Tech giants are fighting an all-out platform war. Amazon, Apple, Facebook, Google, Microsoft and others are battling to dominate online services and mobile devices, and consumers often collateral damage. But there’s no reason why the content industry generally–and the publishing industry in particular–should provide bullets to any side in this multi-front war.
When the DoJ sued Apple and a group of publishers for conspiring to change the business model for ebooks from the wholesale model (where the retailer sets the end-user price) to the agency model (where the publisher sets the consumer price) I had mixed feelings. One the one hand–of course it’s illegal for competitors to meet over fancy dinners to secretly restructure their industry and its pricing practices. And the optics were terrible–they didn’t just want to switch from wholesale to agency pricing, but to keep consumer prices high. But on the other hand I can understand their motivation: they were terrified that Amazon, already a print-book behemoth, was rapidly becoming an ebook monopoly. (For the record, there’s nothing inherently anti-competitive about the agency model where creators and publishers set their own prices: That’s how both the Google Play and Apple app stores work, after all. But the publishers wanted to use this new model as a cover for keeping prices up.)
Unfortunately, they picked the exact wrong approach to deal with Amazon. Instead of countering its ability to lock in readers, they tried to extend a helping hand to Apple so it could do the same. In so doing they ignored the lessons their friends in the recording industry already know: DRM helps platform owners a lot more than it helps content creators (if it even helps them at all).
Their colleagues in the music industry figured this out years ago. They had demanded that Apple wrap the songs it sells in its iTunes store in DRM, so it did. But Apple’s DRM only worked on Apple devices or software, and only Apple DRM worked with its products. Because of this, anyone who bought music from the iTunes store–which rapidly became the most popular online music store–could only use Apple products to play it back, and people with Apple devices could only buy (DRM’d) music from Apple. DRM’d music did not stop piracy–it was too easy for people bent on sharing music online to get around–but it did help cement Apple’s market-leading position in online music and music players. This was good for Apple, but bad for competition, and bad for the recording industry itself.
All this time, independent sellers like eMusic realized they could bypass the whole mess by simply selling DRM-free, “naked” music. Anyone could buy the music they sold and play it anywhere–and people who bought just DRM-free music were able to avoid Apple lock-in. The recording industry eventually realized that its insistance on DRM had given Apple the keys to the kingdom, giving it pricing power and the ability to set the terms for the industry. It began to understand that this very real, actually-existing threat was greater than the imaginary gains to be had from DRM, and they dropped it. (All major online music stores are now DRM-free.) Ironically, they used dropping DRM as a lifeline to Amazon, allowing it to sell DRM-free music before they let/made Apple drop it, as well.
The recording industry thought that DRM was a magical technology that would stop copyright infringement and let them relive the glory days. They learned that it was a trap–but at least they learned. It is crazy that the publishing industry has not learned from the mistakes its sister industry made–but it hasn’t. Instead, the publishers are making the exact same mistakes, with Amazon playing the Apple role.
Kindle books are DRM’d, and can only be read with Kindle hardware or software. Just like Apple’s DRM, Amazon’s DRM is not much of a barrier to people who are already somewhat tech-savvy. But bypassing DRM is of questionable legality in many circumstances, and most users are not going to figure out how to do it anyway. For average readers, every time they buy a Kindle book they’re that much more likely to buy another one–and unlikely to buy a DRM’d ebook from another source. Amazon may support more devices than Apple ever did–in addition to Kindles, you can install proprietary Amazon software and read Kindle books on iPads and iPhones, Android and Windows Phone, Macs and PCs. But Amazon’s (for now) decision not to use its content to lock users to particular devices doesn’t mean that readers are any less locked in to its ecosystem.
Instead of conspiring “in private rooms for dinner in upscale Manhattan restaurants” and trying to “double-delete” incriminating emails, publishers should just freaking drop DRM already. (Some smart ones like Tor already are.)
If publishers drop DRM we already know one thing: there won’t be any effect on piracy. But more than that, it opens up the retail space, and poof goes the Amazon threat. Without DRM, Apple would be able to sell ebooks that work on Kindle (and Sony and Nook and Kobo) ereaders, and Amazon books would work on any device without Amazon having to first port its software over. (No more leaving behind BeOS users!)
In addition to leveling the playing field between Amazon and Apple, Google and Barnes and Nobel–not a bad thing but not really that inspiring–dropping DRM would open up the door to independent sellers of all kinds, from local bookstores to crazy new startups. Different sellers would compete with each other on the quality of their storefronts, the convenience of their software tools and payment systems, and on price–but not though lock-in. This isn’t a cure-all for competition problems–Barnes & Noble and Borders didn’t use DRM to wipe out so many independent bookstores in their heyday–but it’s a start. In fact, there’s one new dimension of competition that’s possible with ebooks–publishers can just sell books directly to consumers. (Again, smart ones already are.) For that matter, authors can just bypass middlemen like Amazon entirely.
This isn’t the most original idea–it’s obvious to anyone who’s watched the digital media space for the past few years. But the platform wars have been getting more intense and technology platform companies will use any tool, including unnecessary customer lock-in, to get an advantage over their rivals. But this doesn’t only harm consumers, it’s damaging to the publishing industry. There’s no reason why books should be bullets in the platform wars.