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.

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