Retail DRM Versus Library DRM

What's all the damn fuss about 'Digital Rights Management'? Seems like publishers, retailers and library technologists could design an agreeable solution that will allow the free flow and functionality of digital works while still protecting the creative capital of the writers/creators (who have leased some rights to these folks through contracts.

Holy shitswowski, these so-called publishing/book professionals are acting like a bunch of asinine politicians that spend all their time and energy in NOT getting things done just to make opponents look bad and be damn what's good for the country or citizens. 

Definition of DRM from Wikipedia with great links to all the major players.

Now this insight from Michael Kelley, Executive Editor, News and Features for Library Journal:

Retail DRM Is an Apple. Library DRM Is an Orange

The decision on Tuesday by Tom Doherty Associates, publishers of Tor, Forge, Orb, Starscape, and Tor Teen imprints, to make its entire list of ebooks available DRM-free by early July 2012, caused a tremendous amount of discussion in publishing circles with little reference to the library market.
From a librarian perspective, such news is secondary to the ongoing battle to convince publishers such as Macmillan, which is the parent of Tom Doherty Associates, to make even DRM’d content available to the library channel. Something Macmillan has steadfastly refused to do. Talking about DRM-free books, then, is a bit like “focusing on the new skylight you want when you haven’t yet built the walls to support the roof,” as one prominent librarian put it.

Even though the decision could possibly signal a lessening of fear among some publishers, DRM will remain an integral part of the library lending workflow for the foreseeable future. Whatever rethinking is going on among publishers, and that in itself could be a positive, it still remains that what a publisher decides to do with DRM on the retail side does not necessarily correlate to anything they will do with DRM on the library side.

“For Tor, it will undoubtedly be the same thing as O’Reilly does: no DRM for retail, DRM for library lending,” said Bill Rosenblatt, an expert on content protection technologies and the founder of New York-based GiantSteps Media Technology Strategies. “It would make no sense for publishers to abandon DRM for library e-lending just because they don’t like it for retail. The two scenarios are apples and oranges.”

“I could cite other examples of this, such as music downloads being DRM-free but DRM still being used on certain aspects of music subscription services, not to mention audiobooks in library lending scenarios,” Rosenblatt said.

Patty Garcia, the director of publicity for Tor & Forge Books, confirmed what Rosenblatt said.

“This does not affect our library policy in any way; this only affects e-books sold through retail channels and our library position of not lending e-books is unchanged. Tor’s library policy is indeed governed by the Macmillan policy,” Garcia said.

Rosenblatt has blogged about the issue and he will present a panel on June 5 called “The Landscape of Content Protection Technology” for the Digital Book 2012 program at BEA (the program is held in partnership with the International Digital Publishing Forum). The presentation will, among other things, look at potential lending workflows.

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How Much Does It Really Cost to Produce an E-Book ?

Someone is making a ton of money!

How far apart are print book and ebook production costs ?

I ran across an interesting article from a favorite source the other day and encountered some production cost figures that I'm not so sure are telling an accurate story.

Left me a little confused [nothing new about that :)] --- I was dog-tired when I first scanned it and pounded out this post, so I may not have interpreted all as well as I should.

Key excerpt from article:

“We still pay for the author advance, the editing, the copy-editing, the proofreading, the cover and interior design, the illustrations, the sales kit, the marketing efforts, the publicity, and the staff that needs to coordinate all of the details that make books possible,” said Bob Miller in February 2009 on the HarperStudio blog (which has been defunct since April 2010 when the publishing start-up folded) when he was president and publisher of that company; he is now president and publisher of Workman Publishing. “The costs are primarily in these previous stages; the difference between physical and electronic production is minimal.”

That so ? From my initial research I had reached a different conclusion.

Perhaps it's in the way Bob miller is splitting his hairs or framing his parameters.

I do believe that content is king and should drive cost/value, but ...

This from Digital Book World by Jeremy Greenfield: 

Consumers Upset and Confused Over E-Book Pricing

Publishers are making a killing on e-books because they cost nothing to produce, distribute and sell and are almost 100% pure profit. At least, that’s what many consumers think.

“E-books cost almost as much as printed books but are phenomenally cheaper to create,” said Trevor Doyle, 39, a teacher from Ione, Calif.

“There’s so much less cost involved – no material, relatively low distribution cost, no inventory costs, transportation,” said Michelle Barrineau, 42, a sales analyst from Ft. Lauderdale, Fla.

While consumers understand the basic costs involved in the bricks-and-mortar retail world, they don’t understand the costs involved in selling something that is, well, much, much smaller than a bread box.

“With today’s pricing, the profit in e-books is crazy,” said Greg Harris, 49, who lives in San Carlos, Calif., and is a vice president of sales and marketing for an electronics company. “Without the need to stock inventory and move paper all around the country, there should be a significant discount in the pricing model.”

“When I saw how much these e-books cost, I was amazed,” said Heidi Barron, 48, a public relations professional from Atlanta. “There is no printing, no shipping, no warehousing, no retailer. There is simply the transmission of the content through the Internet. Someone is making a ton of money.”

On that last point, Barron may be on to something. Publishing companies that publicly reported earnings for 2011 followed a similar pattern: flat sales, increased income. Digital Book World and others have speculated that higher profit margins on e-book sales are the culprit.

With the recent news about the Department of Justice lawsuit against some of the largest U.S. publishers and Apple alleging an e-book a price-fixing scheme, consumers are more aware than ever that there is a price battle going on in the e-book world. They just may not be aware of who is on what side, what each party wants and why, and what is really at stake.

“Why the frick-frack do these major publishers think it’s okay to put out a paperback at half the price of an e-book they can upload and forget?” said Diane Castle, 36, a writer from Dallas. “To me, this defied logic – until I stumbled upon a news article about the Justice Department’s price-fixing law suit yesterday. Now it all makes sense.”

“I do read e-books and am disgusted with the price that is usually charged,” said Sarah McGill, 37, a freelance writer from San Antonio. “I truly believe that the larger companies participated in some sort of price-fixing.”

So, How Much Does It Cost to Produce an E-Book?

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In the eBook Business, Authors and Readers Are Necessary, Publishers Are Not

Publishers Panic!

History repeats itself, especially if people do not learn from past mistakes.

The publishing industry [by that I mean the old, big house publishing model - not the new digital, streamlined model :)] is going down the same mistake laden path that the music industry did a few years ago.

And what's worse, I believe the publishing powers to be (or should I say mental midgets) were warned of this.

When the new digital tech RE publishing exploded on the scene and leveled the playing field, big publishers tried to maintain ebook prices at or close to print book prices.

Well, the book loving public (smarter than they realized --- as with their music loving cousins) revolted by pirating the ebooks in one way or another, e.g. getting them free from file-sharing sites.

Publishers should listen to their customers! When they think a price is too high they will go elsewhere or pirate it.

'Once record companies put a reasonable price on their products, the vast majority of buyers gave up piracy and started paying for their music. The same can happen with eBooks.'

Ed Hardy, writing for Tablet PC Review, says:

Book Publishers Must Learn the Same Lessons Music Publishers Did


Last week, the U.S. Justice Dept. sued some of the world's largest publishers as well as Apple, accusing them of eBook price fixing. This lawsuit wouldn't be necessary if eBook publishers would learn the lessons that music publishers did a decade ago.


As it stands now, publishing companies like MacMillan, HarperCollins, Penguin, Simon & Schuster, and others want to charge more for the digital versions of books than most of their customers think they are worth. These companies frequently price eBooks the same, or just below, the printed versions. Few of their customers see the logic in this -- publishing a book electronically removes the costs of printing, shipping, and storing a physical object.

The argument the publishers make in response is that the majority of the cost of a book isn't in printing it, but rather in their overhead of paying authors and editors, advertising, etc. The answer this this is clear: if they don't find ways to significantly lower their overhead, these companies are going to be out of business in a few years.

Learn from the Past

There is another industry that was in a similar situation a few years ago: the music business. Around the turn of the millennium, the Apple iPod had made the CD obsolete, and consumers wanted to buy MP3s. The music publishers didn't want to sell these -- they liked being able to force people to buy a whole CD in order to get the one or two songs they actually wanted.

Consumers felt they were being ripped off, and turned to pirating songs instead of buying them. The music industry struggled for years... until record companies finally bit the bullet and started selling songs in digital formats at reasonable prices. Now, people are buying more tracks than ever and the music industry is healthy again.

History Repeating Itself

Book publishers must learn from music producers. Currently, when their customers complain that eBooks are too expensive compared to the security of owning the printed version of a work, the publishers tell them to buy the printed book -- as if that was the only other option.

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Further Dissecting Copyright --- And Its Attached Intrigue

Copyright Has a long Tail

I have posted numerous times on the new conundrums RE copyright brought on by all the new tech and resulting media formats and platforms.

But, tonight, let's really examine and define the damn concept as it is applied in the United States.

I think the exercise will make copyright clearer in the minds of many.

The overview I have chosen is concise, yet detailed, with many informative links to the appropriate sections of the constitutional law.

From Cornell University Law School:

copyright: an overview

The U.S. Copyright Act, 17 U.S.C. §§ 101 - 810, is Federal legislation enacted by Congress under its Constitutional grant of authority to protect the writings of authors. See U.S. Constitution, Article I, Section 8. Changing technology has led to an ever expanding understanding of the word "writings." The Copyright Act now reaches architectural design, software, the graphic arts, motion pictures, and sound recordings. See § 106. As of January 1, 1978, all works of authorship fixed in a tangible medium of expression and within the subject matter of copyright were deemed to fall within the exclusive jurisdiction of the Copyright Act regardless of whether the work was created before or after that date and whether published or unpublished. See § 301. See also preemption.

The owner of a copyright has the exclusive right to reproduce, distribute, perform, display, license, and to prepare derivative works based on the copyrighted work. See § 106. The exclusive rights of the copyright owner are subject to limitation by the doctrine of "fair use." See § 107. Fair use of a copyrighted work for purposes such as criticism, comment, news reporting, teaching, scholarship, or research is not copyright infringement. To determine whether or not a particular use qualifies as fair use, courts apply a multi-factor balancing test. See § 107.

Copyright protection subsists in original works of authorship fixed in any tangible medium of expression from which they can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device. See § 102. Copyright protection does not extend to any idea, procedure, process, system, method of operation, concept, principle, or discovery. For example, if a book is written describing a new system of bookkeeping, copyright protection only extends to the author's description of the bookkeeping system; it does not protect the system itself. See Baker v. Selden, 101 U.S. 99 (1879).

According to the Copyright Act of 1976, registration of copyright is voluntary and may take place at any time during the term of protection. See § 408. Although registration of a work with the Copyright Office is not a precondition for protection, an action for copyright infringement may not be commenced until the copyright has been formally registered with the Copyright Office. See § 411.

Deposit of copies with the Copyright Office for use by the Library of Congress is a separate requirement from registration. Failure to comply with the deposit requirement within three months of publication of the protected work may result in a civil fine. See § 407. The Register of Copyrights may exempt certain categories of material from the deposit requirement.

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How long does copyright protection last?

The New Social Culture Will Market Your Book - Learn It

Social Media Power is
Worldwide!

Social media (SM) as a marketing tool began rather inconspicuously. At first SM was a loose and rather disjointed platform where people just kept in touch with friends and family and exchanged pictures.

But, as most now realize, it has exploded into a genuine news and marketing goldmine as well as a conduit to keep in touch.

Per Wikipedia: Social media includes web-based and mobile technologies used to turn communication into interactive dialogue between organizations, communities, and individuals. Andreas Kaplan and Michael Haenlein define social media as "a group of Internet-based applications that build on the ideological and technological foundations of Web 2.0, and that allow the creation and exchange of user-generated content." Social media is ubiquitously accessible, and enabled by scalable communication techniques. 

Classification of social mediaSocial media technologies take on many different forms including magazines, Internet forums, weblogs, social blogs, microblogging, wikis, podcasts, photographs or pictures, video, rating and social bookmarking. By applying a set of theories in the field of media research (social presence, media richness) and social processes (self-presentation, self-disclosure) Kaplan and Haenlein created a classification scheme for different social media types in their Business Horizons article published in 2010. According to Kaplan and Haenlein there are six different types of social media: collaborative projects (e.g., Wikipedia), blogs and microblogs (e.g., Twitter), content communities (e.g., YouTube), social networking sites (e.g., Facebook), virtual game worlds (e.g., World of Warcraft), and virtual social worlds (e.g. Second Life). Technologies include: blogs, picture-sharing, vlogs, wall-postings, email, instant messaging, music-sharing, crowdsourcing and voice over IP, to name a few. Many of these social media services can be integrated via social network aggregation platforms.

The honeycomb framework defines how social media services focus on some or all of seven functional building blocks (identity, conversations, sharing, presence, relationships, reputation, and groups). These building blocks help understand the engagement needs of the social media audience. For instance, LinkedIn users care mostly about identity, reputation and relationships, whereas YouTube’s primary building blocks are sharing, conversations, groups and reputation. Many companies build their own social containers that attempt to link the seven functional building blocks around their brands. These are private communities that engage people around a more narrow theme, as in around a particular brand, vocation or hobby, than social media containers such as Google+ or Facebook.

Patents

There has been rapid growth in the number of US patent applications that cover new technologies related to social media. The number of published applications has been growing rapidly over the past five years. There are now over 250 published applications.^[4] Only about 10 of these applications have issued as patents, however, largely due to the multi-year backlog in examination of business method patents.

SM has indeed exploded!

Newbie (and not so newbie) writers are always asking "How do I market my book?"

SM is the new and future blueprint for moving all types of publishing and building your audience for even better success in the future.

Bob Cohn, editor of Atlantic Digital, gives us a great looksee into the growth and technical use of SM to master marketing for publishers:   

Welcome to the Sharing Economy

A year ago, the main sources of referral traffic to our flagship site, TheAtlantic.com, lined up in this order:

• Typed/Bookmarked (readers who type our url into their browsers or follow their pre-set bookmark);

• Links from aggregators and other content sites;

• Search engines;

• Social media (a roll-up of Facebook, Twitter, Reddit, Digg, StumbleUpon, and LinkedIn)

Then something interesting happened. The social line began rising, first passing Search and then flying by Other Sites and finally, in late 2011, moving beyond Typed/Bookmarked. Now, TheAtlantic.com receives more than one-third of its referrals from social media, topping all other sources.

This wasn’t supposed to happen. Not long ago, optimizing your site for search, and for the algorithms that determine which stories get featured on Google News, was thought to be the key to generating audience. As a result, Web editors were learning to parse metadata and resigning themselves to writing headlines for machines. Companies like Demand Media were on top of the digital world, suggesting a future in which search requests would replace journalists as arbiters of what stories to publish.

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Is the Academic Publishing Model About to Bite the Dust? - About Time!

Academic Publishing Model
Getting The Boot

I have posted on this subject before (Academic Publishing is a Good Gig if You Can Get It - And a Rip Off for Creators) and Part Deuce of same).

Please read the above links for more background on this issue. 


Ever since time began, it seems, both grad students and professors have had to publish new and researched works in their fields in academic journals to advance in their academic standings and/or careers.
 
And these poor academic field laborers have never gotten paid for their efforts --- Guess who made millions on their free labor and creativity? Academic publishers and journals, that's who!
 
"Essentially, when the academics do all the thinking, all the writing, all the editing, for free, how come three companies can make millions upon millions a year selling it all back to them?"
 
I would say its damn time that the new digital tech leveled the playing field in academic publishing just as it has in traditional publishing :) 
 
Tim Worstall, Forbes, has this to say:
 
The Coming Collapse of the Academic Publishing Model
 
We had a quick look at the economics of the academic publishing model back here, when the subject first came to prominence. Essentially, when the academics do all the thinking, all the writing, all the editing, for free, how come three companies can make millions upon millions a year selling it all back to them?

When it was all about printing up 300 copies of an obscure journal and making sure that they got to the only 300 people in the world interested in the subject there was a possible argument in favour of the model. Now that everything is online perhaps less so.

The Guardian has a nice piece about the general discussion and then there’s this very interesting declaration by the head of the Wellcome Trust:

“But the intervention of the Wellcome Trust, the largest non-governmental funder of medical research after the Bill & Melinda Gates Foundation, is likely to galvanise the movement by forcing academics it funds to publish in open online journals.


Sir Mark Walport, the director of Wellcome Trust, said that his organisation is in the final stages of launching a high calibre scientific journal called eLife that would compete directly with top-tier publications such as Nature and Science, seen by scientists as the premier locations for publishing. Unlike traditional journals, however, which cost British universities hundreds of millions of pounds a year to access, articles in eLife will be free to view on the web as soon as they are published.


He also said that the Wellcome Trust, which spends more than £600m on scientific research a year, would soon adopt a more robust approach with the scientists it funds, to ensure that results are freely available to the public within six months of first publication.


However, here’s the bit that really interests me:

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The Evolution to Digital and a Brief History of E-Book Costs and Pricing

Digital Burnout!

Much has been tossed around of late RE new publishing models (think wholesale and agency), who should set the price of e-books (think publishers or retailers) and the "all shook up" transitioning, publishing landscape in general :)

It can get awfully confusing! So, to promote a better understanding of how we got to where we are today, a little history of digital publishing, including e-book models/pricing all the way up to the DOL investigation into the alleged price-fixing attributed to the big six publishers and the agency model is offered here.

This history is by no means complete --- but is heavy enough to hopefully be informative to many.

"Only time will tell where in the pricing spectrum--from best-selling $25-plus hardbacks at one end to 99-cent music downloads at the other--e-book prices will settle."

By Narasu Rebbapragada of PCWorld:

UPDATED: E-Book Prices Fuel Consumer Outrage

The Department of Justice is preparing to sue Apple and five major e-book publishers on charges that they worked together to push up e-book prices industry-wide.

UPDATE [March 8, 2012]: The Department of Justice said yesterday it plans to sue Apple and five of the largest e-book publishers in the US on charges that they acted together to push up the price of electronic books, the Wall Street Journal reports.

As discussed in this PCWorld investigative feature from last May, e-book publishers deeply resented large retailers like Amazon selling their e-books at deeply discounted rates under a "wholesale model." Apple introduced a new model--called the "agency" model--where the publisher sets the price of the e-book and the retailer sells it for that price, taking a 30 percent fee.

The Justice Department believes that Apple and the publishers may have colluded to keep the prices of all e-books high, which, if true, would be a violation of anti-trust laws. The publishers have denied the allegations of collusion, and believe that the switch to the agency model has enhanced competition by allowing more e-book publishers to survive.

Following is our investigative feature from last May describing how e-books are (over) priced.

An e-book that costs the same as a printed book doesn’t feel right. No trees died to make it. No heavy machinery ran to print it. No planes flew to ship it. You might need to buy one of those new $139 Barnes & Noble Nooks, announced this week, to be able to read it. So why should you have to spend as much as you would for a heavy hardcover book to own it?

Blame the latest phase of the digital content revolution, now more than ten years strong. As first happened with music, then movies, then print news, the book publishing industry is experiencing a shake-up of rules and roles. In particular, the changing relationship between the book publisher (the company that creates books) and the book retailer (the company that sells books) is causing a chain reaction of confusion, mistrust, and price hikes.The good news is that this phenomenon is inspiring enterprising startups to rethink aging models of book pricing.

The bad news is that it’s pissing people off.

Need proof? Look up Emma Donoghue’s Room: A Novel on Amazon. You can get a new hardcover copy for $14.49, while the downloadable Kindle edition costs slightly less at $11.99. Scroll a bit down the product page, and you’ll see that the average customer review out of 829 (at this writing) is a favorable 4.2 stars out of 5. People like the book.

On the Kindle Store page for the book, scroll some two-thirds of the way down to the “Tags Customers Associate with This Product” section, and you’ll notice that nine out of the top ten tags for this book have nothing to do with its page-turning storytelling. The book, last time I looked, had 105 tags for “too expensive for Kindle,” 85 tags for “9 99 boycott”, 65 tags for “overpriced-kindle-version,” and so on. People don’t like the price.

The 9 99 boycott tag, in particular, was created by Kindle e-book users to express their outrage that the prices of some e-books approach if not exceed the price of their hardcover versions. So far, 5892 Amazon users have tagged electronic Kindle books 36,704 times with the 9 99 boycott tag (here’s how to use the tag).

This reader revolt comes at a tipping point for the book industry. According to the Association of American Publishers, e-book sales reached $164.1 million for the months of January and February 2011, a 169.4 percent increase when compared with the same period in 2010. For the same period, sales of combined categories of print books fell 24.8 percent, with $441.7 million sold.

So while print book sales still exceed e-book sales in absolute dollars, we’re seeing their final glory days. The bankrupt Borders bookstore chain, closing 30 percent of its brick-and-mortar stores, has reported a $24.3 million loss for March. Barnes & Noble executive Marc Parrish said at the GigaOm Big Data conference that the book business was shifting to digital faster than the music, movie, and newspaper industries.

Amazon announced in January that Kindle books have overtaken paperback books as the most popular format on Amazon.com (not so much information on sales of The Kindle), and Forrester Research expects e-book consumers to spend nearly $3 billion on e-books in 2015.

Big book publishers are experiencing the shift to digital. “We've gone from a 90/10 physical and e-book split last year, to closer to 80/20, and expect that to increase again next year to 70/30,” says Maja Thomas, senior vice president of Hachette Digital at the Hachette Book Group, via e-mail while attending this week’s Book Expo. “It is too early to tell how the different paper formats will be affected--although I would expect most mass market buyers to migrate to e [e-books].”

Hachette is referred to as a big-six book publisher, along with HarperCollins, Macmillan, Penguin Group, Random House, and Simon & Schuster. Its suspense imprint Mullholland will be producing many digital-only titles, and it is making illustrated children’s books available on the Barnes & Noble Nook Color.

Publishers Strong-Arm Retailers

The move to digital has traditional book publishers scared, which has resulted in a power struggle with book retailers for the right to price books. The score right now is “advantage book publisher,” but the consequence is that e-book prices don’t reflect the normal laws of supply and demand or the current costs of producing a digital book.

“The pricing is a little wonky right now,” says James L. McQuivey, Ph.D., vice president and principal analyst at Forrester Research, about e-books. It didn’t start that way. When e-books were new, retailers set their prices the way they wanted, but lower than print books--generally at $9.99 for new book releases.

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Amazon Screwing With Publishers Again --- So, What's New? Don't Say You Weren't Warned

Karl-Heinz Roseman says Amazon
demanding steep discounts from
 McFarland & Co. Months later,
he still has not been able to
 talk to a live Amazon employee.

I have previously posted numerous times RE Amazon's ever increasing dictatorial business practices. See relevant posts on this blog and on my Publishing/Writing: Insights, News, Intrigue Blog.

Amazon is trying to extort deeper discounts from publishers who have grown their business (and by extension Amazon's business) using Amazon as chief retailer.

Again, Amazon is trying to re-write the rules of publishing --- at the expense and utter destruction of publishers whose books helped Amazon to fulfill its mission of 'Earth's Biggest Selection.'

Amy Martinez of The Seattle Times reports:

Amazon.com trying to wring deep discounts from publishers

Amazon.com, the company that changed the way people buy books more than a decade ago, now appears poised to rewrite the rules of publishing.

The bad news came to McFarland & Co. in an email from Amazon.com. The world's largest Internet retailer wanted better wholesale terms for the small publisher's books. Starting Jan. 1, 2012 — then only 19 days away — Amazon would buy the publisher's books at 45 percent off the cover price, roughly double its current price break.

For McFarland, an independent publisher of scholarly books situated in the mountains of North Carolina, Amazon's email presented a money-losing proposition.

"It was the apocalypse," said Karl-Heinz Roseman, director of sales and marketing at McFarland, which has a long track record of giving all its retail partners the same discount.

McFarland and Amazon have shared a mutually beneficial relationship for more than a decade. A well-regarded source of books on baseball and chess, McFarland helped Amazon fulfill its mission of offering "Earth's biggest selection." And Amazon — in contrast to traditional bookstores — listed all of McFarland's titles, no matter how arcane.

Last year, Amazon generated nearly 70 percent of McFarland's retail sales and 15 percent of its entire business.

"If we made a change for Amazon, we'd have to do it for everyone, and that would jeopardize our business," Roseman said. "We couldn't exist like that."

Now, McFarland and others in the book world worry that Amazon will use its pricing pressure to crush publishers. They say Amazon's demands for deeper discounts threaten already-thin profit margins, and some warn about an Amazon monopoly.

Amazon, which declined to answer questions or discuss its relations with publishers for this story, dominates the U.S. market for print books sold online and also leads the market for electronic books. At the same time, it's working to become a big-name publisher in its own right.

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