Bookseller Backed by Big Publishers Advocates Abandoning Digital Rights Management

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By Jeremy Greenfield, Editorial Director, Digital Book World, @JDGsaid

Major book publishers should abandon the use of technology that limits how their copyrighted digital material is used by readers after sale, according to Matteo Berlucchi, CEO of London-based social e-retailer Anobii.

In a speech this afternoon at the Digital Book World Conference in New York, Berlucchi argued that digital rights management technology, or DRM as it is known, prevents more readers from buying e-books and may actually encourage piracy of copyrighted material.

Industry observer Mike Shatzkin, who is also chairman of the Digital Book World Conference called the argument “significant” because Anobii is partially owned by the UK arms of three major publishing companies, HarperCollins, Penguin and Random House.

In our interview before his speech, Berlucchi stressed that the views were his own and that he hoped that all major publishers consider his recommendation.

“I’m not talking on the behalf of the publishers. I’m an independent company,” he said. None of the publishing companies that are Anobii investors have seats on the Anobii board, Berlucchi told DigitalBookWorld.com.

If major publishers abandoned the use of DRM, Berlucchi argued, they would sell more books, specifically to readers who own the popular Kindle e-ink devices. Those users would be able to buy or download a book from another retailer or from the publisher itself, and then side-load that book onto their Kindle and read it, something that DRM makes difficult.

“What is the challenge the industry faces from a retail perspective? That the consumer marketplace is dominated by Kindle,” he said. “Dropping DRM would enable any retailer to sell e-books to Kindle customers.”

Books without DRM technology are easily shareable between users, just like print books. Therefore, books without DRM are more valuable to readers, Berlucchi said.

Would users actually take advantage of being able to buy from any retailer and side-load to their reader? Would they share books?

Readers are already doing this, said Berlucchi, through services like Calibre, which allows users to buy, read and share e-books without DRM protections and has millions of users. Tech-savvy users would be more apt to take advantage of the device interoperability dropping DRM would encourage.

DRM is often employed by publishers to protect copyrighted material from piracy. Determined intellectual property thieves won’t be deterred or stopped by DRM, said Berlucchi. The music industry dropped DRM en masse in 2007, five years after the rise of the iPod, and there was no rise in music piracy, Berlucchi said. Five years after the rise of the Kindle e-reader, Berlucchi predicts that the book industry’s major players will also drop use of DRM.

Speaking to publishers who worry about the growing influence of Amazon in the book industry, Berlucchi argued that DRM helps protect Amazon’s market position.

“Amazon uses DRM to lock people in. You can’t take the files out. The problem [for readers] is that if you go down the Amazon road, you can’t drop out. If you drop out of Kindle, you lose all your books. They [Amazon] are using DRM to build their silos, like apple did in the beginning with the iPod, which is how they [Apple] dominated the music market,” he said.

As for copyright protection, Berlucchi recommends that publishers use “watermarking,” or tagging copyrighted material so that if it is pirated, it can be tracked to the original buyer. Lawsuits and education are the best ways to fight piracy, Berlucchi said.

Anobii was founded in 2006 by Greg Sung and was meant to be the “Facebook for books.” In June 2010, a consortium of investors led by UK-based retailer HMV bought the company. The UK-arms of publishers HarperCollins, Penguin and Random House also have small stakes in Anobii. Berlucchi would not share how many users Anobii has, but said that the company’s website gets 12 million pageviews a month.

Write to Jeremy Greenfield

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2 thoughts on “Bookseller Backed by Big Publishers Advocates Abandoning Digital Rights Management

  1. Interesting argument, however is DRM the issue or the need to gain interoperability between devices? Consider how this happened with converters between MS Office and Mac.

  2. I attended this session at BEA and fully agree with Berlucchi’s comments. As the owner of an independent publishing company serving the Christian market, DRM is a huge barrier to getting any traction in the ebook download market. We constantly receive complaints from customers purchasing DRM’d content on our eChristian.com store. The process of downloading ACS protected content, even when documented well by the e-tailer, is completely baffling to the majority of users. And many, no matter how savvy will not be able to use the content as intended without breaking the DRM (which is fairly easy for anyone willing to google this topic and spend 5 minutes following a few easy steps).

    As Shatzkin pointed out late in the conference, DRM’s only purpose may be to make Amazon stronger. A majority of publishers will likely look back and wish they’d supported independent e-tailers several years from now by removing DRM. It will of course be too late at that point because these independents will not have been able to build thriving ebook businesses.

    We experienced a similar issue on our christianaudio.com site 8 years ago. DRM was killing our sales. Of every 10 sales, 5 customers asked for a refund and the others did not return. We convinced the majority of publishers in our space to remove DRM. The site immediately began to grow and is still in existence today. We have about 300k registered users. Considering the size of the Christian audio market, that is significant.

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