Joe Wikert's Publishing 2020 Blog

What if DRM Goes Away?

TOC Latin America was held last Friday in the beautiful city of Buenos Aires. Kat Meyer, my O'Reilly colleague, and Holger Volland did a terrific job producing the event. As is so often the case with great conferences, part of the value is spending time with speakers and other attendees in between sessions and at dinner gatherings

Last Thursday night I was fortunate enough to have dinner with Kat, Holger and a number of other TOC Latin America speakers. We discussed a number of interesting topics but my favorite one was asking each person this question: What happens if DRM goes away tomorrow?

The DoJ suit against Apple and five of the big six has led to a lot of speculation. One of the most interesting scenarios raised is that if the government is intent on limiting the capabilities of the agency model, publishers need to figure out what other tools they can use to combat the growing dominance of Amazon.

Charlie Stross is right. DRM is a club publishers gave to Amazon and then insisted that Amazon beat them over their heads with it. So what if we woke up tomorrow and DRM for books disappeared, just like it has (for the most part) with music?

I was unable to reach a consensus at that dinner, but here's what I think would happen: Initially, not much. After all, Amazon has a lot of momentum. If current U.S. estimates are accurate, Amazon controls about 60-65% of the ebook market and B&N is second with about 25-28%. That only leaves 7-13% for everyone else. And if you've been buying ebooks from Amazon up to now, you're not likely to immediately switch to buying from B&N just because they both offer books without DRM. On the surface Amazon's and B&N's ebooks use incompatible formats, mobi for the former and EPUB for the latter. But that's where it gets interesting.

Converting from mobi to EPUB (or vice versa) is pretty simple with a free tool like Calibre. I've played around with it a bit, converting some of the DRM-free ebooks we sell on oreilly.com. I didn't do those conversions to get our books in other formats. After all, when you buy a book from oreilly.com you're buying access to all the popular formats (mobi, EPUB and PDF, as well as others), not just the one format a device-maker wants to lock you into. I did the conversions because I wanted to see what's involved in the process.

If you've ever used Microsoft Word to save or convert a .doc file to PDF you'd find it's just as easy to go from mobi to EPUB in Calibre, for example. But just because the tool is available does that mean if DRM goes away we'd suddenly see a lot of Kindle owners buying EPUBs from B&N and converting them to mobi with Calibre? I doubt it. Those Kindle owners are used to a seamless buying experience from Amazon, so unless there's a compelling reason to do so, they're not likely to switch ebook retailers. And that leads me to the most important point...

Creating the best buying and reading experience is one way any ebook retailer can steal market share from the competition. Amazon has a pretty darned good one, that's for sure, but there's plenty of room for improvement, IMHO. I'm not convinced any ebook retailer has pushed the envelope on innovation and exciting new features in their devices or reader apps. In fact, these enhancements seem to move at a glacial pace. So what if B&N (or anyone else, for that matter) suddenly invested heavily in reader app functionality that puts them well ahead of the competition? And what if some of those features were so unique and innovative that they couldn't be copied by others? I'd much rather see a competitive marketplace based on this approach than the one we currently have where the retailer with the deepest pockets wins.

Innovation is better than predatory pricing. What a concept. The iPod revolutionized music, an industry that was highly fragmented and looking for a way forward in the pre-iPod days. The iPhone turned the cellular market on its head. Think about how significantly different the original iPod and iPhone were when compared to the clumsy MP3 players and flip phones that preceded them. I believe today's crop of ebook readers and apps are, in many ways, as clumsy and simplistic as those MP3 players and flip phones. IOW, we haven't experienced a radical tranformative moment in the ebook devices and app world yet.

Of course all of this innovation I'm dreaming of could happen today. We don't need to wait for a DRM-free world. Or do we? Amazon has no incentive to innovate like this. They already have a majority market share and it's only going to get larger when the DoJ dust settles.

This is more of a rallying cry for B&N, Kobo and every other device and ebook retailer. If DRM goes away tomorrow nothing much changes unless these other players force it to. But why wait till DRM disappears? It might not happen for a long time. Meanwhile, the opportunity to innovate and create a path to market share gain exists today. I hope one or more of the minority market share players wakes up and takes action.

TOC Podcasts: Now in iTunes

A month or so ago we decided it was time to extend TOC's reach with industry news, interviews, etc., in the form of video podcasts. I've already featured many of those segments here on the 2020 Publishing blog but now you'll be able to retrieve them in a more convenient manner.

Head over to iTunes and subscribe to the TOC podcast series using this link. Four of the first sessions are currently available via iTunes and more will follow shortly. Going forward we plan to create 1-2 new segments every week.

We're always on the lookout for new and interesting people, products and platforms to cover via this podcast series. If you know of any be sure to send them my way and I'll make sure the TOC team follows-up on them.

Bob Lefsetz on What the Book Biz Can Learn From the Music Biz

The Lefsetz Letter should be required reading for everyone in the publishing industry. Sure, it focuses mostly on the music biz but so much of what Bob Lefsetz has to say is highly applicable to the world of book publishing. The podcast interview below features Bob's wisdom on topics like what the book publishing industry can learn from the music industry, discoverability, where he believes the book industry is heading and whether anyone can knock Apple of the top of the mountain.

Mitch Joel Tells Us to "Burn the Ships"

Mitch Joel spends every day thinking about digital marketing. He's President of Twist Image as well as author of the book, Six Pixels of Separation. Mitch also has an extensive background in both the music and magazine industries. In this TOC podcast he talks about some of the common challenges facing the music, magazine and book publishing sectors. Mitch also provides more insight to his suggestion that publishers should "burn the ships" and not look back.

Where's Our Industry's GarageBand?

If you own an iPad you've absolutely got to purchase the GarageBand app.  It's the best $4.99 you'll spend this week.  I don't care if you've never played a musical instrument in your life.  You need this app.

Why am I so fascinated by GarageBand?  FIrst off, it's a blast to play with.  You'll be amazed at how good your creations sound and how far your talents can take you even if you can't tell a quarter note from a half note.  Next, I'm finding it to be an incredibly inspiring experience.

Think about how hard it's been over the years to compose music, even something simple.  In the pre-computer days you had to write it all down on blank sheet music.  Composers painstakingly wrote every note for every instrument.  Now a tool like GarageBand not only lets you record the virtual instruments you play on-screen but it also provides an enormous amount of guidance, helping you sound a lot better than you really are.

What I love most about GarageBand is that it encourages experimentation and discovery.  How will that rock guitar sound with this drumbeat?  What if I overlay this bass line with that series of chords?

Now put this in terms of authoring tools.  Most ebooks you read today began life as a manuscript written in a word processor.  Sure, we're starting to add bits of video and audio now that mobile devices (including tablets) are quickly gaining popularity.  But I feel like our authoring tools in general are still stuck in the stone age.  For the most part, we're stuck in place using the existing tools, most of which haven't evolved much in the past 10-15 years, while trying to create something richer and more interesting.

What if we had a content authoring platform as elegant and engaging as GarageBand?  Experienced authors would find new ways to tell their stories, share their how-to knowledge, etc.  But one of the great things about GarageBand is that it's a great enabler for non-musicians.  What about all those people out there who have never written their story, shared their knowledge, etc.?  Would a new, powerful authoring platform like this encourage them to explore, experiment and come up with new types of content than we ever imagined before?  I think so.

Vook App: Reckless Road Guns N' Roses

I've mentioned before that I'm skeptical the road to rich content is as simple as integrating video with the written word.  So when I was approached to review a Vook app called Reckless Road (Guns N' Roses and the Making of Appetite for Destruction) I said I'd be happy to review it but I also explained my bias up front.  The fellow who requested the review was pretty convinced he's got a terrific product and still wanted my feedback, good or bad.  Now that I've had some time to read through Reckless Road and watch many of the videos included in it I can see the value of the Vook approach. It lends itself well to a product like this. Earlier Vook samples I looked at last year felt forced, as though there had to be a certain number of videos for every written piece; the result wasn't all that interesting to me.

With Reckless Road, however, I became more curious as I went along. This is probably due to the fact that I'm always fascinated by behind-the-scenes looks at things, especially rock bands.  It also helps that the author, Marc Canter, is a close friend of the band and collected all sorts of great photos and other memorabilia over the years.  That said, I was never much of a fan of Guns N' Roses, but reviewing this app makes me wish similar ones were available for the bands I followed back in the 70's. Remember that old VH1 series, Behind the Music (the original ones, back when they covered great bands like Thin Lizzy)? Canter's Vook app feels like a modern version of that approach, with the added benefit that you can hop around the story to your heart's content, without having to remember to record it on a VCR!

For $4.99 this is an app any Guns N' Roses fan would greatly appreciate.  I'm hoping the Vook folks can get insiders to create similar ones for Led Leppelin, Lynyrd Skynyrd and some of the other timeless bands from the greatest era in rock.

Would You Like Some Books with that Broadband Deal?

After years of fighting the pirates it appears the music industry has decided to emulate them for a change.  This article in The New York Times talks about how you'll be able to participate in an all-you-can-eat music model with certain cell phone and broadband deals.

Can similar book content deals be far behind?  Wouldn't it be great to get access to a Safari or Books24x7 program with a new phone or DSL/cable deal, even if it's just for a limited time?  Sure, it would be a series of tiny revenue streams and although the content providers probably wouldn't "make it up in volume" the service would be discovered by countless new prospective customers, many of which are likely to sign up for a regular subscription after the introductory period expires.

Why Amazon Should Try a "Radiohead Experiment" on the Kindle

Remember that Radiohead experiment back in 2007, the one where they allowed free downloads of their latest album and asked listeners to pay what they felt was fair?  Some say it was successful and others beg to disagree.  Assuming Amazon ever gets back to an in-stock inventory situation with the Kindle I think they should try a similar experiment with a big-name author's next book.

Why?  First of all, it would be interesting to know how much value readers place on content, particularly e-content.  Secondly, although some customers won't pay a penny for it, others will and it's that data that would be so fascinating to study.

Then there's the PR opportunity for Amazon, publisher and author.  Imagine how much free publicity this would generate.  It would probably open that author up to new customers who've never read his/her previous work.  But for Amazon it's an opportunity to generate a lot of buzz about a product they do almost zero advertising for; sure, they're out of stock, but again, I'm talking about the value of this when (if?) they ever get inventory again.  As I've also said before, I'm amazed at the number of people (including regular Amazon customers!) who've never even heard of the Kindle.

Btw, just like the Radiohead deal, this would be a limited-time offer.  Unlike the Radiohead deal though, I could also see an opportunity for Amazon (and the publisher/author) to sell sponsorship of the event.  An ad (or series of ads) would appear in (or periodically throughout) the free Kindle edition of the book.  This would help offset the lost revenue from downloaders who turn out to be freeloaders.  Then again, is that really "lost" revenue?  Those people probably wouldn't have bought the paid edition anyway.

Only a very forward thinking publisher and author would participate in something like this.  It's not without risk, of course, but it's also an experiment in a very limited space; the number of Kindles out there is tiny compared to the number of book-buyers who don't own a Kindle.  So even if it's wildly popular but nobody pays a penny for the content the other 99.999% of the book-buying public won't have been affected.

Speaking of that other 99.999%, Amazon, publisher and author could use this as a way to promote the book to that majority as well.  Think word-of-mouth and add in an affiliate discount code Kindle downloaders can pass along to their friends, creating even more buzz and giving everyone an additional incentive to buy the book.

One final thought: If a publisher really wants to do this they wouldn't even have to work with Amazon to make it happen.  They could simply offer the unprotected mobi file on their own site for a free, limited-time download.  Think about that for a moment...  That publisher would be able to establish a direct relationship with all those Kindle owners, capturing e-mail addresses and the opportunity to market directly to them in the future.  Take that a step further and if the publisher makes it clear to the customer, they could conceivably sell that list to other publishers to market to them as well.

See all the interesting directions this can go in?...

"Trading Analog Dollars for Digital Pennies"

That headline quote is from NBC Universal's Jeff Zucker and appears in an article about Atlantic Records in today's NY Times.  The article talks about how Atlantic is apparently the first record label to report that more than half their revenue comes from digital products.  Unfortunately though, as Zucker's quote alludes to, even if a player or two manage to get a larger slice of the pie, the pie itself is shrinking.

That phenomenon isn't unique to the music business.  I believe the same trend will appear (and in many respects already has) in other industries.  Think newspapers, magazines, and...dare I say...book publishing.  Experimenting with a variety of digital distribution services is vital, but not enough.  It's equally important to think about driving new revenue streams that may not be directly tied to the original content itself (e.g., sponsorships, partnerships, etc.)

Zucker's right that the pie will be smaller, but only if we limit ourselves to applying yesterday's solutions to tomorrow's challenges.

Plastic Logic Previews their eReader at DEMO

The eInk reader market is about to get a bit more crowded.  Today at the DEMO conference Plastic Logic gave a preview of the e-reader device they expect to ship in 2009.  The focus here seems to be all about form factor, and I don't get it...

I've been using the Kindle's 3-1/2 x 4-3/4" screen for awhile now and I've never stopped to wish the darned thing was larger.  Never.  I'm not just reading books on here either.  It's a mix of newspapers, magazines, books and business documents, the latter apparently being a big selling point for the Plastic Logic device.  Would it be nice to see PowerPoint slides on my Kindle? I guess, but just like the Plastic Logic device, they'd be rendered in black-and-white so they'd lose a lot of their impact.  They're also hyping the thinness factor on Plastic Logic's reader.  There again, I've never wished my Kindle was just a bit thinner.

I almost titled this post, "It's the Content, Stupid!", because I want to hear more about what content sources Plastic Logic is building their service around.  I like that they've included wireless as a feature but will they have as many content options as the 140K+ books as well as dozens of newspapers and magazines Amazon currently offers for the Kindle?  If not, is e-reader access to your business docs really a compelling enough feature to make this one a winner?

On a related note, I recently had the priviledge of getting a sneak preview of a soon-to-be-released e-doc platform and tool from a major vendor. The thing that kept crossing my mind was, "all of these features are so cool...nobody's going to use them on their computer though, so when will the be offered on the Kindle, Sony Reader, etc.?"  The answer is, of course, "not for quite awhile."  I'm talking about embedded video, audio, color and other nifty bells and whistles. The eInk platform is many generations behind what you can do in something as simple as a PDF file.  While I love that eInk is easy on my eyes I hate it that it's holding us back from implementing some truly outstanding features on these e-readers.  The market for reading books on a computer is tiny, so I hope eInk (or some other provider) can figure out how to implement these features on an e-reader before too long.