In the early days of e-books, digital rights management (DRM) emerged as a controversial solution to protect intellectual property and curb piracy. Publishers and readers alike debated its merits and drawbacks. DRM was the one topic guaranteed to induce shouting at otherwise civilized publishing conferences. Fifteen years into the e-book era, now is an opportune time to take a fresh look at DRM and its impact on the publishing industry.
A Recap of the DRM Wars, Circa 2008
From the beginning, publishers demanded DRM. They believed that without DRM, e-book piracy would be rampant. In addition to outright piracy, publishers were concerned about casual sharing. One common refrain from that era was that “DRM keeps honest customers honest.” Rightly or wrongly, the big publishers would never have signed on to Amazon’s Kindle platform without DRM. DRM enabled the launch of the modern e-book marketplace in a very tangible way.
Meanwhile, consumers hated DRM. Early e-book adopters remember the pre-Kindle era: competing file formats and DRM systems, all equally inconvenient and incompatible. DRM prevented how and where they could read the books they paid for. And because DRM is easily broken, it punishes paying customers while doing nothing to stop piracy. Instead of keeping honest customers honest, DRM sent honest customers to the seedier parts of the web in search of DRM cracking software.
Pirates didn’t care about DRM. It was barely a speed bump for them.
The Real Problem: DRM’s Lopsided Value Proposition
From the beginning, one major problem for DRM was its lopsided value proposition. DRM provided value to publishers (if only illusory) while offering nothing but headaches for consumers. As a result, the idea of transparent DRM became a Holy Grail for the industry. If consumers didn’t notice the DRM, maybe they wouldn’t mind it so much, so the thinking went.
Another way to address DRM’s lopsided value proposition is to offer consumers something in return for accepting content restrictions. In other media, DRM restrictions have enabled new business models that provide value to consumers, such as music streaming, video streaming, and short-term video rentals. Consumers understand that content restrictions are connected to time-limited access. The benefit to consumers is access to vast libraries of content on-demand.
At the very least, DRM-restricted e-books should solve some of the common problems that DRM inflicts on readers: make it easier for them to get books onto their desired reading device, help them move books between devices, and sync their reading position so they can pick up where they left off on any device. While none of these features require DRM, they do go some way toward mitigating the problems associated with content restrictions. Additionally, these features extend consumers’ access to their e-book libraries rather than limiting access.
The E-Book Market, Circa 2023
E-books are still with us. It’s estimated that e-books make up around 20% of book sales—quite a bit lower than projections from 15 years ago. That percentage might be larger had agency pricing not led to a situation where trade paperbacks are often less expensive than e-books. I mention this to make the point that I don’t think the prevalence of DRM is why the e-book market has plateaued.
DRM is still with us, but no widely used standard exists. While retailers now make DRM optional, big publishers still demand it. Each retailer chooses its own flavor of DRM. The closest thing to a standard is Adobe’s DRM, used by multiple retailers not named Amazon or Apple. As a result, Adobe DRM protects less than 20% of e-books sold.
E-book piracy is still with us. Pirated e-books are still widely available through many sources. The feds continue to wage battle against Z-Library and its collection of 22 million pirated e-books. Meanwhile, affordable book scanners and OCR software provide another avenue for pirates. DRM has not eliminated book piracy.
A Breakthrough: How DRM Stopped Annoying Consumers
Amazon’s WhisperSync technology, combined with Kindle apps on every conceivable platform, looks like the Holy Grail of transparent DRM. The average e-book consumer doesn’t think twice about DRM on Kindle books. Whispersync allows readers to access their Kindle library from any device, syncs their reading position, and on a Kindle device, consumers can easily buy their next book and begin reading immediately. Amazon figured out what e-book consumers wanted and gave it to them while simultaneously giving publishers the DRM they demanded.
The problem for publishers is that e-book consumers are locked into Amazon’s walled garden, and most don’t mind. While other reading systems may offer similar features and conveniences, Amazon has a massive lead in e-book market share, and that’s unlikely to change.
The e-book market has matured, and the significance of DRM has diminished. Use it or not. Your customers probably won’t notice.
The exception is a segment of customers who still fiercely oppose DRM. These consumers worry about e-book doomsday scenarios. What happens when the content server that authenticates their books goes offline? What happens if Adobe Content Server ceases to exist altogether? These customers continue to crack DRM and maintain personal libraries of DRM-free (and DRM-freed) e-books. It’s worth noting that these customers also buy e-books. But unlike the happy walled-garden customers, these customers aren’t tied to a single retailer.
Opportunities for Innovation Still Exist
All of these years later, e-book piracy flourishes, yet it hasn’t killed the book business. Similarly, DRM is ubiquitous, yet it hasn’t been the savior publishers hoped for. Ironically, the one outcome publishers feared more than piracy has come to pass. Amazon dominates the market for e-books.
There might yet be room for disruption in the e-book marketplace. Publishers unsatisfied with the status quo can draw inspiration from another content business that’s transitioned to digital: motion pictures.
“Movies Anywhere” is an industry-supported service that allows consumers to buy a movie from any digital retailer, then view it on any platform. From the consumer’s perspective, their library of purchased movies is available in iTunes, Prime Video, Google Play, Vudu, etc.
“Movies Anywhere” provides flexibility to consumers by decoupling their movie libraries from the point of sale. And when digital media purchases are no longer tied to a particular point of sale, consumers can purchase digital media from any retailer without concern for issues like media formats or DRM schemes. Participating retailers include tech heavyweights like Amazon, Apple, Google, Microsoft, and several cable providers. None of those digital retailers dominates the market for movies like Amazon dominates the market for e-books.
In an industry still ripe for innovation, real opportunity lies in using models like “Movies Anywhere” to reshape the e-book ecosystem, focusing on enhancing the consumer experience rather than viewing customers as potential pirates. The key to dethroning Amazon’s dominance and invigorating the e-book market requires bold and innovative steps.