Is piracy likely to harm ebook sales?

[Ben Thornton]

I've been thinking about this, and wonder whether the real thing that publishers should focus on is getting people excited about reading, rather than attempting to clamp down on piracy.

Just to be clear, I'm not talking about:

• whether piracy is good, bad or indifferent
• whether piracy is theft
• or any of the other topics into which this thread will, inevitably, degenerate

Instead, I'm wondering whether piracy is really the problem that publishers face. My view is that it isn't their big problem, and my analogy would be with the music industry.

The music industry seems to be blaming piracy for reduced sales, but I don't believe them. Overall, sales in entertainment and media keep going up - the problem with the music industry is that there is more choice, but only so much available spend to go around. Specifically, things like video games and DVDs are taking away some of the available spare cash that people would have spent on music. This view is supported by, for example, this report.

It seems to me that the problem that the music industry faces is to persuade me to buy a CD (or two) rather than Super Mario Brothers Galaxy 2.

For ebooks, I think that the same logic applies. Piracy of books is only a problem for people who could care less about books, who are the people spending money with publishers in any case. The real challenge for publishers is to make reading a book seem a better bet for your $10 than a CD, video game, movie etc. A successful clampdown on piracy would do them no good, because their problem is to gain market share vs. other options.

Publishers have a huge underexploited asset in their back-catalogues, which they could market at a low price to get people reading. I wonder whether they will pursue this, and other measures designed to promote reading - or whether they will die a slow death whining about piracy from their best customers?

[JSWolf]

The agency model is more likely to harm eBook sales.

[CyGuy]

I think that "they" are making the assumption that a book downloaded free is a lost sale. I disagree. Many of the people who download free books would not have paid for it to begin with. That holds true for music as well. The vast majority of downloaded books are NOT lost sales in my opinion. So no, it will not harm eBook sales, and just might get more people into reading. It should certainly help with the sales of eBook readers and tablet computers, which is where people should spend their money anyway, very little should have to be spent for content.

[GhostHawk]

Brutally hacked from Eric Flint's statement on the Baen Free Library site........

This all started as a byproduct of an online "virtual brawl" I got into with a number of people, some of them professional SF authors, over the issue of online piracy of copyrighted works and what to do about it.

There was a school of thought, which seemed to be picking up steam, that the way to handle the problem was with handcuffs and brass knucks. Enforcement! Regulation! New regulations! Tighter regulations! All out for the campaign against piracy! No quarter! Build more prisons! Harsher sentences!


I, ah, disagreed. Rather vociferously and belligerently, in fact. And I can be a vociferous and belligerent fellow. My own opinion, summarized briefly, is as follows:

1. Online piracy — while it is definitely illegal and immoral — is, as a practical problem, nothing more than (at most) a nuisance. We're talking brats stealing chewing gum, here, not the Barbary Pirates.

2. Losses any author suffers from piracy are almost certainly offset by the additional publicity which, in practice, any kind of free copies of a book usually engender. Whatever the moral difference, which certainly exists, the practical effect of online piracy is no different from that of any existing method by which readers may obtain books for free or at reduced cost: public libraries, friends borrowing and loaning each other books, used book stores, promotional copies, etc.

3. Any cure which relies on tighter regulation of the market — especially the kind of extreme measures being advocated by some people — is far worse than the disease. As a widespread phenomenon rather than a nuisance, piracy occurs when artificial restrictions in the market jack up prices beyond what people think are reasonable. The "regulation-enforcement-more regulation" strategy is a bottomless pit which continually recreates (on a larger scale) the problem it supposedly solves. And that commercial effect is often compounded by the more general damage done to social and political freedom.

In the course of this debate, I mentioned it to my publisher Jim Baen. He more or less virtually snorted and expressed the opinion that if one of his authors — how about you, Eric? — were willing to put up a book for free online that the resulting publicity would more than offset any losses the author might suffer.

The minute he made the proposal, I realized he was right. After all, Dave Weber's On Basilisk Station has been available for free as a "loss leader" for Baen's for-pay experiment "Webscriptions" for months now. And — hey, whaddaya know? — over that time it's become Baen's most popular backlist title in paper!

And so I volunteered my first novel, Mother of Demons, to prove the case. And the next day Mother of Demons went up online, offered to the public for free.

Sure enough, within a day, I received at least half a dozen messages (some posted in public forums, others by private email) from people who told me that, based on hearing about the episode and checking out Mother of Demons, they either had or intended to buy the book. In one or two cases, this was a "gesture of solidarity. "But in most instances, it was because people preferred to read something they liked in a print version and weren't worried about the small cost — once they saw, through sampling it online, that it was a novel they enjoyed. (Mother of Demons is a $5.99 paperback, available in most bookstores. Yes, that a plug. )

Then, after thinking the whole issue through a bit more, I realized that by posting Mother of Demons I was just making a gesture. Gestures are fine, but policies are better.

So, the next day, I discussed the matter with Jim again and it turned out he felt exactly the same way. So I proposed turning the Mother of Demons tour-de-force into an ongoing project. Immediately, David Drake was brought into the discussion and the three of us refined the idea and modified it here and there. And then Dave Weber heard about it, and Dave Freer, and. . . voila.

The Baen Free Library was born................(End hackage)

What he says rings true.
Give people a taste, give it to them for free, and they'll come back willing to pay for more. Its so simple even drug peddlers use it, and they ain't rocket scientists!

The more an author is read, and talked about the more people will buy his books.

The people who will pirate were not going to go out and pay 15 - 25$ for that hardcover book in the first place. Probably wouldn't spend 8 - 12 $ for a paperback.

I've "liberated" a lot of books, but I very seldom if ever had the money to buy new ones. Once in a while I'd get a gift card for B&N. I think 3 times I've signed up for the Science Fiction book club, get 7 or 8 books for 1$ and agree to buy 2 more over the course of the next year. So you pay 12 - 18$ each for 2 books (choosing wisely of course) and you end up with 10 nice hardcover books for 2.50-3$ each. Not a bad bargain actually. My biggest problem was waiting for them to have enough good stuff to choose from.

If publishers have problems they need to fix the biggest one first. And that is waste, unsold, stripped, remaindered hard cover and paperbacks. Books that are produced that never get sold. Wasted time, wasted material, wasted shipping. Fix that problem and they won't have to worry about the few sales a pirate might have made but chose not to.

Whats more as Eric mentioned above, (More hackage) As a widespread phenomenon rather than a nuisance, piracy occurs when artificial restrictions in the market jack up prices beyond what people think are reasonable.(End Hackage) (Gee the cutlass is sharp today! )

Cut out the waste, remove unnecessary overhead, make ebooks easily accessible, reasonably priced, DRM and geographic restriction free in a variety of formats and pirates will go back to drinking rum and telling tales about "the good ol days".

[CyGuy]

Just a thought:

If I buy an eBook reader or a tablet computer that has 32GB of storage and I fill it up with eBooks, how much will I have to pay? My Mobi books average about 500K each, just a rough average. After formatting my 32GB, I actually have around 28GB of space left. I should be able to fit about 56,000 books on my 32GB device using the rough estimates above. So, how much do I have to pay to fill up my new reader with books? If I pay $9.99 for each book, it will cost me $560,000. Yep, over half a million dollars. What about the 64GB model? What about the ones with SDHC card readers? So if I want to fill up my 64GB model with a 32GB card inserted, I can expect to pay around $1,680,000 dollars for content. Nice…

[foghat]

^ ???? Not sure what you are trying to get at. Yes, if you plan buy 56,000 books, you had better start saving.

[Elfwreck]

Originally Posted by Ben Thornton

I've been thinking about this, and wonder whether the real thing that publishers should focus on is getting people excited about reading, rather than attempting to clamp down on piracy.
...
The real challenge for publishers is to make reading a book seem a better bet for your $10 than a CD, video game, movie etc. A successful clampdown on piracy would do them no good, because their problem is to gain market share vs. other options.

They're also competing with free online content. Not just public domain & creative commons ebooks, but blogs, messageboards, fansites, and Youtube.

Hmm, let me think: $10 for a book worth a few hours of reading time, which I hope to enjoy based on reviews & maybe a sample, viewable on my PC or portable device (after some hassle of installing DRM software), but not sharable with friends,
vs
$0 for a few hours of discussion on message boards, which I know I will enjoy because the entire history of the board is visible, and which I can switch to some *other* form of entertainment if I decide I don't like it right now, viewable on PC or some phones with no extra software, sharable with as many friends as I can convince to be interested.

It's really amazing that books *ever* win out. (Someday, someone will make a fully cross-linked ebook out of TVTropes.com, and the ebook industry will collapse in terror.)

But yes. "Piracy" is not the problem ebook publishers/bookstores are facing. The problem is convincing people to read their books, rather than participate in the countless *other* forms of entertainment/education available.

[Ravensknight]

I don't have much to add except that I agree with the "competing attractions" idea. I have to choose after work whether to sit down and read an ebook, read the latest scifi/fantasy offering I borrowed from the library, watch a dvd I borrowed, or browse Mobileread ;-).
Life is tough...

[ficbot]

They really must make the price/value equation balance if they want to compete with the other choices the customer has. I don't mean all books must be free or authors don't deserve to get paid or anything like that. I mean that they need to think seriously about what a reasonable person will pay for their product and price it at that level to drive sales (for example, iTunes has sold over a billion downloads because it is affordable and dead easy). Cable television is another industry they can learn from. I moved last summer and realized that with a cheap $40 antenna, I could get five channels over the air, and they showed nearly all of the shows I watch. Cable starts at $40 a month. Not worth it just to watch the one show I'll miss. Yes, there are other channels with other things but if I, the customer, does not care about those things, they will not entice me to pay for them at the price they want.

[mr ploppy]

What you call "piracy", which is really just unauthorised downloading, can only have a positive impact on the book industry. It will create a demand for ebook readers in much the same way that the unauthorised downloading of music did for mp3 players. This demand will lead to very cheap ebook readers and make them mainstream devices. When they are mainstream, most people will look for mainstream ways of getting their ebooks. Which is when the publishers and distributors will make their vast profits, just like the music publishers and distributors are doing now with mp3.

[Solicitous]

Originally Posted by Ben Thornton

For ebooks, I think that the same logic applies. Piracy of books is only a problem for people who could care less about books, who are the people spending money with publishers in any case. The real challenge for publishers is to make reading a book seem a better bet for your $10 than a CD, video game, movie etc. A successful clampdown on piracy would do them no good, because their problem is to gain market share vs. other options.

Good post, some good thoughts. For me personally, piracy is the result of poor company policy rather than people who don't care about the product.

I'll talk specifically with TV shows. Quite common in Australia a new TV series will start, advertised to the max, after 5-10 episodes it is either dropped or used as a time filler and not played in order. You got hooked on the show and suddenly the TV stations are mucking you around. You have 3 options, (1) put up with it, (2) wait 12-18 months for DVD to be released, or (3) download off internet at watch it in order. Option 3 looks pretty good for most people. Those who wait for option 2 find on release date the boxed DVD set it $90, "hang on, the previous season was $50 when released, why is this worth $90?". As a consumer we find big DVD sales where the $90 TV series is dropped to an amazing $40, but you can't buy it because the store is sold out and sorry, no rainchecks. So your thinking now is "I'm not going to pay $90 when it has been sold as low as $40". So, you go then with option 3.

Now ebooks has been spoken quite a bit with piracy. Essentially a big factor is GR. You want to buy it but are refused, so you pirate. Or DRM, issues there, can't read what you bought etc, so you pirate.

Secondly with ebooks the publishers are wanting to sell the ebooks at the same price as a paper/hardback, but what the consumer is buying are two different products. Buying a paper/hardback you buy an actual product which you have rights to (sell, share, even copy for personal use in some countries). Ebooks you buy a licence to read. Publishers are wanting people to pay the same for less essentially. Two things need to either take place (1) the price of ebooks needs to drop to represent the actual product you are paying for in comparison to the paperback, or (2) ebooks need to be value-added to justify the price.

Regardless, there will always be a group of people who will pirate regardless. What needs to be worked on is the honest pirate, the person who pirates because he has been driven to that extent.

[delphidb96]

Originally Posted by Ben Thornton

I've been thinking about this, and wonder whether the real thing that publishers should focus on is getting people excited about reading, rather than attempting to clamp down on piracy.

Just to be clear, I'm not talking about:

• whether piracy is good, bad or indifferent
• whether piracy is theft
• or any of the other topics into which this thread will, inevitably, degenerate

Instead, I'm wondering whether piracy is really the problem that publishers face. My view is that it isn't their big problem, and my analogy would be with the music industry.

The music industry seems to be blaming piracy for reduced sales, but I don't believe them. Overall, sales in entertainment and media keep going up - the problem with the music industry is that there is more choice, but only so much available spend to go around. Specifically, things like video games and DVDs are taking away some of the available spare cash that people would have spent on music. This view is supported by, for example, this report.

It seems to me that the problem that the music industry faces is to persuade me to buy a CD (or two) rather than Super Mario Brothers Galaxy 2.

For ebooks, I think that the same logic applies. Piracy of books is only a problem for people who could care less about books, who are the people spending money with publishers in any case. The real challenge for publishers is to make reading a book seem a better bet for your $10 than a CD, video game, movie etc. A successful clampdown on piracy would do them no good, because their problem is to gain market share vs. other options.

Publishers have a huge underexploited asset in their back-catalogues, which they could market at a low price to get people reading. I wonder whether they will pursue this, and other measures designed to promote reading - or whether they will die a slow death whining about piracy from their best customers?

Oh please! *ALL* of these views have been discussed to the point where the only rational response is to spew chunks!

Yes, most readers understand completely that anti-piracy efforts and money spent by the publishers would be better used to develop the vast backlists for the ebook market.

Yes, most customers realize that the major publishing houses have rocks-for-brains as their senior management.

Yes, most people have been fooled-once/fooled-twice by claims of same publishers re: ebooks.

Yes, any aspect of this subject truly is

Derek

[fugazied]

Originally Posted by JSWolf

The agency model is more likely to harm eBook sales.

Agreed.

They are still at the stage where the publishers pricing structures, DRM, low quality, geographic restrictions and missing titles lose more money for publishers than piracy would. Once they set the price point right, get the quality up, remove the DRM (or make it more reasonable so I can LEND the book I bought to a relative as I would a paper book) and get the range up then they will see profits increase.

However they are terrible at fixing their own internal policy problems so instead they use the law to pursue pirates. Pirates are also easy to scapegoat!

edit: yes beating a dead horse again. But that's the reality. Piracy is a minor threat to publishers, and a lot of the piracy only occurs because publshers PUSH people towards it with the regional restrictions/restrictive drm/pricing/lack of titles and so on. They are their own worst enemy.

[Fat Abe]

Originally Posted by Solicitous

What needs to be worked on is the honest pirate, the person who pirates because he has been driven to that extent.

I have to hand you the reward for best oxymoron (Honest Pirate) of the year. Who is this Honest Pirate that you speak of? Would you have us laud Robin Book, new thief of Sherwood Forest?

Back in 2004, the MPAA commissioned a survey of movie piracy:

http://www.mpaa.org/press_releases/leksummarympa.pdf

Though flawed, and in some ways overreaching in its conclusions, it indicates that there was and still is a sizable loss in "potential" revenues. I place the figure in the hundreds of millions of dollars, while MPAA estimates billions. Why is this of concern to me, and how does the study apply to the book publishing industry? I stated in another post that history is repeating itself. The offshore component of the pirates is costing western democratic countries millions of dollars. This affects our trade balance with China, one the most egregious copyright violators. How would they feel if we began copying their currency, and distributed it freely throughout the world?

If I chop a tree down in the forest, and the landowner does not hear me do it, is this stealing or not? The specious argument reads as follows: If I had to pay for it, I would not have stolen it. Therefore, I am not costing the owner anything!

Look, we still live in a civilized nation, and without recompensing each other, we all suffer. If a pirate chooses to be honest, he should do a good deed, equal in value to his bad deed. Buy a print copy (or substitute title) from the publisher.

[Iphinome]

Originally Posted by Fat Abe

I have to hand you the reward for best oxymoron (Honest Pirate) of the year. Who is this Honest Pirate that you speak of? Would you have us laud Robin Book, new thief of Sherwood Forest?

Back in 2004, the MPAA commissioned a survey of movie piracy:

http://www.mpaa.org/press_releases/leksummarympa.pdf


If I chop a tree down in the forest, and the landowner does not hear me do it, is this stealing or not? The specious argument reads as follows: If I had to pay for it, I would not have stolen it. Therefore, I am not costing the owner anything!

Look, we still live in a civilized nation, and without recompensing each other, we all suffer. If a pirate chooses to be honest, he should do a good deed, equal in value to his bad deed. Buy a print copy (or substitute title) from the publisher.

Look at it this way, The forest that someone took a tree from is owned by the local baron, The serfs pay their taxes to the baron but still aren't allowed to go collect any firewood, I'm not even talking about chopping down trees I mean fallen branches. The serfs can't keep warm or cook food anymore so they sneak into the forest and cut down a few trees.

Fallen branches in this case would be both fair use and the public domain in the forest of copyright. People are pushed too hard and finally they say screw it, if the local baron hadn't been so interested in control as to make the people suffer those big trees might still be there but the situation he created cost him a few big trees, they made enough firewood to last the village all winter.

The publishers aren't doing any good deeds I'm including movie and music publishers not only books they've not held onto their end of the copyright bargain. When are they going to give us something of the same value as their bad deeds?