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June 2012
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How Publishers Can Kill the Kindle by Trusting Customers

There is no avoiding the fact that the Big 6 publishers created their own problem in the Kindle.  Amazon provided them with an easy way to start making a move into digital publishing when it was just getting off the ground and they jumped at it.  That alone wasn’t the problem, though.  The issue was that they were so paranoid about the medium that they managed to lock people into the first platform they purchased any significant number of books through.  Let’s face it, nobody is better at successfully selling, suggesting, and just generally getting people interested in books than Amazon.

I’ve talked here before about how the Kindle deserves its place as the top selling eReader primarily because nobody else has come close to designing a store that gives customers so much of what they want.  The suggestions are often eerily accurate, the categories make sense, and the search options are almost always up to a given task.  Even Barnes & Noble can’t come close because of how used to the store-based practice of sponsored marketing they are.  Given a choice between accurate recommendations based on personal purchase history balanced against similar customer profiles and recommendations based on what publishers decided to pour an advertising budget into, the choice is fairly simple.

We know that Apple’s price fixing scheme was not the answer in the long run.  Not only did it not work particularly well to decrease Amazon’s influence, now the publishers are enjoying legal troubles for their efforts.  They do have plenty of reason to want more diversified distribution, though.  Looking at Amazon’s treatment of the IPG is enough to highlight some of what it means to be completely at the mercy of a single distributor.

The problem these publishers really need to address is that of their DRM.  Amazon has not required publishers to participate in their DRM scheme, to the best of my knowledge.  That was forced by publisher paranoia over piracy.  If done away with, they are afraid that eBook profits will plummet.

Here, it seems like publisher interests are actually well served by the design of the Kindle.  Without losing existing Kindle owners as customers, publishers could easily begin selling their titles without DRM and encourage wider competition.  Best case scenario, this would allow publishers to open their own cooperatively stocked eBook store. It would also make possible the creation of smaller stores taking advantage of the same opportunity.

If somebody got truly ambitious, it wouldn’t even be hard to create a Kindle alternative that allowed for essentially the same experience.  There are any number of Kindle clones on the market already that do the job fairly well and could probably do it better if the provider felt it was worth the investment in development.  There’s no incentive if they can’t attract customers because Kindle Store purchases are locked down to Kindles.

All of this hinges on publishers looking past the possibility of piracy.  How is that really so difficult, though?  The DRM on eBooks is already laughably easy to get around, judging by how common stories of switching platforms through format conversion have become.  If somebody really wants to pirate content, it is going to happen anyway.  If these companies genuinely believe that the only thing keeping most Kindle owners from helping themselves to hundreds of free books is the DRM scheme, they’re fooling themselves and working against their own best interests.

8 comments to How Publishers Can Kill the Kindle by Trusting Customers

  • I don’t even call it piracy! Why should I? People are buying e-books, from anywhere, we remove the DRM, convert the e-books and read them on our preferred e-reader without even thinking in the direction of piracy. Why call it piracy when we honestly buy the e-books to their given price and read them?

  • matthew

    I think it’s the difference between technical piracy and philosophical piracy. I agree with you and find nothing morally troubling about the practice. From a legal standpoint there is reason to call it piracy. That doesn’t mean I never do it, but to characterize it any other way would be to potentially mislead. I don’t want to get anybody in trouble for thinking there was not even a slight chance of trouble over the conversion.

  • David Lang

    how can it be piracy when you are paying what they ask?

    just like broadcasters tried to get VCRs outlawed, once you get something legally, there’s a lot that you are allowed to do with it. time-shifting and space-shifting were the bugaboos of the VCR, device switching is the bugaboo with e-books

  • David Lang

    what did Amazon do so wring related to IPG? the two couldn’t come to an agreement on the costs of e-books from IPG, so Amazon had no right to sell e-books from IPG, Amazon stopped selling things that they had no right to sell. what should they have done?

    If they had continued selling e-books that they had no right to sell IPG would have had a clear (and simple) lawsuit against them.

    There have been two cases in the last few years where Amazon and a publisher havn’t been able to agree on prices, so the books stopped being sold by Amazon, the IPG issue and the McMillian issue. Why was the McMillian case described as “McMillian pulled their books from Amazon”, while the IPG issue is described as “Evil Amazon stopped selling IPG books”??

  • matthew

    David,

    It is piracy in a technical sense only, as I mentioned. My understanding is that this is similar to how first-sale doctrine doesn’t apply to digitally distributed products. I don’t think anybody has been, or ever will be, successfully prosecuted for device switching. I endorse the process and routinely make sure my new purchases are clean so that I am not tied down should I decide to swap.

  • matthew

    As for IPG, my complaint isn’t how they handled the results of the disagreement. My complaint is how it came about. In the case of McMillian, we were talking about a clearly coordinated effort to slap down Amazon and put control in the hands of the big publishing houses. If it had been their independent decision, I would have applauded it as a gutsy move, if not a smart one. I look down on it because they were part of an organized and (to the best of my knowledge) illegal arrangement that removed the need for competitive pricing altogether.

    Amazon’s actions with regard to the IPG were hardly so underhanded, but I do view them as opportunistic. I don’t believe Amazon did something inherently evil or that they are out to destroy small publishers and authors. I just think that they went in to squeeze more than they needed to out of people who were already in a comparatively disadvantaged position due to their having to compete with the Big 6. The melodramatic response in favor of IPG was ridiculous, but that doesn’t mean Amazon was completely in the right.

  • David Lang

    I’m not saying Amazon was in the right. I have no information to know who was right and who was wrong, and I don’t know that anyone else outside of the companies do either.

    so how can it be phrased as “Amazon’s treatment of IPG”? especially without knowing that Amazon was making demands and that it wasn’t a case of IPG demanding more?

    Just phrasing the issue that was is passing judgement on the issue.

  • I don’t think that the Kindle is as great as you’re making it out to be because personally I think the iPad can do everything the Kindle can do and more but you definitely make a good case for Amazon.

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