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CNet has an article wondering whether the iPad will lead to more ebook piracy and it’s worth a read. It brings up a tangentially related but much bigger topic -

What is the reality of ebook piracy?

Everyone seems to have a different opinion of it and it involves complicated things like good and evil and a fight for rights and morals and ethics.

This post will suggest that all the moralizing and talk of principles comes into play after people have made their assessment of what’s in their best interests - Not before.

The ‘People do what’s best and most convenient for them’ Model of Piracy

 Let’s start with customers -

1. One set of Customers want to see fair prices and don’t like piracy. They will not pirate – However, they want fair prices.
2. Another set of customers want free books and also want as much convenience and as good a reading experience as with paid books. They will always pirate - they just want the quality and convenience of reading pirated books to match paid books.
3. There is a third set of customers who will pirate if they are pushed beyond a certain limit. They will pirate if they feel they are not given a fair deal.

This is a rough approximation – it’s more of a continuous spectrum with higher concentrations at the very ends of the spectrum.

People factor in benefits, especially convenience, and costs, especially punishment

The first thing people look at is – What’s the benefit to me.

They look at the book, the value for money, the joy they’ll get, how much they want it, the convenience, the quality of the reading experience and come up with a rough idea of the net benefit to them (the pleasure they will derive).

Next they look at the costs of choosing between buying the book and pirating it.

1. Cost of buying the book – Monetary, Risk of frustration if book is not high quality (not well formatted), taking the risk of being disappointed with the book, amount of effort they have to make, time it takes, and so forth.  
2. Cost of pirating the book – Amount of effort to acquire the book, time it takes, chance of getting a good quality copy, risk of being found, risk of punishment, getting a bad reputation and other societal costs, guilt of doing something unethical (it is also linked to societal costs), guilt of denying author of a livelihood (also societal).

Basically our model points out that nearly all of the downside of pirating the book is related to societal costs - guilt which is an ancestral remnant of the importance of working together, the risk of getting a bad reputation, and the risk of being punished by society’s laws.

Three Switches for Rampant Piracy

Three key switches that need to be flipped to make piracy rampant -

1. Convenience – It should be possible and convenient to pirate ebooks.  
2. Freedom from Guilt and a Bad Reputation – There should be some easy excuse to rationalize breaking the social contract. An excuse for others and for ourselves.
3. Freedom from Punishment – Some safeguard against being identified and punished. An absence of punishment would do too.

There are some people who will never pirate because that just goes against their values. There are also people who will always pirate because paying would go against their values. If we leave out these people we get the majority of people who will pirate based on whether the three switches are flipped or not.

What flips each switch for a person is different.

1. Searching 5 minutes to find a pirated copy would rule out some people because it’s just too inconvenient. This is why some people who fully intend to pirate want DRM free ebooks.
2. Higher Prices make some people feel they are absolved of guilt as Publishers are breaking their end of an implicit contract. They begin to believe that they now have some sort of moral right to steal.
3. Anonymity is the key for other people. As soon as they feel they could never get traced the lack of the threat of punishment frees them to do what they feel is best for them – pirate ebooks.

Basically, it’s not that people are choosing to pirate out of frustration. It’s that people are not pirating due to the costs – even if the costs are intangible things like the risk of damage to your reputation or a personal sense of right and wrong.

If we remove the costs we will get the natural state i.e. people not paying for ebooks.

The natural state is to pirate things

This might sound crazy. However, if you had one person with food and another without and no societal rules you would only have three possibilities -

1. They decide on an agreement. 
2. The one without food steals from the other and succeeds.
3. The one without food tries to steal and fails.

The Internet is in many ways like that – With the added bonus for thieves that there is no identification. People are put into tempting situations again and again without the threat of damage to their reputation and without any fear of punishment.

Companies and Authors don’t really understand piracy

It’s easy to understand why companies and authors misunderstand piracy – the huge danger piracy poses for them makes them irrational when confronted with it.

1. For retailers it’s best to sell a lot of books and get as large a share as possible. For them piracy is very bad as it cuts sales drastically.
2. For Publishers it’s again best to sell a lot of books and get as large a share as possible. For them piracy is especially bad as they lose sales plus they end up producing goods for freeloaders and parasites.  
3. Established authors fall in the same camp as Publishers. 
4. Upcoming authors or those using a pro-customer stance as marketing are willing to give away their product without anti-piracy checks. They feel the lost sales are made up by reciprocation and free marketing and people returning the favor in other ways.

The 4th is the most interesting and we’ll address them last.

Let’s start with Retailers, Publishers and Authors.

Since piracy is very harmful to them and since people always provide surface reasons for piracy Publishers never realize the dual tasks they face -

• They have to understand that the natural state is piracy – People not paying for ebooks. Publishers have to put in place costs to ensure people avoid this pirate state.
• At the same time they have to do it without pointing out the natural state or giving customers another excuse to justify their piracy.

Publishers have to establish a win-win contract, convince customers it’s valid and good for both parties, and then enforce it.

Companies aim to maximize profits

What makes things interesting is that just as the natural state for customers is to steal whatever they can (steal being used in a mild sense), the natural state for any company is to maximize profits any way they can.

They have to convince users of the value of their product and it helps to paint a win-win scenario. However, companies aim to create the most profits – whether it is via higher prices or higher volumes or lower costs.

In a way it is a company’s job to get the most profit out of customers – whether it is ethical or unethical just depends on the individual company’s strategy and value-system (their actual one – demonstrated via their actions, not the one they put on a poster).

This brings us to a very surprising conclusion. 

The need to pretend that what you’ve decided is ‘the right thing to do’

We have two warring desires -

1. Publishers and Published Authors’ desire to maximize profits and  make the most money they can.
2. Customers’ desire to get the lowest possible prices and the most value – including, if possible, pirated ebooks.

In an ideal world the parties would draft up a win-win agreement. However, reality insists that each thinks they can outwit the other.  

The sub-conscious ‘What’s best for me’ Decision

What both parties do is figure out what’s best for them.

1. You have reasonable people on both sides who come up with a win-win model. 
2. There are greedy Publishers who come up with a $25 ebook model. 
3. There are greedy readers who come up with an ‘information wants to be free’ model. If they’re smarter they try to achieve the same via pushing for elimination of DRM.

People on both sides are figuring out what’s best for them, factoring in what they think they can get away with, and then promoting that.

The politically correct reason designed to fool others

To get away with more than you’re entitled to you have to fool others and that’s where it helps to have a good red herring -

1. For readers who want to pirate books conveniently DRM becomes about freedom and convenience. 
2. For Publishers who want to fleece readers higher prices become ‘necessary to sustain the business’. 

The more hard to explain and decipher the reason the better. The more emotional and moral and ‘good’ the reason the better.

That’s why, even with 25,000 Publishers, we still can’t get one straight answer on what the costs of creating and publishing books really are. It’s also why people with the most extreme views about ebook rights always claim to have the higher moral ground.

The reason we often need to fool ourselves 

It’s easier to fool others into doing something (that’s good for you personally) if you yourself believe that’s the right thing to do and helps both parties.

It also works as a safeguard against all our social inclinations and instincts.

Take an author whose selling point is fighting for ebook rights. The reality might be that the main reason his books sell and he gets coverage is because he claims to be for ebook rights. In a way it’s his calling card. Yet to be truly effective he has to believe that it is a moral war. It sounds so much less powerful (even to oneself) if it’s painted as just an innovative new marketing strategy.

People want to have their cake and eat it too – not only do they want things that benefit them a lot, they also want to believe that they are actually sacrificing themselves while making all these profits.

Is there such a thing as justifiable piracy?

That’s not really a question that can be answered. It’s all supply and demand and power and control.

Companies that have products that are in high demand try to make as much money as they can. If they get more and more power they keep making things more and more lopsided until at some point things snap and people leave.

When customers get a lot of power they do the same. Take the Internet and how people expect everything to be free. Customers, when they get lots of power, start exploiting content creators until at some point the content creators just leave for greener shores.

We’re seeing this same greed with ebooks. Everyone is focused on the layer of illusions and lies and rationalizations – whatever gives them freedom to do what benefits them the most.

The truth is that ebooks are cheaper and easier to publish than physical books. Publishers are trying to hide that – perhaps due to still being stuck in the model of physical books. It’s also true that ebooks are easier to pirate and there is far less danger of being caught. Readers are trying to make the most of that.

We have two groups of people trying to exploit each other instead of working together and it’s going to hurt both in the long-term. The decline of Books will just be collateral damage.

Filed under: publishing Tagged: | ebook piracy, false altruism