DRM a drag on e-book growth, say critics

Amazon.com and Adobe both creating consumer-unfriendly hassles

Imagine bringing home a music CD from Best Buy and discovering that it will only play on some of your stereo equipment. Moreover, you're limited in the number of times you can switch the CD from one stereo to another.

That is the kind of restriction and hassle that e-book enthusiasts face today, according to critics, because of the widespread use -- misuse, they would argue -- of digital rights management (DRM) technology.

"I don't have to put on special glasses when I read a book published by Random House, so why should I need a special software reader from Adobe or someone else?" asked David Rothman, co-editor of the TeleRead e-book blog and an author of six nonfiction books. "It's a bizarre notion." DRM is nearly dead in the music industry, after Apple Inc.'s January decision to stop protecting songs sold through iTunes.

But DRM's use as an antipiracy tool continues in software and DVD publishing, as well as e-books.

The difference is that the e-book market remains nascent and fragile. According to the International Digital Publishing Forum, wholesale revenue from U.S. e-book sales last year totaled just $52.4 million. (IDPF's figures only include a dozen leading publishers, and should be doubled to arrive at a more realistic retail dollar sales total.)

Sales of dedicated e-book readers such as Amazon.com Inc.'s Kindle or Sony Corp.'s Sony Reader were slightly better. Last year, just 538,000 e-book readers worth $154 million were shipped, according to the Consumer Electronics Association.

Critics said two of the biggest champions of e-books, Amazon.com and Adobe Systems Inc., are potentially stunting the industry's long-term growth with their strong support for DRM. They also criticize the two vendors' lukewarm support -- at best -- for the emerging open e-book publishing standard known as .epub, in favor of their own proprietary ones.

For instance, Amazon's Kindle favored format is its own, DRM-restricted AZW e-book format. Those who purchase an e-book on their Kindle cannot transfer it to read on their PC or iPhone, though Amazon hinted earlier this month that it might allow that in the future.

Amazon has also negotiated exclusive rights for Kindle e-books from author Stephen King and biographies of First Lady Michelle Obama and Cindy McCain, the wife of last year's Republican presidential nominee, Sen. John McCain, (R-Ariz.).

"There are wonderful people at both Adobe and Amazon.com," Rothman said, "but if I were them, I'd worry less about my slice of the pie, and more about growing the total pie."

Meanwhile, Adobe continues to hawk DRM-protected versions of its PDF format and the open .epub format at book publishers, rather than the plain-vanilla, non-DRM-protected version of .epub.

"I'm wary of Adobe," said Mark Coker, CEO of independent e-book publisher Smashwords Inc. "Do they really support .epub, or do they want to get people to do .epub within the PDF environment or simply move all of their e-books onto PDF?"

"Nothing beats PDF if you want to print out an e-book on your home computer," said Coker. "But for most electronic books, PDF is overkill. It's like driving a tractor to work when a regular car or bicycle would do just fine."

In an interview last fall, Tom Prehn, senior product manager at Adobe, said the company's belated embrace of .epub, introduced with the then-new Adobe Content Server 4, is sincere. "We erred in thinking that PDF was all that was needed," he said.

Adobe offers DRM, he said, as an option because publishers expect it.

Prehn also pointed out that Adobe's DRM for .epub lets e-book readers register up to six desktop and six handheld devices on which content can be shared without restriction.

Adobe's more middle-of-the-road approach is helping it win partners such as Lexcycle Inc., maker of the popular Stanza app that turns the iPhone into an e-book reader.

Although Neelan Choksi, chief operating officer at Lexcycle, has made many public statements against DRM, the company agreed to support Adobe's DRM technology to gain access to the e-books that use it.

Coker argues that Amazon's spurning of .epub and even stronger support for DRM puts it at risk of turning into a marginal, Betamax-like player in the long run. "If the mobile phone vendors got their act together, there's no reason they couldn't dwarf the Kindles of this world in a matter of months," he said.

Others said the VCR format wars offer the wrong analogy.

"Proprietary formats are going to hurt the Kindle -- just like they hurt Apple's iPod, right?" said Don Leeper, founder and president of BookMobile, a digital printing house in Minneapolis. Still, critics propose two solutions to the confusing morass of DRM and formats. Rothman favors a solution called "social DRM," in which e-books are digitally watermarked with the buyer's name, but not physically prevented from redistribution. Embarrassment will discourage most piracy, he said.

Coker favors a total shareware approach, arguing that a pure honor system can work. "Consumers, on the whole, do want to support artists and writers," he said. "The brave publishers who get rid of DRM will see greater returns from it. So I do think it's inevitable that it will go away."

Copyright © 2009 IDG Communications, Inc.

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