By: Gigaom
Note to publishers: your addiction to DRM is killing you
Book publishers argue that Amazon is a vicious monopoly that has too much power over them and their content -- but they need to realize that they gave Amazon much of that power themselves when they agreed to shackle all their books in DRM chains.

The Department of Justice’s lawsuit against two major book publishers — for allegedly colluding with Apple to keep the price of e-books artificially high — continues to make its way through the courts, and has set off a frenzy of finger-pointing about who is to blame for the destruction of the book industry at the hands of Amazon’s evil monopoly. I’ve argued that there’s a little bit of evil on both sides of this issue, but one thing seems fairly certain: if the publishers dislike the power Amazon has over them, they need to recognize that they shoulder much of the blame, since they helped to forge the DRM chains that have kept them shackled to the company’s platform. Why not break those chains and try to set their content free instead?

The publishers have tried to argue that they were forced to cut a deal with Apple to institute an “agency pricing” model for e-books — which allows them to set the ultimate price for their titles instead of giving that power to the end retailer, the way they did with Amazon until Apple came along — because otherwise Amazon would push prices down to unreasonable levels and take even more control over the industry. But who gave Amazon a lot of that control in the first place? The Big Six publishers themselves, by requiring DRM. As author Charlie Stross argued in a recent post:

By foolishly insisting on DRM, and then selling to Amazon on a wholesale basis, the publishers handed Amazon a monopoly on their customers.

Amazon no doubt wanted to lock up all that e-book content with digital-rights management protections just as badly as the publishers did, since that helped tie customers to its Kindle platform and the Amazon ecosystem. But the Big Six enthusiastically embraced the idea because they believed that piracy was a major risk with digital content, and the only way to prevent it was to wrap it in Amazon’s proprietary file format. Not only that, but those DRM controls also allowed publishers to set all kinds of restrictions on what e-book owners could do with their books — including how many times (or even if) they could lend them.

Has DRM prevented piracy? That seems unlikely, since it is relatively easy to get around those locks and copy a book if you really want to. What is pretty clear, however, is that those rights-management locks have cemented Amazon’s control over the publishers’ content — in other words, it has given the online retailer a stick with which to beat them, as Stross described it recently. And it has also made it more difficult for some independent e-book sellers, because publishers won’t let them sell their books without DRM.

Those DRM chains are hobbling the industry, not pirates

When it comes to readers and book-buyers, meanwhile, DRM has been nothing but a source of pain and frustration — just as it has been in every other content market, including digital music. Books from the Big Six can’t be loaned or borrowed, or only a certain number of times, and they can only be used on one platform, with all kinds of restrictions. What these chains and locks do, more than anything else, is to make the simple act of buying and reading a digital book horrendously complicated. Does that make more people want to buy and read e-books? It’s hard to see how. In a very real sense, those locks are hobbling the industry.

I think Christopher Mims of MIT’s Technology Review is right when he says that the only option for publishers is to to embrace the disruption that digital provides, and do their best to disrupt themselves — and Amazon — rather than setting up artificial barriers:

It’s abundantly clear that publishers that survive in an Amazon world will be those who disrupt Amazon itself. If Amazon’s aim is to “cut out the middleman” then the next logical step is for publishers to cut out the middleman that is Amazon.

Some publishers refuse to bow to the god of DRM: O’Reilly Media, for example, sells all of its titles without any digital restrictions whatsoever. Tim O’Reilly has said that he isn’t concerned about digital piracy because most of the people who take his books without paying probably never would have bought a copy anyway — so it’s not as though he has lost a sale, and someone who reads them for free might later decide to pay (musician Neil Young has said that “piracy is the new radio”). And J.K. Rowling sells e-book versions of her massively successful Harry Potter series without DRM, although digital locks are added when a copy is downloaded to a Kindle.

Some, including Financial Times writer John Gapper, are skeptical that giving up DRM would make much of a difference for traditional publishers — since Amazon would presumably just continue to push down prices of e-books regardless, putting pressure on their profit margins and inexorably gaining more market share. And abolishing DRM certainly wouldn’t be some kind of magic wand that would return the book-selling business to the glory days of old. But at least it would give publishers a chance to be more flexible and adaptable, instead of trying to prop up their failing business model with price fixing.

Post and thumbnail images courtesy of Flickr user Christine Zenino and Marcus Hansson

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