Books, Business Models, Commerce, Reading, Technology

Why E-book Distribution Is Completely and Utterly Broken (and How to Fix It)

A train wreck

Photo via iStockphoto

A recent incident involving Amazon and a Norwegian reader has highlighted the sad state of e-book distribution on many levels. For those new to the story, which was broken on Martin Bekkelund’s blog late last month, a Norwegian woman named Linn (described as a friend of Bekkelund’s) reportedly found her Amazon account closed and all the e-books she had purchased via Amazon wiped from her Kindle with no explanation. Bekkelund further documents on his blog an email exchange that he says took place between Amazon and Linn, who sensibly inquired as to what exactly was going on. The series of exchanges is a surreal back and forth communication with Amazon that Cory Doctorow has since characterized as “a sort of Kafkaesque dumbshow of bureaucratic non-answering” in which Amazon provides no substantive explanation beyond a vague abuse of Amazon polices – without naming which policies or what the nature of the abuse entailed.

Some additional sleuthing by Simon Phipps turned up a bit more context. And indeed, it is a more complex story than it appeared at first blush, as these things usually are. Phipps reports that Linn lives in Norway but bought her Kindle in the UK. And then, being a good daughter, gave that Kindle to her mother and bought another one. Which subsequently broke. Twice. Amazon agreed to ship her a replacement, but insisted on sending it to address in the UK, as opposed to where Linn resides in Norway. All of this maternal gifting, device replacement, and international back-and-forthing apparently kicked up some sort of flag in Amazon’s systems resulting in the account shut down.

After the story appeared on Doctorow’s and Phipp’s blogs and was written up in the Guardian, Phipps reports that Linn’s account and e-books were just as mysteriously restored. Hooray. Case closed? Not so fast.

While in one sense this may be a minor customer service snafu on the part of the Amazon brought on by an admittedly complex (but in no way unusual) chain of events, it serves as a useful lens into the train wreck that is e-book distribution today:

1. A Lack of E-book Purchasing Alternatives. Yes, I realize there are a growing number of e-book distributers – Amazon, Barnes & Noble, Kobo, Apple’s iBooks, Google Play, Stanza, etc. And of course in professional and scholarly publishing platforms like Ovid, JSTOR, Project Muse, Wiley Online Library, Science Direct, Access Medicine, Safari Books, SpringerLink, and others have long offered access to digital books (largely online via HTML or via PDF download — EPUB and other “e-book” formats are largely eschewed). Leaving aside this (largely) institutional market in scholarly and professional books, Amazon is pretty much in a class by itself — accounting by some estimates for approximately 70% of the e-book market in the US.

In one sense, this is odd given e-book distribution is actually pretty easy, technologically speaking. E-book files are simple files relative to the complex XML that those of us in professional and scholarly publishing have been working with for well over a decade. Moreover, wrapping some e-commerce around them and putting them all on a platform is pie-like in its easiness. The complex parts are negotiating all the deals with publishers (which is made even more complex by the way in which rights are apportioned geographically, as is discussed below) and (up until recently anyway) integrating with e-reading devices. Amazon was early (but interestingly, not first — Sony anyone?) to market on both fronts.

Amazon achieved its dominance by copying a move from Apple’s iPod strategy, which integrates a distribution platform, a content management system, and a device for content consumption. In Apple’s case this was the iTunes store, iTunes, and the iPod; in Amazon’s, it is the Kindle Store, the Kindle Library, and the Kindle. Same same, but different, as they say.

Barnes & Noble has attempted, with limited success, to replicate this strategy with the Nook ecosystem, and even Apple has tried to copy Amazon’s copy of their own playbook with the iPad and iBooks. But neither Nook nor iBooks has really been able to dislodge the Kindle. Others such as Kobo and Google (with Google Play) have entered the e-book distribution market, but no one has yet presented a serious challenge to Amazon.

There are some chinks in Amazon’s seemingly impenetrable fortess walls, however. The proliferation of mobile tablets such as the iPad (and iPad Mini), the new Microsoft Surface and other tablets in the new Windows ecosystem, and of course the tablets running various flavors of Android, are not tied exclusively to a given e-book distribution platform. I can read e-books via Kindle or Nook or Google Play or Kobo apps on any of these tablets. E-book agnostic devices remove one of the 3 pillars of Amazon’s strategy.

The question is whether e-book agnostic devices will be able to foster more competition in this space or whether Amazon will dominate here as well. If publishers are going to overcome the Amazon virtual monopoly, they must change the rules of the game. And of course publishers attempted to do just this (with an assist from Steve Jobs) with the switch from the wholesaler to the agency model – a move which limits the ability for Amazon (or any other player) to use revenues from other business lines to offer artificially low prices (as Amazon has historically done) in order to maintain market dominance  – a strategy that has been thwarted by the misguided and ham-handed actions of the US Department of Justice.

That being said, the agency model was not a silver bullet in and of itself (and indeed organizations like Apple and Google have enough cash on hand to beat Amazon at this game if they so chose). To truly open the market to competition in e-book distribution, publishers must disrupt the proprietary lock-in of the Kindle ecosystem – and they have tools at their disposal to do so.

2. DRM Is a Problem, Not a Solution. DRM is a good way to frustrate your paying customers and does nothing to thwart pirates and others who will in any event never pay you a dime. Pirates can always get around DRM and once one person takes the time to do so, just once, the world now has access to free copies of your content. But here is the thing – such people, the ones downloading publishers’ content via Bittorrent or other means – they are not lost customers as they were never going buy most (any?) of the content they have downloaded legally. But there are millions of people in the world that will buy publishers content legally so why not focus on maximizing revenue from these people (e.g. “customers”) by making life easy for them? Ditch the DRM.

Interestingly, Amazon attempted to employ precisely this strategy as a way to break Apple’s stranglehold on music distribution. While iTunes music is currently DRM-free, there was a period of time when Amazon convinced record labels to let it sell DRM free music as a differentiator vs Apple. Apple’s continued dominance in music is largely based on the sheer number of iOS devices and the inertia of using iTunes since it comes standard on all of them. While the Kindle Fire plays music, it doesn’t fit in your pocket.

Eliminating DRM will accelerate sales. Users continue to view e-book purchases as, well, a purchase – not a rental (which is what in reality e-books currently are). That could change with other all-you-can-read rental models with monthly fees (Spotify for books), but that is not what we are talking about here. When a user buys an e-book, they expect to “own” that copy of the e-book in perpetuity (whether they technically own it is irrelevant as long as they know it is stable and can be moved about to other devices and software). They get rather befuddled when, as in the case described above (or as with the perfectly ironic George Orwell Nineteen Eighty-Four incident), their e-books are suddenly wiped from their devices. Eliminating DRM will allow users to place their e-books beyond the reaches of Amazon and other platform providers in secure libraries. Once users are confident in the stability of their libraries, they will buy more e-books. The present situation is one where many users are hesitant to invest in libraries that may suddenly (and inexplicably) vanish, or be preempted by another distributor (remember Sony? Borders?) requiring repurchase of all those e-books all over again.

3. Proprietary Formats Must Go. The Kindle Format (KF8) really offers no advantages (to users) over EPUB; it is simply just different enough to make it incompatible with other readers. So even if users could get their Kindle-formatted e-books out of their Kindle Library, there is no other way to read them other than the Kindle (or Kindle app). Similarly, the Kindle App does not render EPUB files.

From a user’s perspective – and a publishers perspective – the ideal scenario would be to have a plethora of different e-book stores where one could buy e-books – e-books which could then be kept in a central, store-agnostic library, accessible from multiple devices and readable via any number of standardized reading applications. The Kindle strategy is designed to thwart precisely this scenario. Publishers need to intervene to bring it about. One way would be to simply refuse to deal with any e-book seller – including Amazon – that uses a proprietary format. Sure, e-book sales will take a short-term hit while Amazon circles their virtual wagons before ultimately capitulating, but in the longer-term, publishers, and the readers of their content, will be much better off.

The DRM-controlled use of the K8 proprietary format is the lynchpin of Amazon’s lock-in strategy, and by forcing the abandonment of both, publishers will, in a single stroke, end Amazon’s virtual monopoly. Why? Because with DRM-free and non-proprietary files can be used interoperably. Users will be free to buy e-books wherever they like (just as with physical books), store them in whatever library system they would like, and read them on any device using whatever reading application they would like.

This will create more opportunity for e-book stores to differentiate themselves in terms of service, reviews, specialization, quality control, and other services (and indeed, Amazon is good at these things and will likely continue to do very well). It will also create more competition for innovation in reading software and e-book library management software. And ultimately it will spur more sales as the e-book ecosystem becomes both more competitive and more stable (as the content purchased by users will be less dependent on any one player in the ecosystem).

Publishers will be better off as they will not be held hostage to the dictates and pricing schemes of Amazon. Users will be better off as they will have more and better reading options and will likewise not be held hostage to a single organization that can control, or erase, their libraries at a stroke.

4. Territorial Distribution Models Inherited from Print Books are Nonsensical. Another factor in both the the story of Linn’s vanishing Kindle library and the elimination of DRM more generally is the way in which rights are currently apportioned. When dealing with print books, authors have traditionally contracted with books publishers in their home country. That publisher then represents the author globally by licensing the rights for the work to other publishers in other countries. In some cases this may involved a translation. In other cases it does not. A US publisher, for example, might offer the rights to distribute a book in the UK and a different publisher in Australia and yet another publisher in South Africa. In all cases the work is published in English.

While this system may have made sense for the distribution of print works (especially the local distribution of print works via physical book stores) it makes no sense for the distribution of e-books, where anyone anywhere in the world may download a book from the same website. And yet this is how e-book rights are often handled, leading to the lack of availability of titles in some countries.

Doctrow’s post provides speculation as to how issues with territorial rights (or lack thereof) may have led to Amazon’s flagging (and then wiping) Linn’s Kindle library. It is worth reading though beware understanding the current state of affairs in territorial rights for e-books may hurt your brain.

Publishers need to dispense with this nonsense and move to global rights, and global distribution, for any given language. If I live in Arizona and want to download the German edition of Gerhard Richter’s biography “A Life in Painting” (as opposed to the US translation) why should that be complicated? If I live in Norway and want an English edition of the latest Iain Banks novel, why should that be a problem?

Until publishers abandon DRM and proprietary formats (as even the much maligned and generally backward music industry has done) and move to global distribution and rights licensing models, they will continue to be held hostage in the golden cage that is Amazon – with readers ultimately paying the price. The status quo seems like a risky strategy and increasingly opens publishers up to market disruption and disintermediation. Authors and readers are the two necessary nodes in this system. To the extent that publishers and distributors make more efficient and effective the connection between authors and readers, they will profit. Right now they seem more focused on causing friction. This is not a winning strategy.

 

About Michael Clarke

Michael Clarke (@mtclarke) is the Founder and President of Clarke & Company (www.clarke-company.com), a management consultancy focused on digital information strategy, product development, and marketing research related to STM and scholarly publishing. Prior to founding Clarke & Company, he was Executive Vice President for Product and Market Development at Silverchair Information Systems. Additionally, Michael has held positions at the American Medical Association, the American Academy of Pediatrics, and the University of Chicago Press. He currently serves on the board of directors for Silverchair Information Systems and has previously been elected to the boards of the Society for Scholarly Publishing, and the Council of Science Editors. Michael is a graduate the University of Colorado and the University of Chicago.

Discussion

62 thoughts on “Why E-book Distribution Is Completely and Utterly Broken (and How to Fix It)

  1. Check out Baen Ebooks. They are a small player in the Science Fiction and Fantasy niche, but they do have a much more open (non-DRM) approach to ebooks.

    Posted by rhwoodman | Nov 2, 2012, 6:10 am
    • As a former Borders employee, I have to point out an error in the article. When Borders began it’s Liquidation Sale, it sent out emails to all customers who had ebook libraries at the Borders.com site detailing how to go about transferring their ebooks to the Kobo.com site. There was no charge to do that, nor did anyone have to repay for ebooks they’d already purchased. Since I was one of the ebook salespeople at our story, I personally helped some customers do this who were having trouble with the process. I might add I still have my Kobo ereader and transferred my elibrary to Kobo.com myself without a hitch

      Posted by billwest | Nov 3, 2012, 12:12 pm
  2. “Territorial Distribution Models Inherited from Print Books…” — this happens even for printed books ONLY and ONLY with regards to physical book stores. The same Amazon (.com, .co.uk, .de, .fr, whatever) can ship ANY physical book to ANY physical location on Planet Earth. How come they can not to the same with e-books?

    No, this is not inherited from print books. It’s inherited from music and DVDs.

    Posted by Béranger (@beranger_v4) | Nov 2, 2012, 7:01 am
    • They might be doing it but it is actually illegal in many countries including India. It is similar to why cheaper Indian editions cannot be sold to US customers.

      While it is true that having differential pricing doesn’t make sense when you look at it technologically, there is still the issue of different markets supporting different price points. If you are selling a book at the same price in US and India, you will either not sell many books in India or you will leave a lot of money on the table in US. So this is more complex then it looks.

      Posted by Abhaya | Nov 3, 2012, 10:52 am
      • But why should it be complex? Why should there be different prices for digital products in different countries? Go ahead and set prices to maximize profits, finding the sweet spot between what the US and Indian markets will pay.

        Posted by kwhedlund | Nov 9, 2012, 5:24 am
  3. Would you extend this approach to library purchases so that a library could purchase and then loan (for one user at a time) a copy of the e-book?

    Posted by David Lewis | Nov 2, 2012, 9:25 am
    • Libraries are a different case. If someone “checks out” an ebook from the library, it does seem to me like there does need to be some DRM involved. When one checks out a physical book from the library, one gives it back at some point.

      Posted by Michael Clarke | Nov 2, 2012, 9:44 am
      • I wonder if that is really the best policy. I manage electronic resources for an academic library, and I get the job of explaining eBook platforms to users. DRM generally requires an additional sign in or two (for a total of three sign-ins for off-campus users) as well as unfamiliar software. It’s just too difficult for many users. Journal articles have long been available as DRM-free PDFs. I think it makes sense to offer books and chapters as DRM-free files too, and some of our platforms already offer this. Why make the experience worse for readers?

        Posted by Chris Bulock (@chrisbulock) | Nov 2, 2012, 5:39 pm
        • I think we are talking about two entirely different scenarios and two entirely different types of “ebooks.” I agree that in in the case of academic libraries DRM makes littles sense (leaving aside the issue of textbooks here – which I’m not even going to touch as that is an entirely different post). But “ebook” means something very different the academic space and is accessed by different means and with different expectations. In the academic setting, and ebook means the HTML and/or PDF books available via JSTOR, Project Muse, Ovid, Wiley Online Library, Science Direct, Access Medicine, SpringerLink, and other platforms. I agree with you that DRM does not make a lot of sense in this context.

          That is not the scenario I was envisioning in my response to David Lewis above. The scenario I was envisioning is where a user at a public library wants to “borrow” a copy, in EPUB format, of the Hunger Games or Fifty Shades of Gray for the next four weeks. I was speaking explicitly to a trade/consumer scenario and not an academic/professional scenario.

          Posted by Michael Clarke | Nov 2, 2012, 6:39 pm
  4. “The DRM-controlled use of the K8 proprietary format is the lynchpin of Amazon’s lock-in strategy”: I think that this is overstated. DRM is a selectable option for anyone publishing via Amazon. Amazon will happily sell an ebook without DRM, and some self-published authors and publishers do exactly that.
    The KF8 format may indeed contribute to lock-in, but I see that as far less burdensome than the DRM barriers you describe in section 2. In the absence of DRM, conversion from one format to another is easy and legal. So format-based lock-in is more a matter of convenience than coercion.
    The fact that format conversion isn’t practiced by a large segment of the ebook-consuming population is, I suspect, largely because obtaining such software and learning to use it is not worth the effort to most people as long as the vast majority of their purchases have DRM. If DRM were rare, then format-based lock-in would be reduced to a simple bias towards a selected platform, on a par with the edges offered by other legitimate discriminators such as effective advertising, general reputation, convenient link locations, and sheer force of habit as a driver for repeat business.

    Posted by SteveZ | Nov 2, 2012, 9:28 am
  5. Publishers of the world unite and boycott Amazon? Yet another crusade? This is what makes revolutions so interesting. As Dylan put it “There must be some way out of here… There’s too much confusion. I can’t get no relief.”

    I am not mocking you Michael, just making an important observation. Things will indeed change and no one knows how. The crusades are the vectors of change whose strength is unknown. Good luck with yours.

    Posted by David Wojick | Nov 2, 2012, 9:43 am
    • David – I have no dog in this hunt, except as a reader. And I don’t view it as a crusade. We are in the midst of a revolution whether we like it or not. Publishers have made, and will continue to need to make, decisions about their business practices as the technology continues to evolve. Those decisions can lead to a market that is more competitive or less competitive, and to user experiences that are better or worse. The decision to move to an agent model by the industry is one example of such decision making — and it was a decision that, absent the bizarre intervention by the DoJ, would have led to a more competitive market space. The decisions to use DRM or to use proprietary vs open standards are decisions – and they are decisions that should be made actively, and reevaluated regularly. The music industry learned this lesson too late in the game.

      Posted by Michael Clarke | Nov 2, 2012, 10:06 am
      • But you have on fact just proposed a boycott of Amazon by publishers, right?

        Posted by David Wojick | Nov 2, 2012, 10:15 am
        • Not at all. I would not call the publishers’ decision to move to an agency model (thereby rejecting Amazon’s wholesale model) as a boycott of Amazon. Nor would I categorize rejecting a proprietary format as a boycott. With print books, publishers do not print a different edition in special sizes to fit Amazon’s shipping boxes. They can simply say, here are our EPUB files – you are welcome to sell them just like Barnes and Noble, Apple, Google, and others – have at it. I’m not sure how this could be construed as a boycott. It is simply a renegotiation of business terms.

          Posted by Michael Clarke | Nov 2, 2012, 10:21 am
          • Okay let us call it not a boycott. Let us say that it is just that a lot of publishers coincidentally refuse to sell to Amazon until the terms you describe are met. A coincidental confluence of interests as it were. The obvious questions are how many coincidental publishers will it take? How long before Amazon folds before this coincidence? And what will it cost the industry, coincidentally, to bring Amazon around to your way of thinking? A guess will be sufficient because you seem not to have considered what Amazon might do in retaliation to this coincidence. Amazon is a bit larger than the ebook industry.

            I too have no dog in this hunt but I am a pretty good judge of dogs.

            Posted by David Wojick | Nov 2, 2012, 8:58 pm
            • I’m not sure it would come to a war with Amazon. It appears that Amazon is now selling DRM-free ebooks. And it is within the purview of publishers to change the way they manage territorial rights. So the real issue of contention would come down to proprietary formats. There are many ways to put pressure on a distributer without sparking a war. Publishers could, for example, release new titles in EPUB a month before “other” formats. Amazon would still be welcome to sell them, just like Apple, Google, and Barnes & Noble, if they agree to use the EPUB format. Publishers are already doing this with regard to the delay from hardcover release (which Amazon also sells) to ebook release so it is not much of a stretch. Just one possibility – there are many others.

              I am not anti-Amazon here. I think they deserve more credit than anyone for getting the ebook market off the ground. They have made it convenient and easy to download and read ebooks – something no one else had been able to do. Moreover, I use Amazon’s Kindle app myself and would use it MORE (much more) if they sold ebooks in a non-proprietary format with no DRM so that I know my library is stable.

              This post is not about Amazon, but rather about the business decisions that publishers can make that will, over time, lead to a more competitive market. This will ultimately benefit publishers, benefit readers, and will likely even benefit Amazon as the overall market size will increase and while their market share might diminish, their revenue would likely increase.

              Posted by Michael Clarke | Nov 3, 2012, 11:52 am
              • Unfortunately, control of territorial rights is not in the publishers’ purview. It is in the purview of authors and agents. The economics of the book industry continue to demonstrate that an author will nearly always make more money by selling US & UK rights separately. The advance a US publisher would pay for World rights will almost never (save for really big blockbuster titles) be greater than the total of a US-only advance plus a UK-only advance. E-books still do not account for enough marketshare for authors and agents to expect this to change any time soon.

                Also, even when World rights are sold to a single publisher, it is often more economically beneficial to the publisher, author and agent for that publisher to sublicense some of those rights to another publisher in the other territory. Yes, worldwide distribution of ebooks is becoming simpler, but most authors want their books to be as widely available in print formats. In a low margin business like publishing, the only way to do that is to take advantage of current territorial divisions, and import/export rules. Moving a print book edition around Europe is much simpler for a UK publisher than a US publisher, and moving books into Canada is easier for a US publisher than for a UK publisher.

                Territoriality can’t be removed from the equation without seriously impacting the ability of authors to earn a living as writers of books. At least, not yet. Give it another 20-25 years, and it may be possible, but the market for books, and the laws and tariffs that govern their import/export, will have to change substantially in that time.

                Posted by Sean P. Fodera | Nov 7, 2012, 10:24 am
  6. Best discussion I’ve yet seen of the interrelations among DRM, proprietary formats, territorial rights, etc. Note that Project Muse does NOT use DRM on its books included in the UPCC program.

    Posted by Sandy Thatcher | Nov 2, 2012, 10:06 am
  7. The survey of what’s broken in the eBook landscape is spot on but the solution you offer, or at least a big piece of it, is perplexing and may be ignoring basic business realities.

    You say, “The DRM-controlled use of the K8 proprietary format is the lynchpin of Amazon’s lock-in strategy, and by forcing the abandonment of both, publishers will, in a single stroke, end Amazon’s virtual monopoly.” And you point out that Amazon controls an estimated 70% of the eBook market.

    Where is the leverage that would allow any of the publishers to insist on DRM-free eBooks given the market share that Amazon has?

    DRM will only die if (1) for some reason the advantages it accords Amazon is weakened by other innovations or changes in the eBook ecosystem or (2) if major publishers decide to sell eBooks direct and drop DRM as a strategic move to give them an advantage. The former basically involves a waiting game; the later depends on one publisher being willing to go to war with Amazon, on their own, and then others following–not an attractive proposition for a CEO watching cash-flow.

    Posted by Peter Turner (@PeterTurner) | Nov 2, 2012, 10:14 am
    • As Steve Z. points out above, Amazon does, in fact, allow publishers to sell books DRM-free. I was not aware of this – and am curious as to how easy it is to export a DRM-free file from the Kindle library as I see no obvious way to do this. I just bought the DRM-Free edition of the Shakespeare Chronicles, by James Boyle, from Amazon – I see no obvious way to actually get to the K8 file now that I have bought it.

      So abandoning DRM will not require a war with Amazon. Abandoning proprietary formats may or may not. Amazon does not want to drive users to other ebook platforms to find ebooks because they are not available via the Kindle Store. They have a strong incentive to keep users doing what they do via force of habit. Disrupting that habit could lead users to get comfortable with a new platform.

      There may be short-term revenue implications for publishers pursuing such a strategy, sure. The question is whether to force the issue now while revenue from print books remains sizable or to hope for the best in the future where, if the issue is not addressed, publishers will be even more beholden to Amazon.

      Posted by Michael Clarke | Nov 2, 2012, 11:53 am
  8. Excellent post. I just debuted with Kindle Store on my android tablet with my Amazon account, in Chile. I “rented” a copy of Goldacre’s Bad Science. Then a couple of days ago I got an email from Amazon saying that I had to prove residency in the States. What?? How was I to know that that internationally known book could only be purchased there. They never said anything about territorial limitations! So now I have to send a copy of my US passport, which by chance I have (I am a dual national, but that’s not the point!). This story is in evolution. I am quickly reading this book before it disappears and if that happens, that’s the end of my customer experience. I hope they will one-click me my money back in that case. So, to conclude, you are so right about the need to facilitate and not hinder authors outreach to readers. Great post.

    Posted by Vivienne Bachelet (@V_Bachelet) | Nov 2, 2012, 12:07 pm
  9. Companies can do very little because Amazon won’t listen but if there are enough consumer complaints Amazon will respond. I would think Amazon would like to sell more titles to any device. So what are the advantages and disadvantages to open distribution.

    Posted by harvey kane | Nov 2, 2012, 3:42 pm
  10. Two minor items left out of your argument are the natures of the ‘new’ bookstore and of the current end-user software. At this point all Amazon really has going for it (in the ebook world) is name-recognition and a predisposition on the part of the consumer to think in terms of an online ‘superstore’ being easier; just as a bricks and mortar superstore is. A simple search like “download ebook” will reveal a lot of options to purchase without any extra effort. In moments I can choose the same book from many different retailers and formats. Meanwhile the online bookstore standard suffers from a lack of shopability, an inability to provide any kind of common user experience and an increasing lack of trustworthiness. Head to Macmillan’s website choose an author, pick a title and be presented with choices of where you are can buy from… from the consumers point of view it makes more sense than wading through Amazon’s site. Hopefully consumers will eventually realize that the model has changed and none of the benefits of the bricks and mortar book store have managed to translate to the online version. The book buying experience has changed, we just haven’t realized it yet.

    Which highlights the second issue. If I buy they way these online retailers are telling me I have to then it follows an assumption that I must read my kindles on a Kindle, nookbooks on a Nook, ibooks on an iPad, Sony books on a Sony etc. This is the online bookselling giants blatantly misinforming us that’s how it has to work under the guise of ‘making it simpler & better’ (much like Apple did with the AAC and the mp3); locking us into proprietary formats when we don’t actually need to be.

    Calibre is a great example of what ebook software should be like and, for all its clunkiness and neverending updates and tweaks, it always makes me wonder what ebook libraries would be like if someone with money and and honest interest in improving the experience took on the challenge in spite of the efforts of the big players. Caliber (donationware) finds books, converts formats, helps us add our own categorizing information and metadata and loads all of it on whatever hardware we want: iPad, Sony eReader, Kobo… whatever. Oh, and if you set it up correctly, it automatically strips most DRM as soon as you load the book.

    My long-winded point is that we are letting the retailers dictate the experience; the retailers, not the authors, not the publishers and certainly not the readers. The true nature of the ebook experience is there, it’s just obfuscated by one big money-grabbing smokescreen.

    Posted by BruceKeith (@BruceKeith) | Nov 2, 2012, 5:28 pm
    • I do have to hand it to Amazon that the incredible convenience of their model (once click and you can whispernet just about any book right to your devices in seconds) jump-started the ebook market in a way no one had been able to do previously. They were innovators and have earned the market share they’ve gained.

      My big complaint is less about the experience of the store (though your point is well taken and I imagine many people are turned off by the mega-store and would prefer a more reader-centric approach) nor even Amazon’s actions to-date (with the exception of the occasional snafu like the Nineteen Eighty Four incident or the incident documented here). It has become clear to me that while Amazon can take a lot of credit for innovation over the last 5 years, they are now in a position where they are holding up new developments (and overall market sales of ebooks). I was an early fan of iTunes and the iPod – however, I bought very little music via the iTunes Store until they dispensed with DRM as I didn’t want to get locked in. Now most of my music purchases are digital and while Apple is not the only beneficiary of that (I also use Amazon and eMusic) my overall business via the iTunes store has certainly risen dramatically. I’m in the same position now with the Kindle. I generally like the experience but if I’m going to invest in a digital library, I want one that is portable, stable, and platform agnostic.

      I absolutely agree that end-user software for managing/reading/converting ebooks is a largely neglected opportunity. Thanks for the tip on Calibre – I will check it out.

      Posted by Michael Clarke | Nov 2, 2012, 7:05 pm
  11. DRM.. territorial restrictions.. sound more and more like it’s the publishers that are the problem and not Amazon :P

    Posted by Bara Minata (@bminata) | Nov 2, 2012, 10:46 pm
    • It is indeed correct that DRM and territorial restrictions are two factors that are within control of publishers to change today.

      Posted by Michael Clarke | Nov 3, 2012, 11:32 am
      • As far as DRM in particular are concerned, I totally agree. So much so that we have just launched in Italy an ebookstore that only sells DRM-free ebooks.
        As far as I know, it is the first multi-publisher DRM-free ebookstore in the world; ebg-store.it is part of ebookgratis.it, the leading Italian search engine for legally available free ebooks.

        Posted by Cristian Ardu | Nov 3, 2012, 8:10 pm
      • DRM is also a factor where much of the power is controlled by authors and agents. Many authors and agents require publishers to DRM their books. It is a common demand of authors and agents when negotiating their contracts. In particular, UK authors and agents (and perhaps publishers) make use of this limitation very often. However, the UK ebook market remains behind the US by a few years in terms of the understanding of how ebooks can or should be marketed.

        Some publishers have given up DRM, such as Tor Books. Tor abandoned DRM a while back. I’m not certain how they dealt with the authors on their list who had DRM provisions in their contracts, but since Tor publishes Doctorow, Stross and Scalzi, their science fiction authors may have been a bit more ahead of the anti-DRM curve than other non-genre authors.

        Posted by Sean P. Fodera | Nov 7, 2012, 10:50 am
  12. Great article here explaining why it’s nearly impossible to compete with Amazon: essentially Wall Street has such faith in Amazon’s eventual profitability that they can poach sales away from any industry by lowering prices to a point where they lose money. Unlike other businesses, which must remain profitable to stay in business, Amazon apparently has no such restrictions, at least as far as investors go:
    http://www.slate.com/blogs/moneybox/2012/10/26/amazon_profits_they_don_t_exist_but_the_company_keeps_on_keeping_on.html

    Posted by David Crotty | Nov 3, 2012, 11:09 am
    • This is why the US Department of Justice’s actions against publishers using the agency model is so misguided. If there was, in fact, collusion then the publishers should pay a fine. But to prohibit use of the agency model damages the competitiveness of the industry and plays into precisely this Amazon strategy. And ultimately it will not even benefit consumers, the people whose interests the DoJ is purportedly looking out for. That is because Amazon’s strategy is not sustainable. At some point, even they will run out of money and have to raise prices. And because they have so much market share, at that point there will be little competitive pressure to keep such price increases at bay.

      All that being said, both Apple and Google have enough cash on hand to go head-to-head with Amazon at this game if they so choose (B&N of course, does not). But it does not seem like a healthy development for the industry if the only ebook sellers are multi-billion dollar tech titans, none of whom view books as a core business.

      Posted by Michael Clarke | Nov 3, 2012, 12:18 pm
  13. international rights: by close recent examination I can confirm that German language e-books are essentially unpurchasable by persons resident in the United States. You may purchase the print book from any online retailer, but the ebook you may not. Amazon is flagrant about this, but the publishers, with some befuddlement, back them up. There is no good reason for it. The line of argument seems to be that if there were rights that could hypothetically have been sold at some time and you’re not absolutely sure they weren’t, you’d better be careful; and since you’re being careful about some books, you might as well be similarly careful about all. German language publishers are thereby depriving themselves of a market, quite voluntarily.

    Posted by Jim O'Donnell | Nov 4, 2012, 3:06 pm
    • Have you suggested to German publishers that they are losing out in a big way by their actions? If so, what were their responses?

      Posted by rhwoodman | Nov 4, 2012, 4:04 pm
    • Jim O’Donnell, when you researched this, were German-language publishers aware of just how much money they potentially were losing by their actions?

      Posted by rhwoodman | Nov 4, 2012, 4:06 pm
  14. Thanks for the link to my speech on DoJ. We certainly agree that the government is misguided here.

    While I am comfortable with much of your diagnosis of the problem, I think you’re off base in the solutions you suggest.

    The idea that the publishers could in some unified way tell Amazon anything, let alone that they have to change their ebook format, was effectively squashed by the recent DoJ action. Publishers will do anything today to avoid the appearance of collusion, and I see no way to implement the industry-wide strategy you propose vis a vis a trading partner without risking serious legal jeopardy. And they won’t.

    Furthermore, you blame the wrong parties when you tell publishers not to divide up rights. While I agree that there is strong logic for one ebook distributor per language in the world, rather than breaking it up the way we’ve always done for print, that decision doesn’t rest with publishers. It rests with agents. They’re the ones who learned (as all do in trade publishing — although not in other publishing) “acquire rights broadly, license rights narrowly.” They believe it is in the authors’ best interests to withhold rights territory by territory until they get the best deal. And it is abundantly clear that they can’t get a good print deal anymore without ebooks thrown in.

    This problem reaches ridiculous levels. Kobo has told me about books for which the Canadian rights have been licensed but the US and UK haven’t yet. Therefore, they have the file but can’t sell it to US or UK customers, who have NO way to purchase it. There’s no doubt this is a problem, but the publishers are not in a position to solve it.

    Posted by Mike Shatzkin | Nov 5, 2012, 10:28 am
    • Thanks for the comment Mike. I know you have been thinking on these issues longer and more deeply than anyone.

      With regard to the issue of collusion (or the perception thereof), I wonder if there are nonetheless some actions publishers might take unilaterally. Like, for example, selling content without DRM, which is appears Amazon is open to (though how to make use of the DRM-free file is a separate issue – Kindle does not make it ease to export the file). I’ve also noticed that there are a number of publishers still delaying release of e-books some weeks after the hardcover (necessitating my lugging a hardcover copy of the Hydrogen Sonata across the Atlantic last month as the e-book edition was not released in time for my long flight). Might such a publisher, unilaterally, make a decision to exempt this delay for distributers who sell non-proprietary formats? Perhaps it is too small a lever.

      I stand corrected with regard to where the blame lies for the mess that is international ebook rights. It nonetheless remains a mess and at some point I hope agents figure out that they are costing their authors sales. I imagine this will sort itself out over time as e-book sales eclipse print sales at which point, who cares how good or bad the deal is on print if the e-book distribution is in the drink?

      I do wonder, however, if there is an opportunity here for smaller publishers to take a “digital first” approach and work with agents/authors who are focused on global e-book distribution and consider print to be ancillary. Also is there a danger for traditional publishers here in that one can now “direct publish” with Amazon and cut a deal for global ebook distribution rights in English, German, French, Spanish, Portuguese and Italian. (I understand this is self-publishing, though I also understand Amazon is moving upstream and is offering more and more traditional publishing services– like advances — presumably with the same global e-book distribution rights as core to the proposition).

      Posted by Michael Clarke | Nov 5, 2012, 11:25 am
      • I think you’re right that as digital becomes dominant, licensing behavior will change. But, on a global basis, that’s still a ways off.

        Posted by Mike Shatzkin | Nov 5, 2012, 11:32 am
    • Regarding Kobo, even if you give them international rights, if you are using the agency model they will only accept to sell in the countries for which a price list has been established. As if a Thai reader would never buy on the web in USD $…

      Posted by Daniel Desjardins | Dec 15, 2012, 10:57 am
  15. Couple of years ago I purchased for about $11 SEX AT DAWN by Christopher Ryan for my iPhone. Excellent book, but at my age I can not read books on such a small screen. I tried to port it to my Macintosh, but with no avail. eBook disappeared from my iPhone and I do not even remember who sold it to me. Having to pay for it again is an insult. I want it on my Macintosh, possibly on my iPad and no mysterious disappearances!
    Any advice? latarnik@icloud.com

    Posted by latarnik2012 | Nov 5, 2012, 2:58 pm
  16. It’s due to cases such as this that we’ve resisted buying ebooks and ebook readers. The industry seems at odds with itself and needs to standardize. Case in point, a work colleague brought in a boxful of old paperbacks she no longer wanted. I picked up a couple of novels I hadn’t read — both over 20 or 30 years since original publication. In the modern climate I would be expected to pay to read these books, and they would not belong to me. Also, a few years ago, while browsing a country bookstore, I came across a heavily discounted copy of Arthur Miller’s biography, which was still selling at full price in city bookstores. What chance do I have of coming across such bargains today?

    At the age of 62 I believe I can withstand the digital BS that passes for publishing these days. I couldn’t tell you how many books I’ve bought during my life, or how many I’ve given away to friends or charity, but it’d be most, I’d guess. I only keep stuff I feel I might want to read again — usually nonfiction.

    If we — my wife and I — ever buy ebook readers and ebooks, they’ll be DRM-free versions.

    Posted by Michieux | Nov 6, 2012, 10:20 am
  17. I’m quite puzzled by much of what you write here. Have I understood you? It is a simple matter to transfer non-DRM books purchased at Amazon onto another platform. Calibre will do this for you in a matter of instants. It is also a simple matter to strip the DRM; this may be illegal, depending on where you live, but you can do it, and many otherwise upright and worthy citizens do so, not because they want to sell the books on, but because they believe that they should be able to have a similar degree of control over their ebooks to that which they exercise over the printed kind.

    Amazon is an excellent purveyor of ebooks – it is very simple to find the book you’re looking for (I have tried other sellers, but they are not as satisfactory). I think Amazon would be quite happy to do away with DRM for books, as they have done for music. It is the publishers who don’t wish them to do so.

    Things will undoubtedly change. I don’t believe that publishers have been taking the ebook seriously up to this point. You will, for example, find books from well-known houses that are full of errors that should have been picked up in proofreading. Many publishers simply have not thought of how to present graphic information or tables in a readable form. That is changing, but far too slowly. When they *have* figured out how to use the technology, we will see a change in the very conception of what a ‘book’ should be, and how it should be read. But this will only happen when the publishing trade has allowed younger and more flexible minds to take charge – and I write this as someone who is on the cusp of retirement.

    Posted by Timothy Mason (@timothyjpmason) | Nov 6, 2012, 5:10 pm
    • Well, the analogy with what you can do with print books is not exactly straightforward. E.g., if you want a paperback, you generally have to buy a copy, though in theory you could laboriously strip off the cloth cover and rebind with a paper cover. Also, with music, you had to buy a tape version if you wanted it in that format instead of as an LP. So, why in the digital age do you think you should be entitled to have the work you buy in multiple formats at no extra cost?

      Posted by Sandy Thatcher | Nov 6, 2012, 7:25 pm
  18. That’s what I like with publishers like O’Reilly.
    You register on their site, you order/buy a book, and it is offered on multiple electronic formats without DRM. And you can download it everytime from your account (sort of a cloud storage for books), so if I travel with another device or I relocate, the books are still in my account.
    I prefer much this model. No geographic licenses, no licenses, no fuss.

    And I avoid using a closed system like Kindle for exactly this reason. I want to keep my books with me (or my account), if I get another reading device I just re-download the book and I enjoy it.

    N.F.

    Posted by Nick Fotis | Nov 6, 2012, 5:23 pm
    • Not to suggest that there is no difference between O’R and Amazon, nor that there aren’t advantages to DRM-free, but, in fact, you can change devices pretty much all you want and download your ebooks from your Kindle account (or Kobo account, or NOOK account, or Google account) any time you want too. So the very specific advantages you are enumerating are not specific to O’Reilly or to DRM-free.

      Posted by Mike Shatzkin | Nov 6, 2012, 5:28 pm
      • Well, I forgot to add that the O’Reilly titles are available in multiple standard industry formats which are device-independent (PDF, ePub, MOBI, etc.).

        So, besides being able to copy the files between your devices freely, to have the titles available 24/7 over their site is an additional bonus.

        I like this way of buying e-books, and I will continue buying from publishers that treat me in such a way. They even offer a very low price for getting the electronic version of a book you got already in printed form.

        N.F.

        Posted by Nick Fotis | Nov 6, 2012, 5:54 pm
  19. Your article chimes with us. We are a small specialist non-fiction ebook publisher (since 2006) and have never had DRM. We use the pdf format, with embedded video, now playable on iPad and tablet using ezPDFReader. We believe that DRM creates hostility to the product and the company. Our bestselling first title remained a bestseller for 5 years even though it is an unsecured PDF. We are about to go live with a new website vivebooks.com which makes our large PDF files downloadable, while still being available on disk too. Vivienne Wells of Rainbow Disks

    Posted by vivienne | Nov 7, 2012, 10:43 am
  20. You can publish prose DRM free and device agnostic on Smashwords. As a reader, I think this is almost a perfect service. They publish in all the major formats and then some. You can read the beginning of each book (with no missing pages) to decide whether you really like it. Pricing is very fair and the pricing model is crystal clear. O’Reilly is my favourite tech publisher. I buy a lot of ebooks. I will never buy anything that locks me in to any specific vendor. I like Amazon but I don’t buy ebooks at Amazon. I want to own stuff that I spend money on! The thought that Amazon can destroy your digitial identity in minutes like they did with Linn is creepy. How could I trust them?

    Posted by Will | Nov 7, 2012, 6:32 pm
  21. Reblogged this on lara harlow-hentz and commented:
    A Norway Library asked me for my two books and so far, Amazon was not listing my ebooks as available!

    Posted by lara harlow-hentz | Nov 8, 2012, 11:16 am
  22. A library in Norway contacted me about carrying my two ebooks. Only one was published with PressBooks in Quebec who is working on ebook global distribution. So far, the library has not had any success in getting either book. Any suggestions?

    Posted by lara harlow-hentz | Nov 8, 2012, 11:29 am
  23. Amen.

    Posted by Pia | Nov 8, 2012, 12:11 pm
  24. If you look at how illegal file sharing has ruined the music business for many, many musicians – only the very top artists can make a living anymore selling recorded music – you have to feel some concern. The lesson from the music industry is that, sadly, most people won’t pay for content if it’s easily available for free, even if they know that accessing the content for free isn’t legal or right.

    I just don’t see how it makes any sense to eschew some level of IP protection for authors.

    As I see it DRM does three things – it makes a statement that the author is using reasonable means to protect their IP, many otherwise-honest people won’t pirate content if they have to go through the trouble of doing something illegal (e.g. using a hacking tool) to obtain it, and, third, if an author finds an in-the-clear version of their work on an Internet site it’s immediately clear that the author did not intend for the content to be there – and that facilitates the effective use of take-down notices.

    I love reading books, and I want to make sure that there are plenty of people out there with the time and incentive to keep on creating books. DRM does have user experience issues, and it’s not a panacea, but it’s a lot better than rampant, illegal content consumption that leaves all but the Dan Browns of the world looking for day jobs.

    Posted by Dave | Nov 8, 2012, 2:57 pm
    • I am an independent publisher with over 65 books in print through Ingrams (don’t get me started) and ebooks on Kindle (ugh!!!!). Where to start…first off the “contact us page for problem resolution usually means a 24 to 48 hours wait from someone named Rajhi in India or close by to “talk” to me about the problem. It starts with a “let me see if I’ve got this straight” scenario and then asks me if that has solved the problem …(please click this for yes and that for no…to reontact if that doesn’t solve the problem you ahve to go back to the contact us page again. Right I am working on a remittance issue with a discrepancy of 75 book sales in printed format that my author says are on Author Central which never showed up in my reports on AmazonAdvantage. I also have a problem with a book called Cosmic Dust and the Eternal Code (which has a contest in it and a cash prize for the person who breaks the code) and the original book called Cosmic Dust which I have been forever trying to get taken down sin ce it is not the book we want people to buy. I know I’m not the only one feeling the frustration. Kindle Fire is the only way to preview ebooks now and it is totally different from Kindle.

      Posted by Dianne Helm, Helm Publishing | Nov 8, 2012, 6:31 pm
      • Also, we do not advocate DRM..

        Posted by Dianne Helm, Helm Publishing | Nov 8, 2012, 6:34 pm
        • Amazon also tells you what they are going to sell your ebook for, not what you have priced it at. IE A King’s Task by A. V. Wedhorn is listed at 3.99 but Kindle is selling it for 99 cents. … Thier answer to me was that they list a book at 99 cents because they are selling it at that price. Amazon also has this KDP program where you have to be exclusive to their Amazon site and library lending which hasn’t sold 1 book since I signed up in 2010.

          Posted by Dianne Helm, Helm Publishing | Nov 8, 2012, 6:40 pm
  25. I think it’s a great idea, and I’ve been wanting this, as a reader, for many years now. Now someone needs to create a great library app for storing EPUB files on various devices. I do, however, think the files shouldn’t be email-able, because that makes sharing too easy, and publishers and writers need to make one money.

    Posted by Bess | Nov 10, 2012, 10:27 am
  26. DRM measures and a bewildering variety of file formats definatley turns consumers off eProducts at a time when content creators/providers should be doing more to encourage people to buy their output. Consumers need to feel ownership once they have bought their ‘property’, if they feel there is a risk of Amazon (for example) taking back what they have legally bought then there is a danger that they will just not both buying from them. this may mean ‘hacking’ the device/software and obtaining a pirated copy or finding a print alternative.

    Posted by Wayne Noble | Nov 19, 2012, 11:30 am

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