Why Are Book Publishers Making The Same Mistake The Record Labels Made With Apple?
from the we've-seen-this-movie-before,-and-it-doesn't-end-well dept
Back in 2005, we noted that Apple’s dominance over the online music space, which upset the record labels tremendously, was actually the record labels’ own fault for demanding DRM. That single demand created massive lock-in and network effects that allowed Apple to completely dominate the market. If the record labels had, instead, pushed for an open solution, then anyone else could have built stores/players to work as well, and it could have minimized Apple’s ability to control the market. Yes, everyone is now opening up (including Apple), but it took a long time, and Apple had already established its dominant position.
So why are book publishers doing the same thing?
Farhad Manjoo has an interesting article in Slate where he notes that publishers are worried about Amazon turning into “the Apple of the book industry,” yet at the same time, they’re the ones who are pushing for DRM and limitations that will effectively lock users in to Amazon’s ebook platform for a long time. If the publishers had insisted on more open solutions, then a real competitive market could develop. That would be better for everyone. As great as the new Kindle is, it’s still rather expensive. Allowing others to enter the market would lead to greater innovation — making it easier for more people to get into the ebook reader market, and open up plenty of new opportunities for publishers. But the dumb and pointless infatuation with “DRM” and “protecting” works will basically hand the market over to Amazon for many years, and get many folks locked into to Amazon’s Kindle platform, even when more open solutions finally start to become popular.
Filed Under: drm, ebooks, kindle, lock in, publishers
Companies: amazon, apple
Comments on “Why Are Book Publishers Making The Same Mistake The Record Labels Made With Apple?”
iBooks
Amazon certainly want to become the Apple of books.
But it seems strange in a world where it is so easy to publish text to large numbers of people that book publishers are lagging so far behind.
They had all the warnings from the record companies, yet there are a bunch of popular .mp3 stores on the net and only one major book website. What went wrong?
I suspect the big stumbling block for publishers is they still view themselves as nothing more then content providers and gatekeepers.
The romanticism of paper books will likely insulate publishers from the worst of the digital generation for a few years yet, but not forever.
Re: iBooks
I think there are still one or two companies out there who’re making buggy whips at a profit… though I’m sure it’s not a big profit.
Re: Re: iBooks
My neighbor makes a living making bull whips and holds classes to teach using them and even workshops on making your own. Real bull whips, suitable for snapping the head off a snake or splitting a critter stem to stern. He also makes buggy whips on the side.
/It’s funny to see the city slickers buy the bullwhips as a novelty and end up snapping it back across their face.
Re: iBooks
“They had all the warnings from the record companies, yet there are a bunch of popular .mp3 stores on the net and only one major book website. What went wrong?”
Nothing. There are exactly as many businesses as the market will support. The fact is, ebooks are no more “the next big thing” now than they were the last time that prediction was made, or the time before. An ebook is a substantial downgrade from the “old” technology, so it is unlikely to ever gain ground unless the devices can be had for very cheap, and the books become a much cheaper alternative, which they currently aren’t. Even then, I don’t know many readers who would switch.
Check out Baen Books. They make the vast majority of their books available electronically on cd’s bound inside their books when they are first released in hard cover. The cd usually has two or three dozen books, in various formats, on the cd. Completely DRM free and you are free to copy and give them away. You just can’t charge for them. Doesn’t seem to have hurt Baen as they have been doing this for several years now.
Re: Re:
While Baen books does, in fact, include books on cd’s, it is no where near most of their books. Usually they will have one or two books of a series by an author, but not the whole series. The entire library fo material that is available for download can also be accessed through their website, but again, its no where near the majority of their titles.
Re: Re: Re:
The selection there changes frequently, however. So if you are a regular visitor, you could eventually read a large portion of the library that way.
Plus, isn’t it pretty smart to give away just the first book or two of a series? You hook the reader into the series, then they buy the rest. I don’t see your complaint. It’s a smart business move.
Re: Re: BAEN
It is usually all the previous ones in that series though. And they have many of the first few books in the different series on their home page.
It’s a great marketing strategy. After I borrowed the first Honor Harrington from a friend, then saw the web site and read the second, I turned around and bought all the books. Later, I gave them away, and bought them all again for myself. I wish more book companies did this. Especially for hard to find or out of print books.
Re: Re: Re:
While Baen books does, in fact, include books on cd’s, it is no where near most of their books. Usually they will have one or two books of a series by an author, but not the whole series. The entire library fo material that is available for download can also be accessed through their website, but again, its no where near the majority of their titles
You are confusing the free library with the CDs. The CD’s include several books that are not available from the Free library, including whole series. (typically, the latest book in a series or by a popular author will include a CD with the complete series, and possibly other complete series from the same author)
The vast majority of books they publish are also available as e-books from webscriptions. There’s more to Baen electronic publishing than the Free library.
Re: Re: Baen Books
Yes, but the books are about $6 each and you can download them DRM-free in multiple formats, including HTML. Because of this, I was able to write a converter program to translate my legally downloaded HTML eBooks from Baen into the FB2 format preferred by my “Hanlin V3” eBook reader.
The advantages of DRM-free eBooks are not theoretical – this would not have been possible with DRM’d eBooks! That’s why I will only ever buy DRM-free books.
Re: Re: Re:
While you are correct that Baen does not release most of their books for free, either on CD or on their web site, they do make a significant number of them available for free, and they sell all [or very nearly all] of their titles on their website in multiple unlocked e-book formats.
So I think the author’s original point is still valid: Baen makes all their e-books available without DRM (some for free, some for pay,) and it seems to be working very well for them, which makes the other publishers look really silly for insisting on locking up their content.
“Rather expensive” is putting it mildly for what is essentially a glorified flash card reader with the ability to download from a specific location. The whole “e-paper” thing doesn’t impress me in the least.
Like everything else, someone in China will come up with a vastly less expensive alternative using an open platform.
Re: Re:
Actually, the “e-paper” is totally cool. It only requires power to change the display, rather than constantly draw power like an LCD. So it *should* be an extremely green, low-power device.
Having said that, yeah, it’s an overpriced, inflexible piece of proprietary doggie doo.
As an added bonus, you even have to pay for public domain works that can be downloaded for free on the internet. $1.95 for Alice in Wonderland.
Curiouser and curiouser.
Re: Re:
“Rather expensive?” You get free cellular wireless wherever you are. Granted it can only be used for wikipedia, but nonetheless, thats still something. So, not only is their the price of the technology itself, but you get free access to a vast resource of knowledge, wherever you are (well, assuming you’re within range of the signal of course). Honestly, with that on top of the price, its not so bad.
Plus, eInk is pretty friggin’ amazing. Its the only thing thats going to allow for digital books. LCD screens will kill your eyes if you use it as a dedicated source to read a book, unless you keep the screen more than arms length from you. Its no secret that even computer monitors are still linked to worsening eyesight for people who stay in front of them for extended periods of time.
Re: Re: "Free wireless" isn't much of a feature
@Anonymous Coward — The “free cellular wireless” that you tout is IMO worse than useless: the most likely use I could see for a Kindle would be taking it on trips abroad instead of dragging books with me. But of course the CDMA Sprint hookup they use on the Kindle is U.S. only. And traveling is precisely when you won’t have your computer with you either, so over the air downloads would really be useful. Not putting WiFi on it instead was a dumb, dumb, dumb move.
Re: Re: Re:
“LCD screens will kill your eyes if you use it as a dedicated source to read a book…”
Not true. Take if from someone who’s been reading ebooks for years, starting with a color iPaq and currently using Stanza on the iPhone. High-density LCD screens give you high contrast ratios and much better readabilty under low-light conditions.
Try reading a Kindle. (I sent mine back.) The extremely low contrast (80% black text on a 25% gray page) is a killer under anything but optimum lighting conditions. Besides, I HATED those annoying flip-the-entire-screen-to-black page turns….
Re: Re:
Why wait for China? Roll your own. E-Ink sells developer samplers that are pretty much the guts of a Kindle. Add your own 3G/wifi radio and now you’ve got the device you really want, without the Amazon lock-in.
It’s a bit underpowered for a full Ubuntu build, like a netbook, but E-Ink tosses in the Linux distro they use. You can grab the drivers out of that and brew up your own.
Re: Re:
well the whole e-paper thing cost $150 million and took 20 years to develop.
http://www.google.com/url?sa=t&source=web&ct=res&cd=5&url=http%3A%2F%2Fwww.informatikforum.de%2Fshowthread.php%3Ft%3D111780&ei=tHOoSZC9NKPQMoqjlM4C&usg=AFQjCNG0xHMmIjsxAuvtWk4TYzdupX5NrQ&sig2=fJAoihHndAYI5a2hfOVixA
“Why Are Book Publishers Making The Same Mistake The Record Labels Made With Apple?“
That’s a really good question. If you think about the RIAA shooting itself in the feet by screwing over web radio and going after broadcast radio. If you think about Warner screwing over its artists by pulling their songs from YouTube and Rock Band. And of course all the related BS.
Basically, copyrights cause a sort of mental illness which keeps the holder from thinking and planning long term. There must be something intoxicating and blinding to be given a government monopoly cash cow.
Of course the pharmaceutical industry will never come up with a cure, it’s probably all tied up and buried in patents.
Re: Re:
“Of course the pharmaceutical industry will never come up with a cure”
There is no money in curing people, just attempting to cure them, that’s where the money is!
Re: Re:
“Basically, copyrights cause a sort of mental illness which keeps the holder from thinking and planning long term. There must be something intoxicating and blinding to be given a government monopoly cash cow.”
This is one of the dumbest things I have ever read! Copyrights exist so that the creative people who originated the art get to keep the money generated by it. That IS thinking long term, since royalties are the 401Ks of artists. Writers and artists are self-employed, self-insured (maybe) who need and deserve the fruits of their labor. Only a moron liberal would suggest that it’s greedy for people to think they are entitled to the money their hard work produces. You want something for nothing? You want to be able to pay piddle or steal off the internet because….you want it, right now, even if it belongs to someone else? Who the hell do you think you are?
By the way, patents are something else entirely. Not art, but an diagrammed explanation for a given product. You are totally right about the evil pharmas. They would watch us all die, although who would buy their shares then is beyond me.
Re: Re:
“Basically, copyrights cause a sort of mental illness which keeps the holder from thinking and planning long term. There must be something intoxicating and blinding to be given a government monopoly cash cow.”
This is one of the dumbest things I have ever read! Copyrights exist so that the creative people who originated the art get to keep the money generated by it. That IS thinking long term, since royalties are the 401Ks of artists. Writers and artists are self-employed, self-insured (maybe) who need and deserve the fruits of their labor. Only a moron liberal would suggest that it’s greedy for people to think they are entitled to the money their hard work produces. You want something for nothing? You want to be able to pay piddle or steal off the internet because….you want it, right now, even if it belongs to someone else? Who the hell do you think you are?
By the way, patents are something else entirely. Not art, but an diagrammed explanation for a given product. You are totally right about the evil pharmas. They would watch us all die, although who would buy their shares then is beyond me.
DRM = more money today
simple as that
On the nail...
I quite agree. It gets more ridiculous when buying an electronic copy of a book costs more than the paper version – pure absurdity.
@mike42: No you don’t. You can put anything on the Kindle. PDF, txt, mobi formats are supported. You can pay .10 to email a document one of those formats directly to your Kindle, or use the “free” email address you get to simply convert the PDF, etc to the Kindle format and mail it back to you as an attachment.
Then you can just drag and drop them to your Kindle.
So it does actually support open formats. Amazon will convert them to the Kindle format.
It’s not as easy as ripping CDs in iTunes, but it’s there.
@Michael Foord:
“buying an electronic copy of a book costs more than the paper version”
No it doesn’t. New release hardcovers are like $16-25. Kindle versions are $9.99.
Brand new paperbacks are usually $6-8. Kindle versions are less.
And as another poster said, there’s nothing stopping anyone from torrenting books and putting them on the Kindle. Free.
Re: Re:
And why are they $9.99 on the Kindle? Hardcovers cost more than paperbacks, but you also get a more durable, collectible book with larger, higher-quality print. $9.99 is more than the paperback…and you get nothing but a glorified text file.
Re: Re: Re:
Let me make it clear: I understand that Kindle charges less once a book is in paperback. But, they should NEVER charge more than paperback price. With a hardcover book, there is a benefit to the buyer beyond getting the book sooner: they get a better quality book. With the Kindle, they’re paying more just to have it now, but there is no other benefit. Plus, there is no printing or distribution cost to the publisher, so they should be willing to charge a dramatically lower price.
Last, you are compared SRP to Kindle’s price. In reality, a lot of hardcovers can be purchased at their release for 30-40% off in department stores, which significantly narrows that price gap. $12-16 is a common price to pay for a hardcover at Wal-Mart.
Re: Re: Re: Re:
“$12-16 is a common price to pay for a hardcover at Wal-Mart.”
Yeah, if it’s one of the dozen or so they bother to carry.
Re: Re:
“No it doesn’t. New release hardcovers are like $16-25. Kindle versions are $9.99.
Brand new paperbacks are usually $6-8. Kindle versions are less.“
That makes no sense. First you say that Amazon sells ebooks for $9.99. Then you say that Amazon sells ebooks for less than $6-8 the cost of “brand new paperbacks”.
Unless Amazon sells its Kindle ebooks in both a “paperback” and a more expensive “hardcover” form, which I do not understand at all.
Re: Re: Re:
“That makes no sense. First you say that Amazon sells ebooks for $9.99. Then you say that Amazon sells ebooks for less than $6-8 the cost of “brand new paperbacks”.
Unless Amazon sells its Kindle ebooks in both a “paperback” and a more expensive “hardcover” form, which I do not understand at all.”
Ima, I’m guessing that the 9.95 price is in effect while only the hardcover book is available. Paperbacks versions come out many months later and then I’m guessing the Amazon price drops to the lower price.
Re: Re: Re:
I believe it’s a time based two-tier pricing model.
$9.99 while the book is only out in hardcover, to not eat away at too much of the hardcover print sales (probably something the publishers insisted on).
Less than the paperback cost, once it comes out in paperback.
I would assume that direct-to-paperback books (the majority) go out on Kindle at the lower price to start with.
You can fault publishers for being a little slow on the uptake overall, but this particular thing makes sense. Most of the profit in books is in high sales popular hardbacks, and killing those sales would tank the industry at the moment. What the future holds for publication models is an open question, but right now, this is an obvious smart move on everyone’s part.
Re: Wait What?
They actually charge more for digital copies of hardcover books?
…
Ok, I just had to read what I just wrote again because much like Chewbacca being a Wookie who lives on Endor, this does not make sense.
The reason hardcover books cost more is because of the hard cover (duh). Why the hell is Amazon charging more for a ‘feature’ that doesn’t even apply to a digital copy? Unless the Kindle grows lips and gives me a blowjob every time I download a hardcover book, there’s no way they can justify that.
Re: Re: Wait What?
Ah never mind. Didn’t even see the other responses here. Yeah I guess it makes a bit of sense charging more for the ‘hardcover’ version until the soft cover comes out.
I didn’t know you could upload your own stuff to the Kindle. This might make it kinda useful for carrying around my massive collection of engineering e-books. Too bad the damn thing costs so much.
iPhone & Touch will Dominate
eBooks for the iPhone and Touch are smoking the kindle for breakfast. The Kindle as sold tens-of-thousands of units while the iPhone & Touch are well in the tens-of-millions.
YEAH ????
Apple and iTunes has been a real disaster . . . who would want to emulate that model?
Re: YEAH ????
Holy cow, I know! How many billions of songs have been sold there? Such a waste.
Fruity Boob Tube....stage right
Time to revive Apple TV with the Apple Television!
http://dougitdesign.com/blogs/blog_1_12_09_Is-Apple-about-to-put-the-television-into-Apple-TV.html
eBooks
A pocket PC(or PDA) is a GREAT book reader. In most cases it is better than a book – you can read it one handed, you can hold THOUSANDS of books in a 99p ($1) SD card. You can read it in the dark and with the best reader you NEVER lose your place. Thousands of the BEST books are available FREE and the latest books are NOT usually the best. So pick up a PDA on eBAY for £40 ($70) and load it up with more books than you could read in a lifetime for zero cost.
Books vs e-books, vs audio books
I read books. I read a lot of books. I don’t care if I’m reading a paper book, or an e-book (I love my Sony PRS-500), or listening to an audiobook (Audible is a godsend for long car trips).
I understand that publishers want to make money. It takes a long time to write a good book. Much longer than it takes to write a good song.
However. Yes, there is a however. A paperback book is cheaper to produce than a hard cover book. Thus it makes sense that a paperback book is cheaper than a hard cover book.
An e-book is cheaper yet. Why then does an e-book cost more than a paperback book? Why do they sometimes cost more than the hard cover edition? This is not an attempt to move into a new age of books, this is pretending to care while quietly hoping it goes away.
Audio books are more expensive to produce than e-books. And yet… and yet… I buy e-books from audible at approximately the same price as a paperback.
Publishers need to learn that this is a market which they can make a killing in. E-books allow publishers to make more per copy than paperbacks. If publishers were to set their pricing at the same level as paperback books they would see an increase in purchases, resulting in increased profits.
With books, as with music, if price gouging continues then people will turn to alternatives. Most of these alternatives result in a lowered profit for publishers.
Re: Books vs e-books, vs audio books
Actually the problem with ebooks is another one and traces back to a difference between authors of books and music artists.
The price of producing the n-th copy of an ebook is nearly zero so the price of ebooks will eventually go down to zero, just like the price of any other digitalized good.
Music artists could give away their songs for free and still be able to make a living out of concerts. It’s not clear how an author will be able to get money when the income from selling books will be gone. Are we going back to an era of travelling storytellers?
So easy
“…then anyone else could have built stores/players to work as well”
Right, because it’s just so easy to do that.
Re: So easy
Right, because it’s just so easy to do that.
No one said it was “easy,” but at least others could and likely would be able to offer products in the market.
But, you know, nice to put words in my mouth rather than respond to the actual points.
Re: Re: So easy
“at least others could and likely would be able to offer products in the market”
No, you said, “..then anyone else could have built stores/players to work as well”.
Guess what, for half a decade everyone and his brother from Redmond to Tokyo did try to do just that, in hardware, software and services. Some several times. They could NOT pull it off.
Some like Real and DVD Jon actually tried to hack FairPlay. Others like Dell tried to bribe you with a DJ if you were willing to give up on the iPod. Many tried subscriptions, pre-loading players, suing Apple, and so on. Not one of these worked.
And you’re here to tell us, they could have just done it. It was just the DRM. Right.
Apple Dominant??
Apple doesn’t “dominate” any market. Even if you restrict yourself to “legitimate” (Big-Content-sanctioned) downloads, the ringtones market alone is several times the size of the iTunes store.
And if you include illegitimate downloads, Apple shrinks down to a drop in the bucket.
Re: Apple Dominant??
“Even if you restrict yourself to “legitimate” (Big-Content-sanctioned) downloads“
If you restrict yourself to legitimate downloads of AAC formatted songs, I think Apple wins.
But like you said, compared to the money made on ring-tones, iTunes doesn’t have much to brag about.
RE: Books vs e-books, vs audio books
“However. Yes, there is a however. A paperback book is cheaper to produce than a hard cover book. Thus it makes sense that a paperback book is cheaper than a hard cover book. An e-book is cheaper yet. Why then does an e-book cost more than a paperback book?”
The return on investment for books is like releasing a movie. The real money is made at the first run theatres before it moves to video and PPV. Same with books which is why hardcover and paperback do not have simultaneous release dates. Selling ebooks even at 9.99 is cutting into traditional revenue streams during the early release phase.
Publishers ask this question every day
I’ve actually spoken with a fair number of publishers about this very issue. They’re always asking how they can avoid making the same mistakes the recording industry made. Sadly, they never seem to think the answer applies to them.
They underestimate the impact that DRM has on shaping the marketplace for digital content. Somehow they imagine that Kindle’s increasing market dominance will be eroded when new ereaders become available. Never mind the fact that those readers will be using a competing and incompatible DRM scheme.
More here:
http://medialoper.com/hot-topics/amazon/the-authors-guild-vs-kindle-2-could-users-be-held-liable/
Doh! I’m lame. Wrong link. More here:
http://medialoper.com/hot-topics/drm/when-the-smell-of-books-becomes-the-stench-of-drm/
But, we *want* Amazon to become the Apple of Books!
I’m an academic. Publishers in my field have long since pushed the prices of technical books to the point where not only can I and my students not afford them, but libraries cannot either. EBooks are ultra cheap to produce, and in academic realms the work is done by people who are not looking to make serious money by authoring books. (I’m putting aside textbooks here.) When I look at the prices that technical publishers are beginning to ask for in e-versions of their books, it’s ridiculous Pennies less than the print versions, if that. What I want is someone to kick their greedy hinders and force them to lower their prices, as Steve Jobs did with music. At present Jeff Bezos is doing squat to make this happen, partly because he’s no Steve Jobs, but also partly (I hope) because he’s not yet in a position to do so.
I think it’s really simple. People prefer to hold onto what they know and understand.
There are enough examples throughout history to demonstrate that a conservative response to change is ultimately doomed to failure. The agricultural revolution, industrial revolution, Edison’s recording technology, Ford’s automobile, radio, tv, there are countless others. That doesn’t prevent fear of the unknown from dominating thinking. It is part of the human condition.
The industry leaders (sic) are trying to hold onto what they know and understand. DRM is to them the answer to the ‘threat’ this new fangled technology represents. It’s disappointing, but hardly unexpected that book publishers would react in the same way that their fellows in the music industry did.
If there’s one thing to learn from history, it’s that people don’t learn from history.
At least when it comes to the publishing industry there are examples of real leadership like Baen books who have embraced change and been DRM free for years. The music industry didn’t have such examples when they made their mistakes.
COST BENEFIT OF E-BOOKS
E-books are quite useful and interesting but cannot at this stage compete with paper books. The cost of the readers are high and the cost of content is high. Why should I pay $10 for an electronic title (plus the $350-400 cost of the reader amortized) when I can buy the paperback for $8 or even less. On top of all that some readers, Sony’s in particular, live in a totally Windows world, so tough tit to you Mac users. Kudos to Kindle that it acknowledges that Mac users are also readers.
In terms of content, Baen Books have the right idea on the release of older titles which I am sure spur the purchase of newer releases.
I use an e-reader but prefer a book for a variety of reasons including cost of content.
Some books should be sold by the chapter
The thing that really drew me to iTunes was the ability to buy just the songs I wanted. I was tired of being forced to purchase an entire CD when I only liked one or two of the songs. The great advantages of my iTunes library are: (1) It contains 100 percent songs like I like, (2) I can search it instantly, and (3) I can output it to my computer, earbuds, iPod, iPhone, and then to my car stereo. I have a lot more control over my music.
Many books are the same. I have a cookbook collection but I never make desserts. I would rather not have bought the chapters with desserts. I’d also like to be able to search my cookbook collection for that great recipe we tried last year. Then I’d like to be able to output that recipe to a printer, iPod, or laptop.
Travel books are similar. We have a vacation planned to France this year. We’re going to Brittany and the Dordogne regions. But the France travel books dwell on Paris and devote precious little space to the regions we’ll be visiting. I’d rather buy the relevant chapters from multiple travel books.
as far as eBooks go ...
Amazon’s platform sucks. Who wants to buy a kindle? At least with ITMS you can use iTunes AND iPods (not to mention burn CD’s and then take your content anywhere you want). With kindle you need to use kindle, period. As far as them committing to DRM for all their books, good! It leaves the market open for someone else to come along and make some good competition.
For the paper book world (or as I like to call it, the analog books, they have been leading that market for years, but they are not the “Apple” of it by any means, they still have some stiff competition on many fronts (B&N, books a million, in canada chapters). A lot of people that are buying analog books still want to pick them up and touch them and look at the physical product so a trip to a local bookstore happens quite often. In that analogy I don’t know when I last visited a CD/record store.
eBooks
Does Amazon take 55% of Kindle sales like they do on books?
Re: eBooks
They guarantee something like 35% of full retail to the writer and/or publisher.