Forbes has a very interesting three-page interview with Tim O’Reilly in which he discusses a number of things about piracy, the e-book market, and the future of publishing. Back in 2002, O’Reilly described piracy as “progressive taxation” on fame, and has been quoted in defenses of piracy ever since (including mine). He’s got some more fascinating insights to give here.
The first question has to do with the “death of print”. O’Reilly points out that print probably won’t die, but electronic media will transform what a “book” is. He uses an example of electronic maps, such as Google Maps—no longer static things that just sit on the page, they now show you not only where to go but also how to get there, and in some cases what you can do once you are there.
So the question we need to be asking ourselves about e-books is, are there similar transformations that we can expect in what we think of as the book and it becoming electronic. That’s where the really interesting game is going to be played—in making it new. We’re already seeing this in [Rupert Murdoch’s] The Daily. It’s just too close to the current conception of a newspaper. Meanwhile, FlipBoard and news.me did something much more interesting by turning your Twitter feeds into a kind of realtime newspaper. That’s a completely different approach and angle of competition that newspapers didn’t really think about. I look at news.me instead of the New York Times in the morning. The user interface is perfect for using on a tablet, great for scanning interesting news when you want to have your cup of coffee and just see what’s happening in the world. And it’s curated out of my social network. So you know that kind of transformation is going to happen to e-books as well.
He mentions that the technical/self-help book market has changed considerably over the last few years, with reference titles waning as it became possible to find out freely online how to do a lot of the stuff that those books would have formerly covered. As for the books that do still sell, O’Reilly finds that people reading the books as PDFs on the PC are willing to pay higher prices than those who want to read them on their phones. He is still working on finding exactly the right price points.
On the second page of the interview, O’Reilly reiterates his stance on piracy. He finds it is not much of a problem, because most of the pirates wouldn’t have bought it anyway—but the wider-circulated the pirated material is, the more likely it is someone who will buy it will see it.
Let’s say my goal is to sell 10,000 copies of something. And let’s say that if by putting DRM in it I sell 10,000 copies and I make my money, and if by having no DRM 100,000 copies go into circulation and I still sell 10,000 copies. Which of those is the better outcome? I think having 100,000 in circulation and selling 10,000 is way better than having just the 10,000 that are paid for and nobody else benefits.
People who don’t pay you generally wouldn’t have paid you anyway. We’re delighted when people who can’t afford our books don’t pay us for them, if they go out and do something useful with that information.
He also points out (correctly) that DRM interferes with the user experience, and you don’t sell more copies by making it harder for people to use your product.
He also suggests that, by making it possible to read a Kindle e-book on almost every non-e-reader device you own in addition to the Kindle, Amazon is “effectively” dropping DRM—a barrier that isn’t a barrier isn’t a barrier. While I wouldn’t entirely agree with that, and I’m sure a number of TeleRead readers wouldn’t either, I can see his point.
When the interviewer presses him on the issue, asking what if Amazon really ditched DRM, making piracy easier, O’Reilly points out that there are a lot of people who can’t or won’t take free stuff but won’t think of paying a couple of bucks for a legitimate copy of it. He adds that there are things that can be done outside of DRM to reduce piracy—locking down accounts that see suspicious downloading activity, for instance—and that DRM has never itself been proven to work.
But to me the analogy is: yes, there are people who break into your house, and if you live in a really high-crime neighborhood, maybe you have bars on your windows. But if you live in an ordinary neighborhood you don’t put bars on your windows just because somebody could easily break the glass and get into your house, because guess what? Most of the time people don’t. And when they do, we send police after them to check it out. The whole model that says we must somehow lock things up so that no harm is possible permeates a lot of our psyche.
On the third page, he talks about the Google Books lawsuit, and suggests that in the future the lawsuit will be looked upon as a textbook case of stupidity—when Google offered an avenue for publishers to compete against Amazon, the publishers sued them instead of taking advantage of it.
Finally, he suggests reasons why people might still want to submit works to traditional publishers even in a self-publishing age.
There are several things that they’ll offer, and they’re at different levels of value. Publishers overestimate the value of some and underestimate the value of others. First off, they offer a marketing advantage. They don’t offer that today in e-books, but somebody will have to figure that out. Building a brand, having lesser-known authors draft better-known authors, building out a fanbase. It’s different for genre fiction versus professional books or even literary fiction. With genre fiction, the brand of the publisher really matters, and in literary fiction it doesn’t, at least not very much. It’s like being plugged into the network of people who share. One of O’Reilly’s advantages is that we have a network of thousands of user groups to whom we give free books, to whom we advertise our products, and they spread the word. If you don’t have that database it’s hard to get the attention of the market.
Not everybody will agree with O’Reilly’s points, but certainly nobody can accuse him of being a newcomer to the publishing business. He’s been around since the ‘80s, and is just about the only publisher of his era still around as an independent company.
As O’Reilly points out, the publishing industry is going to be changing a lot over the next few years. I can’t wait to see how it all turns out.
What would happen if Amazon really ditched DRM on kindle books? What would happen if Amazon ditched DRM on songs? Or if Apple did likewise? They did, so we have some stats to indicate what might, or might not, happen.
By the way, I noticed in today’s Staples sales flyer in the newspaper they are selling Kindle DX at $80 off, in-store purchase only. Amazon still lists the regular $379, so I don’t know if this presages any upcoming Kindle news, or if Staples is just closing out their stock before they stop selling the DX.