Dispatches from the Digital Revolution

Retailers, agents, and pirates: The ebook pricing debacle


As I’m sure most other publishing students and professionals are, I’ve been doing a lot of research into the legality of the agency model in the few weeks since the DoJ announced its antitrust lawsuit against five of the big six publishers and Apple.

A disclosure: I want to support the agency model; I’m anxious about what I believe are the monopolistic and monopsonistic practices of the largest online ebook retailer, Amazon, and I see the agency model as the only viable alternative to those practices, allowing publishers to regain some semblance of control over the perceived value of their content.

Of all the blog posts, articles, and rants I’ve digested recently, one seems to stick out in my mind. It came from the blog of Charlie Stross, called Charlie’s Diary, which I discovered along one of my convoluted navigations through another article’s reader comments section. Of course, this is merely a well thought-out and articulated opinion piece, full of the sci-fi author’s personal perspectives and prejudices. But in “What Amazon’s ebook strategy means” Stross has embarked on an idea I haven’t seen anywhere else thus far: an alternative to both traditional wholesale and agency models of ebook pricing. Stross writes:

It doesn’t matter whether Macmillan wins the price-fixing lawsuit bought by the Department of Justice. The point is, the big six publishers’ Plan B for fighting the emerging Amazon monopsony has failed (insofar as it has been painted as a price-fixing ring, whether or not it was one in fact). This means that they need a Plan C. And the only viable Plan C, for breaking Amazon’s death-grip on the consumers, is to break DRM.

DRM, or digital rights management, is a technology used by publishers with their ebooks in order to prevent digital piracy—or so they think. It has lately come to light that DRM is actually quite easily removed, thereby not really deterring pirates but only annoying legitimate customers, who don’t understand why the content they purchased can’t be shared with a friend or transferred to another reading device.

Not everyone in publishing land has come to accept this fact just yet, however, as Leah Thompson described in her summary of a recent Bookbuilders of Boston panel, in which the panelists vehemently defended or opposed the technology.

Amazon welcomed publishing’s insistence that ebooks be sold with DRM, since that lent credence to Amazon’s closed-platform Kindle technology. With DRM, consumers are tied to the device the book was purchased on, just as they are if they purchase a Kindle book. If I bought my ebooks on a Kindle reader and one year later decided to buy the new Barnes & Noble NOOK Simple Touch with GlowLight, I wouldn’t be able to carry them over to the new device; I would have to repurchase them on the NOOK bookstore. So essentially, when I bought that Kindle book on my Kindle reader, I didn’t really purchase it at all—I had merely paid to access it on the Kindle platform.

What Stross has proposed, and I find an exciting prospect, is for publishing to abandon DRM and allow ebooks to be bought and shared by its customers in the same ways that print books are. If they do, readers will come to expect the capability to move their content across platforms and will start to view Amazon’s device-specific file format as a thing of the past. Amazon’s ebook success comes in large part from its ability to keep its customers tied to Amazon devices: what reasonable person would opt to switch platforms and therefore lose all the content he’s paid for? And if we break the artificial bonds consumers now have to certain ebook retailers, we would promote more competition in the digital sphere: exactly what Apple and the five publishers named in the DoJ antitrust suit claim to be accomplishing.

The wholesale supply chain and pay-for-access retail model combination is a failure for content creators and consumers alike, and apparently, the Justice Department frowns on the price-fixing aspect of the agency model. If a solution to the ebook pricing problem is to encourage competition by getting rid of technologies that inhibit cross-platform movement, thereby opening up the market for other ebook retailers to place a real stake, then it’s a smart move that some publishers have taken the lead and started to remove DRM from their ebook files. The always innovative O’Reilly Media has, and last week the Macmillan imprint, Tor/Forge, announced it too would drop DRM. It would be interesting to see what would happen if all major publishers followed suit. Could such a move become an alternative to the alternative: the agency pricing model?

One comment on “Retailers, agents, and pirates: The ebook pricing debacle

  1. Pingback: What’s the cost of credibility? « appazoogle

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This entry was posted on May 1, 2012 by in Business, Opinion and tagged , , , .

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