DRM free ebooks!? It is going to happen …

Last year I wrote about J.K. Rowling, author of the immensely successful “Harry Potter” series, breaking out of the traditional publishing mould by offering Harry Potter ebooks through her own site. Another interesting recent development within the ebook world is digital publishers slowly starting to drop digital rights management (‘DRM’) from their ebooks.

The main thing about DRM is that it is meant to stop piracy and to stop people from sharing content. However, DRM also makes it harder to read an ebook across different devices, limiting users to a single technology to read ebooks with.

This BBC post explains this problem very clearly: “At present a user who buys a DRM-encoded book via Amazon, for example, can only read it on one of the firm’s Kindle e-readers or a device running one of its Kindle apps. They cannot transfer the title to a Sony Reader, Kobo eReader or use it with Apple’s iBooks.”

Last month, sci-fi publisher “Tor” announced that it will release all its digital titles DRM free as early as July 2012, citing author and reader requests as the main reason for this bold move. Tom Doherty, president of Tor, explained about his readers that “they’re a technically sophisticated bunch, and DRM is a constant annoyance to them. It prevents them from using legitimately-purchased e-books in perfectly legal ways, like moving them from one kind of e-reader to another.”

Going back to J.K. Rowling’s Pottermore site; she also chose to offer her ebooks DRM free (mind you, this only applies to ebooks sold through her site directly). The only thing she did do instead was inserting a digital watermark to prevent users from copying her books illegally. The question remains how many other, less ‘niche publishers will start releasing their ebooks without DRM protection. It is interesting to note in this respect that Tor  is part of Macmillan, a publishing giant, who seem to have gone for a strategy whereby DRM is dropped on a small scale first, to then roll it out across a much larger catalogue of – more mainstream – titles.

Main learning point: it will be interesting to see how many other, more mainstream publishers will follow Tor’s lead. One could argue that the effectiveness of DRM protection in light of battling piracy is limited and that therefore a better user experience should prevail. The publishing industry seems to be going for a ‘softly softly’ approach where DRM free ebooks are introduced gradually, which makes a lot of sense. From a purely personal point of view, I welcome any move towards DRM free ebooks since I think it will force publishers to rethink their anti-piracy measures and improve their readers’ user experience at the same time.

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How robust will Netflix’ business model turn out to be? – Part 3

Just as I thought that the Netflix saga had come to an end with my blog post a few weeks ago (in which I wrote about Nextflix’ CEO Reed Hastings’ announcement to split the business into two separate units), the story has taken another twist. Last week, Netflix reversed its decision to split its business into two parts, streaming (Netflix) and DVD rental (Qwikster) and became a single unit again.

In a very succinct blog post, CEO Reed Hastings wrote: “It is clear that for many of our members two websites would make things more difficult, so we are going to keep Netflix as one place to go for streaming and DVDs” but he did not offer any further explanations as to his reasons why.

What could those reasons be? Let me just speculate for a minute:

  1. Reed Hastings is speaking the truth – Netflix users genuinely struggled to have to use two different sites. Call me cynical, but surely a problem of this nature would have come to light in early stage user testing or forum groups?
  2. Too much change in one go – Perhaps the pace with which Hastings wanted to introduce business change was simply too high for most Netflix users. An official Netflix statement read: “We underestimated the appeal of the single Web site and a single service.” Nevertheless, make no mistake, online streaming does remain Netflix’ core focus going forward, despite this retracted spin-off.
  3. Unexpected amount of “churn” – The number of people who terminated their Netflix subscription as a direct result of the announced split was simply too high and was putting the overall business revenue at risk. I’m not sure if this was the case, but Netflix users still got a shock when Netflix was unified again, whilst keeping two separate price schemes for DVD rental and streaming respectively.

Main learning point: even though Netflix and its CEO were halted in their tracks to split up the business, there’s no doubt that Netflix strategic focus will be on streaming in the years to come. I’m sure that when the time is right (and Netlix’ users are ready) Netflix will spin off its DVD rental business and concentrate solely on online content streaming.

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Pottermore and the digital publishing extravaganza

ebook publishing is taking off in more way than one. Back in April the Association of American Publishers reported triple-digit growth in ebook sales. Earlier this week Louise Voss and Mark Edwards became the first “indie authors” to top the UK ebooks chart.

Finally to top it all off, JK Rowling, author of the iconic “Harry Potter” series announced yesterday that she is launching the digital version of her work on her own site and leaving her publisher in the cold.

All these interesting developments that are currently happening in the digital publishing industry, where should I start?

  1. Sign up to the digital transformation or lose out – Established publishers like Random House and Penguin are in the process of becoming a digital content provider (as opposed to just a supplier of physical or digital books).
  2. There is more to come though – Publishers are slowly starting to make content available on multiple media, in multiple formats on multiple platforms (think apps, audio, video and games).
  3. Self publishing – The recent success of authors like John Locke, Mark Edwards and Louise Voss clearly shows that authors do not need a big publisher (and its marketing budget) to be successful.
  4. Cut out the middleman – J.K. Rowling is taking self-publishing to the next level by creating her own “Pottermore” online bookstore. Even though Bloomsbury, her publisher, is said to get a set percentage, online ebook retailers like Amazon and Barnes & Nobles are likely to miss out on all the action.
  5. New tools and players galore! – Tools like Kindle Direct Publishing make it easy to publish and sell your own books. Crickey, even ebook signs can now be done online! If you still need assistance, for instance to create your interactive promotional site or to convert your book into an interactive game, agencies like Smashing Ideas and Think are more than happy to help out.

Main learning point: I learned that the face of traditional book publishing is changing rapidly. Publishers can either adapt and fully embrace this change or ‘undergo’ things halfheartedly and view it all as necessary evil. As for the latter option, the record industry made that mistake and are now paying for it dearly. I say: “bring on exclusive John Grisham content through his own interactive site, EA launching “The Last Juror” game and him throwing “The Innocent Man” videos on YouTube!”

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