The Great Lie Behind DRM: Just like that, a little truth seeps out…

Yesterday, I ran across this piece by internet maven (and author) Cory Doctorow detailing the contents of a letter sent by HatchetteUK and its imprint Little Brown to its writers who also publish in other territories with publishers who don’t use DRM, principally Macmillan imprint Tor, presumably. It set off a bit of a pissing contest with Little Brown’s CEO Ursula Mackenzie. In the letter, Hatchette makes a rather interesting demand of its writers, that they force their publishers in other territories to place DRM on their ebooks. Here’s Doctorow:

“I’ve just seen a letter sent to an author who has published books under Hachette’s imprints in some territories and with Tor Books and its sister companies in other territories (Tor is part of Macmillan). The letter, signed by Little, Brown U.K. CEO Ursula Mackenzie, explains to the author that Hachette has “acquired exclusive publication rights in our territories from you in good faith,” but warns that in other territories, Tor’s no-DRM policy “will make it difficult for the rights granted to us to be properly protected.” Hachette’s proposed solution: that the author insist Tor use DRM on these titles.

“The letter also contains language that will apparently be included in future Hachette imprint contracts, language that would require authors to “ensure that any of his or her licensees of rights in territories not licensed under this agreement” will use DRM.

Let’s forget for a moment that territoriality, once essential in publishing, is quickly becoming threatened by digital encroachment, and will soon be little more than yet another publisher-inflicted hindrance between readers and the books they want, if it isn’t already. (It probably is.) Primarily, I was a bit taken aback, as was Doctorow, by the audacity of a publisher dictating in pretty forceful, albeit polite, terms to writers what they can do with rights the publisher doesn’t own. Doctorow himself said, “Hachette has balls the size of Mars if it thinks it can dictate what other publishers do with titles in territories where it has no rights.”

He’s absolutely right about that, and, if it had been me who received one of those letters, I’m pretty sure my two-word reply would consist of the terms “piss” and “off.” If you’d like to tell me what I can do with the rights to my work, then buy them. Otherwise, you’re entitled to your opinion and I’m entitled to laugh at it.

Anyway, Doctorow went on with his usual anti-DRM line, one I personally find a lot to agree with. This, in turn, spurred Mackenzie to release a statement clarifying their position, taking a few jabs at Doctorow in the process. Here’s Mackenzie, as reported via The Bookseller:

“In the statement, Mackenzie confirmed that the publisher did plan to change the wording in its
contracts, but said the modification was designed to make the position clearer and that “variations” on the boiler-plate could be negotiated.

“Our new wording is clearer and we will, as always, negotiate variations of that wording with the many parties with which we trade, nearly all of whom agree with the basic principles of our DRM policy.”

So Hatchette is going to make you follow their terms whoever you publish with, in whatever territory, whether they own the rights or not, but don’t worry, it’s only negotiable boilerplate. Go back and read that second paragraph from Mackenzie again. I’ll wait. Sounds negotiable, doesn’t it? Especially the parts about variations of that wording and the various parties who nearly all agree with their position. Sure, you can negotiate to your heart’s content, you just can’t actually change anything substantive. Sounds perfectly reasonable.

Mackenzie goes on, and here’s the kicker, for me at least. In her spirited condemnation of Doctorow, she let slip a dirty little secret about said DRM and what its real purpose actually is. (Hint: it’s not fighting piracy):

“Mackenzie, who is also president of the Publishers Association, was critical of Doctorow’s position on DRM, saying that it contained “the usual long list of anti-DRM arguments”. Mackenzie stated: “We are fully aware that DRM does not inhibit determined pirates or even those who are sufficiently sophisticated to download DRM removal software. The central point is that we are in favour of DRM because it inhibits file-sharing between the mainstream readers who are so valuable to us and our authors.”

You get it now? They know DRM has no effect on piracy, and they know it doesn’t stop people with the moderate technical knowledge to do an end-around. They use it specifically to handicap what their good, paying customers can do with their legally purchased ebooks. Nice. At least, for once, I can say someone from big publishing was actually honest, for a change. If I owned that company, Mackenzie would have a pink slip on her desk this morning, along with a security guard standing by to make sure the front door didn’t hit her on the ass on the way out. Even if I willfully supported using technical means to screw the people buying my products, I would be incensed that the head of my company openly admitted it.

There, in a nutshell, is the giant lie beneath the concept of DRM. It has nothing to do with anything but creating constraints on the majority of the ebook buying public, then profiting from those artificial restrictions. If readers really were valuable to them, as she says, they wouldn’t treat them so poorly. Their value isn’t in a loyal customer relationship sense, but in an overtly exploitative one. Most of us out here paying attention already knew that, of course, it’s just a little surprising to me to see someone perpetrating the DRM fraud to openly say as much.

Mackenzie goes on:

“We are glad that we have adhered to a model of selling e-books one by one at fair prices and protected by DRM. This model is working very well; although some would like us to change it, the risks are huge and the upside is negligible.”

Of course she’s glad. She’s not the one paying overpriced rates for intentionally handicapped products. Fair prices from who’s point of view? Again, she let something slip. It’s their higher than needed pricing structure that’s protected by DRM, not the IP itself. How can you even begin to justify ebook prices anywhere near print prices in the same sentence that you admit to purposefully limiting them, effectively removing much of the tangible value that exists with a print book? You can do it because this has a lot to do with defending print. Charge higher prices while offering less value with ebooks makes print look better by comparison. That’s the theory, anyway.

Doctorow, apparently always thinking ahead, actually had a response to this in his piece before she even wrote her’s:

“If the Big Six thought Wal-Mart and the other big-box retailers had them over a barrel, just wait until the DRM vendors do to them what they did to the music industry before it abandoned DRM in a Hail Mary attempt to get some competition back into the music retail market.”

Yes, by all means, let’s follow in the music industry’s footsteps with DRM, because, you know, it only very nearly wiped out their business, but hey, this is publishing, we know best, right? Who was it that spurred all that damage to the music industry, again, after DRM locked themselves into a platform? Oh, that’s right, it was Apple, who leveraged their dominance in the mp3 player market with the iPod to redefine digital music sales. This is also the same Apple who’s iBookstore agency pricing arrangement has gotten publishers into serious, potentionally deathly hot water with anti trust investigators.

It’s also the same Apple who’s currently dominating the tablet market with the iPad. In 2012 alone, Apple is responsible for 64% of the the tablet sales for the entire planet, more than six times as many as the second place company, Samsung. By the way, Apple is also suing Samsung for those tablets, with chances of a win looking pretty good while doing it. Smartphones are also fast becoming an ebook reader of choice for many. Guess who’s a major player in that market too? Apple’s iPhone. Oh yeah, let’s totally lock ourselves into DRM in an environment where Apple is the dominant device manufacturer. What could possibly go wrong?

Not only is DRM ineffective against piracy, and easily circumvented, its only effective use seems to be exploiting paying customers who lack the expertise to get around it, as Mackenzie basically admitted. But much like publishers exploiting these poor, unsuspecting readers, DRM also serves Apple’s purposes as the dominant device manufacturer, which they will use to exploit publishers much like they did with the iPod and music companies. And all the while, the entire industry ties itself in knots over Amazon, just like the music industry did with Napster while simultaneously handing the keys to the store to Apple. This would all be hilarious if it weren’t so damn serious.

It reminds me of a line from the recent remake of Battlestar Galactica, “This has all happened before and it will happen again.” Unfortunately, while it had a good, often great run, the finale of that show ultimately sucked. Hopefully, publishers will wake up before it’s too late or find themselves facing an ending much like it.

Correction: Originally, I stated that the iPhone was the leader in smartphone sales. Turns out, they are actually third, trailing Samsung (who Apple is suing over their phones, as well as their tablets) and Nokia, who is falling precipitously but still a good ways ahead of Apple in marketshare. My confusion was probably spurred on by first hand observation. Of the 30 or so people in my immediate circle with smartphones, easily 2/3 have an iPhone (I don’t. I have an HTC. I’m contrary like that) and I’ve heard most of the holdouts suggest that they’ll be getting an iPhone on their next upgrade. Maybe they’re just more popular here in Maryland, I don’t know, but everybody and their brother seems to have one, particularly younger people. Also, I can count the number of Nokia smartphones I’ve seen folks with on the extended fingers of one hand clenched in a fist. Even so, my point stands. Apple’s marketshare on phones is growing, even if they’re not yet at the top. They’ve got Samsung tied up in court on patent related issues and Nokia is falling backwards. It’s not out of the realm of possibility the iPhone could reach #1 in the not-too-distant future. Their tablet is unquestionably dominant, however, and when talking about ebooks, the tablet is king.

Back To The Past: Is the iPad a new revolution or a return to locked down media control?

Everybody loves the iPad.  The first weekend of availability produced 300,000 units sold and over a millions apps downloaded, according to Apple.  It’s a God-send, and we’ll all benefit infinitely from its arrival, everyone says.  Well, not quite everyone.  There’s a segment of people out there who are voicing a concern, justifiably so, in my opinion, that the iPad is a step backward from open and interactive internet to locked-down, strictly consumer controls of the past.  Here’s media pundit Jeff Jarvis’ take on the matter. He makes some very cogent points, the most important of which is his reasoning that big media is getting behind the iPad because its very nature turns the audience back into strictly consumers under their control again.  And if you don’t believe that there are many people within the media business who would like to put the web genie back in the lamp, and do away with the new-found freedoms everyone has with regards to controlling and creating their own content today, you’re kidding yourself.  Will it work?  In a word, no, but that’s not going to stop them from trying because they’ve had a decade and a half to figure out how to adapt to the changes in the marketplace and still can’t get out of their own out-dated business model thinking.

Here’s a quote:

“So I see the iPad as a Bizarro Trojan Horse. Instead of importing soldiers into the kingdom to break down its walls, in this horse, we, the people, are stuffed inside and wheeled into the old walls; the gate is shut and we’re welcomed back into the kingdom of controlling media that we left almost a generation ago.”

Now, here’s another similar point of view from writer Cory Doctorow. He, also, makes some very nice points in the same vein, about how the iPad is a device designed to stifle some of the very freedoms that have opened the web to all of us and made it so very useful.  The part I like most is his reference to the Marvel Comics iPad app and how it transitions us away from some of the very behaviors that the comic book business was built on in the first place, namely the ability to share.  With this app, you can buy comics in a digital version, but you can’t transfer them, can’t share them, can’t give them to your fiends, can’t resell them, can’t do anything except the few limited things Marvel allows you to.  He talks a bit about the old days of pouring through comic book stores racks of back issues and used comics, and how that helped not only expand the business to other people, but made it all that much more exciting to its fans.

I’ve often had a similar feeling with regards to digital music and movies.  Over the years, I’ve spent a small fortune buying CDs and DVDs, amassing large collections of each.  The one positive to all this was that, in occasional periods of hard times, I could sell off some of my inventory to pay the  bills.  I did this about a year and a half ago, for instance, parting ways with a sizable number of DVDs because I needed the money.  With these kinds of new digital age products, the entire after market ceases to exist because, even though we actually have paid for these products, we don’t actually own them.  We are allowed to use them, per the terms big media sets, but that is all.  Anything else is deemed infringement and is probably illegal.  This is an enormous step backwards  that takes away much of the power of the consumer, not to mention that it does direct harm to the creators.  Big media companies have never seen the value inherent in the after-market for their products, primarily because they weren’t getting a direct cut of the pie.  But that exposure and availability of used material opened up their products to a wider audience, expanding the pool of fans and product consumers for their next release.  These kinds of limitations destroy that after-market, and with it, a significant portion of the potential business in the future.  But in order to appreciate those affects, you have to be able to see past the immediate point of sale value of today to long-term brand value.  Most media just doesn’t get that.

I often cite The Grateful Dead when I talk about this kind of stuff.  The Dead built their legacy on the open and free distribution of bootleg copies of concert recordings made by their own fans, hauling their own recording equipment into shows, and traded freely in the parking lot.  The Dead didn’t find success because of any great recording industry marketing machine, but from a vast network of fans who spread the word on their own in a network of community that any internet junkie today would be proud of.  With the kinds of restrictions on recordings that are being foisted on us today, that never would have been possible.  And that’s the way Big Media likes it.  After all, total control of distribution is how they make their money.

Here’s a quote from Doctorow:

“So what does Marvel do to “enhance” its comics? They take away the right to give, sell or loan your comics. What an improvement. Way to take the joyous, marvelous sharing and bonding experience of comic reading and turn it into a passive, lonely undertaking that isolates, rather than unites.”

In essence, the iPad may be a cool little gadget.  It may be a nice way to consume content, in much the same way you consume content on your television or used to with your CD player, but in that sense, it’s not really progress, but is, in fact, a high-tech means of transitioning back to models that were important two decades ago.  Will it be popular?  Seems like its started out well, but is it something that’s going to forever change us back from an innovative, self-creating culture that the web has propagated to one where we just buy what the media companies see fit to sell us?  I don’t think so.  Besides, as I’ve pointed out before, technology is advancing far faster than most of us can keep up.  Today’s iPad is tomorrow’s coffee table coaster, soon to be replaced by something else that takes the best of what it offers and builds upon it.  And that creation will be specifically in opposition to the controls, not because of them.  That’s as it should be.

As one final note, here is a take by Alan Mutter on what publishers can do to benefit from the iPad. It’s some things I’ve heard before, and he ends with this point:

“Publishers who want to take full advantage of the iPad will have to do better by creating content that is media-rich, interactive, viral, transactional and mobile. In other words, this is no time to cut corners.”

While I agree with much of what he has to say, I can’t help but think that this is the same old song and dance for publishers. It started with websites years ago when publishers just dumped their print material onto their sites to their own detriment and all the pundits said, “You have to do things differently than you always have.”

Then it was mobile devices, smart phones, etc., and they created apps that just dumped the same material onto your phones, and the pundits said, “You have to do things differently than you always have.”

Now it’s the iPad and the like, and publishers are following the same pattern.  He references the Wall Street Journal’s app, which is little more than an electronic version of the paper, and  I read an article that sited Time Magazine yesterday, who’s iPad app was basically a PDF of the magazine, and so on.  I’ve even seen some people hailing the iPad’s effect of making a page in an eBook actually look like its turning as a good thing rather than a cheap attempt to imitate yesterdays material.  And in many circles, the pundits are already saying, “You have to do things differently than you always have.”

As transformative as this new toy may end up being, by this time next year, we’ll be two or three generations beyond it, and I’ll be willing to bet the pundits will still be saying to publishers, “You have to do things differently than you always have.”

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