After much back-and-forth, a verdict came down on Wednesday in the Apple (s aapl) ebooks case: a judge found the company guilty colluding with five of the big six major book publishers in a scheme designed to inflate prices. The publishers (all of whom settled with the government before the trial) have tried to argue in the past that they were forced to cut a deal with Apple because of Amazon’s (s amzn) monopoly — but when it gets right down to it, the real culprit is the DRM lock-in that the publishers themselves pushed for. In effect, they forged the chains that bound them to Amazon in the first place.
My GigaOM and paidContent colleagues Jeff Roberts and Laura Owen have written about the details of the judgement itself, and also about the potential impact on Apple and the ebook business as a whole, but what really interests me is the broader landscape in which the lawsuit sits, and how much of that has been determined by the digital-rights management infrastructure the Big Five publishers put in place. Without it, there likely wouldn’t have been a trial at all.
Publishers locked themselves in
Tech writer Rob Pegoraro commented on this in a perceptive post last year, in which he noted that DRM locks provided the foundation for the Amazon monopoly that book publishers were complaining about so loudly:
“So long as DRM stays part of the plot, every Kindle reader sold, every Kindle app installed and every Kindle title purchased will strengthen Amazon’s hand… if you could buy an e-book in a standard format that, like an MP3 music file, would be playable on current and imaginable future hardware, it wouldn’t matter which store sold it. There would be no lock-in.”
That’s not to say Apple and Amazon weren’t willing participants in the DRM game, because of course they were. It was in their interest to adopt measures that would (theoretically at least) prevent copying of content just as much as it was in the publishers’ interest, since that would help keep consumers locked into their respective platforms. And this was particularly important for Amazon because its whole business model is predicated on using the Kindle as a cheap delivery system for content.
But the publishers’ desire for DRM locks was what gave Amazon the bricks and mortar with which to construct that business model. In effect, as author Charlie Stross put it in 2011, by pushing for DRM so strenuously, the publishers gave Amazon the stick it subsequently used to beat them:
“The Big Six’s pig-headed insistence on DRM on ebooks is handing Amazon a stick with which to beat them harder. [Their] 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.”
The Big Six gave Amazon the keys
Imagine for a moment if an ebook wasn’t locked to a specific platform, or even to a specific retailer. It may sound far-fetched, but only because we have all come to accept that the way the digital book business works now is the only way it could possibly function. That’s not the way physical books work — we are free to buy them from whatever retailer we wish, and while publishers have exclusive deals with certain chains, that doesn’t prevent us from doing whatever we want with the book after we have bought it.
By contrast, DRM locks — and related restrictions on things like lending or moving ebooks to a different platform — make the whole process of buying ebooks so complicated and unfriendly that many book lovers don’t even bother doing it in the first place. That’s arguably as big a problem as Amazon’s control over prices, if not bigger. How much larger could the ebook market potentially be if publishers hadn’t built those DRM walls around their content and given Amazon and Apple the only keys to unlock them?
Instead of seeing the ebook market as one that could grow their market in different directions, or offer different opportunities for revenue generation, most publishers saw it instead as a threat to their existing business, and did whatever they could to protect themselves from that threat. That’s where the impulse for DRM locks came from, and they have been paying the price ever since. In that sense, the Apple case is more of a sideshow than it is the main attraction.