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April 18, 2012
Will General Trade Publishers Kill DRM to Break Amazon's Death-Grip on Consumers and the Publishing Industry?
In What Amazon's ebook strategy means, Charlies Stross writes that "[b]y foolishly insisting on DRM, and then selling to Amazon on a wholesale basis, the publishers handed Amazon a monopoly on their customers—and thereby empowered a predatory monopsony." In view of the DOJ antitrust lawsuit, Stross thinks
If the major publishers switch to selling ebooks without DRM, then they can enable customers to buy books from a variety of outlets and move away from the walled garden of the Kindle store. They see DRM as a defense against piracy, but piracy is a much less immediate threat than a gigantic multinational with revenue of $48 Billion in 2011 (more than the entire global publishing industry) that has expressed its intention to "disrupt" them, and whose chief executive said recently "even well-meaning gatekeepers slow innovation" (where "innovation" is code-speak for "opportunities for me to turn a profit").
And so they will deep-six their existing commitment to DRM and use the terms of the DoJ-imposed settlement to wiggle out of the most-favoured-nation terms imposed by Amazon, in order to sell their wares as widely as possible.
If they don't, they're doomed. And all of us who like to read (or write) fiction get to live in the Amazon company town.
I would like to hope that the general trade publishing industry moves to a DRM-free eBook business model based on an ownership model instead of a licensing model but I have my doubts. The industry can escape the the death-grip Amazon has on both consumers and themselves by concentrating their sales efforts on their own eCommerce sites while preserving DRM like legal publishers of eBooks do on an exclusive basis for individual consumers. Why not eliminate the middleman and offsource tranactions to India (or China) to reduce the cost of direct sales.
For additional commentary and analysis on LLB, see Mark Giangrande's Some Thoughts on the DOJ Lawsuit Against Apple and the Publishers. [JH]