Think

This post, by Laura Hazard Owen, originally appeared on PaidContent.org on 4/24/12.

Calls for big-six publishers to drop DRM have increased in recent weeks, coinciding with the DOJ price-fixing lawsuit. Many observers fear that the lawsuit will actually reduce competition in the e-book marketplace by cementing Amazon’s role as the dominant player — and they wonder whether DRM is simply another weapon in Amazon’s arsenal, keeping customers locked to the Kindle Store.

Here at paidContent, independent e-bookstore Emily Books‘ Emily Gould and Ruth Curry have argued that DRM is crushing indie booksellers online. And Hachette VP, digital Maja Thomas recently described DRM as “a speedbump” that “doesn’t stop anyone from pirating.”

Still, it may be a long way from this discussion to the first big-six publisher’s actual removal of DRM from its e-books. For now, many readers know they can download free tools to let them read a Barnes & Noble Nook book on a Kindle, or an Apple iBookstore book on a Nook, or a Google book on a Kobo. I’ve used these tools. I recently bought a Google e-book from an independent bookstore, broke the DRM and converted it to read on my Kindle.

Recently, I began chatting with a publishing industry executive about this. This person — who I’ll call Exec — was interested in learning how to break DRM on e-books. About a month later, Exec is a convert and was ready to talk about the experience, albeit anonymously. I don’t think Exec is the only person in the publishing industry breaking DRM on e-books they buy…and those who aren’t doing so already might want to give it a try, if only to see what readers go through. Here is Exec’s story.

I was coming to the conclusion that I wanted to start breaking DRM on e-books I bought so that I could read them on any e-reader, but what pushed me over the top was a terrific post from science-fiction author Charlie Stross, “Cutting their own throats.” He argues that DRM is a way for the Amazons of the world to create lock-in to their platforms.

 

Read the rest of the post on PaidContent.org.

Given that anyone who reads my blog is an author, publisher, or otherwise involved in the book business, I don’t think I need to trouble myself with recounting every detail of how the U.S. Department of Justice came to charge Apple, Inc. and publishers Macmillan, Penguin, Hachette Group, Simon and Schuster and HarperCollins with collusion to fix ebook prices. But judging by the many hysterical, righteous articles and editorials I’m reading in the wake of antitrust charges being filed and three of the five named publishers promptly settling out of court, there’s plenty of inaccuracy and flawed logic out there that needs to be addressed.

1. Before Apple and the Agency 5 publishers established their Agency Pricing plan, Amazon was hurting publishers’ bottom lines by offering their Kindle-format bestsellers at a discount price. Publishers had to do something to stop Amazon from doing this, so they could earn enough money to cover their expenses and still earn a modest profit.

FALSE

Prior to Agency pricing, publishers sold their Kindle-format books to Amazon under the same basic wholesale terms they used to sell their hard-copy books to Amazon. Publishers set a suggested retail price for the public, but sold each copy to Amazon at a lower, wholesale price that generally constituted 60% of the suggested retail price. That percentage is standard across the industry for all booksellers, and is fixed regardless of the price at which a given book, digital or hardcopy, actually sells.

This means that if the publisher set a suggested retail price of $20 for a given Kindle book, Amazon had to pay the publisher $12 per copy sold. Even if Amazon elected to sell those books at a discounted retail price of say, $9.99, it still had to pay the publisher $12 per copy sold. Most of the mainstream Kindle bestsellers Amazon was selling at $9.99 were being sold at a loss to Amazon, but publishers still earned the same cut as they would if Amazon hadn’t discounted.

 

2. If Amazon is allowed to offer mainstream bestsellers as a “loss leader” product, it will soon have a monopoly over ebook sales in general and will then demand that publishers accept a lower cut on each copy sold—and in fact, they are already starting to do this with their 2012 vendor contracts with publishers.

FALSE

While it’s true that Amazon’s 2012 vendor contracts do charge higher prices for on-site promotion than in prior years (though specific details of the new contracts have not been publicly disclosed), no one is claiming Amazon is demanding any decrease in the publishers’ usual 60% cut. It’s unclear whether publishers can opt out of the on-site promotion, but still offer their books for sale on the site.

 

3. Amazon has already driven most of its competition out of business through predatory pricing tactics.

FALSE

While it’s true that Amazon operated at an annual, multimillion dollar loss for its first five years in business (as detailed in the documentary film series, Nerds 2.01: A Brief History of the Internet, 1998), during which time it was primarily a bookseller, the primary reason for its losses had to do with the usual business startup expenses, plus Jeff Bezos’ very ambitious growth and expansion plans for the burgeoning e-tailer. Amazon spent immense quantities of cash on advertising and setting up a nationwide network of fulfillment centers in those early years.

Amazon also invested heavily in making its customers’ buying experience the best it could be. Recall that Amazon launched at a time when online shopping was far from typical, and most consumers viewed online stores with suspicion, fearful that their credit card and other personal information couldn’t possibly be kept secure online. A second obstacle to overcome was consumers’ habit of instant gratification: why buy online, which is essentially no different from mail-ordering, a product one could buy in any local store? Amazon had an answer to both issues.

First, it could afford to offer products at a lower retail price because its overhead costs were much lower than those of a brick-and-mortar store. Warehouse space is cheaper to buy or rent than retail space, and fewer workers are needed to run a fulfillment center than to staff a retail store; much of its processes could be automated.

Of course, a lower retail price is meaningless if the difference is made up in shipping expense, and the customer has to wait for his purchase to arrive in the mail to boot. Amazon’s answer to these two problems was to frequently offer free shipping, and (for its first couple of years in business) to ship every domestic order out via Federal Express, regardless of whether or not the customer opted to pay for expedited shipping, as a standard practice. Remember that?

These were strategic moves aimed at establishing the internet as a safe place to shop, and Amazon as a trusted retailer in the minds of consumers. Of course Amazon also wanted to become a preferred retailer in the minds of consumers, but that’s true of any retailer. If its mail-order business model is simply more financially efficient and convenient for customers than brick-and-mortar shopping, that’s more the natural outcome of a major technological and cultural shift than the result of any targeted, purposeful attempt to drive all competitors out of the marketplace. As plenty of others have observed, I’m sure the buggy whip manufacturers were pretty angry when automobiles became the standard mode of transportation, too.

 

4. Amazon is now in a position where it can strong-arm publishers into whatever pricing and sales terms it wants, slowly bleeding those publishers to the point where they can no longer survive.

FALSE

Publishers are no more dependent on Amazon for their survival than computer manufacturers are dependent on Best Buy for theirs. Publishers are free to enter into direct competition with Amazon by pulling all their titles from the site and selling them exclusively through their own online stores and selected brick and mortar outlets, such as Barnes and Noble, Target and airport stores. Computer and other manufacturers have long offered direct sales to consumers through their websites, and there’s nothing stopping publishers from following suit, other than a reluctance to alter their failing, bricks-and-mortar-centric business model.

Certainly, a considerable amount of effort and capital investment would be required to set up an online sales outlet where none exists today for most publishers, but the realities of remaining competitive in a changing marketplace are what they are. The fact that publishers dragged their feet and dug in their heels rather than adapt to changing market forces can hardly be blamed on Amazon. The internet moved their cheese, not Amazon.

As to slowly killing off publishers, it behooves Amazon NOT to bleed its primary suppliers dry. Amazon has been launching its own publishing initiatives, but unless it succeeds in luring most major authors away from every major publisher, unless it starts buying up competing presses (a mistake the major publishers have made in spades and have probably now come to regret), it will always be one among numerous publishers.

Finally, consider the digital music example set by Apple with its iPod and iTunes. Apple undoubtedly dominates the digital music market, but it has not bled any labels dry or begun gouging the music-loving public. Tower Records, Licorice Pizza and The Wherehouse have disappeared from the music retail landscape, but I don’t recall anyone accusing Apple of any kind of orchestrated campaign to cause their demise. Again, it’s a simple case of consumers voting with their wallets.

 

5. Publishers have to play ball with Amazon if they want to offer their books in digital form, because the Kindle is the dominant e-reader platform.

FALSE

The Kindle is the dominant e-reader platform, but it can read formats other than Amazon’s own proprietary .azw file type. It can read .mobi files natively, for example. Publishers are free to sell non-.azw format ebooks directly through their own websites, and Kindle owners would still be able to read those books on their Kindle devices. It wouldn’t be as convenient for customers as downloading books directly to their Kindles from Amazon, but this is the same situation as loading digital music files that weren’t purchased from iTunes onto an iPod: it can be done pretty easily, though it does require transferring files to the device.

Furthermore, if publishers really wanted to ensure the Kindle couldn’t dominate the e-reader landscape they could do so, by offering customers the one thing the ebook reading public has most wanted from the beginning that they aren’t already getting from Amazon: a cross-platform, DRM-free ebook format that can be read across multiple devices. They could invest in the development of cross-platform e-reader software users could run on devices they already own rather than having to buy a Kindle, Kobo Reader, Sony Reader or Nook, but here again, there’s a reluctance on the part of publishers to take risks, expand their business model, innovate and compete.

 

BOTTOM LINE: Amazon has achieved a dominant position in bookselling and e-tailing through aggressive, risky and costly startup efforts. Unlike most CEOs who hold the title today, Jeff Bezos took and held the long view through some very lean and nerve-wracking years. If his ultimate goal for Amazon is to become and remain the #1 company in its sector, then all he’s guilty of is the same thing that can be said of ALL CEOs. 

Perhaps if publishers and competing retailers had been a little more forward-thinking, and willing to take the same risks, they would now be reaping similar rewards. Since they weren’t, they are reaping a bitter harvest of resentment and fading market share instead. It’s still not too late for publishers to turn the situation around, but their time, money and effort would be better spent on R&D than M&C*.  

*(moaning and complaining)

This is a reprint of an editorial from April L. Hamilton’s Indie Author Blog. UPDATE, 4/15/12 – The author adds:

It’s time for publishers to shift their focus away from Amazon, and toward consumers (the people who buy books) and authors (the people who write books). In fact, this shift is long, long overdue.

Railing against Amazon isn’t winning any hearts or minds among consumers, who generally have a positive opinion of the e-tailing behemoth. Telling consumers they owe it to the publishing establishment to tolerate arbitrary delays for paperback and ebook releases, to keep subsidizing publishers’ dated and unsustainable business model, and to pay ebook retail prices that FAR exceed those books’ production and distribution costs, isn’t endearing publishers to the book-buying public.

And when top authors have the power to pack up their fanbase and go Pottermore, it’s time for publishers to face the cold, hard, devastating truth: Amazon is the least of their worries if publishers lose the geese who lay their golden eggs. Once an author comes to feel her publisher isn’t adding any value, and is actually putting obstacles between herself and her fanbase, that author is prone to jump ship. No top authors means no reliable bestsellers, and no reliable bestsellers means bankruptcy. But not every author wants to run his own mini-empire; hmmm, might there be some value publishers could add in this area, perhaps by redefining their corporate mission, setting up and overseeing a whole bunch of Pottermores for their authors?

A scary proposition for publishers, to be sure. But if competition were effortless and risk-free, it wouldn’t be called competition. Right now publishers are losing with authors, the ones who create their product, and consumers, the ones who buy it. Worse yet, it’s all too easy for those two factions to deal directly with one another, and cut publishers out of the equation entirely. If the Big 6 publishers can’t justify their inclusion in the book feeding chain, if they can’t give authors a reason to stay and consumers a reason to buy, then they have no business being in business.

 

This post, by Nathan Bransford, originally appeared on his site on 3/29/12.

Harry Potter and the Deathly Hallows is the last tome of a hardcover that I lugged around on vacation. It took up seemingly half my suitcase and weighed a ton, but because it wasn’t available in e-book form and because I don’t believe in piracy, I carried that thing across the country.

Now I’m thrilled to have the entire Harry Potter series resting weightlessly within my iPad.

As you have likely heard, Harry Potter is available in e-book form. And not just in e-book form, but available only through Pottermore, the digital extension of the Harry Potter brand. No other e-book vendor has it for sale, including the e-book behemoths like Amazon, B&N and iBooks. And the e-books are published by Rowling herself.

Yeah, wow.

Why This is a Big Deal

J.K. Rowling just did an entire end-around on the entire publishing world in many, many ways.

Most of the focus has been on how these are for sale only from the author, and rightly so. Even Amazon is playing ball, listing the books for sale but referring people to Pottermore to make the purchase.

And the manner in which these e-books are being distributed is revolutionary.  They’re being sold without DRM but with digital watermarks to guard against piracy. Each purchaser has 8 digital copies they can download in various formats, and it’s very easy to convert to the most popular devices. I had the e-books on my iPad within minutes.

The approach to DRM is, ironically enough, extremely similar to my earlier post on what good a good approach to DRM would look like – you can convert the files to any device and you have a sufficient number of copies for yourself and others… Only there’s no DRM. Ha! 10 points for Gryffindor.

So let’s talk about this. No publisher. The author as e-distributor. No DRM.

 

Read the rest of the post on Nathan Bransford‘s site.

This post, by Dan Arnzen, originally appeared on Writely Done on 12/2/11.

“The times they are a-changin’ [sic]” – Bob Dylan

A quick Google search on “economics of ebooks” will result in a mix of articles either espousing gloom and doom for the book publishing industry, or discussing the unfairness of e-book pricing. Most of the discussion focuses on comparing e-books to printed books. This is not a valid comparison because the economics are completely different.

 The music industry has gone through several transitions in the past. There are two transitions I want to focus on: the transition from cassette (analog) to CD (digital), and the transition from CD (physical) to MP3 (virtual). When music went from being distributed in analog format to digital there was fear that the ability to make perfect copies would kill the industry. This didn’t happen; however, the transition to MP3 and down-loadable music has been very disruptive. This is because the industry had been optimized over many years for the economics of the physical distribution of recorded music. The technology resulted in large changes in the behavior of consumers, which changes everything. Years later, the music industry continues to adapt to these changes.

Most analysis of e-books are looking at the transition like the move from cassette tapes to CD. The focus is on the lowering cost of production and consumers demanding lower prices, or how DRM is needed to prevent piracy, or how authors will starve as they receive a percentage of a smaller revenue stream.

Book publishing is making a bigger transition. Digitization and virtualization are occurring simultaneously. It is more like going from cassettes (or even LP’s) to MP3’s directly. This results in a lot of turmoil. No one knows how this will change the behavior of the consumer, and the existing infrastructure is trying to maintain the status quo on how business is done.

Supply and Demand

 

Read the rest of the post on Writely Done.

This post, by M. Keep, originally appeared on her Femmedia blog on 2/24/12. 

I wrote before about barriers and piracy, but this time I want to narrow in on a single barrier.

The biggest barrier for indie publishers (of all media) is not being known. No one is going to buy your book, or game, or movie, or anything else if they don’t know you or it even exists. 

Anyone who has become well-known in their market has had an enormous amount of luck on their side, be it a good review on a popular site (or many popular sites), or if they just got a small group of fans that kept growing as they kept putting out more and more media.

The barrier here is obvious – people can’t buy your stuff if they don’t know it exists. Piracy, then, has been stated to have had a very positive effect on people who aren’t well known. There was a group of indie musicians that came out in support of Napster back in the 90s. These relative-unknown’s were building a fan-base. People were looking for sounds similar to what they already enjoyed, and Napster provided an easy way to browse similar users collections and be exposed to a band they never would have heard of otherwise.

The same applies to books.

Even once you do stick your head above the crowd, you have to make it count. I don’t read as many books as I’d like because I’m not familiar with many authors that have impressed me, and $10 (the typical paperbook price) is daunting to figure out if I like an author. My location isn’t very library friendly either, so it’s a 40 minute walk to and from a library and there are just some points of the year I’m not up for that hike (say, in the winter or rain).
 

Read the rest of the post on Femmedia.

My latest opinion piece has been published today at The Punch, “Australia’s Best Conversation”. The title was the work of the editor, and is deliberately sensationalist, but the piece should clarify my position. It begins thusly:

Digital Rights Management doesn’t work. DRM is a method of locking digital media so it can’t be shared. Except it fails. For every form of DRM employed, pirates instantly break it.

DRM only inconveniences honest, paying customers. For example, in the case of eBooks, a person might justifiably want to have their book on their PC and their tablet, but DRM can prevent that.

I regularly get Google Alerts about my books being mentioned online and many times it’s when they appear illegally on filesharing sites. For every download like that, it’s a drop of cash not going to keeping food on my table, right? Actually, probably not.

Read the rest here.

 

This is a cross-posting from Alan Baxter‘s The Word.

Seems like everyone is weighing in on this debate and I can’t help having my say too. First and foremost, I’m all about seeing things from every side and not throwing out babies with bathwater. Seriously, who the f*** throws out babies!? So it’s fair to say that I still really like Amazon and all they’ve done. There’s no question that they’ve changed the face of publishing and bookselling and, for the most part, in very positive ways. Of course, brick and mortar booksellers will have a different view, but that’s life and progress.

[Publetariat Editor’s Note: strong language after the jump]

Amazon single-handedly made ebooks the ubiquitous force they are today. Others helped it along, of course, but Amazon made it happen in the timeframe we’ve seen. They’ve opened up the playing field to let indie authors and small presses compete realistically with the Big Six. They’ve made books and other items readily available and affordable to millions of people who may have had trouble accessing those things before. I don’t like everything about the Kindle model – exclusive file format, etc., but it’s very good overall. Amazon are very good overall.

There’s no question that I would rather have Amazon around than not. Although, on a slight digression, when the hell are we getting an amazon.com.au? Seriously, Amazon, why do you hate Australia?

But there are changes happening at Amazon that I don’t like. I’ve never been able to ignore a bully and I don’t like monopolies. They’re bad for everyone except the person in control of said monopoly. And while Amazon are still doing many good things, they’re starting to do many questionable things as well.

The major problems are these:

– Setting up as a publisher, not just a retailer;
– Starting the KDP Select program;
– Cutting publishers out of control;
– Propogating the cheap and free model.

Why are these things bad? Let’s look at them one by one.

Setting up as a publisher:

This is not a bad thing per se – another opportunity for writers to get published is a good thing, right? Well, not if it restricts the writer’s ability to sell their work. Whenever Amazon set up a service, they make it exclusive to themselves. For example, their CreateSpace POD printing venture means stock is only available through Amazon.com – not even the other Amazon branches internationally. As a result of in-fighting, Barnes & Noble have said they won’t stock any Amazon published books. This is a direct result of B&N’s problems with previous Amazon exclusivity policies, and I can’t really blame them. But it means that writers being published by Amazon have a greatly restricted range of outlets for their work. And Amazon encourages that in order to gain monopoly share.

Starting the KDP Select program:

This is a program where authors can make their Kindle ebooks available free for 5 days out of every 90. The idea is that it will greatly enhance their profile, drag more readers to their work and they’ll see greater sales in the long tail. Amazon have a pool of cash and for every author with a free book, Amazon distributes a share of that pool based on how many free downloads that book saw. Sounds great, but it’s not. That distribution pool is already getting smaller, the vast majority of people involved will only ever see a tiny fraction of it and, worst of all, those books can only be included if they’re exclusive to Amazon. No iBooks, no Smashwords, no Nook, etc. That means that once again, Amazon are forcing exclusivity and using sweet, sweet cookies to lure authors into snubbing every other retailer. Then you find out that the cookie is made of mud and dog crap.

Cutting publishers out of control:

It’s getting harder and harder for publishers to manage their stock at Amazon. My novels are published by Gryphonwood Press. They recently commissioned new cover art for both books and tried to get Amazon to update the art. Nothing happened. No responses, no changes, nothing but huge frustrations. Eventually, after talking to my publisher, I went to my Amazon Author Central page and requested the changes myself. The update was made inside 24 hours. This is Amazon responding to authors, not publishers. That means they’re actively cutting publishers out, which actively encourages authors to do their own thing. That’s not an author’s job. It’s their publisher’s job. But this strikes me as an underhand way of getting authors to distrust their publishers or decide they can do without them and go the indie route, which is better for Amazon.

Propogating the cheap and free model:

So many novels are on Amazon for 99c. I’ve already talked about the free option on the KDP Select program. This is a big problem. For one, many readers are starting to undervalue work. They decide to wait until something is free or reduced to 99c before buying it and that’s bad for authors. This is our job – we’re trying to make a livng here and there’s a lot of work in writing a novel. It’s worth more than a single dollar. But Amazon don’t care. They’ve got something set up where anyone can upload an ebook, charge a buck for it and think they’re on the author gravy train. 99.9% of those people are unlikely to sell more than a handful of books. But that’s all right with Amazon. After all, if they make 75c for every book sold, they don’t need to sell millions of every book. They just need to sell a few copies of millions of books. Each author is making fuck all, but Amazon are raking it in. And those authors who stick exclusively with Amazon are told they’ll do even better, with no guarantee that that is actually the case.

You can see how all these things are set up to benefit Amazon, at the expense of everyone else – authors, publishers and readers. It’s better for all of those people if price points reflect the effort involved in making the work being sold; if product is available through a range of outlets for a range of devices to give readers a choice and therefore give authors a greater chance at more exposure and sales, leading to a stronger career. The only beneficiary of the models described above is Amazon.

Now I don’t mind Amazon doing well for itself, but not by monopolising an industry and not at the expense of authors and readers. That’s where I have to step in between the bully and bullied and say, “Wait a fucking minute, here, what do you think you’re doing?”

What can you do about it? Lots of things.

If you’re a writer or publisher:

Don’t make your work exclusively available in one place. It benefits everyone to have it available in as many places, for as many devices as you can.

Don’t price your work ridiculously low and devalue it. Equally, don’t price it stupidly high and drive all the readers to pirate sites instead.

Don’t saturate the work with DRM, inconveniencing readers who can’t read a book they paid for on seperate devices.

Stand up against monopolising policies wherever you can.

If you’re a reader:

Check various venues for the availability of the work you want and don’t always buy in one place.

Try to buy non-DRM versions in order to encourage greater openess in the future. DRM is not the way to fight piracy.

Don’t go for pirated work. If you respect the authors you’re reading, pay them for their work.

Don’t only read free books and those you can get for 99c. At the very least, you’re cutting yourself off from some really good stuff out there and only encouraging the lowest common denominator.

Chime in with a comment below if you have an opinion or an idea about this. Or if you completely disagree with me – I’d love to hear why.

 

This is a reprint from Alan Baxter‘s The Word.

I recently read a guest post by Chris Keys, author of The Fishing Trip – A Ghost Story and Reprisal!: The Eagle Rises!, about the difficulties of selling self-published books.  According to Chris, he’s only sold about a dozen books.  It seems typical of independent authors, but here’s the catch: I looked for Chris’ book The Fishing Trip – A Ghost Story on Amazon and found that he only had it in print.

 

What really bothers me about this is that he used CreateSpace to publish his book.  I would think putting out a Kindle edition as well as a print edition would have been a no brainer.  It’s really too bad Chris didn’t go with both because I was poised to purchase an eBook edition, provided the price was right, on the spot.  I wishlisted the book, but that doesn’t mean I’ll remember to go back and buy it later.

I’m left wondering how many indie author sales are lost because of this kind of shortsightedness.  Between earning higher profits on lower prices and the immediate delivery (aka immediate gratification) of eBooks, how can anyone afford not to publish in electronic format?  That’s especially true now that epublishing is free on major bookseller sites like Barnes & Noble and Amazon.

I suppose many authors cringe at the idea of formatting their manuscript into eBook format. It’s not as difficult as you might think, though it does take some time. There are numerous articles on the web on how to do this, including “How to Format Ebooks” by Jamie Wilson and “How to Format an Ebook” by Smashwords’ Mark Coker. If you use Adobe InDesign, check out EPUB Straight to the Point by Elizabeth Castro. For basics on Kindle formatting browse Joshua Tallent’s Kindle Formatting web site.

If you still don’t want to try formatting your own book (or find you just can’t wrap your mind around it) then find someone who can. Indie Author April L. Hamilton of Publetariat warns us of taking the cheap route and simply converting a manuscript rather than having it formatted properly. It’s better to spend a little money on putting out a great book, than lose readers due to poor formatting.

Formatting is different from conversion in that formatting standardizes the manuscript and creates any companion files needed for the eBook while conversion is simply loading the work into a program and clicking a button. Conversion is easy. Formatting takes more time and effort.

Regardless of whether you choose to do it yourself or have someone else do it for you, if you want to get your book into the hands of more readers, don’t neglect the eBook format.

 

 

This is a reprint from Virginia Ripple‘s blog.

I’ve just been to a few of my favourite fiction podcast sites – places like Pseudopod and Podcastle, among others – and donated a few dollars their way. I’m a starving artist, but I love to listen to the things they produce and they pay their authors well. It’s in all of our interests to support them. They all have an option on the site to subscribe (by paying a regular amount every month) or to simply donate once.

When we buy a magazine – in ebook or print – we’re directly helping that publication to stay alive. But so much content online these days is essentially free and relies on the generosity of its fans to keep it going. I read a thing recently that talked about how downloading doesn’t really cost sales. From the article:

 

The report states that around a third of Swiss citizens over 15 years old download pirated music, movies and games from the Internet. However, these people don’t spend less money as a result because the budgets they reserve for entertainment are fairly constant. This means that downloading is mostly complementary.

On the whole, people can be honest and kind and they do value the things they consume. I’m firmly against DRM and all for open source and Creative Commons. I think it engenders a greater sharing of art and a greater consumption overall. The Swiss study cited above seems to validate that opinion. I know for a fact that I’ve bought music from a band I discovered via downloads. I’ve bought books by authors after borrowing one of their works from a friend too, and that’s exactly the same thing. It’s all about learning that these things exist, discovering that we like them and subsequently paying for those things we enjoy.

With stuff that’s always free, however, like podcasts, it’s not so easy to follow that line of action and end up giving back. So we have to make that little bit of extra effort and find a way to give. Most podcasts, ezines, magazines, publishers and so on have a PayPal option on their site for you to drop a few shekels through and show your appreciation. Tis the season to be loving and generous, so get online and get clicking. Throw some cash around. It only has to be the cost of a few beers and you’ll be making a real difference to your culture and the livelihoods of struggling artists like myself – we need places to sell our work to, and they need cookies to pay us. It’ll make you a better person, I promise.

(Incidentally, Thrillercast has a donate button too. Just, you know, in case you were interested.)

 

 

This is a reprint from Alan Baxter‘s The Word.

In which the comedian, writer-director and producer makes proponents of DRM look foolish, and demonstrates how going indie can be much more profitable for artists—even those as famous and successful as himself.

Today, Galleycat reported Louis CK Earns $200k Profit on DRM-Free Show:

Comedian Louis CK wrote a frank essay about his most recent experiment, a “Live at the Beacon Theater” comedy DVD that was sold for $5 to fans without any digital rights management (DRM) protection. In less than four days, he has earned a $200,000 profit by avoiding traditional distribution strategy and channels.

Nearly all digital books currently contain some sort of DRM protection–making it harder for readers to take notes, read on different devices or share the book. Publishers and authors should read Louis CK’s argument against using these tools to restrict your readership.

In the ‘frank essay’, Louis C.K. shares the following interesting facts and figures:

The show went on sale at noon on Saturday, December 10th. 12 hours later, we had over 50,000 purchases and had earned $250,000, breaking even on the cost of production and website. As of Today, we’ve sold over 110,000 copies for a total of over $500,000. Minus some money for PayPal charges etc, I have a profit around $200,000 (after taxes $75.58). This is less than I would have been paid by a large company to simply perform the show and let them sell it to you, but they would have charged you about $20 for the video. They would have given you an encrypted and regionally restricted video of limited value, and they would have owned your private information for their own use. They would have withheld international availability indefinitely. This way, you only paid $5, you can use the video any way you want, and you can watch it in Dublin, whatever the city is in Belgium, or Dubai. I got paid nice, and I still own the video (as do you). You never have to join anything, and you never have to hear from us again.

Read the full statement from Louis C.K. here. (Note: the statement contains some strong language)

 

This post, by Richard Curtis and Anthony Damasco, originally appeared on e-reads in October of 2010, and was reprinted on the same site 10/27/11.

The ability of the human mind to rationalize is extraordinary. Take piracy. Among the many comments we have received in response to our postings on the subject, we have heard every rationalization under the sun, ranging from “I didn’t know it was copyrighted” to “I don’t know what copyright is” to “DRM sucks” to “The e-book wasn’t available on legitimate retail sites” to “Information wants to be free” to “I’m not reselling, just sharing with friends” to “The percentage of pirated books is an insignificant fraction of sales through legitimate channels” etc. etc.

Piracy is something that other people do. When we do it there’s always a good excuse. When other people do it, it’s as heinous as grand theft auto.

Clearly, there is a disconnect between the phenomenon of rampant piracy and the scarcity of perpetrators, and the reason seems to be semantic. If we can develop better definitions we may be able to develop better solutions.

Towards that end we offer the following categories of pirate:

1. The Innocent

Young children, technologically inexperienced individuals and others who know nothing about copyright law or Internet etiquette and don’t realize they may be stealing when they download music or e-books. People who simply don’t know better.

2. The Ignorant

These are downloaders who know enough about copyright law to understand the difference between right and wrong, but choose to ignore or flout it.

Though many who fall into this category are young, the classification includes adults, some of whom are highly educated – business people, computer engineers and other professionals who should know better.

We’re giving Innocents/Ignorants the benefit of the doubt by describing their acts of downloading as “inadvertent” or “improper” rather than “illegal.” But if nothing else they must be aware of the legal principle that ignorance of the law is no excuse. If an aggrieved publisher decides to sue you for illegally downloading e-books – as has been done in the music and movie fields – your case will not be automatically dismissed because you didn’t know it was against the law.

3. The Customer

These are people who paid for one version of a book and feel entitled to acquire other versions without paying for them. A good example is the case of a consumer who buys a hardcover edition of a bestselling novel and feels justified in downloading a pirated e-book because the publisher’s legitimate e-book version has not yet been released. No less a personage than the New York Times‘s own ethical arbiter felt that a customer has the right to do this. (See NY Times Ethicist Condones Ripping Off E-Books). In other cases, consumers impatient with DRM restrictions will download a ripped off version of a file instead of paying for it and dealing with customer support.

 

Read the rest of the post, which covers 4 more types of pirate, on e-reads.