is all about. Saying no to money, in order to advance someone else's interests at your own expense. DRM means "Fuck you and your fucking money." That's about as rational as DRM gets, if your business is content. If your business is selling the one legal implementation of that DRM, though, it's reasonably sane.
At the same time, the release prices for entertainment are completely batshit crazy. Games are $60, books are $35, and movies are $12? Who can afford that crap? Those prices all fall pretty quickly, but can't they come up with a better model than fleecing their most eager customers and then doling it out one step at a time to the next most impressive or convenient formats?
This is actually the whole point: Market Segmentation. Your goal with any product is to extract maximum sales revenue from it, which means finding the optimum point on the price/demand curve. But if you sell at only one price point, you actually leave money on the table from individuals who were willing to pay you more for that product. For example, suppose I've figured out that maximum revenue for my widget is at $10/widget. However, I also know that there are people who are willing to pay $20/widget; there simply aren't enough of them to make the $20/widget price more profitable than the $10/widget price. Wouldn't it be great if I could get the best of both price points? If I could sell the product for $10/widget to those customers who would only be willing to buy at $10, but also turn around and sell it at $20/widget to those customers willing to pay more? Wouldn't it be great if I could do this in such a way so that the $20 customer actually is pleased with his purchase, and doesn't feel ripped off, by providing some kind of extra value to that $20 customer?
The solution to this problem is to segment your market. With some goods this means coming out with slightly different products for each market segment. (eg, Mercedes has a C-series, an E-series, etc. etc. etc.). The solution in other products is to segment by time, so your most ardent customers pay extra to get the product right away, while more value-conscious customers wait for price drops or sales.
This is in fact the solution used for most entertainment products, and honestly I don't think there's anything wrong with it. The brand new game may start at $60, for those fans that are very interested in the product and want it right away. (Market segementation also goes higher, with special and collector's editions with extra doodads for superfans). Then the price gradually drops until it covers every level of enthusiasm/budget for the product, until it shows up in a Steam sale for $5 and even those people who say "meh, looks interesting, guess I can try it" become customers. This system nicely balances multiple interests - it makes the same product accessible to a wide range of consumers, with each consumer paying what they think that product is worth to them (and the ones paying more getting some benefit from that higher price).
I bet you change your tune when it's your mother/sister/girlfriend/wife who gets kidnapped and raped, and then killed because you can't come up with what they want fast enough, or if she gets returned, seeing her live with the aftermath. You'll be just as miserable as she is, unless you shut her out of your life afterwards.
Yeah, think about that. That Tomahawk sound a little better now?
I see armies of cocaine huffing, hooker bashing, Harvard educated RIAA trust-fund babies who've never wanted for anything in their life but a full head of hair, going on about how Limewire costs them the GDP of the entire world [oddballdaily.com] ($75,000,000,000,000 dollars) in lost revenue and also, simultaneously, claiming to have had one of their most profitable years ever [azoz.com]. How do you even rationalize that kind of blatant, intrinsic wrongness?
Here's the thing: the statistics you posted are from 2002. Also, it's a myth that the music industry is doing well. )I can imagine why pirates would have an interest in perpetuating this myth,) Here's the real numbers - all the way up to 2010. The music industry sales are in serious decline. They're roughly 30% of what they were 10 years ago - that's a 70% decline. In fact, you can find the peak year for music sales: 1999. Also, Napster was released in the middle of 1999, which I think it suggestive. There's also data showing that the top-selling albums can never get anywhere close to the sales numbers they were getting ten years ago. Top selling albums in 2010 are getting something like 1/3rd the sales that top selling albums were getting 10 years ago. Here's a chart showing the huge decline in music sales: http://static6.businessinsider.com/image/4d5ea2acccd1d54e7c030000/music-industry.jpg and here's related article: http://articles.businessinsider.com/2011-02-18/tech/30052663_1_riaa-music-industry-cd-era
I've run similar numbers for the movie industry, and while it hasn't been hit as hard, it's also seeing declines both in box-office revenue and DVD/BlueRay sales. (Box Office revenue peaked around 2001/2002.)
Hell if someone made a torrent on The Pirate Bay of my work I'd probably just feel proud that I'd made a book people really want to read.
When you heave neither fame nor money, it's easy to accept the idea of getting fame and no money. I think this is particularly pervasive among college students and recent college students because getting fame alone would be a step up from obscurity and poverty. However, I absolutely back the "getting paid" part of the equation because it sustains the industry - otherwise, you're going to lose people (like so many of my college graduate friends who studied history or psychology and are now doing other jobs - because they can't get paid for it). I wish that "I'll work for your approval but you don't have to pay me" worked for people in other spheres of life -- the company that mows my building's lawn wouldn't ask for money, they'd just do it for my approval. I think that's really devaluing their work and effort.
It's a crime to defeat DRM due to the DMCA. That's the end-around. Space-shifting was guaranteed under fair-use, USa Inc. didn't like that, so they made space-shifting impossible without breaking DRM, and then made breaking DRM illegal.
May not get me sued, but still shows you how things work around these here parts... what the motivation is, and who gets listened to.
Immoral. Whether they sue or not.
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