Of e-book pricing, Justice Dept. charges, DRM, and Pottermore

As the U.S. Department of Justice takes on publishers over e-book prices, perhaps it's an opportunity for dropping digital rights management to save everyone?

Danny Sullivan

Last week, the U.S. Department of Justice took on Apple and publishers over charges of e-book price fixing. Depending on what you read, those parties are either guilty as charged or are the only thing holding back the greater evil of Amazon.com. I don't know who's right. I do know, however, that the e-book model itself feels pretty broken.

Over the past few years, I've gone from paying $7 for paperback novels that I could read anywhere, lend to others, or even resell, to paying $10 for the novels in e-book format with none of these rights. I feel like someone is screwing me over. But I also know that trying to pin the blame results in a lot of finger-pointing, which is made worse by a complicated and archaic-seeming mess of how books are priced and released.

For some clarity, let's set aside distribution agreements like "agency model" versus "wholesale model." Let's set aside whether Amazon is trying to build a monopoly to wipe out real bookstores and gouge publishers. Let's set aside if publishers are trying to work with Apple to push prices higher. I want to approach this from the consumer angle: what feels wrong with e-book pricing and how the recently launched Pottermore service offers some hope.

The consumer bill of book rights
I easily own more than 2,000 books, perhaps even more. On the bookcase next to my desk are 500 of my favorites, mostly science fiction novels. None of these books requires me to use any platform to read them other than my eyes.

Recently, I convinced one of my sons to read the excellent John Christopher "Tripods" trilogy, which I enjoyed when I was growing up. I pulled the same books I read as a kid off my bookshelf for him. I didn't have to buy new copies. I didn't have to worry if the books would work on any particular e-book platform.

In the past, I used to take some books I didn't want to keep into used bookstores for trade-in value on other books. More recently, I would sell a few books back via Amazon, if they would still fetch a few dollars. In most cases, I simply donate the paper books I no longer want to a local library.

To recap, these are the basic rights I have with all my "real" books:

  • The freedom to read them however I want
  • The freedom to lend them to others
  • The freedom to resell them

Same price, fewer rights?
With the e-books I've purchased, I lack these rights. I lack them despite sometimes being charged as much for the "real" version of books. Let's go over a couple examples.

Amazon

Rachel Maddow's "Drift," a New York Times bestseller published by Random House with a list price of $25, is out in hardback right now for $15. Want the e-book version? It's $13 through Amazon's Kindle Store, Apple's iTunes, or Barnes & Noble's Nook Book Store. It's nice to get the $2 discount, but is that all the publisher saved producing the e-book version versus the print edition?

Barnes & Noble

Let's take another New York Times bestseller, one from the paperback list. Mary Higgins Clark's "I'll Walk Alone," published by Pocket Books, costs $8 in either paperback or e-book form. Fewer rights, same price, should be the motto here.

Hardback pricing is archaic pricing
Part of what I've learned over the years as a book consumer is that novels typically come out first in hardcover, then, usually a year later, a lower-price paperback version appears. There might even be a higher-price "trade paperback" and a lower-price "mass-market paperback" edition.

I've assumed that this was a mechanism by publishers to make more money. If you want the latest book, they're going to charge you more for it. The hardcover or trade paperback formats also give the physical appearance of costing substantially more, so perhaps consumers buying these don't somehow feel that they were ripped off when the cheapest paperback version eventually appears.

Personally, I've avoided hardbacks. I didn't like to store them. I found them hard to hold and read one-handed, as I like to do with paperbacks. As a marketing device to get more money out of me, hardbacks were a big failure. For others, perhaps they were a big win. Regardless, the arrival of e-books has disrupted the pricing of old.

Pricing by release date, not format
It's really not that we're paying a "hardcover" or a "paperback" price for a book any longer. Instead, we're paying a "new-release price" versus a regular price. Indeed, with e-books, I don't have to do the "I hate hardbacks" debate any longer. If I want a new book that has just come out, I can buy the e-book and get instant gratification.

Part of the consumer upset over e-book prices might go away, if the industry considered positioning books this way. Rather than consumers asking why they pay the same price for a hardcover versus an e-book, it might make more sense to them that they're paying the same new-release price, regardless of the format they purchase. Similarly, after a book has been out for some time, paying the same price for a paperback versus the reduced e-book price makes sense.

Repositioning things like that might help defuse some of the cost argument about why e-books aren't cheaper than paper books, given that they have fewer production costs. You're not paying for the format. You're paying for when you get access to the book.

The lack of consumer rights over books they own, however, remains an issue. You're still paying the same amount for less control over books than you had in the past. That doesn't feel fair.

Recovering our book owner rights
Of the three rights I listed above, I can agree to give up the third, the ability to resell my books. In a world of easy digital duplication, there's no way to tell if I'm really "selling" my e-book by giving up my only copy or still keeping a version for myself. Actually, publishers could concoct a way for me to transfer a licensed version, but I'm trying to be realistic.

But how about the other two rights? This is where the Pottermore shop comes in, a shining example of returning rights to book owners, at least to view books on the platform of your choice.

Pottermore, launched last month , is how author J.K. Rowling has decided to distribute her Harry Potter novels in e-book format, and it's a model I wish more publishers would follow.

After purchasing a book, you're allowed to download up to eight copies of it, in a variety of formats. I bought the first book in the series and was easily able to send it directly to my Amazon Kindle and Google Play accounts. More importantly, I was able to do a direct download, which gave me the file in ePub format without digital rights management protection.

Pottermore

Think of the direct-download option as getting an MP3 file for books. If you have a DRM-free ePub book, you can convert it into any format you want, to read the book on any platform you want, just as an MP3 file can be converted to play music on devices made my companies ranging from Apple to Samsung to Sony.

Now my book really is my book. It's not locked to Amazon, leaving me potentially stuck, if Amazon were to go belly-up at some point. That doesn't seem likely, but anyone have old LPs or cassette tapes or, dare I say, 8-track tapes they'd like to listen to? Still have that Betamax for watching videos? I'd rather have my books in a format I can convert for future uses than stuck in some proprietary one.

Having the book in ePub format also physically enables me to lend the book to others in my family. Of course, this is where Pottermore lets me down. Lending violates the purchase agreement:

You may not and may not permit others to do any of the following things in relation to any book....sell, distribute, loan, share, give or lend the book or extract to any other person, including to your friends.

Realistically, if I do lend the book to others in my family, Pottermore will never find out. Potentially, the same is true if I lend it to a friend. So I feel that I'm part of the way to recovering the lending rights that real books have, though I wish this were officially supported.

Will you autograph my book with your watermark, please?
While Pottermore books aren't DRM-locked, they are watermarked, a way that allows the book to be tracked back to me, should I (or someone I might lend it to) put the file out on the open Web for others to use. The watermark isn't visible to me, and this seems to be an excellent way to help deter wide distribution of a book while protecting an owner's rights.

I'd even support greater watermarking. Why not, when I order a book, put my name on any page. Go ahead, say "This book belongs to..." like the bookplates of old. Perhaps there's even an innovative way that authors could digitally autograph books. Publishers need to figure out something along those lines. I still want to meet authors, but I'm only buying e-books now. What do I have them sign, when I wait in line?

This all leads back to some of the arguments that have been coming out in the debate over e-book pricing. For one, if Amazon can sell e-books for less than it buys them from publishers, will that put other booksellers both online and with actual stores out of business? Will it help Amazon corner the market on e-books, in the way some fear?

Dropping DRM could benefit everyone
Maybe. Maybe not. You hear lots of arguments, but I don't think anyone knows. I do think that one of my favorite authors, Charles Stross, had a good argument this past weekend for dropping DRM on e-books to help prevent this, one that the Internet Archive's ;Peter Brantley, among others, has talked about before. In part, Stross wrote:

The only viable Plan C, for breaking Amazon's death grip on the consumers, is to break DRM. If the major publishers switch to selling e-books without DRM, then they can enable customers to buy books from a variety of outlets and move away from the walled garden of the Kindle store...If they don't, they're doomed. And all of us who like to read (or write) fiction get to live in the Amazon company town.

Amazon does have a death grip on me. Virtually my entire e-book library is locked into its proprietary format, and I don't like it one bit. But my choice is to, what, go with the Barnes & Noble's proprietary Nook format? The DRM that's part of many Google Play books?

Relatively few publishers seem to release DRM-free books O'Reilly, like Pottermore, is one that does. But those two are rare exceptions. How might things change, if no DRM were the rule? That leads to the role of bookstores, online and offline.

Wither the bookstore? Or evolve it?
The author Scott Turow, who is also president of the Authors Guild, worried much about how bookstores might survive, if the Justice Department did take action against Apple and publishers. In a piece he wrote last month, he said:

Our concern about bookstores isn't rooted in sentiment: bookstores are critical to modern bookselling. Marketing studies consistently show that readers are far more adventurous in their choice of books when in a bookstore than when shopping online. In bookstores, readers are open to trying new genres and new authors: it's by far the best way for new works to be discovered.

Publishers shouldn't have to choose between bricks and clicks. A robust book marketplace demands both bookstore showrooms to properly display new titles and online distribution for the convenience of customers.

Apple thrives on this very model: a strong retail presence to display its high-touch products, coupled with vigorous online distribution. While bookstores close, Apple has been busy opening more than 300 stores.

I'm not sure how Apple having retail stores translates into saving bookstores. I've never seen any of Turow's own books sold in them, and I'm pretty sure I never will. But the argument about the death of bookstores is heartfelt by me.

I love spending time in bookstores, scanning the shelves and discovering new works. In contrast, I've found the "browsing" experience on Amazon to often be appalling. All those books, yet trying to find something new and interesting using my Kindle often makes me wish for a "show me nothing that costs less than $6.99 option."

But I can't say that walking into a brick-and-mortar Barnes & Noble bookstore is that much better. I love to scan the shelves, but books by many authors aren't stocked. More importantly, I'm living in the e-book world now. I don't want any more physical books. Amazon's not killing bookstores for me. The advance of technology is doing it, just like it killed the corner record store, the telegraph shop, and horse troughs on the sidewalk.

Innovation, solutions, not finger-pointing
What I really hope for is that publishers seek innovative solutions, not solutions that seek to shove an e-book genie back into some pricing model of old. Drop the DRM, and build a kick-ass online bookstore. That's one way to attract and keep me. Offer the ability for me to buy from Apple and send to Kindle, if I want. Do the same with Amazon, and let me send to Google Play or Nook. Insist upon these things; the consumers would back you up.

Amazon

I think it's also important to understand that the value of some books isn't just what the consumer pays for it. "The Hunger Games" remains the top movie in the United States. If giving the first book away for free helped produce sales for the second and third and, in turn, spurred millions of dollars in ticket sales, to be followed by more in DVD sales and online rentals, was the first book really given away for free?

Pricing is also tricky. For example, O'Reilly may sell a book directly to consumers at a set price, but then Amazon, Barnes & Noble, or Google Play might sell the same book at a lower price due to discounting on their end. That can seem crazy to consumers; it sure can be worrisome for the publisher. It's one of those no-easy-solutions situations.

Perhaps also, could we just get more books into e-print? Turns out, long after I read the "Tripods" trilogy as a kid, John Christopher wrote a prequel to it, "When the Tripods Came." That's not out as an e-book. In fact, of the original trilogy, only the first book -- "The White Mountains" -- is out as an e-book. It's crazy. If you do buy the first book in e-book format, you'll want the second and third.

What we don't need is more shouting and finger-pointing, nor more assumptions that there's one "right" model for all e-book sales. Textbooks are expensive. Tight DRM might make more sense for them than for consumer entertainment novels, especially when the target for those novels will probably find it easier to just buy a copy rather than hunt down an edition on the Web somewhere.

In the end, if the Department of Justice is going to come down on publishers for anything, I'd hope that it finds a way to do it over locking us into platforms. Taking away our book rights is a pricing issue too.

 

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