Amazon Will Be The Big Winner When eBooks Go DRM-Free
You may have read the hot news today about Tor/Forge Books. They’re going DRM free round about July of this year, with all ebooks in all stores dropping existing DRM. There’s even a chance that Tor/Forge ebooks might even show up in ebookstores that never offered DRM, though that seems unlikely (side from Baen’s ebookstore, none are large enough to matter).
One curious detail about this story is that there are signs that this move was discussed all the way at the top of Macmillan, the corporate parent of Tor/Forge. Charlie Stross has posted about a meeting he had in NYC with senior folks at Macmillan where DRM was the main topic.
The talks at the top are particularly interesting because it’s a sign that the senior folks are likely to be at least talking about the idea that Macmillan as a whole might go DRM-free.
Let me assure you, nothing would make Amazon happier.
Right now DRM-free ebooks are being touted as the next step in fighting Amazon domination of the ebook market. Agency pricing has gone by the wayside thanks to the Price Fix 6 colluding in expensive NYC restaurants. TBH, I’m not sure it helped at all, given that the agency model only affected a fraction of the ebooks on the market from a fraction of the publishers in the market. But that’s a post for another day.
I’m sure many publishers see DRM-free ebooks as a chance for other ebookstores to start poaching Amazon’s customers. The idea is that dropping DRM will enable customers to walk from the Kindle Store and take their ebooks with them when they move to another ebook platform.
While that will likely happen, I wonder if everyone has really thought this through. There are a couple details that most seem to forget when they pin their hopes on this: Amazon has a nicer ecosystem and Amazon is better at selling stuff.
They are not quite as lean and hungry as they used to be but they are quite nimble. If the new game is poaching customers then Amazon will figure out how win it. In fact, I would go so far as to suggest that Amazon is probably already planning for the day when the walls come down.
Let me make a prediction about that day. Some time about 2 weeks before the first major publisher follows through on going DRM-free, Amazon is going to offer a couple new services:
- they’ll bump the space available in the Kindle Cloud to 10GB so you can store more ebooks, and
- they’ll start supporting Epub for the email conversion service.
I’m pretty familiar with the Kindle ecosystem, and so far as I can tell Amazon’s first major stumbling block for poaching customers is getting the content from other ebookstores into the Kindle ecosystem. Before you can read the ebooks in the apps and on the Kindle you first have to upload them, and that usually also requires conversion.
Converting a lot of Epub files at once can be a hassle; I know because I’ve tried. So Amazon will need to make the process super easy and they can do that by finally allowing the automated email conversion service to accept Epub. This is a minor technical change given that the email service is based on KindleGen (which already works from Epub).
Now, they won’t really need to increase the storage, but I would. The Kindle is the one ebook platform that lets you store your own ebooks on their servers. That gives Amazon a decided advantage over everyone. And what better way to emphasize that advantage than by making a spectacle over giving everyone more space to store their ebooks?
Admittedly, this is a marketing suggestion rather than an improvement to the service, but it’s still worth doing just because of the attention it will generate.
The free storage and free conversion, as well as the many other services offered by Amazon, are all part of the Kindle ecosystem. To hell with low prices; that ecosystem is Amazon’s greatest weapon, which is why it will be the reason everyone starts running towards Amazon, not away.
Here’s my point, folks. Like a lot of heavy ebook buyers, I’ve purchased ebooks in a number of different ebookstores. If and when the major publishers go DRM-free I am going to be able to concentrate those ebooks in a single location (thanks to the many services pioneered by Amazon). Is it the best format? No. But it is the most convenient solution, and that is what is going to win out.
And once my ebooks are on the Kindle servers, guess where I will most likely buy my ebooks?
Björn April 25, 2012 um 5:57 am
What is the problem with storing everything in the same location? Even if it is Amazon – but tomorrow another service could pop up and you could move there. Atm kindle seems the only usable option for eReading anyway, so Amazon effectively has the monopoly on selling ebooks. I don’t think the publishers worry about where people store their books, or that somebody else could make money with book storage (the horror!). They worry that Amazon will be able to dictate the prices and take a huge share of all sales.
Nate Hoffelder April 25, 2012 um 8:02 am
There’s no problem, but there is some value in terms of convenience. It means I don’t have to keep track of multiple reading apps. It also means I don’t have to manage my own files and copy them from one device to another..
Xyzzy April 25, 2012 um 6:33 am
I wonder if Amazon really is the leader in terms of e-readers in service these days, though… I’ve been paying attention recently, and there aren’t many Kindles showing up in public anymore (mostly phones, Nook, Sony, and iRiver), and my psychiatrist said that whenever he’s asked a patient if their e-reader was a Kindle, they’ve all told him it was a Nook. The damage Amazon can do is obviously substantial, but if a large percentage of their former users have switched providers, it would seriously limit the effect they can have.
Mike Cane April 25, 2012 um 6:53 am
Nook buyers former Kindle users? I really doubt that. Nooks have expanded the market, not stolen Amazon customers. People who wouldn’t have bought a Kindle before because they couldn’t try it first went with the Nook because they could try it at a local B&N.
As for ever seeing an Story in the wild, the one or two people who were seen with them were probably related to Google employees.
George April 25, 2012 um 6:13 pm
Hmmm, when my psychiatrist asked me what kind of eReader I had, I said Kindle.
DavidW April 26, 2012 um 8:18 am
Contradicts my experience. I’ve been traveling alot in the past few months, and what I’ve seen in airports and on planes is that the only device used more frequently than the kindle is the ipad. And the nook… I almost never saw it.
Mike Cane April 25, 2012 um 6:58 am
If Amazon holds to releasing new Kindles every year as they have, we’re due for at least one new model this year. I say at least one because Amazon will want to match B&N’s GlowLight.
What if Amazon went insane and made it a *dual* format device: Kindle *and* ePub? Further, what if they did what I suggested in another post: follow iTunes Match and swapped out Adobe DRM ePub for Amazon-DRM ePub?
DRM can be used as a weapon by the Big Six against Amazon, but I really can’t be bothered to do yet another post trying to save their inept asses.
Nate Hoffelder April 25, 2012 um 8:05 am
One point that I was hoping someone would make in the comments:
If you look at the services Amazon has launched over the last year (Kindle Cloud in particular), it looks like Amazon was planning ahead for the day when they start poaching customers. See, I told you they could figure out the new game fast.
Rebecca Allen April 25, 2012 um 8:48 am
I noticed recently that they’ve changed the way the books I buy over at Baen are handled. Before, those could be mailed to the kindle, but they didn’t show up in Archived Items (IIRC); now they do, so I no longer have to go back to Baen when I get a new kindle (or kindle app on some other device) to redownload it. Amazon remembers and stores it for me.
This hasn’t affected my commitment to Amazon/the kindle (I’m so committed that could not increase anyway), however, it has made ma a lot more willing to buy things over at Baen, so I do more browsing there than I used to. I’d love to see this happen in general (shop anywhere, Amazon remembers it for me).
Nate Hoffelder April 25, 2012 um 9:05 am
Yep. That’s the Kindle Cloud. Amazon started storing your ebooks for you right about the time the new Kindles were announced.
Peter April 25, 2012 um 2:21 pm
The "cloud" isn’t cheap- Amazon’s data centers single-handedly cost more to run on an annual basis than most entire brick-and-mortar store chains.
So if e-book customers start to care about/notice/ demand this sort of service, it’ll be a huge advantage for Amazon (also Google has a decent cloud that they appear to have acquired more cost effectively)- if they don’t, it may just be an example of "everything looks like a nail when you’re holding a hammer".
Joy April 25, 2012 um 8:05 am
Google just opened Google Drive in beta. They are trying to drive that gigantic tank of theirs into all forms of entertainment.
Let’s see how long it takes for them to offer good ebook services. With my other accounts at Google, having my ebooks stored there won’t be a problem. As long as they offer a format for my Nook, I’ll let my Google Checkout do the work too.
Barnes and Noble has a terrible web site, they seem unconcerned about their online presence and their apps are sparse. Without DRM Google could undermine them and grab a huge chunk of us in a heartbeat.
Peter April 25, 2012 um 3:20 pm
"Without DRM Google could undermine them and grab a huge chunk of us in a heartbeat."
Google DRM already works with the nook, so in theory they could do this now.
And I’m not sure B&N is crying about that. Last week, ereading margins migrated from no-barrier-to-entry books back to high-barrier-to-entry devices (8 LED lights do not cost $40). This trend will continue with the introduction of Mirasol and the end of agency. Surely B&N would be happy to let Google take more of the latter in order to promote the former.
The problem is if Kindles can also read Google books- then Barnes and Noble may no longer be the premier destination for Google book users looking for a device.
Xhara April 25, 2012 um 9:41 am
Hmm, I really don’t know why I should upload my books to any cloud. I rather store my books at my reader and at my pc – organizing them with calibre which also allows me to convert my books to any format I want or need – AND add missing metadata before it. Additionally I can specify in which way they will put onto my reading device – naming- and order-wise.
Especially for big book collections I haven’t found a good alternative to calibre. No reading platform or device offers similiar possibilities.
Peter April 25, 2012 um 2:07 pm
I agree completely-
DRM gave competitors a chance to avoid the bully simply by building a new playground.
Take it away and Amazon will get 70-80% of ebook sales for the same reason they get 70-80% of ALL online sales- Amazon pops up first (by far) in the search results for pretty much anything and people use the default when there’s nothing wrong with it.
Of course, Amazon’s tendency to poop where they eat is now upsetting Google as well as the publishers, so that status quo may soon change. But that’s another story.
Bill Smith April 25, 2012 um 7:28 pm
I plan to buy my Tor books from Smashwords if they are offered through them.
Why? Simple — sign in, buy and download direct to my PC.
With Amazon, I have to tell them which "registered" device I want to download it to…I run Linux and want to *download* so I can archive my files, not be restricted to just the Cloud Reader.
Smashwords is the better vendor for me unless Amazon begins to allow direct downloads outside of their device/app ecosystem. (Hopefully Amazon will pursue since they allow this with MP3 downloads.)
Chris April 25, 2012 um 10:01 pm
I agree, Amazon will do well in a DRM-free world.
BUT in a DRM-free world Amazon can’t quietly build up a large market share and then stop being competitive. They’d have to keep competing because at any time their customers could walk away and buy from somewhere else.
It gets rid of the anti-competitive problems of a near-monopoly.
Nate Hoffelder April 25, 2012 um 10:07 pm
Except that none of Amazon’s detractors actually want Amazon to be competitive. They want Amazon hobbled, which was the whole point of Agency.
b June 16, 2012 um 7:24 am
Yes….They play Dirty!
I am the product development manager for an online company. We decided to become a seller on Amazon….BAD IDEA! The only reason that Amazon allows other sellers to participate is to steal good ideas. We have a very niche product, and as soon as Amazon saw how well we were selling, they contacted the manufacturer, and started selling our products…and undercutted our price…UNDER OUR COST from that manufacturer.
Then they charged US fees to give them this information and steal our marketshare. All in all…we did Millions on Amazon with no profit!
I feel abused. They let me construct their product page, then took it from me. And Charged me for my information and work to expand their products….Thanks, but No Thanks Amazon…Keep this up, and people will start to notice.