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Anobii chief says drop DRM to fight Amazon
26.01.12 | Philip Jones
Matteo Berlucchi, chief executive of the social e-retailer Anobii, has urged publishers to drop the restrictions placed on how readers use e-books. Berlucchi told delegates at New York digital conference Digital Book World that the move would allow Kindle owners to more easily buy e-books without having to go direct to Amazon.
According to comments reported on DBW's website, Berlucchi said: “What is the challenge the industry faces from a retail perspective? That the consumer marketplace is dominated by Kindle. Dropping DRM would enable any retailer to sell e-books to Kindle customers.”
He said books without DRM technology were easily shareable between users, like print books, meaning books without DRM were more valuable to readers. He said DRM created "silos" and killed "interoperability", and was what made an e-book inferior to the print book.
The comments seemed to have additional resonance in the audience because the UK start-up is backed by publishers Random House, Penguin, and HarperCollins, but Berlucchi insisted that the views expressed were his, and not those of the company or its shareholders.
Berlucchi said 92% of the 1.3m e-readers estimated to have been sold in the UK over Christmas were Kindles. He said the use of DRM helped Amazon consolidate its position. “Amazon uses DRM to lock people in. You can’t take the files out. The problem is that if you go down the Amazon road, you can’t drop out. If you drop out of Kindle, you lose all your books. They [Amazon] are using DRM to build their silos, like Apple did in the beginning with the iPod, which is how they [Apple] dominated the music market,” he said.
According to the DBW report, Berlucchi said that five years after the rise of the Kindle e-reader, the book industry’s major players would also drop use of DRM. Citing the music industry, Berlucchi argued that the evidence suggested that DRM did not help fight piracy.



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He's correct. There is no good reason to use DRM besides locking consumers to your platform.
I would also agree, but until there is a way to protect from "replication", DRM is still really the only option, and the likes of Amazon & Apple will continue to use this to their advantage.
One physical book purchase can only be read by one person at a time. A mobi or epub without DRM can be replicated thousands of times in minutes, allowing a single purchased copy to be read by said thousands at the same time.
We need new "protection" technology before we can wave good by to DRM forever. I for one hope that day comes soon.
Agreed. I like Mr Berlucchi's focus on the consumer, I think this sometimes gets missed in the welter of discussion on market share and the future of the industry.
That said, people have done time for sharing music in the same way that Berlucchi is advocating the sharing of books.
Well, perhaps not quite the same way but where is the incentive to write a book if its just going to become public property?
Will the consumer know that they can put non-Kindle books on their Kindle? I doubt that very much.
..and good luck with that. If the combined might of the Music and Film industries haven't figure this out over the last 15 years with something as data heavy as audio and video I don't think the publishing industry stand a chance with a glorified text file. As long as something exists people will copy it. The only way to stop it is to not create it in the 1st place. Sad but true. Don't waste millions trying to come up with technology to prevent it because there are thousands of people around the world who make it their hobby to crack a new challenge and once one has done it it goes viral and you're back to square one.
My opinion, for what it's worth, is to stop throwing everything at a technology that will eventually ruin the industry and get back behind the printed book again. Sometime in the next week would be fine.
People seem to assume they can read all ebooks on Kindles and are surprised when they find they can't - so I think there's an expectation from customers that they should be able to buy ebooks anywhere and read them on any ereader and that seems fair. I'm being given this advice about stripping DRM from our ebooks so we can sell from a variety of websites including our own.It's interesting to hear it from somebody in the position of Berlucchi. We do need to be able to sell books on various websites, and it's vital to compete with Amazon on this. People who want to pirate books don't have much trouble stripping DRM and loading ebooks on to various devices. I've been talked through it myself.
Sorry, but it's a pipe dream. There's no way to protect a book against replication and thus DRM is literally impossible.
An ebook has to be displayed in a way that a person can read. If it can be read, it can be copied. The simplest way, time-consuming though it is, is simple transcription: you copy the book out. That happens more often than you might think.
The next simplest way you might break any DRM is to take a screen shot of whatever you're reading it on and run an Optical Character Recognition program on it. You could easily write a script to do that on your PC and rip a book from, say, Adobe Digital Editions or Kindle, in minutes. It doesn't matter how fancy your DRM software is when you can sidestep it that way.
And bear in mind that any DRM scheme actually has to give any legit customer the encryption keys so that they can read the book. So any algorithm can be reverse-engineered in a couple of different ways without too much difficulty. It's easier in many ways to protect a Blu-Ray or a CD, which at least need to be read by a machine to be intelligible, and look how quickly they were cracked.
None of these methods are quick and easy, but it only takes one person to break the DRM. The book's then out in the wild, unprotected, and people write little tools to strip all of the rest of your books. If you look at the quality of pirate books these days, you notice that five years ago they were full of typos because they were made from scans of printed books, or painstakingly copied out. Now they're indistinguishable from the commercial editions, because they are the commercial editions; and anyone who wants one can easily get one. The more successful the author, the easier it is.
DRM on ebooks isn't working. Pirates never even notice it, because they're outside the DRM ecosystem; legitimate customers, if they notice it, are annoyed by it. Spending money on it is a waste of time and resources that could be better applied elsewhere.
Obviously DRM isn't a foolproof plan to stop piracy, everyone knows that. What DRM does is stop the average person from pirating and copying everything, there will always be people who can pirate an eBook - but the majority won't.
I don't see what people's umbridge is is with Amazon locking you into their system, you buy a Kindle from Amazon - why wouldn't they want you to continue to buy books from them? Its the same with Apple in a large variety of ways, especially with the new text books stuff they are bringing out.
We have published quite a few eBooks over the past year both as EPUBS and for the Kindle - this has opened it up for us to be able to sell on almost any platform, because most accept EPUBS. Its also not breaking the bank to produce these two copies instead of one. In one way or another most tablets or e-reader's will try to lock you into their system. The idea that everyone should be able to read every eBook regardless of the device will only happen if a publisher puts their material on every platform possible.
Having no DRM on any eBook isn't a good idea in my opinion, you are just opening the door for everyone to copy and share your material. So where as now if 10 people want to read it, generally speaking, those 10 people have to pay to read it. No DRM would be the opposite - 10 people want to read it, 1 person just has to buy it and share it. How would any publisher survive with that?
"What DRM does is stop the average person from pirating and copying everything, there will always be people who can pirate an eBook - but the majority won't."
I'm sorry, but that is arrant nonsense. The average person who wants a pirate copy of an ebook simply googles for it and finds an edition with the DRM already removed by a more sophisticated pirate. It's the path of least resistance.
"I don't see what people's umbridge is is with Amazon locking you into their system, you buy a Kindle from Amazon - why wouldn't they want you to continue to buy books from them?"
My sense of umbrage comes from the fact that if you want to switch reading platforms at any stage you have to leave your library behind you. Let's say you decide you'd rather read in iBooks on your shiny new iPad. Well, you can't read any of the books you bought in Kindle. You either fragment your library or you make a decision to stick with one vendor for as long as you're reading ebooks, whatever happens in the future. Kobo brings out an e-reader better than the Kindle? Nook offers cheaper prices? Sorry, you can switch away from Amazon but you can't take your books with you. You'll have to blow the dust off your old gadget should you want to reread anything.
I can understand how it benefits Amazon. It doesn't really seem to benefit the consumer much.
"The idea that everyone should be able to read every eBook regardless of the device will only happen if a publisher puts their material on every platform possible."
Whereupon you will need to buy the same book once for each platform. This also doesn't seem to benefit me much. I'd much rather choose where to buy my book from and then be able to read it however I wish.
"Having no DRM on any eBook isn't a good idea in my opinion, you are just opening the door for everyone to copy and share your material."
Newsflash: everyone copies and shares DRM ebooks right now. It's easy to beat.
"So where as now if 10 people want to read it, generally speaking, those 10 people have to pay to read it."
Nope. At the current time, if a person wants to download a free pirate ebook, generally speaking, there's no difficulty about that at all.
"No DRM would be the opposite - 10 people want to read it, 1 person just has to buy it and share it. How would any publisher survive with that?"
Plenty of publishers do manage to live without DRM. Pan Macmillan. Baen in the US. JK Rowling will release Potter with no DRM. And look at other industries: all iTunes music is DRM free, for example.
You need to cure yourself of this assumption that DRM is actually doing anything to prevent sharing, or that removing DRM will cause an explosion of it. Honestly: it isn't. If it were, I'd be with you, but it isn't.
"I'm sorry, but that is arrant nonsense. The average person who wants a pirate copy of an ebook simply googles for it and finds an edition with the DRM already removed by a more sophisticated pirate. It's the path of least resistance."
The average person? If that were even remotely true then eBook sales wouldn't be growing at the rate they are, i agree DRM isn't even slightly full proof but there is this assumption in the world that everyone is out to get something for free. Its almost as if you are expecting someone to walk into Waterstone's and steal a book because its there and they might be able to. What ever protection you put on an eBook, someone will be able to work around it - but the majority will in my experience pay for what they want. If that were so untrue you wouldn't see so many publishers heralding there massive rise in downloads. You also wouldn't see so many independent publishers putting there eBooks online.
Your negative view sense of what "everyone" is very confusing, i know plenty of people who have Ipads, Kindles, Vox's and i even know someone who has a Nook. Funnily enough each person buys there eBook through the relevant channel. I am also aware that people buy their tablet or e-reader based on what they want from it - i don't know many people out there with an iPad going "I wish i had a Kindle" - in the same vein that I know plenty of people with a Kindle that bought it because the iPad is too expensive.
You use iTunes as an example - surely thats a bit contradictory, I have an iPad and an iPod and last time i checked if i download a song through the iTunes store without pirating the music I have to play it on my iPod - I can't put it on my dad's mp3 player.
Plenty of Publishers manage to live without DRM, just as plenty of Publisher's live with DRM. DRM might not be doing much, but its better than leaving the door open to anyone and everyone. What is your suggestion, that every eBook should be DRM free? What will that prove or do to anything? Basically it'll be everyone accepting that they can't secure their eBooks, wow that sounds productive.
I work for a Publisher and even with all this piracy you seem to think everyone is doing, we still manage to get a great stream of revenue from our eBooks, all of them DRM-wrapped. If everyone is pirating those eBooks, why are people still buying them?
Nick, you seem to have misread me a bit. I don't say that 'the average person' is a pirate; I'm talking about the average person-who-wants-to-pirate, for whom DRM is no impediment.
Most people are honest. They are the people who get into annoying wrangles with DRM. For example, as a legit customer, why should you not be able to play your mp3s on whichever player you wish?
The iTunes thing changed around 2009 - iTunes no longer requires DRM - but you need to pay to upgrade your library to DRM-free. That's actually a good indication in this discussion - Apple realised that people would actually pay more for DRM-free content. DRM is actually of negative value to your customers.
"I am also aware that people buy their tablet or e-reader based on what they want from it - i don't know many people out there with an iPad going "I wish i had a Kindle" - in the same vein that I know plenty of people with a Kindle that bought it because the iPad is too expensive."
Sure, but let's say you're reading on your Kindle now because the iPad's too expensive. Next year you've saved up enough to buy one and you want to switch to iBooks. You have to leave all your old books behind in the old device. Is that what you want?
My point wasn't that people buying a Kindle wouldn't want an iPad because its too expensive, it was that the majority of people who buy one or the other by and large stick to that device. So for instance my colleague has an iPad - absolutely loves it, uses it for everything - same person wouldn't be seen dead with a Kindle because he loves that iPad.
Another example - People buy the Kindle because they feel the iPad is a waste of money, especially as the Kindle Fire is in between both of those - those people aren't ever going to really want an iPad. In the same sense as said person buying a Kindle but really wanting an iPad - surely the logical solution for that would be to continue to save up, rather than save up a bit buy a Kindle and start from scratch?
That is my point, this whole idea that someone will constantly jump e-reader and tablet devices over the years - I think its unfounded. From what I have seen, either because they have had to, or because they realistically want to for varying reasons - most consumers buy the table/e-reader they want and stick to that e-reader.
Yes your right its a bit annoying that if you have a Kindle and you suddenly want something else your back catalogue of books is lost. But unfortunately for Amazon's cheap prices and large range - you kind of have to give something back to Amazon. I am not a pro Amazon fan boy, but thats the reality of the situation.
Yes your right iTunes no longer requires DRM - you can pay extra to upgrade your library to DRM-free. I bet you the majority of people don't do that, why? because they have an iPod, iPhone or iPad that they are perfectly happy to use. When it breaks, they buy a new one. Because they love the Apple ecosystem.
Obviously for the average person-who-wants-to-pirate, DRM isn't always a great security. But for the majority of readers - I don't actually find that this DRM issue is such a major deal, I say that because if it were such a major problem the majority of people wouldn't buy eBooks.
I don't mind Amazon locking Kindle books into the Kindle device. What I mind is that they demand exclusivity if we use certain of their services, like the Kindle Lending Library. They expect us not to sell on any other website if we use it.
I also mind that they do price matching and can reduce the price they pay if they see an ebook on another website at a lower price. It's possible for publishers to sell ebooks at a more competitive price on other websites because they don't have to let Amazon take 30% commission (or 65% in a number of countries).
It should be possible to sell ebooks on other websites for less if we want to, and doesn't have an impact on Amazon because people who want Kindle books will buy from them. The other websites are selling ebooks for other devices. If Amazon don't want competitive prices on other websites they should lower the commission they charge.
And I think people could change the device they use for reading and would want the books available for both. We have a Kindle at home and we're very likely to get an iPad. If you build a library of ebooks it seems like a valid concern to me that you don't want them locked into one device.
Price is also a reason for pirating. Ebooks just aren't that much cheaper than the printed book. However much the industry have convinced themselves that consumer's aren't bothered by price, I get customers in store every day buying real books again because of the price of ebooks. A sizable proportion of people paying for ebooks are the older generation and that should be the warning bell right there.
At first people didn't mind or notice, so caught up were they in the cool new technology. As VAT and prices have increased,publishers fixed prices and people get more price conscious, it's become more apparant. So many customers have told me they got a kindle for xmas (sigh - it's always a KINDLE) but haven't really used it as the books they want are near enough the same price as the printed copy. In that case they buy the actual book as if the Kindle breaks they'll lose the whole library rather than just one book.
Think of it this way. The latest George R.R Martin is actually cheaper (or the same price) to buy on Amazon in paperback as it is in ebook. The same for the majority of Scandi authors etc.
So say 30 quid for the series in pb pr maybe 25 quid on ebook. Doesn't stack up as...
If you're going to buy them in e-book form you also need to spend £100 or more on the technology to read them.
If all you are going to save is a pound on each ebook then you would need to buy an AWFUL LOT of ebooks each year for it to be cost effective.
Plus if they are going to break down or the technology is going to be redundant every few years, it becomes an awfully expensive conveniance. The elderly demographic of ereaders are now begining to figure out these sums and won't renew and I also see angry elderly people who can't understand why the technology breaks down after a few years . I don't see dedicated ereaders surviving unless the VAT, durability and price fixing is addressed.
Where ebooks do work are where the ereader is built into something that people already NEED like tablets and smart phones. The people using these are younger people and for these, DRM avoidance and piracy is easy. It's these people that are the future of digital ! The industry needs to be looking to this demographic instead of pursuing arguments the music industry lost years ago. For goodness sake, ITUNES sales went through the roof once they converted to mp3 and Amazon have pretty much said they will open up the format in the near future. DRM is doomed.
I agree the price matching is a massive pain, but I think it is something you come to terms with as Amazon has always billed itself as a discount retailer for customers - it wouldn't last too long if its prices were higher on a Kindle - grey scale - than say on an iBook for the iPad where you get better quality. I am using picture books as an example of that.
When you say that you have a Kindle and are likely to get an iPad - is that at the expense of the Kindle? As I believe that many people who are likely to have both are likely to keep both - meaning that the locking to one device isn't such a massive issue.
I think for the Kindle Lending Library its a bit of a double edged sword really - people want to be part of it and get the money that Amazon has on offer but don't want any negatives with that. Asking for exclusivity is a pain, but its one of those things that you don't have to be part of the Library Lending. In the same vein as all of this Author App for the iPad which locks your text books to the iBooks 2 model - people are flocking to it and are happy for that exclusivity. Those that don't like it just don't do it.
I find with Amazon that they are a pain but those things that are a negative in one sense sometimes prove a positive in others. In our printed books side the whole lowest price on the net part of Amazon works wonders, why? Because quite a few times Amazon has found our books cheaper on third party sites and matched that price or got very very close to it - without it affecting our rate.
No one will ever like everything Amazon does, mainly because Amazon is such a behemoth that if you don't like that one aspect it can effect you on Amazon internationally. But on the flip side - one of those companies driving eBooks forward in the digital age is Amazon.
As for the competitive price issue - in my experience I don't actually know many platforms that sell at a largely better commission than Amazon? iBookstore is pretty similar, Kobo is along those lines, Even the Nook isn't vastly different. The 65% off in a number of countries can be counteracted by opting out of any country that doesn't have an Amazon website.
I definitely agree with you on the pricing issue, its always shocked me that a lot of Publishers stick to very rigid pricing structures when it comes to eBooks. Granted they may have reasons for this and cost implications, but it doesn't always stack up.
If I were to buy a Kindle or an iPad or even use my smart phone for eBooks - I would want them at a markedly cheaper price, largely because I know that the costs of creating and maintaing said eBook for Publishers is massively less. We sell Children's eBooks that retail at £14.99 in paperback but as an eBook start a £3.99, why because 50 eBooks had covered the conversion and time costs - the rest was pretty much profit.
I think for eBooks to continue to grow at the rate they have, after the wow this is shiny and new mentality has worn off, is to look at the pricing in more detail. I find its the same with MP3's - a physical album can be as little much as £9.99, on iTunes the same album can be £7.99. I don't think thats a massive saving personally and its that price issue that leads people to thinking well I can get that for free somewhere else.
"I know that the costs of creating and maintaing said eBook for Publishers is massively less."
My experience has clearly been different from yours. If I make a children's book the vast majority of the cost - paying the author, editing, design, marketing, etc - goes against both the print and ebook editions.
There's practically no unit cost for ebooks, but there are two other factors that eat into ebook profit. The first is VAT, which costs up to 20%. The second is increased author royalties - they can be twice as much as the corresponding print edition. With a 30% cut to Apple, say, you're looking at paying out up to 75% of ebook cover price right off the bat.
The nice thing about ebooks is that you can't really *lose* money on them - conversion costs, as you say, are tiny, and you don't need to risk anything on printing and warehousing physical books. But they're not massively more *profitable* than print.
My feeling is that ebooks should be cheaper than print - by a couple of quid. With ebooks you don't get the loving care of the type designer, the pleasant heft of a physical object, or many of the property rights we associate with print books. But I also think we should try to keep the two editions in the same neighbourhood where price is concerned. It becomes rather difficult though when Amazon are being mischievous - say, discounting the (reseller model) print edition so that it's cheaper than the (agency model) ebook edition in an attempt to force the latter down. ("This price was set by the publisher.")
I agree that both the design, editing and marketing etc go into both print and eBooks. But I think the difference is regardless of whether you made it into an eBook or not you are still paying those costs and using those costs for working out the profit of your print book. Thats the way we see it - regardless of eBooks; currently we are still paying for artists, designers, authors and editors - all of those costs are covered by the physical book we produce. The cost for the eBook is conversion and marketing - markedly cheaper. Though I do get what you are saying, when it comes to costs its each to their own as to what you ascribe as the individual cost.
I also agree that eBooks are not massively more profitable than printed books in some senses - once you have taken out individual people's costs. Its definitely about getting the balance right, and it is a difficult balancing act.
I also definitely agree with you saying Amazon are mischievous - there pricing is a bit of a mine field, thankfully it hasn't screwed us over too much. Our main gripe is the lack of clarity; Amazon set the sale price based on the lowest price they have found available on the website either through physical or electronic books - I would love to know where they have found it.
I think eBooks should always be cheaper - thats a given, I find some Publisher's stretch this rule to make them only slightly cheaper. I don't particularly love the other end of the scale either, where eBooks are sold for 99p - as that doesn't exactly help eBooks in the long run. You start down the 99p route and sooner or later people won't want to pay anymore. I think this is the norm in a new product and new technology, no one really knows how to price properly - some will price incredibly low (Sometimes because of Amazon) and others will do the opposite. It was funny seeing some hardback books on Amazon selling for less than the eBook counter part on the Apple iBookstore. That is definitely a hard pill to swallow for any reader.
You hit the nail on the head with your final point. Pricing ebooks artificially low, for whatever reason, is shooting yourself in the foot. If the industry goes the way ebook fanboys want it to go then print books won't be around to subsidise the design, editing and marketing of ebooks any longer. Where does that leave you to go with pricing other than up? Then all the cheap and nasty 49p ebooks will swamp the charts, standards will plummet and in the meantime you've sped up the demise of the printed book by increasing the incentive for readers to switch to ebooks.
A very true point - in the short term you get a cheap eBook for less than a pound. In the long term you might not get the same quality books.
Its getting the mix right, I think some Publisher's have held too firm with high prices - whilst other sellers have gone ridiculously low. My hope is that eventually we will reach a natural plateau that sits somewhere in the middle.
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