Random Rant going on here. Take from it what you will. The video from BookNet Canada’s 2010 Tech Forum where Kobo’s Michael Tamblyn presents “Lessons Learned from Shortcovers and Kobo: A Year in the Life of the What and How of Selling eBooks” is not new to most people in the publishing industry. There were some great lessons learned and I took a lot from the presentation. It’s well worth the 50 minutes and I’ve posted it here if you haven’t seen it. I was especially interested in the pieces around ebook pricing. One of the things that’s been on my mind since the advent of the iPad is the new pricing arrangement that publishers set up with Apple, or perhaps, what Apple set up with publishers. Those of us in the industry know it as the “agency model”. Publishers can sell ebooks at their preferred price and Apple simply takes 30% for making it available in their iBookstore. Publishers, agents, and authors all lauded this new model. Then publishers turned their gaze towards Amazon and forced them to take on a similar model. Prior to this Amazon had been using the “wholesale model”, where Amazon purchased the book from publishers and sold ebooks at whatever price they wanted. During the time that Amazon was using the “wholesale model” they were selling ebooks at no more than $9.99, and often at a loss. Their take, I assume, was that if ebooks were cheap more people would buy their e-reader, the Kindle. I get that argument. And quite honestly, if I’m going to spend a nice amount of money on an e-reader, the books shouldn’t cost the same as paper. They should be considerably cheaper. I had the same feeling about mp3’s and CD’s. If I am going to buy an mp3 it better be really cheap since I’m not buying all that packaging. Sadly, the music industry learned that lesson the hard way. So here we are today. Apple and Amazon are now selling ebooks using an agency model and if you look, you’ll find some paper books cheaper at Amazon than their respective ebook format. That’s a sore point with a lot of readers. So that brings me to this post. When folks in the industry were applauding the agency model of business saying this is good for authors, publishers and agents, nowhere did I hear anyone saying that this was good for the consumer. And quite frankly, as a consumer myself, it’s a little insulting. And at the end of the day, publishers are going to learn this lesson the hard way, just like the music industry did. As a result of all of this I decided to run my own poll around what was a factor for buying books. Surprisingly, price ranked third, tied with the author. Certainly something for publishers to consider, especially since their own “brand” is at the bottom of the list. Now, let’s move on to Digital Rights Management (DRM) since that comes up quite frequently around ebooks these days. DRM was something the music industry tried to implement and it failed miserably. Consumers don’t want something that limits their ability with something they own. I find that when it comes to consumers, their attitude is that if they paid for it with their hard-earned money, they own it. They can do what they want with it – end of discussion. DRM basically tells them they don’t own it and that they are limited in what they can do with it. So when it comes to books, when you buy an ebook that has DRM, the following will happen: - if you move from a Kindle to the Sony, you have to buy the book again. You don’t have the right to move from one platform to another. - if formats change in a few years and you want that book on some new e-reader, you need to buy it again. There’s a whole lot more, but what I’m trying to illustrate is that you technically don’t own it any more. Unlike a paper book, you can’t lend it, you can’t resell it, you can’t keep it for 20 years because no technology platform will last that long. Basically you’ve licensed the use of it for the life of the device that you’ve got in your hands right now. When you move to some other platform, that’s it. Bye bye book. And that’s just want publishers want. Buy, buy book. There have been a number of arguments around DRM and the protection against piracy, but you know what? They’re wrong. DRM doesn’t protect anything. There is, and there will always be, someone who will hack it. And they will do it because you’ve given them the challenge. And whether an ebook has DRM or not, those consumers that are determined not to pay for content, will find it free no matter what. So now the choice needs to be focused on the consumers that are not quite so willing to venture into the Darknet to get their content “illegally”. How can you keep customers buying instead of looking for your ebook for free? Make it cheap, make it easily accessible, and make it theirs. Let them do what they want with it once they’ve paid for it. It’s their perception that they own it, and they’re right. I ran a couple of polls over the last few weeks to get some feedback from readers. They are completely unscientific, but the results are below.

Not only do readers prefer their books without DRM, but 26% of the readers who took this poll won’t even buy an ebook if it has DRM. That’s significant. The next two polls were on pricing. Because the respondents were from around the world, I couldn’t price things in US dollars. So I used a pricing structure relative to the cost of a trade paperback book. The first poll is what readers were willing to pay for an ebook if it had DRM. Most people were willing to buy the book at 50%-75% of trade paperback price if it had DRM. But again, 25% of the respondents would not buy the book at all.

In the last poll I removed DRM to see if the attitude would change when there was no DRM in place. The majority of respondents were willing to pay 50%-100% of trade paperback prices if there was no DRM. This is a huge signal to publishers that they should rethink some of their strategy.

I wish Kobo had done some more research around DRM. My own polls are obviously limited, but I think they say something about the reading public and the publishing industry needs to pay attention to what they’re saying. There have been a number of complaints at places like the Amazon Kindle discussion groups and mobileread.com where consumers with e-readers gather en masse. Publishers need to drop in and listen to what their readers are saying.

In the meantime, go check out places like Smashwords. Their books are DRM-free. Once you buy the book, you can download it over and over again. And if you change devices, you can download it in the format for your new device without hassle and free of charge. And most of the books there are cheap. This is where ebooks should be. Rant finished.