ebooks, monopolies, monopsonies, DRM and me

I was late last night reading. I had finished reading Evan Currie’s Valkyrie Burning (Warrior’s Wings Book Three) on Amazon. I went looking for new publications from Evan which included The Heart of Matter: Odyssey One. But there was a change in price, The Heart of the Matter is $7.99. Sure it’s not a lot of money. But I’ve previously bought 4 of Evan’s books (including the price I paid):

So from an average price of $3.49 to a new book of $7.99. A 229% price increase. I want my authors to get paid. I like them earning more and generating more and better content. But a 229% price increase, and it’s not just the popularity of authors but current events and my choice of operating system that have me paying more. So I support an author and they become “famous” or “popular”, and I’m am supposed to grin and bear it because I can. I’m all for paying for integrated services, I’m all for authors earning more, I’m all for a better experience. But seriously a 229% price increase, something doesn’t feel right.

Amazon Prime pricing for $0.00

But wait, I can get the book for $0.00 as a Prime member. I didn’t think Amazon Prime was available to me in Canada. I was on Amazon.com, but my credit card and my shipping address is Canadian. Maybe with hope that Amazon Prime was finally available in Canada. I don’t think so, Kindle Owner’ Lending Library is only available in the US. I was just being hopeful that perhaps another large company had decided to invest in the Canadian market, much like Netflix and take on the regional licensing restrictions. </sigh>

I am trying to better understand the implications of my choices, i.e, buying and consuming DRM books in a closed ecosystem (see Kindle SF). I like integrated services. I like unified experiences. But I don’t like being taken advantage of, or having freedoms taken away.

Distribution, Disintermediation, and Monopsony

I was trying to understand Amazon’s ebook strategy and what its implications mean for me as a consumer in Canada.

We’re use to monopolies, well really ogliopolies (wireless companies, banks, internet service providers, we’re good on this one) and monopsonies (Canadian Wheat Board that ended Aug 1, 2012) . But I was surprised in Charles Stross’ analysis of Amazon, was they were playing both sides of the monopoly/monopsony market equation.

“And the peculiar evil genius of Amazon is that Amazon seems to be trying to simultaneously establish a wholesale monopsony and a retail monopoly in the ebook sector.” Charles Stross

One explanation for the increase in kindle prices is predatory pricing. And it’s not like the DOJ is investigating Amazon, Apple and the big six publishers for predatory pricing of ebooks. This has disintermediated retailers and how consumers purchase and consume books. Next to disintermediate the publishers themselves, and Amazon with Kindle Direct Publishing has given authors a way to get large distribution and forego publishers. The ebook market is growing at 200 percent per year, and Amazon owns “70 to 80 percent of the [ebooks] market“.

 “By 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.” Charles Stross

Crap, I fell for it. Other consumers fell for it. Publishers fell for it. What to do next?

“And the only viable Plan C, for breaking Amazon’s death-grip on the consumers, is to break DRM.” Charles Stross

O'Reilly eBooks Advantage - No DRM

This means changing my behaviour to support authors and publishers that publish DRM-free content. Thank you O’Reilly, all of the technical books I’ve purchased are available without DRM. It also means that I might consider removing the DRM from my existing Kindle purchases, oh wait, I can’t do that any more. It might violate the Terms of Service for Kindle, which you, like me, probably didn’t read. It’s too bad that I have bought a “limited license to use the product, rather than actual ownership of an object” with the ebooks (yah, it surprised Bruce Willis about his iTunes collection). It is why for a long time, I purchased movies on DVD rather than iTunes. At least, I could back them up.

But the goal isn’t to put the books back on my Kindle, but to have a back up copy that is future proofed.

Bill C-11 and Changes in Canada

But I can’t do that in Canada since Bill C-11 which passed in June 2012. It includes a digital locks provision that is “one of the most restrictive digital lock approaches in the world“. It seems that my worries in Dissident, Citizen were more about the Canadian government. And it seems that my worst nightmares about copyright and content are coming true.

I am going to have to rethink all of my media consumption behaviours. Ranging from ebooks to mp3s to DVDs.

I’m starting to really understand companies like Wattpad, Smashwords, CD Baby, O’Reilly and others that offer distribution, monetization and consumer choice related to DRM.

Additional Reading

  • http://yousayyeah.com Lee Dale

    This is currently a major issue across all forms of media other than music (the Bruce Willis rumor was not correct in its implied interpretation of the iTunes music license – though there is a lack of clarity there).

    Back to books: we’re stuck in the no mans land between paper (printing, shipping, lack of portability) and DRM (more immediately convenient, but sure to be a pain in the ass across platforms and devices).

    On the one hand, the Kindle is missing a requirement for reading large volumes of text (for some of us, at least) – hyphenation. So I’ve managed to steer clear of getting sucked into the Amazon DRM jungle. But every time I want to get a book I jump to iBook for convenience, and then I remember DRM. (Side note: I sure would rather read on a Kindle than my iPad – lighter and easier on the eyes. Alas, even the just announced Kindles remain free of hyphenated text.)

    Now, I remember DRM because it was a massive pain in the ass when I was buying DRM music and, in one specific example, couldn’t play it for friends, on my own computer, even with my password (other licensing limitations got in the way). That was the last time I bought a DRMed piece of music.

    And just like music, books are meant to be read and shared (I have no issue with being asked to transfer ownership) and/or reread. In a DRM world, good luck. If a DRMed book is cheap enough, fine ($2.99ish), but the last one I added to my wish list was $14.99. For that, it better be DRM free.

    And as much as I enjoy reading design books (I’ve got most of Rosenfeld’s books – DRM free), the mind withers at the possibility of reading only DRM free books given the current crop of options.

    So, for now, distrubution of creative works (books, comics, magazines, movies, TV) is stuck in a DRM world. One I won’t subscribe too.

    And, in the case of books/comics/magazines, I have little recourse, since the only other distrubution channel is hard copy, which bothers me (it’s wasteful and cumbersome).

    So, I offer two suggestions for publishers who insist on DRM:
    1. Type “bookname pdf” or “bookname epub” or, for comics “comictitle cbr” into Google and see what you get. Maybe the book is out there in some kind of DRM free format.
    2. Failing that, find the cheapest version on whatever platform you can and enjoy the book now (because you might not have access to it later, as it’s definitely stuck on whatever platform you purchased it on).

    Following that, we can start a petition (easy), or write all the publishers we want to buy books from (tedious).

    We can also add a quick thank you for being DRM free note when we checkout of any store selling DRM free content.

    Bottom line, we’re nowhere near the tipping point music was when Jobs wrote his DRM rant which followed shortly with the music industry bailing on DRM. And we need to find a way to get there.

    • http://davidcrow.ca/ davidcrow

      Strangely, I think we’re near the tipping point. Though this time driven by publishers, not by a big distributor (Apple).

      I was surprised to see that Bill C-11 had eliminated rights or at least made them more confused that I previously had as a Canadian citizen. The fair use definitions are way more restrictive, and the digital locks restrictions means that ripping a DVD or breaking DRM prevent me from previous fair use.

      I just hadn’t realized how important these were to me, or the other unintended consequences of decisions.

  • http://davidcrow.ca/ davidcrow

    It is probably the best strategy. Aim to make the device irrelevant. Just like Rosenfeld and O’Reilly Media, own the relationship with their customers. I love that I buy direct from O’Reilly. I love that many of my fav SF authors are on SmashWords.

  • Steve

    I have an ebook reader that is not a Kindel. I have two choices if I whish to read Valkyrie Burning which is only availabe from Amozon and only in the Kindel format. Buy the Knidel version, remove DRM and convert, or, find it on a torrent and down load for free. Either way, to read this book, I will have to break some law or another.

    Not only are Amazon price gouging with sole distributor rights they are preventing the majority of ebook reader owners from reading this author legally.

    DRM – broken by design.

  • http://yousayyeah.com Lee Dale

    Here’s Amazon’s latest trick: imply fraud, shut down your account, remove access to all your purchases (!), refuse to explain why or offer any recourse whatsoever.

    Source: http://www.bekkelund.net/2012/10/22/outlawed-by-amazon-drm/