Why the e-reader market needs to kill DRM now

Pop quiz: How much music do you buy or borrow in a month? And how many books to you buy or borrow in a month?

Next question, how much music do you listen to in a month? How many books do you read in a month?

Finally, how many times do you listen to the same album or song? How many times do you re-read a book?

I'll bet your music vs. book answers are radically different, aren't they? How you acquire and listen to music is completely different than how you acquire and read books, and in vastly different quantities. Unfortunately, the publishing industry thinks selling e-music and e-books are exactly the same thing, or at least similar. As a result, publishers are following a scarily similar DRM path in the nascent e-book business as the music industry did a decade ago.

This is not good, not for publishers and not for prospective e-book and e-reader buyers.


Two Key Questions About E-books

Let's say you buy an e-reader like a Kindle, a Sony Reader or the new IREX. You download a book you think a friend would really enjoy. Can you loan said e-book by transferring the file to their device, just like you would loan a physical book?

Now let's say you compile a tidy library of books on your e-reader. Three or four years from now you decide to trade up to a new reader. Will you be able to transfer your library to your new model?

Both are excellent questions and are critical to the future success of the e-book concept. Over the last few weeks, I've posed these questions to myriad publishing and e-reader executives and consultants who are supposed to be in the know. And the answer is: No one is quite sure.


Kindle vs. Everyone Else

In one way, the e-book business is traveling along a parallel path as the digital music industry. Amazon has developed its own proprietary formats and ecosystem, just like Apple created like iPod/iTunes ecosystem. E-books bought from Amazon will only work on a Kindle, which can read only Amazon-formatted e-books.

As long as I stick with Kindle, everything is jake — Amazon keeps all my e-books on file and can repopulate a new Kindle. E-books I bought on the Kindle 1 automatically showed up on my Kindle 2 as well as on the Kindle app on my iPhone.

As a result of getting the Kindle out there before anyone else and perfecting its closed ecosystem and seamless user experience, Amazon has grabbed a bulky early share of the e-book/e-reader business — about 60%, according to Sarah Rotman Epps, an e-book analyst from Forrester Research.

(Just an aside: Amazon's closed e-book ecosystem is ironic considering they were all about being the open, non-protected anti-iTunes music store. Now back to our regular programming.)

Meanwhile, the rest of publishing industry has adopted a standardized formatting code called ePub. Theoretically, an ePub book can be read on any ePub-compatible device. Sony's Readers are switching to ePub, and both the IREX and the coming Plastic Logic and Cool-er readers are all ePub compatible.

So Amazon has unified the competition against itself, à la Blu-ray vs. Toshiba. And if that format war was any indication soon we'll all be living in an unconfusing all-ePub world, right?


The Threat of DRM

"ePub is ePub," says Epps. "Any device that supports ePub will read ePub files. If you buy ePub books today you should be able to transfer them to another ePub-compatible device in the future."

That's great!

"The idea is ubiquitous content for whichever device," says Steve Haber, president of the Sony Reader division. "If you walk into a shopping mall, you can shop in one store or shop in all the stores. It's how you expand the industry and the market — more ereaders coming in is a good thing, multiple devices are a good thing. It's better to be open than to be closed and will help innovation in this market."

I love where this is going, except that — aside from the open ePub coding — e-books are additionally laden with DRM (digital rights management). Most folks are using Adobe Content Server 4, better known as ACS4, which defines how and where you can digitally move an e-book around. And these DRM decisions aren't up to Sony or any other non-Kindle e-reader maker.

"The publisher gets to set all kinds of rights restrictions," explains Liza Daly, president of Threepress Consulting, which provides software and services for the publishing industry. "They can limit the number of devices it will work on. They can limit the number of times it can be re-downloaded, perhaps because your e-reader fell in the bathtub."

Crap.


DRM for the Rest of Us

There is one good reason for DRM: libraries. You can (or will soon be able to) borrow an e-book from your local library. But its DRM will make your borrowed book self-destruct on its due date, so get reading.

Publishers think they have learned a lesson from the music industry's P2P prosecutions. What I hope publishers haven't missed is the lesson's final answer — Apple, the leading music retailer and seller of around 70% of all downloaded music, stopped selling copy-protected music once it realized its DRM restrictions were confusing, nay, pissing off all us law-abiding music downloaders who represent the bulk of its customers.

But all this loquacity assumes that we consume books the same way we consume music. As I think I've demonstrated, that's a completely false premise.

Simply, e-music and e-books are not the same thing. The lessons learned from the digitization of the former should not and cannot be applied to the latter. And while we're at it, e-books aren't like e-movies, either.

"Some in the industry are trying to treat books like music," confirms Daly. "For example, Shortcovers, an ebook vendor based in Canada, sells book content by the chapter. Publishers think that the problem with the music business is that they weren't vigilant enough in preventing runaway piracy in the first place, and that consumers will accept limitations on digital reading if they have no other choice."

Double crap.

"The publishing industry is definitely split at the moment as to how much to 'protect' e-book files from being passed around or copied," moans Mike Shatzkin, CEO of The Idea Logical Company, a publishing industry consulting company. "Publishers have managed to coalesce around a file standard, ePub. Coalescing around a protection standard would be much more difficult. I think it will be a long time before there won't be great variety in what is offered and great confusion for the consumer who wants to read a book on multiple devices or read it again 10 years later."

Geometrically increasing crap.


How This All Helps Amazon

I hope Mike is wrong. I hope publishers see that the mass of erudite e-reading consumers will pay the 10 bucks for legal e-books, especially when you don't put any confusing e-roadblocks in our e-path.

A completely open DRM that merely identifies a file as legally purchased and watermarked so if it shows up on an e-book pirate site it can be tracked down is reasonable. That won't stop me from loading an e-book I've bought onto multiple e-readers or other devices, and it's the only way publishers can build the kinds of digital conveniences Amazon offers and the only way other e-reader makers can break Amazon's early e-book monopoly.

I hope cooler e-book heads prevail.