A recent incident involving Amazon and a Norwegian reader has highlighted the sad state of e-book distribution on many levels. For those new to the story, which was broken on Martin Bekkelund’s blog late last month, a Norwegian woman named Linn (described as a friend of Bekkelund’s) reportedly found her Amazon account closed and all the e-books she had purchased via Amazon wiped from her Kindle with no explanation. Bekkelund further documents on his blog an email exchange that he says took place between Amazon and Linn, who sensibly inquired as to what exactly was going on. The series of exchanges is a surreal back and forth communication with Amazon that Cory Doctorow has since characterized as “a sort of Kafkaesque dumbshow of bureaucratic non-answering” in which Amazon provides no substantive explanation beyond a vague abuse of Amazon polices – without naming which policies or what the nature of the abuse entailed.
Some additional sleuthing by Simon Phipps turned up a bit more context. And indeed, it is a more complex story than it appeared at first blush, as these things usually are. Phipps reports that Linn lives in Norway but bought her Kindle in the UK. And then, being a good daughter, gave that Kindle to her mother and bought another one. Which subsequently broke. Twice. Amazon agreed to ship her a replacement, but insisted on sending it to address in the UK, as opposed to where Linn resides in Norway. All of this maternal gifting, device replacement, and international back-and-forthing apparently kicked up some sort of flag in Amazon’s systems resulting in the account shut down.
After the story appeared on Doctorow’s and Phipp’s blogs and was written up in the Guardian, Phipps reports that Linn’s account and e-books were just as mysteriously restored. Hooray. Case closed? Not so fast.
While in one sense this may be a minor customer service snafu on the part of the Amazon brought on by an admittedly complex (but in no way unusual) chain of events, it serves as a useful lens into the train wreck that is e-book distribution today:
1. A Lack of E-book Purchasing Alternatives. Yes, I realize there are a growing number of e-book distributers – Amazon, Barnes & Noble, Kobo, Apple’s iBooks, Google Play, Stanza, etc. And of course in professional and scholarly publishing platforms like Ovid, JSTOR, Project Muse, Wiley Online Library, Science Direct, Access Medicine, Safari Books, SpringerLink, and others have long offered access to digital books (largely online via HTML or via PDF download — EPUB and other “e-book” formats are largely eschewed). Leaving aside this (largely) institutional market in scholarly and professional books, Amazon is pretty much in a class by itself — accounting by some estimates for approximately 70% of the e-book market in the US.
In one sense, this is odd given e-book distribution is actually pretty easy, technologically speaking. E-book files are simple files relative to the complex XML that those of us in professional and scholarly publishing have been working with for well over a decade. Moreover, wrapping some e-commerce around them and putting them all on a platform is pie-like in its easiness. The complex parts are negotiating all the deals with publishers (which is made even more complex by the way in which rights are apportioned geographically, as is discussed below) and (up until recently anyway) integrating with e-reading devices. Amazon was early (but interestingly, not first — Sony anyone?) to market on both fronts.
Amazon achieved its dominance by copying a move from Apple’s iPod strategy, which integrates a distribution platform, a content management system, and a device for content consumption. In Apple’s case this was the iTunes store, iTunes, and the iPod; in Amazon’s, it is the Kindle Store, the Kindle Library, and the Kindle. Same same, but different, as they say.
Barnes & Noble has attempted, with limited success, to replicate this strategy with the Nook ecosystem, and even Apple has tried to copy Amazon’s copy of their own playbook with the iPad and iBooks. But neither Nook nor iBooks has really been able to dislodge the Kindle. Others such as Kobo and Google (with Google Play) have entered the e-book distribution market, but no one has yet presented a serious challenge to Amazon.
There are some chinks in Amazon’s seemingly impenetrable fortess walls, however. The proliferation of mobile tablets such as the iPad (and iPad Mini), the new Microsoft Surface and other tablets in the new Windows ecosystem, and of course the tablets running various flavors of Android, are not tied exclusively to a given e-book distribution platform. I can read e-books via Kindle or Nook or Google Play or Kobo apps on any of these tablets. E-book agnostic devices remove one of the 3 pillars of Amazon’s strategy.
The question is whether e-book agnostic devices will be able to foster more competition in this space or whether Amazon will dominate here as well. If publishers are going to overcome the Amazon virtual monopoly, they must change the rules of the game. And of course publishers attempted to do just this (with an assist from Steve Jobs) with the switch from the wholesaler to the agency model – a move which limits the ability for Amazon (or any other player) to use revenues from other business lines to offer artificially low prices (as Amazon has historically done) in order to maintain market dominance – a strategy that has been thwarted by the misguided and ham-handed actions of the US Department of Justice.
That being said, the agency model was not a silver bullet in and of itself (and indeed organizations like Apple and Google have enough cash on hand to beat Amazon at this game if they so chose). To truly open the market to competition in e-book distribution, publishers must disrupt the proprietary lock-in of the Kindle ecosystem – and they have tools at their disposal to do so.
2. DRM Is a Problem, Not a Solution. DRM is a good way to frustrate your paying customers and does nothing to thwart pirates and others who will in any event never pay you a dime. Pirates can always get around DRM and once one person takes the time to do so, just once, the world now has access to free copies of your content. But here is the thing – such people, the ones downloading publishers’ content via Bittorrent or other means – they are not lost customers as they were never going buy most (any?) of the content they have downloaded legally. But there are millions of people in the world that will buy publishers content legally so why not focus on maximizing revenue from these people (e.g. “customers”) by making life easy for them? Ditch the DRM.
Interestingly, Amazon attempted to employ precisely this strategy as a way to break Apple’s stranglehold on music distribution. While iTunes music is currently DRM-free, there was a period of time when Amazon convinced record labels to let it sell DRM free music as a differentiator vs Apple. Apple’s continued dominance in music is largely based on the sheer number of iOS devices and the inertia of using iTunes since it comes standard on all of them. While the Kindle Fire plays music, it doesn’t fit in your pocket.
Eliminating DRM will accelerate sales. Users continue to view e-book purchases as, well, a purchase – not a rental (which is what in reality e-books currently are). That could change with other all-you-can-read rental models with monthly fees (Spotify for books), but that is not what we are talking about here. When a user buys an e-book, they expect to “own” that copy of the e-book in perpetuity (whether they technically own it is irrelevant as long as they know it is stable and can be moved about to other devices and software). They get rather befuddled when, as in the case described above (or as with the perfectly ironic George Orwell Nineteen Eighty-Four incident), their e-books are suddenly wiped from their devices. Eliminating DRM will allow users to place their e-books beyond the reaches of Amazon and other platform providers in secure libraries. Once users are confident in the stability of their libraries, they will buy more e-books. The present situation is one where many users are hesitant to invest in libraries that may suddenly (and inexplicably) vanish, or be preempted by another distributor (remember Sony? Borders?) requiring repurchase of all those e-books all over again.
3. Proprietary Formats Must Go. The Kindle Format (KF8) really offers no advantages (to users) over EPUB; it is simply just different enough to make it incompatible with other readers. So even if users could get their Kindle-formatted e-books out of their Kindle Library, there is no other way to read them other than the Kindle (or Kindle app). Similarly, the Kindle App does not render EPUB files.
From a user’s perspective – and a publishers perspective – the ideal scenario would be to have a plethora of different e-book stores where one could buy e-books – e-books which could then be kept in a central, store-agnostic library, accessible from multiple devices and readable via any number of standardized reading applications. The Kindle strategy is designed to thwart precisely this scenario. Publishers need to intervene to bring it about. One way would be to simply refuse to deal with any e-book seller – including Amazon – that uses a proprietary format. Sure, e-book sales will take a short-term hit while Amazon circles their virtual wagons before ultimately capitulating, but in the longer-term, publishers, and the readers of their content, will be much better off.
The DRM-controlled use of the K8 proprietary format is the lynchpin of Amazon’s lock-in strategy, and by forcing the abandonment of both, publishers will, in a single stroke, end Amazon’s virtual monopoly. Why? Because with DRM-free and non-proprietary files can be used interoperably. Users will be free to buy e-books wherever they like (just as with physical books), store them in whatever library system they would like, and read them on any device using whatever reading application they would like.
This will create more opportunity for e-book stores to differentiate themselves in terms of service, reviews, specialization, quality control, and other services (and indeed, Amazon is good at these things and will likely continue to do very well). It will also create more competition for innovation in reading software and e-book library management software. And ultimately it will spur more sales as the e-book ecosystem becomes both more competitive and more stable (as the content purchased by users will be less dependent on any one player in the ecosystem).
Publishers will be better off as they will not be held hostage to the dictates and pricing schemes of Amazon. Users will be better off as they will have more and better reading options and will likewise not be held hostage to a single organization that can control, or erase, their libraries at a stroke.
4. Territorial Distribution Models Inherited from Print Books are Nonsensical. Another factor in both the the story of Linn’s vanishing Kindle library and the elimination of DRM more generally is the way in which rights are currently apportioned. When dealing with print books, authors have traditionally contracted with books publishers in their home country. That publisher then represents the author globally by licensing the rights for the work to other publishers in other countries. In some cases this may involved a translation. In other cases it does not. A US publisher, for example, might offer the rights to distribute a book in the UK and a different publisher in Australia and yet another publisher in South Africa. In all cases the work is published in English.
While this system may have made sense for the distribution of print works (especially the local distribution of print works via physical book stores) it makes no sense for the distribution of e-books, where anyone anywhere in the world may download a book from the same website. And yet this is how e-book rights are often handled, leading to the lack of availability of titles in some countries.
Doctrow’s post provides speculation as to how issues with territorial rights (or lack thereof) may have led to Amazon’s flagging (and then wiping) Linn’s Kindle library. It is worth reading though beware understanding the current state of affairs in territorial rights for e-books may hurt your brain.
Publishers need to dispense with this nonsense and move to global rights, and global distribution, for any given language. If I live in Arizona and want to download the German edition of Gerhard Richter’s biography “A Life in Painting” (as opposed to the US translation) why should that be complicated? If I live in Norway and want an English edition of the latest Iain Banks novel, why should that be a problem?
Until publishers abandon DRM and proprietary formats (as even the much maligned and generally backward music industry has done) and move to global distribution and rights licensing models, they will continue to be held hostage in the golden cage that is Amazon – with readers ultimately paying the price. The status quo seems like a risky strategy and increasingly opens publishers up to market disruption and disintermediation. Authors and readers are the two necessary nodes in this system. To the extent that publishers and distributors make more efficient and effective the connection between authors and readers, they will profit. Right now they seem more focused on causing friction. This is not a winning strategy.