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How publishers gave Amazon a stick to beat them with

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We’ve described a number of times at GigaOM how Amazon (s amzn) is disrupting the traditional book-publishing business, both by allowing authors to self-publish and do an end-run around the traditional industry, and by signing writers to its own imprint — as well as starting its own e-book lending library and other ventures. But as author Charles Stross argues in a recent blog post, the mainstream publishers are partly to blame for their own misfortune, since they themselves handed Amazon one of the weapons it is using to attack them and steal their market share: the use of digital-rights management or DRM locks on their books.

As Stross notes, the rationale for requiring these kinds of digital locks is simple: the Big Six publishing houses are owned by large media and entertainment conglomerates, and those parent companies are far more concerned about piracy than they are about serving authors by helping their books be read on as many different platforms as possible. So they require their e-books be bundled with DRM restrictions, which in many cases prevent them from being loaned by the users who allegedly acquired them, or allow Amazon to remove them automatically from people’s Kindles by remote control.

Amazon could be a far bigger threat than piracy

But Stross makes the point that piracy isn’t the only threat the mainstream publishers face as their industry gets disrupted, and it may not even be the primary threat. The most significant threat, he argues, is that Amazon is eating their lunch in a variety of ways, and it shows every sign of continuing to do so:

The corporate drive for DRM is motivated by the fear of ebook piracy. But aside from piracy, the biggest ebook-related threat to the Big Six is called Amazon.co [and] the Big Six’s pig-headed insistence on DRM on ebooks is handing Amazon a stick with which to beat them harder.

The playing field between Amazon and the major publishers began to shift when the rise of e-books started to turn into a massive wave, which happened over the last year or so. First, the electronic retailer tried to force the publishers to accept lower prices for their e-books, and retaliated against the ones who refused by yanking their books from its virtual shelves. Apple (s aapl) helped turn the tables when it launched the iPad and offered publishers the “agency model” of pricing (for which it is facing an antitrust lawsuit) but Amazon still controls a majority of the e-book business.

A big part of that control stems from Amazon’s ownership of the Kindle, the leading e-book reader, and that books bought for the device have DRM built in. Stross argues that this effectively locks many e-book buyers into the device, since it’s virtually impossible to read Kindle books on other devices (other than through Amazon’s Kindle software on the iPad, or its Cloud Reader) without buying a new copy.

If you buy a book that you can only read on the Kindle, you’re naturally going to be reluctant to move to other ebook platforms that can’t read those locked Kindle ebooks — and even more reluctant to buy ebooks from rival stores that use incompatible DRM.

Publishers have locked readers inside Amazon’s walled garden

This kind of insistence on DRM and incompatible platforms, as well as the tangle of rights and often competing interests of publishers and authors when it comes to licensing copies or sharing, makes e-book buying a snake-pit of complexities — and only reinforces Amazon’s hold on the market, since it offers a simple end-to-end solution. This makes sense for the retailer, and its focus on launching new platforms like the Kindle Fire make it obvious it plans to extend that dominance into other areas. But how does that help publishers and authors? To quote Stross again:

As ebook sales mushroom, the Big Six’s insistence on DRM has proven to be a hideous mistake. Rather than reducing piracy, it has locked customers in Amazon’s walled garden, which in turn increases Amazon’s leverage over publishers.

Publishers — and some authors, especially those who control the Authors Guild, which has fought every attempt by Google (s goog) and others to open up the book market — have been so obsessed with piracy and locking down their products that they have allowed Amazon to take control of their fate (if that reminds you of Apple and the music industry, that’s probably not a coincidence). Instead of making it easy for readers to download their authors’ work on different platforms and share and copy it, they have only made it easier for Amazon to control them and dominate the industry.

As some authors have pointed out, even if you take advantage of Amazon’s self-publishing options to avoid having to get a traditional publishing deal, you’ve really just exchanged one corporate overlord for another. For most writers, the ideal would be an industry with multiple players — but unfortunately, their own publishers have helped make that even less of a possibility. And Amazon is the major beneficiary.

Post and thumbnail photos courtesy of Flickr users Abysim and Mike Licht

12 Responses to “How publishers gave Amazon a stick to beat them with”

  5. yt75

    What is needed these days is a clear role (function) separation between some “private bookshelf holders” organizations (private bookshelves holding on contracts/refereces/licenses, not copies in anyway) on one side, and contents creators/editors/hosters on the other.
    This “vertical” development around 2 ou 3 monsters of the technological infrastructure (terminals devices included) is kind of disgusting, especially when something else could exist, and it is much more a question of structure maongst actors than a technical one (cf Web, a book can also be “a web site that I can buy (acess to) in one shot”, and with html 5 blurring local copies or not), summary below (but in french) :
    http://iiscn.wordpress.com/2011/05/15/concepts-economie-numerique-draft/
    Which is also linked to the identity aspect :
    http://iiscn.wordpress.com/2011/06/29/idenum-une-mauvaise-idee/
    As to pirating, clearly the approach should be to block pirating centers (there are always centers in pirating dur to the need for catalogs (links exchange forums and the like), P2P also a vast hypocrisy in the words and everybody knows it) :
    http://iiscn.wordpress.com/2011/05/15/piratage-hadopi-etc/

    December 5, 2011 at 1:36 am