News

Hachette UK: DRM 'working very well'

Hachette UK has insisted its model of selling e-books with Digital Rights Management included [and at fair prices] is "working very well", with the risks of changing it "huge" and the upside "negligible". It also confirmed that it was to alter its author contracts in order to make its position on DRM “clearer”.

The publisher's statement, released by Little, Brown chief executive Ursula Mackenzie and which she said reflected Hachette UK's position, came after author Cory Doctorow criticised Hachette UK for writing to some authors warning them against allowing overseas publishers to drop DRM from their books. According to Doctorow, who is an advocate of DRM-free e-books, the letter warns that a no-DRM policy "will make it difficult for the rights granted to us to be properly protected". Doctorow stated that the letter had been sent to authors published by Hachette UK in some territories and with US publisher Tor Books and its sister companies in other territories.

Tor, a Macmillan imprint specialising in science fiction, fantasy and horror, announced earlier this year that it planned to release e-book titles without DRM. Doctorow added that Hachette UK was to modify the language in its author contracts to "ensure that any of his or her licensees of rights in territories not licensed under this agreement" would use DRM.

In the statement, Mackenzie confirmed that the publisher did plan to change the wording in its contracts, but said the modification was designed to make the position clearer and that "variations" on the boiler-plate could be negotiated.

The statement read: "Many contracts from all quarters already contain some form of wording to ensure that the licensee publisher does apply DRM and also sees to it that their sub-licensees and e-tailers apply it too.

"Our new wording is clearer and we will, as always, negotiate variations of that wording with the many parties with which we trade, nearly all of whom agree with the basic principles of our DRM policy."

It is not known if the authors to whom the letter has been sent were originally Tor writers, or those published by Hachette UK, from whom Tor has bought US rights. A number of Orbit writers including Ian Tregillis,  David Brin, Orson Scott Card, and the English author Charles Stross are also published by Tor in the US. [Tor US is publishing Stross' The Rapture of the Nerds, written with Doctorow, in September.]

The development shows the difficulties in moving to a DRM-free regime where existing (and multiple) author contracts in other territories stipulate that both author and publisher maintain some kind of defence against piracy. Rogers, Coleridge and White managing director Peter Straus, president of the Association of Authors Agents, said agents expected publishers to be vigilant about piracy wherever they published a writer: "We applaud publishers efforts to fight piracy in the territories they control, and by the best means they have available." Straus said publishers also had to be concerned about "leaking" where piracy measures were relaxed in one territory.

Mackenzie, who is also president of the Publishers Association, was critical of Doctorow's position on DRM, saying that it contained "the usual long list of anti-DRM arguments". Mackenzie stated: "We are fully aware that DRM does not inhibit determined pirates or even those who are sufficiently sophisticated to download DRM removal software. The central point is that we are in favour of DRM because it inhibits file-sharing between the mainstream readers who are so valuable to us and our authors."

Hachette UK chief executive Tim Hely Hutchinson has previously said the company continues to back the use of DRM. “Our view is that the advantages greatly outweigh any perceived disadvantages," he told authors and agents in March this year.

Mackenzie said she saw no reason to change this position: "From the early days of e-books, many self-styled experts advised publishers to adopt free or very cheap e-book supply models, perhaps funded by advertising, subscription or other, as yet undeveloped, revenue models.

"We are glad that we have adhered to a model of selling e-books one by one at fair prices and protected by DRM. This model is working very well; although some would like us to change it, the risks are huge and the upside is negligible."

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Wow, they specifically ignored the important "anti-DRM" argument: that once a single "sufficiently-determined pirate" has cracked the book, he puts it up on file-sharing sites and then it indeed does become trivial for "file-sharing between the mainstream readers".

What a thought provoking post. As you say, Mackenzie's comments shine a light on some of rarely discussed challenges of going DRM-free. As a former publisher--one that very rarely bought subrights or sold English-language rights for UK/Commonwealth territory--I had not thought through some of these issues. As you know, the major U.S.-based publishers very regularly license North American or US rights to books originated in the UK. And they often license rights to the UK/Commonwealth territorial rights to UK-based publishers for books that they originate.

I have to admit, it does seem that a UK publisher who licensed rights to MacMillan/Tor, might be justified in thinking the value of the rights they've withheld were diminished. I don't personally feel that way, for the same reason Doctorow doesn't, but neither nor I are the rights holder in this case.

It also makes me wonder how many of the smaller US publishers are writing in language to their boilerplate author contracts, giving them latitude to remove DRM if they feel it's in the best interest of the author and the publisher. It's also not hard imagining that agents would want a say in this.

DRM has been traditionally a decsion made by indivual publishers in the U.S.

Howver, here are the larger issues. DRM is easily broken in today's environment. Piracy sites will get the books whether or not there is DRM. The pirates are the major problem.

The Hachette group has been very aggressive on this point in going after pirates. The pirates for the most part are not hard to find. They even advertise on Youtube. First publishers need to write take down notices. I also suggest that e-transaction companies such as Paypal be contacted so funding of the pirate sites can be choked off.

Authors can not be put in the middle of these issues between publishers. Authors for the most part have no control over what different houses on different sides of the globe do. I liken it to the "open market". Historically, authors have left the open market to the U.S. and British publishers to compete in. Some times one or the other jumps the gun and puts books in that market before the other. This can cause a problem as it is supposed to be on a  simultaneous basis.  If an author was required to warrent that neither publisher can jump the gun but one did the author would be liable for a great deal of money potentialy and possibly damages. That is why author's don't make warenties in this regard.

If a publisher in the U.K. asked an author guarantee DRM from a house in the U.S. Trident would have to turn down that request.

A technological fix is not the answer in my opinion rather a dedicated stratagy to attack pirates and nock them out of the game is a better way to go.

Robert Gottlieb
Chairman
Trident Media Group, LLC
www.tridentmediagroup.

"We are fully aware that DRM does not inhibit determined pirates or even those who are sufficiently sophisticated to download DRM removal software. The central point is that we are in favour of DRM because it inhibits file-sharing between the mainstream readers who are so valuable to us and our authors."

DRM doesn't inhibit 'determined pirates', no. As to the people who are cracking the DRM off files themselves - well, I'm assuming you already sold a copy to them, or why is the DRM even present? The fact is, your 'mainstream readers' are only a Google search away from finding a copy of the book with the DRM already cracked. You don't need to be sophisticated to use Google.

You need more sophistication to find, copy and share a DRM-free ebook that you bought legitimately for your e-reader. How many 'mainstream' readers know where to look in a Kindle filesystem for ebook files, or in iTunes?

I look forward to Tor reporting on their DRM-free ebook sales and wiping Hachette's eye with them. We could do with some kind of empirical evidence for what removing the infection does to the bottom line.

It occurs to me though that maybe what Hachette is really concerned about is not piracy - that's a pretext, as ever. It's about territoriality. I for one also look forward to being able to buy Tor ebooks direct from them and read them in the UK, as soon as possible.

The upside neglible? Whoever wrote that has no idea what they are talking about.

For those customers who are less technically minded, the upside is huge. It prevents them from messing up their Adobe ID settings when they change email addresses or computers.

Publishers need to understand that while the principle of DRM is fine, in practice it doesn't work for a lot of people. And those people would tend to be the ones who are honest enough to buy books in the first place.

I would assume Little Brown's CEO knows her job better than journalists and some other stakeholders in the ebook publishing industry. So when she says DRM works well for them, this should be taken as a statement and not disputed unless one can proof they are wrong.
And since nobody else has access to their data, it would be nearly impossible to proof the contrary. Of course this means that the statement itself should be taken with the usual grain of salt as it can't be checked by third independent parties.

The real reasons why DRM allegedly works well for them are perhaps different from the stated ones, and Little Brown has all rights not to unveil what such reasons really are. They might well be related to subrights for other territories or to other unknown reasons. 

I just want to point out that DRM is not as solid as one might think.
It is not just the pirates or very sophisticated readers who can remove DRM or at least download DRM free eBooks from illegal sites. 
In Italy, we estimate at least 15-20% of young ebookreaders below 30 can remove DRM by themselves. They are way too many to be simply considered as the usual bad apples in a market.
Let me also share a personal anedoct: In the past 2 months out of 10 candidates I personally interviewed for a job position on ebook publishing operations, 40% admitted (!!) they were downloading copyrighted ebook from filesharing sites and/or from friends (and I have reasons to believe that some of the remaining 60% were cautious enough not to admit it).

Certainly the majority of current book readers of many publishers are still yet unable to strip off the DRM by themselves. But it won't be advisable to rely on such incompetence for a long time. It's very easy to be acquired. In less than 10 minutes any expert can teach almost anyone to do it. And we should not forget the young readers, who might be buying less now, but they definitely are going to be the readers of the future.

Focussing only on big pirate sites, take down notices (and many other sophisticated economic and legal counter measures), it is very urgent and necessary but it might not be enough if free ebook reading were to become as natural as water drinking.

It might turn out like sending all Army the borders to fight an external enemy (the Pirates) and not realize the huge bottom-up revolution that is taking place inside one's country.... We should all not forget it's the population that chooses its governement and not the other way around. The same holds true for readers and publishers. And we all know that in the music industry this revolution has already happened.

If DRM currenly works well, can DRM free work as well? How? We'd better be prepared to answer THIS question, even if today we might not need it yet.

Marcello Vena
@marcellovena

Wow, they specifically ignored the important "anti-DRM" argument: that once a single "sufficiently-determined pirate" has cracked the book, he puts it up on file-sharing sites and then it indeed does become trivial for "file-sharing between the mainstream readers".

What a thought provoking post. As you say, Mackenzie's comments shine a light on some of rarely discussed challenges of going DRM-free. As a former publisher--one that very rarely bought subrights or sold English-language rights for UK/Commonwealth territory--I had not thought through some of these issues. As you know, the major U.S.-based publishers very regularly license North American or US rights to books originated in the UK. And they often license rights to the UK/Commonwealth territorial rights to UK-based publishers for books that they originate.

I have to admit, it does seem that a UK publisher who licensed rights to MacMillan/Tor, might be justified in thinking the value of the rights they've withheld were diminished. I don't personally feel that way, for the same reason Doctorow doesn't, but neither nor I are the rights holder in this case.

It also makes me wonder how many of the smaller US publishers are writing in language to their boilerplate author contracts, giving them latitude to remove DRM if they feel it's in the best interest of the author and the publisher. It's also not hard imagining that agents would want a say in this.

DRM has been traditionally a decsion made by indivual publishers in the U.S.

Howver, here are the larger issues. DRM is easily broken in today's environment. Piracy sites will get the books whether or not there is DRM. The pirates are the major problem.

The Hachette group has been very aggressive on this point in going after pirates. The pirates for the most part are not hard to find. They even advertise on Youtube. First publishers need to write take down notices. I also suggest that e-transaction companies such as Paypal be contacted so funding of the pirate sites can be choked off.

Authors can not be put in the middle of these issues between publishers. Authors for the most part have no control over what different houses on different sides of the globe do. I liken it to the "open market". Historically, authors have left the open market to the U.S. and British publishers to compete in. Some times one or the other jumps the gun and puts books in that market before the other. This can cause a problem as it is supposed to be on a  simultaneous basis.  If an author was required to warrent that neither publisher can jump the gun but one did the author would be liable for a great deal of money potentialy and possibly damages. That is why author's don't make warenties in this regard.

If a publisher in the U.K. asked an author guarantee DRM from a house in the U.S. Trident would have to turn down that request.

A technological fix is not the answer in my opinion rather a dedicated stratagy to attack pirates and nock them out of the game is a better way to go.

Robert Gottlieb
Chairman
Trident Media Group, LLC
www.tridentmediagroup.

"We are fully aware that DRM does not inhibit determined pirates or even those who are sufficiently sophisticated to download DRM removal software. The central point is that we are in favour of DRM because it inhibits file-sharing between the mainstream readers who are so valuable to us and our authors."

DRM doesn't inhibit 'determined pirates', no. As to the people who are cracking the DRM off files themselves - well, I'm assuming you already sold a copy to them, or why is the DRM even present? The fact is, your 'mainstream readers' are only a Google search away from finding a copy of the book with the DRM already cracked. You don't need to be sophisticated to use Google.

You need more sophistication to find, copy and share a DRM-free ebook that you bought legitimately for your e-reader. How many 'mainstream' readers know where to look in a Kindle filesystem for ebook files, or in iTunes?

I look forward to Tor reporting on their DRM-free ebook sales and wiping Hachette's eye with them. We could do with some kind of empirical evidence for what removing the infection does to the bottom line.

It occurs to me though that maybe what Hachette is really concerned about is not piracy - that's a pretext, as ever. It's about territoriality. I for one also look forward to being able to buy Tor ebooks direct from them and read them in the UK, as soon as possible.

The upside neglible? Whoever wrote that has no idea what they are talking about.

For those customers who are less technically minded, the upside is huge. It prevents them from messing up their Adobe ID settings when they change email addresses or computers.

Publishers need to understand that while the principle of DRM is fine, in practice it doesn't work for a lot of people. And those people would tend to be the ones who are honest enough to buy books in the first place.

I would assume Little Brown's CEO knows her job better than journalists and some other stakeholders in the ebook publishing industry. So when she says DRM works well for them, this should be taken as a statement and not disputed unless one can proof they are wrong.
And since nobody else has access to their data, it would be nearly impossible to proof the contrary. Of course this means that the statement itself should be taken with the usual grain of salt as it can't be checked by third independent parties.

The real reasons why DRM allegedly works well for them are perhaps different from the stated ones, and Little Brown has all rights not to unveil what such reasons really are. They might well be related to subrights for other territories or to other unknown reasons. 

I just want to point out that DRM is not as solid as one might think.
It is not just the pirates or very sophisticated readers who can remove DRM or at least download DRM free eBooks from illegal sites. 
In Italy, we estimate at least 15-20% of young ebookreaders below 30 can remove DRM by themselves. They are way too many to be simply considered as the usual bad apples in a market.
Let me also share a personal anedoct: In the past 2 months out of 10 candidates I personally interviewed for a job position on ebook publishing operations, 40% admitted (!!) they were downloading copyrighted ebook from filesharing sites and/or from friends (and I have reasons to believe that some of the remaining 60% were cautious enough not to admit it).

Certainly the majority of current book readers of many publishers are still yet unable to strip off the DRM by themselves. But it won't be advisable to rely on such incompetence for a long time. It's very easy to be acquired. In less than 10 minutes any expert can teach almost anyone to do it. And we should not forget the young readers, who might be buying less now, but they definitely are going to be the readers of the future.

Focussing only on big pirate sites, take down notices (and many other sophisticated economic and legal counter measures), it is very urgent and necessary but it might not be enough if free ebook reading were to become as natural as water drinking.

It might turn out like sending all Army the borders to fight an external enemy (the Pirates) and not realize the huge bottom-up revolution that is taking place inside one's country.... We should all not forget it's the population that chooses its governement and not the other way around. The same holds true for readers and publishers. And we all know that in the music industry this revolution has already happened.

If DRM currenly works well, can DRM free work as well? How? We'd better be prepared to answer THIS question, even if today we might not need it yet.

Marcello Vena
@marcellovena