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April 5th, 2011:

The Terror of Customer Expectations

As I’ve said any number of times, I loathe DRM and have since I first understood what it was. My reasons are these:

  • It makes content delivery systems fragile. DRM adds complexity to a system, and by its nature is constantly looking for a reason to cut people off. Jerry Pournelle made this point at least 30 years ago, when DRM was “copy protection” and floppies ruled the world.
  • DRM inconveniences paying users and does very little (if anything) to stop piracy. Because…
  • A DRM system only needs to be broken once. A single very bright individual (or a small cadre of them) figures out the crack, then wraps it up in a script or a simple utility that any fool can use. Bruce Schneier made this point at least twenty years ago.
  • DRM often ties content to one single company, generally through some kind of Internet permissions system. If that company goes under, DRMed content can become unavailable.
  • Related to the above: DRM often (admittedly, not always) ties content to a single device or family of devices. Users who want to move to a different content rendering system can lose everything they’ve paid for.
  • Very Large Companies Run By Comittees Of Clueless Egotists (VLCRBCOCEs) forget that the ultimate goal is to curry favor with customers so as to sell them stuff, and allow the pursuit of DRM to make them do really stupid things. Google “sony rootkit” to see how that works. Oh, and Amazon’s private dustup with the 1984 rightholders that led them to “repossess” books right off customer Kindles.
  • Consequences of much or all of the above: DRM turns paying customers into pirates. Piss off honest customers a few times, and they’ll start looking on the pirate sites before heading over to your online bookstore.

In short, DRM creates an adversarial relationship between content providers and content purchasers that benefits neither side. As a publisher, I have promised never to force it on my readers.

Which brings us to today’s issue: What happens when online stores force DRM on me? Jim Strickland and I are preparing ebook editions of all our SF, and as time allows I’m going to do the same for my Carl & Jerry books, and even the Old Catholic Studies Series. It’s not news, and certainly not news to me, but we’ve had to confront the fact that Apple forces DRM on book publishers who want access to its store. Jim and I will probably go along, and think of a clever way to get unencumbered epubs to paying iBooks customers.

I don’t know what that clever way will be yet, but you’ll hear more about it as we figure it out. In the meantime, it’s a headscratcher: Why the hell would Apple do this? I’ve been sniffing around and there’s no clear answer. Some think it’s because Apple owns the DRM technology (FairPlay) and it’s in their interest to sell books with FairPlay gunked to them. I doubt that it’s true (it’s like paying yourself for something you already own) and given that you can download bookstore apps from other vendors to iOS, encumbered ebooks are at a competitive disadvantage, right there on Apple’s home turf. (Amazon allows unencumbered ebooks on Kindle.)

If I had to guess, it would be this: One or more VLCRBCOCEs in the print publishing industry, as part of their deals with Apple, demanded that everybody selling on iBooks must be required to use DRM–or no deal. What’s really at stake are customer expectations. Big Print is in a panic over ebook pricing to begin with, as we learned a year or so ago when Amazon and Macmillan jumped down one another’s throats. Macmillan didn’t want Amazon to “train” customers to think that ebooks should cost $9.99. (I was on Macmillan’s side that time, though for a different reason: If they jack their ebook prices up to the sky, I can undercut them much more easily. Amazon, please let publishers control their own pricing–especially huge, clueless, suicidal publishers.) In this case, Big Print doesn’t want customers to think of unencumbered ebooks as normal and expected, and DRM-encumbered ebooks as undesirable anomalies.

That particular war has already been lost, pretty much. Conventional wisdom among the tech savvy is that DRM is bad, and few of the indies use it. Nontechnical ebook buyers will figure it out when they decide to move to another reader system and can’t take their purchases with them. (The ebook business is so new that most people are still on their first reader and their first forty or fifty ebooks.) The day will come in the next few years when Big Print will be a lot less big, and competing against a lot more ebook publishers who have long understood that DRM does no one any good.

And price expectations, egad. $9.99 is so 2010. Many independent publishers now think that $3.99 or even $2.99 is the new normal. Furthermore, Amazon is now worried about yet another price point–99c!–at which their own ebook business model becomes unsustainable. Ebook pricing is still a huge imponderable, and I don’t (yet) have much useful to say about it. I hope to have some real data for you by this time next year.

Do I have proof that Apple was railroaded by Big Print into requiring DRM from all comers? No. But it makes sense to me: Apple didn’t have the negotiating leverage that Amazon or B&N had. If they get bigger, things may change. And if they don’t get bigger, it may be because everybody else, and especially the indies, is eating their lunch. Either way, for weal or woe, Big Print is in trouble, and therein lie many more entries that I hope to write in the near future.