Imagine buying a car that locks you into one brand of fuel. That new BMW only runs on BMW gas. There are plenty of BMW gas stations around, so convenience isn't an issue. But if a different brand of gas station offers a discount, a membership program, or some other marketing campaign, you can't participate. You're locked in with the BMW gas stations.
This could never happen in the real world, right? Consumers are too smart to buy into something like this. Or are they? After all, isn't that exactly what's happening in the e-book world? You buy a dedicated e-book reader like a Kindle or a Nook and you're locked in to that company's content. Part of this problem has to do with e-book formats (e.g., EPub or mobi) while another stems from publisher insistence on the use of digital rights management (DRM). Let's look at these issues individually.
Platform Lock-in
Here's Amazon's not-so-secret formula: every time I buy another e-book for my Kindle, I'm building a library that makes me that much more loyal to Amazon's platform. If I've invested hundreds of dollars in Kindle-formatted content, how could I afford to switch to another reading platform?
It would be too inconvenient to have part of my library in Amazon's mobi format and the rest in EPub. Even though I could read both on a tablet, I'd be forced to switch between two different apps. The user interface between any two reading apps is similar but not identical, and searching across your entire library becomes a two-step process since there's no way to access all of your content within one app.
This situation isn't unique to Amazon. The same issue exists for all the other dedicated e-reader hardware platforms (e.g., Kobo, Nook, etc.). Google eBooks initially seemed like a solution to this problem, but it still doesn't offer mobi formats for the Kindle, so it's selling content for every format under the sun—except the one with the largest market share.
EPub could be the answer. It's a popular format based on Web standards and it's developed and maintained by the International Digital Publishing Forum, an organization focused on openness and broad industry adoption. It also happens to be the format used by every e-book vendor except the largest one: Amazon.
Even if we could get Amazon to adopt EPub, we'd still have that other pesky issue to deal with: DRM.
The Myth of DRM
Publishers saw what happened in the music industry and figured the only way they'd make their book content available digitally was to tightly wrap it with DRM. The irony is that some of the most highly pirated books were never released as e-books. Thanks to high-speed scanner technology, any print book can easily be converted to an e-book and distributed illegally.
Some publishers don't want to hear this, but the truth is that DRM can be hacked and does not eliminate piracy. It not only fails as a piracy deterrent, but it also introduces restrictions that make e-books less attractive than print books. We've all read a print book and passed it along to a friend. Good luck doing that with a DRM'd e-book! What publishers don't understand is that DRM implies a lack of trust. All customers are considered thieves and must be treated accordingly.
In a terrific blog post entitled "Cutting Their Own Throats," author Charlie Stross argues that publishers' fear has enabled a big e-book player like Amazon to further reinforce its market position, often at the expense of publishers and authors—an unintended consequence of DRM. Given all these issues, why not eliminate DRM, since even the music industry has seen the light and moved on from DRM.
Lessons from the Music Industry
Several years ago Steve Jobs posted a letter to the music industry pleading for DRM to be abandoned. My favorite part of that letter is where Jobs asked why the music industry would allow DRM to go away. The answer: "DRMs haven't worked, and may never work, to halt music piracy." In fact, a study last year by Rice University and Duke University contends that removing DRM can actually decrease piracy.
I recently switched from an iPhone to an Android phone and wanted to get my music from the old device onto the new one. All I had to do was drag and drop the folder containing my music in iTunes to the SD card in my new phone. It worked perfectly because the music file formats are universal and there was no DRM involved. At the moment, incompatible file formats and DRM prevent that from happening with e-books. At some point in the not-too-distant future, however, I'm optimistic the book publishing industry will get to the same stage as the music industry and offer a universal, DRM-free format for all e-books. Then customers will be free to use whatever e-reader they prefer without fear of lock-in and incompatibilities. The music industry made the transition; why can't we?
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