Publishers, DRM, unauthorized sharing, and the NPR example
April 23, 2012 | 1:00 pm
We’ve heard a lot of people arguing that publishers should fight Amazon by dropping DRM. However, in The Scholarly Kitchen, Joseph Esposito has written a long and thoughtful piece looking at the possible drawbacks of this approach.
Esposito first looks at the question of whether unauthorized sharing of e-books increases the market for them. His own guess is that infringement helps sales when there is sufficient friction—i.e. the free copy is harder or more annoying to use for some reason—but hinders them when friction approaches zero. And since free e-books are getting easier and easier to find, publishers are turning to other methods of trying to restore friction, such as lawsuits.
More and more people are advocating that publishers should remove DRM, but is it really likely to help sales? It would have no effect on the big file-sharing sites, Esposito notes, because for the most part their users laugh at DRM already. What it would do is remove the speed bump on casual sharing, so that groups of people who might otherwise have bought individual copies (for example, college students in a class studying one particular book) instead only have to buy one. In those cases, it would actually decrease sales.
And Esposito counters the argument that these free copies would have a promotional value that offsets the additional sharing by pointing to the example of NPR’s pledge drives. Only 10% of NPR listeners ever pledge any money, which suggests most people are not inclined to pay for things they don’t have to.
He also doubts dropping DRM will do much to hinder Amazon’s market dominance. Amazon is already dominant, he points out—the horse has already left the barn. Once people are used to sticking with Amazon, they’ll by and large probably keep sticking. He suggests that most of the arguments in favor of dropping it come from people who simply hate DRM and have been looking for any arguments that could bolster their position.
With this analysis, one might assume that I am in favor of DRM. I am not. I am simply being realistic. A publishing strategy to move away from DRM requires a great deal of thought and contingency planning. Can we afford to lose our course adoption sales? How do we monetize reading groups? And what about the used-book market, from which we currently derive no revenue? Can we come up with new ways to monetize books so that we can recapture some of that lost revenue? The issue concerning DRM is falsely thought to be a technological one. It is not; it is a marketing issue. What is the best way to reach markets, and does DRM help or hinder that goal?
Esposito suggests several broad strategies publishers can use to try to counter infringement. They can try to increase friction by suing everything in sight, they can be more selective about who they sue and just accept that some piracy will happen, they can try to engage with their readers to create more buying loyalty, or they can try to create new products and ways of selling them that won’t be as vulnerable to piracy.
While I still think DRM is annoying and would be better off gone, Esposito makes some good points. I have already reported stories about people who will pirate games even if they could have them legitimately just for one cent, so I can see where he’s coming from with his NPR example.
Of course, Esposito doesn’t address the people who would have paid for the work if it had been available in a form they could use (or convert to one they could use, thanks to an absence of DRM) but go ahead and pirate it instead. It would seem like those should make up for the ones who would have paid for it with DRM but won’t if they can get it free, at least to some extent.
I would also point out that, even if NPR only gets pledges from 10% of its audience, that’s still enough to let it survive year after year. Perhaps publishers should figure out how to adapt so they can also survive on minority revenue.
In any event, I will agree that the issues surrounding piracy and DRM are more complicated than simply removing it. One of the most successful publishers at going DRM-free, Baen, has few incidences of piracy to deal with not because it was kind and thoughtful enough to go DRM-free, but because it constantly engages with its most devoted fans, who in turn will never engage in wide-scale piracy and will help put pressure on those who do. Other publishers are trying to engage with fans (such as Tor) but are a bit handicapped by being beholden to multinational corporations that call the shots (by, for example, insisting on plastering an obnoxious corporate tract at the top of the Tor.com blog for a week).
It’s not a perfect world, and there are probably no easy answers. But I’m sure there are answers that will let writers keep writing, publishers keep publishing, and readers keep reading. They just have to figure out how to find them.
(Found via PaidContent.)