Fact ...

The more "Big [though shrinking] Six" publishers artificially and absurdly inflate eBook prices, as they've been doing, the more they encourage piracy. And DRM won't save them.

Turow & Authors Guild Not Just Out of Touch on the Subject of eBook Pricing, but also ...

on DRM, "piracy," copyright and other things that go bump in the night. Last month, Mike Masnick @ Techdirt: " ... as the Authors Guild continues to have out-of-touch, fact-challenged people lead it, it's only going to serve to drive younger authors away from the Guild. Smart authors today recognize the maxim that obscurity is a much bigger threat than piracy, and many have come to figure out that piracy is nothing to fear if you have a smart business model. If Turow and the Authors Guild really wanted to help authors, they'd focus on helping them understand new business models, rather than supporting ever more draconian laws that will do nothing to help and plenty to hurt."

Video: Neil Gaman Explains How Piracy Helps New Readers Discover His Work, and Thus Helps His Overall Sales in the Long-Run

Scorned librarians and the eBook piracy underground

Violet Blue, ZDNet: "E-books and the ability to share or not to share them: that is the question every publisher and distributor is agonizing over. But no one seems to be answering it with anything short of clutching their petticoats and jumping up on the nearest chair."

Want to Read The Daily? No iPad, No Problem!

Yeah, but what lesson will the Times take away from this info? NYTimes: "Well, that didn’t take long. The Daily, Rupert Murdoch’s big push into iPad-based publishing, was introduced on Wednesday. And on Thursday morning, an unsanctioned Web site appeared with links to every article in The Daily, free on the Web. ... "

Magellan Media's Brian O'Leary: Data Needs to Drive eBook Piracy Debate

Jenn Webb, O'Reilly Media (via Forbes) Interviews O'Leary: "As digital book publishing continues to expand at a rapid pace to meet reader demands, piracy rears its head at the forefront of many a discussion in publisher circles. Many publishers respond to the perceived threat with strict digital rights management (DRM) software. But is this the best solution? And does it even provide protection from piracy?" O’Leary (@brianoleary) discusses "the current state of book piracy, how measurement data isn’t sufficient to determine its impact, and why DRM is a poor anti-piracy tool." Note: New Street Communications, LLC never inflicts DRM on the purchasers/readers of its eBooks.

Japanese Publishers Threaten to Bite Apple

Digits - WSJ: "A Japanese consortium of book, e-book, magazine and digital comic publishers issued a stern rebuke of Apple’s enforcement of copyrights on its App Store. The group said certain works by renowned Japanese authors Haruki Murakami and Keigo Higashino have been illegally scanned and distributed over the App Store. In a joint press release on Tuesday, the Japan Book Publishers Association, the Japan Magazine Publishers Association, The Electronic Book Publishers Association of Japan, and Digital Comic Association said Apple’s distribution of content that clearly infringes copyright is 'illegal.'"

At Last, a Common Sense, Non-Paranoid Consideration of eBook Piracy, and Its Future

Keir Thomas, PCWorld Business Center:

... One of the reasons the MP3 piracy scene was possible was that, along with the capability to shrink music to a 4MB file, it was built around a standard file format, MP3, which was supported by every media player. DivX brought the same standardization to movie piracy. In both cases, an entire ecosystem arose, based around the common file format.

EPUB is supposed to be the e-book standard file format, but by refusing to adopt it for the Kindle, Amazon is taking one step towards stopping a piracy ecosystem developing for e-books. Conversion to a compatible format is, of course, entirely possible, but Amazon may be hoping that the difficulty and hassle of doing so will put many off.

The other strategic difference when e-book readers are compared to media players is that e-book readers usually have built-in bookstore browsers. This was the failing that initially allowed MP3 piracy to gain a hold. In the late 90s, people had MP3 players and software but no legitimate source of MP3s, other than ripping them from CDs. It took Apple and the development of iTunes to bring some order to the chaos, to the extent that now most people are happy paying for music, and piracy is limited to a hard core of people who never had any intention of paying anyway.

While there are still many questions over e-book pricing, statistics released from the likes of Amazon indicate that people are happy making use of e-book stores straight from their devices. While piracy will always be an issue for any organization offering creative content online, all the signs are that those behind e-book readers have thought things through so that they're able to avoid e-book piracy being a necessity, and also less of a temptation. ...

"Your time is up, publishers. Book piracy is about to arrive on a massive scale ... "

Fascinating essay. Big subtext for me: Why easy pirating capacity will ultimately force all eBook prices down, and why the Agency Model may well be the knife with which large publishers cut their own throats. Adrian Hon, Telegraph Blogs: "If book publishers want to see the next decade in any reasonable health, then it’s absolutely imperative that they rethink their pricing strategies and business models right now. I hope this example will illustrate why ... "

Piracy and the Agency Model

We've seen the recent study from Attributor talking about the increase in piracy of eBooks. Interesting to see how this increase is timed, to some extent in step with price-gouging from big six publishers through the terms of the Agency Model. The formula is simple: drive up the price, expect more piracy.

Study: Arghhhh Matey - E-Book Piracy on the Rise

ReadWriteWeb via NYTimes.com: "As the popularity of e-books and e-readers continues to increase, e-book piracy is also growing rapidly. According to Attributor, a company that develops anti-piracy and content monitoring solutions, the daily demand for pirated books can be estimated at up to 3 million people worldwide. The company's latest study also highlights that the total interest in documents from file-sharing sites has increased more than 50% over the course of the last year. Interestingly, e-book piracy is moving away from large sites like RapidShare to smaller sites and those that specialize in pirated e-books."

Authors Guild, Turow, Piracy Redux

Re: My earlier post of today regarding piracy and Authors Guild prez Scott Turow. A friend just sent me this open letter to Turow written a week or so ago by Brian O'Leary of Magellan Media Consulting Partners. O'Leary hits many of my same points, only better. Note especially this:

I do believe that there are markets in which digital book piracy is a net loss - college textbooks may provide the most direct example. But I also believe that there may be markets, and authors, for whom piracy helps improve awareness, trial and paid sales.

That’s why we started studying the impact of piracy on paid sales almost two years ago. On an admittedly limited sample (something we’d like your help to grow), we’ve found an apparent correlation between piracy and subsequent growth in paid sales.

Now, you recently told GalleyCat’s Jason Boog that “…the larger problem for us is the pirating of books”. I ask, simply, “How do you know?”

There are no reliable studies of the impact of piracy in the book business. Because our sample set is limited, I include our own work to date in that bucket. The studies that are cited most often are based on sampling techniques that try to track the instance of piracy, then apply an assumed number for “substitution rates” (lost sales).

The Government Accounting Office recently “assessed the assessments” of digital piracy and found them all lacking. That’s not the final word, but it’s an indication that conclusions drawn on the limited data available are premature, at least. ...

The Grateful Dead, The Economy of Ideas, And Reconsidering the Notion of eBook Piracy

I'm just now noting month-old comments from Authors Guild president Scott Turow citing the "pirating" of eBooks as a large problem.

Two points.

1) I wonder how he has quantified this. I mean, what's the methodology? Given the extent to which all the major players load their editions up with DRM, I'm skeptical of the risk.

2) More importantly, however, I wonder how much of a detriment piracy actually is. Are we even correct in viewing piracy as something we actually want to avoid? There's evidence that piracy (in my view: free word-of-mouth) grows reputations and thus fuels legitimate sales.

So, the question: Do we need DRM? The Grateful Dead used to create a dedicated space at their concerts for people who wanted to record bootlegs of the band playing live. They encouraged the exercise and, in effect, gave away their work (their "content") for free. In turn, the band's reputation/fanbase grew exponentially.

As regards books, per Michael Shatzkin, there's little evidence file-sharing reduces sales. Shatzkin points to science fiction writer Cory Doctorow who "does the best he can to give away as much of his content as possible." The result? Doctorow's sales continue to boom.

I am reminded of a statement in "The Economy of Ideas," that seminal 1994 essay by Grateful Dead lyricist, EFF co-founder, Berkman Center Fellow, and (now) New Street Communications Editorial Advisory Board member John Perry Barlow: "The increasing difficulty of enforcing existing copyright and patent laws is already placing in peril the ultimate source of intellectual property - the free exchange of ideas ... unbounded intellectual property is very different from physical property and can no longer be protected as though these differences did not exist. ... if we continue to assume that value is based on scarcity, as it is with regard to physical objects, we will create laws that are precisely contrary to the nature of information, which may, in many cases, increase in value with distribution."

Here is Barlow making the same point - click the center "play" button:

The Need for an Agnostic Universal eBook Format and Universal DRM

Thanks much to Tim O'Reilly for drawing my attention to this very important Reuters item which comes via Wired:

... Both [Amazon and Apple] want their devices — the iPad and the Kindle — to be the one consumers use to read e-books, and each wants to be the biggest virtual store were such content is sold.

For Michael Serbinis, chief executive of Kobo, a company that allows users to buy e-books and read them on most devices, that battle is a distraction to the real changes coming.

“Today you can buy a book at Barnes and Noble and you can buy a book at Walmart and you don’t have to keep them in separate rooms in your house,” he said. “You buy a book from Apple and Amazon and you have got to keep it tied up with your Apple universe or your Kindle universe.”

Ultimately, consumers want freedom, said David Shanks, chief executive of leading publisher Penguin Group USA.

“Our fondest wish is that all the devices become agnostic so that there isn’t proprietary formats and you can read wherever you want to read,” Shanks told Reuters. “First we have to get a standard that everybody embraces.”

The issue, he said, is the fear of piracy and how to set a common digital rights management system to thwart it. ...

eBook Piracy and DRM Headaches

From Robert McGarvey writing on Internet Evolution:

... On Wednesday last week, at the huge Book Expo America (BEA) tradeshow in New York, RR Bowker vice president Kelly Gallagher previewed the latest round of comprehensive e-book data arising from the Book Industry Study Group's ongoing research into consumer e-book behavior.

The data is fascinating: E-book purchasing definitely ticked up hugely in the first quarter of 2010 (it now represents 5 percent of book sales dollars, a leap from the 1.5 percent registered in 2009). Even more telling is that a surprising 49 percent of book buyers "strongly" or "exclusively" prefer e-books, per BISG research. An unavoidable conclusion is that e-books are on the fast track to becoming the preferred medium.

But when asked by a reporter if the study had generated insights into piracy of e-books, Gallagher indicated that nothing meaningful had surfaced -- which is another way of saying publishers just don't want to look under that particular rock.

Another reality: The DRM (digital rights management) slapped on e-books does not work. "DRM has never worked, pirates have plenty of tools to get around it," wrote Ernesto in an email.

What DRM does do, incidentally, is annoy consumers, per the BISG study. More than one third of the hundreds polled said DRM upsets them, noted Gallagher, and that is up from 28 percent in polling last year. Only 30 percent said DRM does not bother them. Gallagher summed up the findings: "Consumers are increasingly frustrated with the DRM they encounter with e-books."

Is the frustration with DRM enough to prod consumers to pirate e-books? That's the other question of the moment, and when piracy expert Brian O'Leary, a principal at Magellan Media Partners, was asked about this at BEA, he said that as long as legal e-books are convenient to purchase at prices consumers deem fair, he does not envision a rampage of piracy. ...

More about the eBook trends and above research as discussed at BookExpo can by found in this report from Publishers Weekly's Jim Milliot.