A Leaked Contract Reveals that Amazon Insists on DRM

Update: This post is now 10 hours old and in that time I have been told by at least 20 different people on 5 different websites that I am wrong in how I interpreted this contract. You might want to take this with a grain of salt.

Jamazon frowneff Bezos likes to say that Amazon is agnostic on the topic of DRM, but if the boilerplate contract I have sitting in front of me is any indication then I think he might not be telling the whole truth.

I have a copy of an Amazon contract which says that Amazon will use DRM on Kindle ebooks unless they agree otherwise. This contract, which I am told originally came from an ebook distributor, was passed along to me by the editors of Actualitte, a French media blog. They had posted a detailed analysis of this contract earlier this week but were unable to share the contract publicly because of pressure brought by Amazon.

I have posted a copy of the contract as a PDF, and I want you to look at it and read the section on DRM:

Unless we mutually agree otherwise, we will use DRM in connection with the download of the eBooks, and we may use any available digital book DRM technology.

Please note that this is an Amazon contract and that Amazon is the one who is insisting on the DRM. That makes this an interesting contrast, IMO, with Bezos' statements that "If the rights owner wants DRM, we do DRM. If the rights owner doesn't want DRM, we don't do DRM."

The contract clause mentioned above is by no means agnostic on the topic of DRM. It unequivocally tells us that Amazon is the one who gets to decide whether the ebooks have DRM. It also tells us that Amazon _will_ be adding DRM to Kindle ebooks unless the other party can talk them out of it.

Amazon's position (on DRM) in this contract is far from agnostic, and it is in fact much closer to their stated position for audiobook DRM. As I pointed out a few weeks ago, Amazon requires DRM on audiobooks and does not give content creators a choice in the matter:

Audible audio files cannot be converted to MP3 or any other file format because of security technologies used to protect both the intellectual property rights of our Content Providers as well as the Authors.

...

Audible justifies their policy with the statement that their proprietary audiobook format was required to provide the best listening experience for customers. This might be true, but it's also not relevant to the fact that Audible doesn't give creators the option of not using DRM. And that same policy applies to audiobooks sold on the Amazon website, so it's not like Amazon can claim that a subsidiary was making different decisions.

I have contacted Amazon for a comment, but they have not responded. If they respond I will update this post.

Thoughts?

12 thoughts on “A Leaked Contract Reveals that Amazon Insists on DRM

  1. What appears in a contract and how easily the party that “insists” upon it will negotiate it away is often quite different.

    There are items in my firm’s legal documents that I’m agnostic about but are there should circumstances arise to settle a dispute, are there at the insistence of my lawyer, or are there because a measurable number of clients preferred that they be built in by default for *their* protection.

    WRT to Amazon and “insisting on DRM,” my understanding from talking to people who have signed a similar agreement is that this part of the deal was X’d out and Amazon didn’t fight it. Is it really insisting if Amazon doesn’t bat an eye when someone refuses to accept that part of the contract?

    You could very well be right. I just don’t think there’s as much “there” there.

    1. You could well be right, but why didn’t Amazon tell me anything like this when I asked them? A simple denial and explanation would probably have killed the story, but they didn’t bother. Instead they ignored me.

      I know it’s a cheesy line, but their silence speaks volumes.

  2. I’m with Rob–I draft contracts all day long, often starting from proprietary template forms from major clients. It’s very typical for a client to want include a clause requiring something it doesn’t care that much about when they know the other party will almost always want to add in. Saves them paying me to add it in each time. I’d say it’s a lazy convenience type of clause.

    It would be interesting to see stats on how many publishing houses want DRM included. My analysis here is on the assumption that the vast majority of them would insist on DRM.

  3. If Amazon was so hot on DRM, why wouldn’t they insist on it for self-published books? I’m pretty sure Amazon imprint books are DRM free too – at least the ones I one seem to be (although, again, that might be something they leave down to the author).

    1. Of course there’s not a one-size-fits all answer for a company Amazon’s size. My company—presently an eight-person empire—doesn’t have a one-size-fits all answer for how we deal with clients and suppliers. After all, negotiations aren’t always carried out between members of the Mutual Admiration Society.

      Still, there’s nothing here on its face that indicates that Amazon insists—which means a refusal to yield—upon DRM or that the contract’s language indicates that Amazon is being dishonest about its purported DRM agnosticism.

        1. Don’t give up so easily! Even though I disagreed, there’s a possibility you are right. You could dig a little further. Maybe ask Mark Coker if he has any insight on whether Amazon’s default position is DRM or no DRM (as all Smashwords books are DRM free). One other thing you could look into: I remember there being some minor kerfuffle when the French Kindle Store launched, where some were claiming that Amazon’s DRM free books still had some level of DRM on them – even from books like mine which had opted for no DRM (and never had). I can put you in touch with that guy if you like.

  4. Amazon seem pretty restrictive to me. Look at their policy of blocking jail-breaking of their devices. You can’t even install custom fonts on the new PW2. Amazon are about tight-control of everything. Of course they’re going to insist on DRM. They probably don’t care about self-published book DRM because it’s such a marginal and insignificant percentage of their book market. If that changed, I’m sure they’d insist on DRM too. I’m not sure that I blame them for this. After all, they are a business. Now, if only they’d pay taxes and provide decent jobs and pensions…

  5. The statement regarding Mp3 has been in place at Audible the entire time I have been a member of Audible (mid-2008), well before Amazon bought Audible. I whined right away about being able to convert to Mp3 and received that statement. So, this is not necessarily an Amazon rule, but is definitely an Audible one. It’s up to Amazon to decide to change the requirement since they now own Audible.

  6. I wouldn’t give up so easily, either, Nate.

    Amazon does have an interest in maintaing DRM — it helps it keep ebook consumers within its realm.

    Even the fact that Amazon uses .azw and has not jumped on the EPUB bandwagon appears designed to keep Kindle users and ebook purchasers from straying too far from the walled garden, lest their books turn into pumpkins. Unless such users know the magic words to lift the DRM curse, of course.

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