With Sony's ePub Move, Adobe Wins

smallreaderSony’s announcement today that it’s throwing open the doors of its e-book store and reading devices to the ePub standard is certainly good news for consumers. ePub — and open standard developed by the International Digital Publishing Form — is already supported by a growing number of major publishers and a growing number of reading devices. With Sony on board, consumers will have greater flexibility over how they buy and read e-books.

The move is also clearly a bid by Sony to establish itself as the No. 2 in the e-book market behind Amazon’s Kindle before the Barnes & Noble/Plastic Logic alliance comes fully online next year. But the big winner in today’s announcement is Adobe Systems (s ADBE).

While Sony is embracing the open, XML-based ePub standard for delivery and viewing of e-books, those e-books will still come wrapped in copy protection. As part of today’s announcement, Sony said it will scrap its own, proprietary e-book DRM in favor of the more widely supported Adobe Content Server 4 (although the ePub standards has no native DRM the ePub Container format, which bundles e-book content with metadata and other elements for delivery over the Internet, can support third-party DRMs, including Adobe’s).

As Adobe’s GM of ePublishing, Bill McCoy, pointed out in a blog post yesterday, the Sony announcement brings the number of e-book reading devices that are compatible with Adobe’s Server platform to 17, marketed by nine different vendors. Whether by accident or design, the Adobe server system is emerging as the leading e-book publishing and DRM platform after Amazon’s Kindle platform.

Why is that important? As I point out in a report on the e-book market released earlier this month by GigaOM Pro (subscription required), Amazon’s e-book ambitions go beyond simply selling a lot of Kindle devices. Taking a page from Apple’s iTunes playbook, its goal is to establish Kindle as the dominant e-book publishing and distribution platform. And as Apple has amply demonstrated, when you control the platform, you control the value chain, which means you reap a disproportionate share of the value that’s exchanged.

And the best way to maintain control over a platform — again, per Apple — is through the use of proprietary DRM. Like Amazon’s Kindle DRM, the copy protection at the heart of the Content Server platform is proprietary, in that Adobe owns it. Unlike Amazon, however, Adobe’s standard is openly licensable by others. While that still leave Adobe in an enviable position — able to collect licensing fees from both ends of the value chain — it’s clearly a more friendly environment for publishers and consumers than Amazon’s walled-garden approach — and may be publishers’ best bet to avoid getting trapped by Amazon the way the record companies were by Apple.

Interestingly, the odd man out here could be Barnes & Noble. The B&N eBookstore supports the ePub standard, but for now it’s sticking with its own DRM system rather than adopting the Adobe platform. Barnes & Noble was undoubtedly hoping to position itself as the industry’s best alternative to Amazon, but it may just have been outmaneuvered by Sony/Adobe. Two contending platforms is good for business. Three just might be a crowd.

Paul Sweeting writes The Media Wonk blog and is author of an upcoming report on the e-book market for GigaOM Pro.