August 08, 2008

Ebooks, the Coda

by Alan Beatts

I thought this month was going to be easy. I'd been working really hard putting the past few articles together and I figured I was done. This month I was going to write about something simple -- maybe my favorite ten novels or the _real_ story of what happens to socks when they vanish in the dryer. But two things happened. First, there were several pieces of news about eBooks that came to my attention and second, (and most notably) a lot of people wrote me emails about the last article. I had no idea that so many of you were interested in eBooks and their possible effects. I also wasn't expecting so many cogent, thoughtful comments on the topic. Not that I don't think that Borderlands customers are smart (our customers are _very_ smart, believe me) but I figured that you had more important things to do than write me.

So, welcome to _the last_ (I swear) article about the state of books according to yours truly. At least for a while. Here are some headlines to start off with.
*Amazon's Kindle is Doing Even Better
Remember that figure last month about the percentage of eBook sales for the Kindle as compared to physical sales? Of titles that are available in both eBook and physical formats, eBook sales were 6% of all sales. In other words, one electronic version is sold for every 14 or so physical copies. That's old news. According to a recent notice in Publishers Weekly, that figure was up to 12% at the beginning of July. So now one eBook is being sold for every _eight_ physical copies of titles that are available in both formats. That was fast, wasn't it?

*Apple's iPhone Apps Support eBooks
With the introduction of iPhone firmware version 2.0 and the iPhone App store, eReader software (which is used for Fictionwise ebooks) is now available for the iPhone and iPod Touch. In the first day there were over 7000 downloads of this application by iPhone owners. This has been followed by thousands of downloads _per day_ since. It's worthwhile to note that Fictionwise has what I think is the best business model for eBooks in the field. More on that later.

*Apple's New Mystery Product
Speculation is heavy surrounding a new product to release in September or October from Apple that was mentioned in a recent financial report from Cupertino. The most common theory is that it's going to be a tablet-type computer with a screen around 9" in size and probably using a richer version of the multi-touch interface used in the iPhone/iPod Touch. Though I don't think for a minute that it's going to be specifically geared towards eBooks, it would be a truly great platform for reading. And, unlike the other eReaders out there, it would also work very well as an electronic reader for comic books, graphic novels and manga (Japanese comics). That is a _huge_, profitable, and (in the US) untapped market.

*Kindle and Sony eReader Math
Based on reports from the Taiwanese tech news service Digitimes, Prime View International, the company that manufactures the displays for both the Kindle and the Sony eReader, is going to be stepping up their production of those displays. The figures given in that report are very interesting. In the first half of 2008, Prime View was shipping 60,000 to 80,000 displays per _month_, and in the later part of this year they are going to increase production to 120,000 units per month. This figure is important because neither Amazon nor Sony have been willing to share sales numbers for their eReaders. Many have speculated that this is because the sales are very low but I think it's because the sales are very _high_ and they don't want possible competitors to know how rich the market is . . . it certainly seems pretty rich. The display in question is not used for anything other than those two readers and the report went on to say that Amazon takes 60% of the production and Sony gets the remaining 40%. It's pretty simple math to work out that, based on the number of displays being sold, Amazon has been selling (or at least manufacturing) an average of 42,000 Kindles per month. Remember, since Kindles are only available in the US, those figures mean that domestically the Kindle is beating the Sony eReader by a sizable margin. But there's more -- based on the increase in production, it looks like Sony and Amazon combined will sell over _one-million_ eBook readers this year.

*Sony Opens Up the EReader and Hits UK Ahead of Amazon
Surprisingly for a company who is so much in love with proprietary formats (remember Betamax and Memory Sticks?), Sony has just released a firmwear update that will allow their second generation eReader to support both PDF and, more importantly, EPUB format files. PDF files are common as dirt and the EPUB format is open-source (so anyone can use it) as well as having a great deal of support in the US publishing industry. The eReader is the first device to support EPUB. The short version is that Sony (probably under pressure from Amazon's success with the Kindle) has, in one step, positioned their eReader as the open-source friendly, non-proprietary format alternative to Amazon's Kindle. And, continuing to build their competitive advantage over the Kindle, Sony has gotten their device to the British market well in advance of the Kindle. Remember what I said in last month's article about competition provoking rapid advances?

And that's it for the news.

Something that surprised me in the comments I received this month was how many people agreed with my assessment of how the market is likely to go. People including editors, librarians, graphic designers, booksellers, authors, and many avid readers wrote to say that, although they liked how I explained how things might go, it was not news to them that eBooks were going to grow in popularity. So, I guess I could have spent less time explaining, and more time discussing the ramifications and what we as readers can do about it.

What Can We Do?

As I said last month, I don't think that anyone is going to be able to stop the progressive adoption of eBooks. And, for reasons I talked about then, I'm not sure it's in our best interests, as people who love stories and writing, to even try. But there is one thing that I think we can affect -- how the business model works -- and I believe that it is _very_ important that we push for and vote (with our dollars) for a very specific business model.

Here's a question for you: Can you be said to "own" something if you cannot sell it or give it to another person?

My answer is, "No. If I can't sell it, I don't really own it." That may be simple minded, but that's how I look at it. And, furthermore, when it comes to electronic data, if I can't make as many copies as I want for my own use, I don't think I "own" the data.

Compare a book to an eBook. Since a book is a physical object, the question of ownership is simple. I paid for it. I have it in my possession. Therefore I own it. I can do anything I want with it -- lend it, sell it, gift it, or even throw on the fire and use it for kindling. But the one thing I can't do very easily is make a copy. Sure, I can run down to the local copy shop and make a copy, but that copy will not be as good as the original. In the first place, it won't be bound very well, but more significantly it will cost a hell of a lot to do it, probably more than buying another copy.

But data, such as eBooks, can be copied very easily and at almost no cost. As a result, publishers (and authors to a lesser degree) are very concerned that people could copy eBooks and distribute them all over -- with the result that neither the publisher nor the author get their fair share of the profits. So, to prevent this, publishers set up some sort of system that stops people from copying the data that makes up the eBook. In general this is called Digital Rights Management (DRM hereafter). Tens or perhaps even hundreds of millions of words have been written about DRM in the past ten years and I'm not going to rehash all the arguments about it here (if you're interested, you can find all you need to know on the web). But I do want to make one point: if the DRM associated with an eBook means that you can't copy it as much as you want or give it to a friend, then that DRM means that you don't really own the book. Period. And that sucks big time.


There is the obvious reason that you can't exercise the rights you have with a physical book with that eBook. Can't sell it, can't lend it. But there are other, less obvious reasons that are associated with certain business and DRM models. Take the DRM model, in which, anytime you want to copy your data onto a new device like a new computer or eReader, you have to register that device with a central authorization computer that's maintained by the company you bought the eBook from originally. Once your new device is registered as belonging to you, you can copy the eBook onto it. But what happens when the company goes out of business or just stops that part of their business? If the authorization computer is shut down, you can never copy that eBook to a new device again. And that is exactly what just happened to the sorry bastards who bought digital music from Yahoo. Yahoo is stopping that service and they're shutting down their "Key Servers" in a month. And their customers are out of luck.

I could go on with examples but you can find them all over the web, just search "DRM" and away you go. Bottom line is that almost all methods of DRM are broken and seriously anti-consumer but, if we don't do something, DRM is going to be the standard for eBooks. If that happens, we will be losing much more than the smell of paper and the feel of a book in our hands. We'll be losing our real ownership of our libraries. So, if you can avoid it, don't patronize _any_ eBook business or format that is supportive of DRM. Furthermore, don't buy any eReader that doesn't cleanly support multiple, non-DRM formats (which cuts out the Kindle). Over the next ten years, what is going to count is the dollars. If publishers see that sales of DRM-protected eBooks are poor compared to non-protected formats, then they'll respond, but if everyone jumps on the Kindle-style, DRM-protected, single-supplier model, we're screwed.

Some Things to Do If You Want to Be a Smart EBook Buyer

1) Buy non-DRM (what are sometimes called "multi-format") eBooks wherever possible.

2) Be smart about the hardware you buy. Either -

a) If you're going to buy a dedicated eBook reader (i.e. one with the nice, new low-power white screens) buy either a Sony eReader or the iLiad from iRex . Of the two, the iLiad is expensive ($600 to $700) but it cleanly supports a wide range of non-DRM formats (including Mobipocket, PDF and even HTML, but not EPUB, yet) as well as having a touchscreen. The Sony, on the other hand, is half the price and works almost as well.

b) Best of all, use a non-dedicated device like a Palm PDA, an iPhone or iPod Touch, or even a laptop or palmtop computer in conjunction with the reader software of your choice. You'll end up with a more useful piece of hardware and completely avoid supporting hardware that is tied to DRM schemes.

3) Support sellers who are opposed to DRM like Baen Books or Fictionwise.Com . Fictionwise's business model is especially nice in that, once you have an account, they maintain a virtual bookshelf for you. In practice that means you can go to their site anytime and re-download anything that you've purchased from them in any format that is available. And you can do this an unlimited number of times. They do sell DRM-protected titles and so this "bookshelf" model is not flawless, but it's still a very fair business plan and one that I'd like to see used by more companies in this business.

4) Backup your eBooks. I can't stress this enough. If you aren't dealing with a seller like Fictionwise who will preserve your download rights, when your computer's hard drive goes, you'll lose all your eBooks. Please note that I say "when" the hard drive goes, not "if". Imagine what it would be like if a single, nearby lightning strike could disintegrate all your beloved, physical books? You would take steps to protect them, right?

5) DON'T ILLEGALLY COPY AND DISTRIBUTE EBOOKS! Every time someone "pirates" an eBook it's one more argument for DRM. Plus, darn it, the authors and publishers worked to produce that story. They deserve to get paid for it.

Final Thought

We're moving into an age when much of our media (books, music, pictures, films) will exist solely in electronic format. If we as a society don't make smart choices, I fear that we will lose a very essential right to property. And what bothers and scares me the most is that it seems to be part of a larger movement that's been going on for at least half a century. We have been a nation of renters for years now. Even those who "own" their homes do so in partnership with the bank, and as a minority partner at that. The same goes for most people's cars. At the same time, it has become a tiny minority who own their business or who work for themselves. And now we seem to be moving into a time when we won't even own our books and music. Instead we will have some limited set of "rights" relative to those treasured possessions. Rights that are much less than true "ownership".

I'll tell you though, I'll be damned if I'll spend money supporting a business model like Amazon's eBooks, which only gives me the choice of engaging in some strange sort of "rental" of eBooks under the guise of selling me something. Hell, I'm one of the Luddites who still buys actual CDs, takes them home, and coverts them to MP3s for my iPod. At least that way, I _know_ what I own and a decision by the people at Yahoo isn't going to deprive me of my property.

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