Kindle, Piracy and eBooks

The flavor of the week seems to be to discuss ebooks, piracy and the rights and wrongs.

In particular -

  1. Teleread has covered How Publishers Encourage Piracy and a lot of related topics.  
  2. NY Times asks  – Will books will be Napsterized?
  3. The Bookseller talks about the fact that there are 160 pirate copies of Dan Brown’s The Lost Symbol across 12 different download sites.

Not sure what has suddenly got everyone worrying about ebooks and piracy. However, it’s an issue well worth digging into.

What Piracy are we talking about?

This post is focused on copyright infringement and the piracy of books.

In particular we are talking about people procuring (via the Internet or via friends) a book illegally and reading it without compensating the author and publisher.

It’s not a recent problem (snippets from all over the Internet, including Wikipedia) -

Daniel Defoe in 1703 said of his novel True-born Englishman: “Its being Printed again and again, by Pyrates”.

In 1843 Christmas Carol (authored by Charles Dickens) was sold for 2 pounds in the UK, but it was available  for a meagre amount of 6 cents in the US.

Piracy might have been around a while – However, it does threaten to become a much more serious problem.

The Internet and modern technology (scanners, photocopiers, etc.) have made piracy much easier to accomplish and much tougher to restrict. 

The first question to ask before trying to solve Piracy is -

Is Piracy a solvable problem?

Piracy might not be a solvable problem (one of the articles had this assertion, and it’s probably true).

Here are a few reasons -

  1. Privacy rights mean users’ actions can’t really be tracked as much as we’d like to end piracy.  
  2. Peer to peer networks and the high level of interconnection in the world means piracy doesn’t need central hubs.   
  3. The Internet and perhaps other factors have bred a high level of Entitlement.
  4. There are people who are ideologically opposed to ownership and copyright.

And the single biggest reason piracy might not be a solvable problem -

The Law of diminishing returns i.e. The better the systems to stop piracy, the higher the costs. Resulting in a point at which it’s not cost effective to further improve anti-piracy initiatives.

Let’s assume that the aim is to restrict piracy as much as possible, and not to annihilate it.

The first step in that direction is to understand the people who pirate and even more importantly the people who are the foundation of the piracy eco-system.

Who is benefiting from Piracy? 

Let’s look at who benefits from piracy -

  1. First, people who get to read books for free.
  2. Second, people who build the platforms that allow for piracy or in some other way sell or spread pirated products.

Both of these categories of people fall into one of three buckets -

  1. People who know they are doing something wrong and the threat of punishment etc. will stop them.  Let’s call them The Rationals.
  2. People who claim that piracy is justified under certain conditions. Let’s call them the Rationalizers.
  3. People who are against the very concept of copyright. Let’s call them the True Believers (courtesy Felix Torres, and more on this below)

The latter two are much more interesting because these people really feel they are fighting the good fight. Let’s jump into their arguments.

Defenders of Piracy – Rationalizers and True Believers

First, let’s look at people who rationalize piracy i.e. The Rationalizers.

These are people who would not pirate if they were not forced to. A good post which illustrates this mindset perfectly is ‘How Publishers Encourage Piracy’.

Their justifications for doing something illegal include -

  1. Publishers don’t have an ebook available for the book they want.  
  2. DRM restrictions make things inconvenient.
  3. Publishers have priced ebooks too high.  
  4. They bought the hard cover and ought to get the ebook free.
  5. eBook cost publishers next to nothing so there’s no loss if they read it for free.

There is one fundamental fact that these people are missing i.e.

It’s up to the author and publisher to decide the terms on which books will be consumed.

If you don’t agree with those terms it’s ok to boycott the book.

It’s NOT OK to pirate the book.

If a reader is getting the benefit of reading the book, and the author is not getting what the author thinks is a fair price, then it’s piracy.

Next, let’s look at the true danger i.e. the people Felix Torres calls True Believers

True Believers believe that all content should be free, information wants to be free, etc.

These are the people like Pirate Bay that will go to court to keep doing illegal stuff.

Content creators and publishers don’t realize that these people will NEVER stop pirating things.

While Rationalizers have ‘justificiations’ that makes it OK to do something wrong i.e. piracy, True Believers think Piracy is a good thing.

Defending Against Piracy

How do we defend against Rationals?

This is exceedingly simple -

  1. Sue and limit all the platforms that encourage piracy. The greatest scam in the world is  sharing sites claiming they are not responsible for piracy. If they can’t police their sites, and are at the same time conveniently making money from traffic, they deserve to get shut down.
  2. Sue the originators of piracy. The people who upload illegal books.

The threat of punishment is the only strategy that will work against rationals.

If Rationals can make profit, without the risk of punishment and negative consequences, they will. When the risk gets too high, they’ll find another industry to steal from.

A rather contentious, and extremely effective, suggestion would be to include a unique marker in every ebook that can be used to find out where pirated copies originated from. For scanned titles, simply get the courts to reveal the identities of people uploading illegal copies. Fine them huge amounts.

How do we defend against Rationalizers?

The only way to defend against Rationalizers is to NOT point out their rationalizations (when people work a rationalization into their belief system, they tend to never let it go).

In fact point out how their valid actions (yes, not kidding here – tell them they are right) are a function of the environment and not actions of publishers.

Play it as Content Creators in partnership with Rationalizers trying to solve the problem.

Explain the profit systems.

Humanize the publishing industry and humanize the impact.

Show what profits are, who makes what.

Show the wages of the different people part of the creation process.

When you show Rationalizers that pirated books take away from the quality of life of authors, editors and others in the publishing and creation process, you destroy the Rationalizations.

Nearly all Rationalizations are based on ‘people in publishing being greedy’ and ‘trying to get more than books are worth’. That’s the only way Rationalizers can justify doing something wrong.

Humanize the publishing industry and highlight the effect of piracy on these people.

What happens to an editor when 50% of the book’s profits are eaten by piracy?  What happens to the author?

Don’t label anything right or wrong – just talk about the impact on the people.

You’ll have a large portion of The Rationalisers turn into genuine customers.

Which brings us to the ones you’ll lose to the Dark Side, and the Dark Side itself.

How do we defend against True Believers?

Content creators can never convert these people.

Much as Felix Torres says – you can only hope that they never become too big of a demographic.

The ways to limit the damage that True Believers do is -

  1. Change things from ‘Freedom and Openness Versus Publishers’ to Book Creators and Readers Vs Book Piraters.   
  2. Limit their platform of ideas. Keep them and their ideas away from real customers.

It’s all about how you frame the situation.

The True Believers are currently trying to play the Robin Hood card. Look at all their arguments -

  1. DRM is bad for customers. 
  2. Prices should be lower. 
  3. Things should be open.
  4. Readers should have ownership.
  5. Piracy needs to be protected.

These are all arguments (with a modicum of truth) being used in disingenuous ways.

Flip it around and make it about protecting books and the legacy of writing and reading.

What happens if authors don’t make money?

What happens if the Publishing Industry loses its profit to online sites making money off of ads?

Highlight the fact that the only contribution of True Believers is an intangible.

  • They neither write books, nor edit it, nor take the risk of bringing books to market.
  • Shouldn’t the True Believers write their own books and publish them?
  • If they truly believe content should be free, why don’t they create it themselves?

How can these people be champions of the people if they’re creating nothing?

Do Kindle, eReaders and Ebooks help or hurt Piracy?

Well, they hurt Piracy – a lot.

There are a lot of ways in which eReaders in general and the Kindle in particular help fight against piracy.

For Rationals

  1. They know its easier to track who pirated a book first.  
  2. They realize that anyone using a pirated book can be tracked.  
  3. They know that anything bought, read, etc. is in the official record.
  4. They know that courts can pull up this evidence.

Suddenly, every infringer is leaving a trail behind.

This is also the reason removing DRM would be suicide for Publishers and Authors. You lose your means of figuring out where piracy originated from. There’s no longer a threat of punishment for being a node/center.

Both individuals and companies that benefit from piracy will be much more reluctant to dabble with piracy if ebooks are linked to ereaders and accounts (as it is with the Kindle).

For Rationalizers

  1. $9.99 priced Kindle Edition ebooks eliminate a main argument i.e. ebooks are priced too high. 
  2. Amazon and lots of other companies are adding lots of books – thereby eliminating another rationalization. 
  3. Kindle WhisperNet (and Sony’s soon to arrive wireless store) makes things very easy, killing another rationalization.
  4. eReaders add benefits like changeable font sizes and Read To Me that make it hard for Rationalizers to claim prices are not worth the value.

This is where you begin to see the joy of rationalization in full flow.

If Rationalizers’ earlier justifications of piracy i.e. 

eBooks are $20 – that’s ridiculous.

Only 10K books are available.

Are being replaced by newer, less compelling justifications i.e.

eBooks at $10 are still not cheap enough.

Only 350K books are available.

Then you know these people are being rather disingenuous (even to themselves).

For True Believers

As eReader technology evolves true believers will find the odds turning against them.

The more intelligent of these will further arguments that do have some merit i.e.

  1. The loss of ownership. 
  2. The loss of privacy.  
  3. DRM hurts consumers or makes things inconvenient.

The less intelligent will outright flout the law i.e.

  1. Companies like Pirate Bay.  
  2. People scanning and uploading illegal copies.
  3. People Hacking the Kindle and the Sony Reader DRM.

This is all done under the guise of ‘openness’ and ‘freedom’ – However, that doesn’t make it legal.

Which brings us to the fact that the much criticized ‘closed systems’ are great to fight piracy.

Does having a closed eco-system i.e. the Kindle eco-system, the iPhone App Store, etc. reduce Piracy?

Yes. A lot.

While a lot of people realize that the Kindle and DRMed eBooks kill the used books market, they don’t realize the implications for piracy.

Both the Kindle’s eco-system and the iPhone App Store are great for fighting piracy -

  1. With the Kindle and the iPhone you have closed eco-systems that can be policed very effectively.
  2. There is the option, down the line, to track every book, and every copy of every book.
  3. Kindle and iPhone make it very, very convenient to find and buy books. Thereby, making piracy harder.
  4. You leave a permanent trail.

Just the fact that there’s the possibility of a court unearthing every single book you ever read and every single website you ever visited is enough to dissuade most people from ever pirating a book.

What happens to Piracy as eBooks become more popular?

It’s pretty simple -

  1. If the Kindle, Sony’s Store, the iPhone and other closed or mostly closed systems win out, piracy becomes a small manageable problem.
  2. If the Internet starts becoming the big ebooks channel we have a huge problem on our hands.

Publishers, look at your revenues and profit margins from each of these channels.

It might not be the worst idea in the world to focus on channels like the iPhone and the Kindle that greatly reduce piracy, kill the used book market, and in general focus on customers of good intent.

Companies that are losing out to the Kindle and the iPhone will try to win the eReader market by killing the eBooks market i.e. by promoting no-DRM, fully open books.

Publishers and Authors should be very, very wary of this.

  1. Selling an eReader does nothing for a content creator if the channel is polluted.
  2. Advertising can never generate the sort of revenue selling actual content can.
  3. Newspapers are now finally going back to paid content – they have paid with their lives for believing that ads can support them.
  4. All of the ‘greater good’ things i.e. openness, etc. are just strategies to get value for nothing.

Most of all, they should look at how consumers actually behave and not how they claim they will behave.

For example, the Stats from RadioHead’s online ‘pay what you like for our new album’ experiment i.e.

(according to Compete) 62% of people downloaded the Radiohead album for free. Only 38% paid – In the US an average of $8 and outside of the US an average of $4.62.

That translates to an average of $3.20 per album download in the US, and $1.76 per album download outside the US.

Radiohead dispute the figures – However, actions speak louder than words. For their new single, there was no more ‘pay what you like’ option. It was a 1 pound download fee.

Also, this was in an environment where Radiohead were the only band doing this and got a lot of good karma because of this.

A Last Thought

We are seeing newspapers die out.

The Books Industry cannot sacrifice itself at the altar of ‘the greater good’.

  • Most of the people fighting the good fight of anti-DRM or promoting Piracy and Information Wants to be Free are not looking 50 to 100 years into the future.
  • We are not talking about Financiers making tens of millions of dollars a year. We are talking about authors and people in the publishing industry who do it for the love of books and the art.
  • It would be truly sad to see people exploit these content creators (either to enrich their wallets or to spread their personal belief systems) and cause the destruction of the books industry.

The iPhone and the Kindle and other eReaders are saving the Books industry.

  • Think 50-100 years into the future and it’ll be very, very clear.
  • They are creating channels that can sustain entire industries.
  • Books have the option to jump from one pure channel i.e. retail stores to another pure channel i.e. channels of good intent (Kindle Store, iPhone App Store).

All we can hope for is that book publishers and authors can resist the siren song of the Internet.

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