February 25th, 2010
(Notes from the O’Reilly Tools of Change for Publishing conference, February 22-24 2010. All quotes are paraphrases based on this author’s understanding of the speaker’s comments.)
Presenter: Kirk Biglione
Everything is changing rapidly but one thing that is not changing is DRM. And, the best way to look at its impact on consumers is through the lens of another industry. In this case, the music industry.
It’s important to keep in mind that the future of all media is still digital. That definitely includes books. Of course, media companies are challenged by the transition. But don’t worry – you are not alone. Media publishers are facing the same challenges as other companies that have been through the process.
Unfortunately, our consumers have all been burned by their experiences with other industries and they are carrying that negative baggage with them into the digital book world. When you make mistakes, your customers will ask, “Didn’t they learn anything from the music industry?”
Naturally, no one wants to make the same mistakes as the music industry, but unfortunately, most can’t seem to agree on which mistakes, exactly, the music industry has made. So, let’s start off by asking what those mistakes were.
First, some history
Here are some important eras/moments/events to keep in mind when we talk about the music industry.
Mistakes Made by the Music Industry
Forget the iPod moment. What about a CD moment? If publishers got on the digitization bandwagon, you could get users from LPs to CDs (if you sold at a legitimate price). You might sell some books.
DRM Myth vs. DRM Reality
Myth #1 — DRM prevents piracy. It only takes one physical copy to create a pirated copy. As long as there is print there will be piracy.
Myth #2 — DRM Free = free. There are many examples of consumers purchasing DRM-free content. Amazon sells MP3s without DRM. O’Reilley is doing the same with books.
Myth #3 — DRM keeps honest consumers honest. Honest consumers are already honest. They don’t need DRM. In reality, DRM only serves to turn many honest users into hackers so that they can get the digital content they paid for in the manner they want.
Myth #4 — DRM enables a marketplace for digital content. DRM shapes the marketplace for digital content in ways that have unintended consequences.
Two Case Studies
Case Study — Microsoft PlaysForSure Technology
Let’s talk about Microsoft. It introduced PlaysForSure. In 2004, the music labels are beginning to worry that Apple would have monopoly. How will we have an open marketplace if one company controls everything? So, Microsoft launches PlaysForSure. They would widely license it to all manufacturers and resellers. All the major companies signed up except Apple. All the content providers (big ones) signed up — MTV, MS, Rhapsody, etc. They had a branding campaign to inspire confidence about devices and content compatibility.
By any metric, PlaysForSure was the standard DRM for digital music. iTunes didn’t stand a chance.
And then… Microsoft moves in a different direction 2 years later with Zune. PlaysForSure devices would not work on the Zune. It was a whole new musical ecosystem. Most of services using PlaysForSure either closed or switched to MP3.
What happened to iTunes? This month iTunes is celebrating its 10 billionth download.
How did this happen? How did Apple win? 1) Consumer lust for the MP3 player; 2) They provided a better consumer experience (it just worked); 3) They differentiated themselves by not being PlaysForSure compatible.
Case Study — Adobe Content Server (ACS4) Technology
Publishers push it as standard DRM because it is widely licensed (all major devices and all major providers). Then, Sony moved to ePub and Adobe DRM last fall. B&N came out and went to Adobe DRM as well. Everything was going in a single direction.
The came the iPad with iBooks that would also use the ePub format. Suddenly, people were saying the Kindle doesn’t stand a chance. Amazon is an isolated product with a proprietary format. What chance do they stand?
There was only one small problem. Apple is is using its own DRM that is incompatible with the Adobe DRM. Now we have ePub vs. ePub, and eventually it will be ePub vs. ePub vs. ePub. A standard turns into irrelevancy.
How will this story end? A lot like the music industry. Follow Apple’s playbook. Kindle is frictionless. It just works.
What consumers want
1. Anywhere anytime, anyplace, on any device (DRM free but could be Kindle)
2. E-book consumer preferences — reasonable pricing, wide selection, and interoperability (preferably DRM free)
3. Modern consumers always get what they want
4. DMCA did not end circumvention
Top Search Phrases at Medialoper.com
How do I remove DRM?
How do I transfer DVDs to an iPod
How do I burn iTunes videos to DVD
Spikes at Christmas. Don’t give the gift of DRM.
Why not sell consumers what they want?
Why go to war with consumers? The modern digital consumer will always win.
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