Copyright, piracy and anti-DRM dominate Tools of Change

<p>Copyright, piracy and DRM (or rather, the anti-DRM argument); the need for publishers to refocus into narrower verticals; tipping points, pricing, and lessons from the music business and from early attempts at e-books were the dominant themes at Tools of Change (TOC) in New York.</p><p>The TOC conference was sold out again, with more than 1,000 attendees, and remains the techiest, the big kahuna of digital meetings. It is now a three-day event, though some skipped day one which was give over to workshops.</p><p>Day two saw the big names take the podium. &quot;Law is not a business solution; it should only be used to solve problems that are uniquely legal,&quot; lectured Google senior copyright counsel William Patry in one of several keynotes. Patry spoke as an individual: &quot;if I was a Google spokesperson, I wouldn&#39;t be permitted to talk.&quot; He made no overt comment about the settlement, although it hovered, shall we say, in the cloud.<br /><br />Washington-style &quot;regulatory capitalism&quot; implies a failure to innovate and a fear of the market as a dynamic process, Patry asserted. &quot;The US has become the fat complacent Detroit of nations. Copyright law has become a way to milk an ageing cow that is on the way to going dry.&quot; Too many people rely on copyright law as &quot;their business plan.&quot; Yet as Kirk Biglione said later about lessons learned from the music business, &quot;litigation won&#39;t stop the future.&quot;</p><p>Ingram&#39;s Skip Prichard answered the question &quot;Are e-books dead?&quot;: &quot;There is no fundamental right to survive,&quot;. Given the &quot;speed of innovation,&quot; the e-books of today will be gone tomorrow. As a company, forget about focusing broadly and instead refocus on your core, your &quot;unique differentiator&quot;- limit variables for yourself and your consumer, he said.</p><p>Sourcebooks founder and chief executive Dominique Raccah produced some data from the music biz: despite what we may perceive as true, during the first half of 2009, CDs still accounted for 65% of all music sales. The lesson: &quot;the mass market responds a bit more slowly than we think. . . I believe that working with retailers will still be a huge part of marketing in future.&quot; She advised &quot;defining narrow verticals&sbquo; and competing harder in fewer categories.&quot; Like Prichard, she urged, &quot;think what you are expert at, what communities you&#39;re an essential part of. Think through the content you own and ask if there&#39;s an opportunity to create something different. Category leadership enables you to extend the brand,&quot; as Sourcebooks has done with baby-naming books and now baby-naming iPhone apps.<br /><br />Magellan Media&#39;s Brian O&#39;Leary, who has been studying the impact of peer-to-peer file sharing on paid content for O&#39;Reilly, tracking their 2008 frontlist, also had a few eye-openers. What he found was &quot;a low volume of seeds and leeches&quot; rather than widespread piracy, and piracy that &quot;peaks early and falls off fast&quot;. </p><p>Most interestingly, perhaps, there was &quot;an unexplained bump in sales at paid sites after piracy was noted&quot;. O&#39;Reilly sells content without DRM, yet fully a third of the list wasn&#39;t pirated at all. But &quot;correlation is not causality,&quot; O&#39;Leary cautioned. The only way we will know if there is causality is to do a much bigger study involving more publishers, he said repeating a call he made the Frankfurt Book Fair.<br /><br />He was sure, though, that &quot;You create piracy by the failure to release digital content. Don&#39;t try to solve piracy: think about managing it.&quot; He warned against buying into the &quot;urgent-call-to-do-something&quot; mode, which can easily result in doing the wrong thing. <br /><br />Last autumn O&#39;Leary also began studying Thomas Nelson, which uses DRM, for P2P sharing, but he&#39;s found no Nelson titles on monitored sites as of this month. &quot;DRM has no impact on piracy, it has an impact on what readers do,&quot; he flat-out asserted, in a message that was repeated in a later session by Biglione. The music business went wrong by &quot;mistaking consumer demand for piracy,&quot; and Biglione demonstrated how that happens today with books: he&#39;s a fan of Thomas Pynchon, whose novels are not currently available as e-books&mdash;unless you go to file-sharing site.<br /><br />The music business, Biglione reminded us, made a ton of money out of CDs in the 1990s; publishers should &quot;forget the iPod moment in music. If they got on the digitisation bandwagon, they have the potential for a CD moment.&quot;<br /><br />He demolished the argument for DRM by reminding listeners of Microsoft&#39;s disastrous &quot;PlaysForSure&quot; DRM standard, launched in 2004. The company pulled the plug on it two years later. &quot;The iPod worked, it was cool, people wanted it. Apple never licensed PlaysForSure.&quot; He likened the situation to using ePub &quot;wrapped in propriety DRM&quot;; it is &quot;no longer ePub. I think this story will end like PlaysForSure. People will realise that DRM-free is the only way to go.&quot;</p>