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Old 08-23-2009, 02:09 PM   #1
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Bureaucrat Wants To Void Ownership Of Ebooks In Brazil

Here is the link to the news story

This is being covered by an excellent avant-garde brazilian publisher that I discovered only recently, and I felt the need to offer this english version so people across the world could get a feeling for where Brazil might be headed in terms of ebooks.

Mobileread, it would be a pleasure if you wanted to pick this up for the blog, in whichever way you like. Or any other website, for that matter.

Thanks,
Bernie
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Old 08-23-2009, 05:13 PM   #2
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I'm not sure if it's because of the translation, or the article itself (the argument and history as they are presented in the first half read very oddly [almost as though a non sequitur]), but I'm not sure I get the point of the article, really. Sorry.
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Old 08-23-2009, 05:47 PM   #3
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Quote:
Originally Posted by zerospinboson View Post
I'm not sure if it's because of the translation, or the article itself (the argument and history as they are presented in the first half read very oddly [almost as though a non sequitur]), but I'm not sure I get the point of the article, really. Sorry.
Thank you so much for the feedback zerospinboson! I see what you're getting at, the article is both a news story and an opinionated digression summing up the history and points against DRM, so it's a bit all-around-the-block. Also, the tone has been deliberately dumbed down to the man in the street, especially since in Brazil people are mostly ignorant of what ebooks really mean and understand an ebook as a book scanned into a PDF (often ilegally). Apparently that didn't work out so well - hence your feedback is really appreciated. Since there ain't yet a well-informed brazilian ebook community as Mobileread, it's great to have this article here up for criticism and opinion.

Oh, and I'd love if you'd elaborate on what exactly feels non-sequitur to you. I have read it multiple times but can only reckon that the umbrella covering sometimes gets in the way of objectiveness.

My best,
Bernie
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Old 08-23-2009, 06:52 PM   #4
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Well, at first the article seems to be talking about how publishers fear piracy, then about how customers will be expecting the right to copy at will, then there is a paragraph that is simply untrue (look at iTunes's success. people were very willing to buy DRM-ed materials):
Quote:
Consumers simply wouldn’t buy “secured” music (read: copy-protected) or worse, they would often break the protection and go on to share it in peer-to-peer networks simply because it was originally blocked. Companies were eventually forced into selling files void of protection, “unsecured”. Since then, sales have been steadily going up. The BCB’s folks are aware of this, to the point of Farinha citing iTunes as success case.
Sure, they're now selling unDRMed materials, but it's not as though the iTunes MS was unsuccessful before.
Then a passage about how publishers can abuse DRM to 'steal' your purchases from you.
Then a passage that confuses "DRM-free" with "creative commons" (i.e. no copyright whatever) and "free speech".
Then a passage about DRM and vendor lock-in again, and then a passage about how "thing will magically improve". What's missing is mostly a realistic suggestion about an alternative source of income for the authors, about the new role of those publishers, etc.
Basically what I don't understand is how they feel they will be different from the others, and more arguments about how that will work, rather than about how "the others aren't getting the new world order".
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Old 08-23-2009, 09:07 PM   #5
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Thanks for providing such detailed feedback. I got your points and will get back on the author with them, I think they're good points.
One thing to note is that this publisher is non-commercial, though. And yes, I see how that makes your points even more relevant

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Then a passage that confuses "DRM-free" with "creative commons" (i.e. no copyright whatever) and "free speech".
And on this one, it might have well been my bad.
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Old 08-24-2009, 01:11 AM   #6
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Quote:
Originally Posted by zerospinboson View Post
Then a passage that confuses "DRM-free" with "creative commons" (i.e. no copyright whatever) and "free speech".
Creative Commons is not copyright free, but rather that the copyright owner allows for the material to be used openly, if some restrictions are followed (non commercial, etc).
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Old 08-24-2009, 03:42 AM   #7
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Quote:
Originally Posted by Hellmark View Post
Creative Commons is not copyright free, but rather that the copyright owner allows for the material to be used openly, if some restrictions are followed (non commercial, etc).
hence my use of "confuses" ;-)
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Old 08-24-2009, 08:54 AM   #8
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Yep

Hi Zerospinboson,

The text Bernie referred above was written by me. Thanks for your feedback, I'll try to be more objective when writing next time.

The Plus publisher is a NGO, non-profit organization. We publish books under CC - non-commercial, non-derivative works, since last year.

In Brazil, music market is very different from US and others. Music piracy through MP3 is so high that, many times, recording companies achieve more profits selling shows and tours, instead of CD's or music over Internet. I tried to get a point on this, but I really tought that iTunes was not-so-successfull until it started to sell music without DRM - apparently, as you say, I got the wrong way.

The article meant, not to propose anything about new business models for e-books and authors, but to comment about the Brazilian Chamber of Books views about those models and compare it to the current e-book market. Next time I'll be more carefull.

Thanks again.

Eduardo Melo
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Old 08-24-2009, 10:59 AM   #9
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A rough history of the iTunes store and DRM goes about like this:
  • Apple starts working on the store; asks big Record labels to participate DRM free. Labels say "hell no!"
  • Tense negotiations with big record labels lead to a deal allowing 1 year of iTunes music store (ITMS, hereafter) on Mac only -- no PC support. DRM required, with bit-rates restricted to 128kbps. Apple twisted their arms into allowing use on up to 5 Macs and unlimited number of iPods. Note that the labels get roughly 70% of the money from each sale.
  • ITMS goes live, does well. Steve Jobs invites independents and small labels to participate. No negotiation, one standard deal -- take it or leave it. The only option offered is... exactly the same terms as the big labels. This is an unbelievably good deal for the minors, btw.
  • When that year was up, and sales were pretty good, Apple and big labels negotiate extending the deal to PCs as well. Sales grow a lot.
  • (fast forward a few years) One major label goes DRM-free at ITMS, with 2x bit-rate for higher fidelity. Their sales increase much faster than the other three majors.
  • Most observers in the open source software world (wrongly!) attribute DRM at ITMS to Apple, rather than to the labels.
  • (Fast forward a few more years) Sales at ITMS going through the roof, while CD sales continue to drop. Labels get nervous about ITMS dominance of the market. They decide to compete by licensing other stores (like Amazon) DRM-free, while continuing to require DRM at ITMS.
  • Amazon and other DRM-free music stores fail to gain much ground on ITMS. Apple keeps asking for DRM-free music; majors continue to say "hell no!"
  • Apple finally negotiates DRM-free license for all tunes, in exchange for allowing labels to price a limited percentage of their tracks at $1.29 instead of $0.99 (and also pricing back-list at $0.69). Labels still get 70% of the revenue from each sale; how much goes to the artist is determined by contracts between artists and labels (Apple has no say in that part!).
  • ITMS becomes largest music seller in US market, by quite a bit. This includes both ITMS sales and CD sales in all venues.
It is important to note that Apple's been clear from the start that they view DRM as an annoyance that gets in the customer's way, rather than as protection against "piracy." But they had to support it to get the major labels on board. Also, if you go read press accounts at the launch of the ITMS, you'll see that all pundits were astonished that the usage terms enforced by the DRM were as open as they were (5 machines plus as many iPods as you like was far more than anyone expected).

This history, for some reason that I don't understand, appears to be unknown to lots of folks out on the internet. The common assumption is that "competition from Amazon and other DRM-free stores forced Apple to dump their DRM." -- a view which runs counter to plenty of publicly available news accounts and interviews with Apple and record label execs. Go figure.

Xenophon

Last edited by Xenophon; 08-24-2009 at 11:00 AM. Reason: fix emphasis & grammar
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Old 08-24-2009, 11:09 AM   #10
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I'm not so sure Apple was anti-DRM from the start. I remember seeing reports from some indie labels who asked to have their music DRM-free in the store but were refused.
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Old 08-24-2009, 11:49 AM   #11
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I'm not so sure Apple was anti-DRM from the start. I remember seeing reports from some indie labels who asked to have their music DRM-free in the store but were refused.
Indeed they were. See the comment on the deal offered to the indies -- exactly the same as the majors. period. The issue was that Apple felt they couldn't afford to negotiate with all the different indies, not that they wanted the DRM in the first place. I too thought that Apple had missed the idea of just having a "DRM? yes/no" checkbox when submitting content. I found an interview some years ago with one of their legal guys who explained that it was a contractual issue with the majors, rather than being a technical issue.

But if you go back to the interviews and news pieces in the early days of the ITMS, you'll find that all parties publicly stated that Apple had pushed pretty hard for no DRM, and simply lost on that front. And they weren't against it so strongly as to skip the whole thing rather than accept DRM.

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Old 08-24-2009, 12:31 PM   #12
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The article does acknowledge the essential question:
Quote:
Why do companies and publishers have as their first and foremost concern protecting themselves from readers, their customer base, as if the reader’s primary concern was stealing and bringing them down ? Are they so certain that the overwhelming majority of readers still wouldn’t legally buy ebooks were they sold under fair prices and terms ?
This is the issue that every company has to deal with, in order to establish a successful business. It's a basic business equation that is 50% desire, 50% trust, with the intention of profiting from the arrangement (and it is important to note that these terms apply to company and consumer alike). If this equation is unbalanced in either direction, the business model will not function.

And unfortunately, the digital realm is forcing alterations to the basic business equation that will impact both sides... and neither side seems to want to accept that. Both sides are demanding changes of the other, without wanting to relinquish any control themselves, and encountering heated resistance. It's become a perpetual tug-of-war, with mud both between the opponents, and behind them... so whoever wins or loses, everyone will get muddy.

We are still early in the digital business revolution, and hopefully other industries (like book publishers) will learn the real lessons of the digital music tug-of-war. But I think they're going to get very muddy first, before they finally come to their senses.
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Old 08-24-2009, 12:46 PM   #13
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Quote:
Originally Posted by Xenophon View Post
A rough history of the iTunes store and DRM goes about like this:[LIST][*]Apple starts working on the store; asks big Record labels to participate DRM free. Labels say "hell no!"...
Sorry, but your version of history paints a very rosy version of Apple. The one I see sees them embracing DRM, and pretending not to, because of the lock-in value, and only shifting to non-DRM when one of the majors demanded it for their songs.

Apple are very much into control and lock-ins, as can be seen from multiple products.
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Old 08-24-2009, 05:23 PM   #14
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Originally Posted by Steve Jordan View Post
The article does acknowledge the essential question:


This is the issue that every company has to deal with, in order to establish a successful business. It's a basic business equation that is 50% desire, 50% trust, with the intention of profiting from the arrangement (and it is important to note that these terms apply to company and consumer alike). If this equation is unbalanced in either direction, the business model will not function.

And unfortunately, the digital realm is forcing alterations to the basic business equation that will impact both sides... and neither side seems to want to accept that. Both sides are demanding changes of the other, without wanting to relinquish any control themselves, and encountering heated resistance. It's become a perpetual tug-of-war, with mud both between the opponents, and behind them... so whoever wins or loses, everyone will get muddy.

We are still early in the digital business revolution, and hopefully other industries (like book publishers) will learn the real lessons of the digital music tug-of-war. But I think they're going to get very muddy first, before they finally come to their senses.
It's really a shame that the big companies can be so slow to accept market changes, and go out of their way for hindering and keeping old models instead of hopping into the frontline and providing renewed value to their customers, which is how their money-making should always be oriented. I guess you can't expect too much when so many interests are at play. Nonetheless, if Apple tried to lead the revolution back then the way Xenophon has put it, well, kudos to them. I hope Sony takes up that helm for ebooks now, to antagonize Amazon.
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Old 08-24-2009, 10:13 PM   #15
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Quote:
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It's really a shame that the big companies can be so slow to accept market changes, and go out of their way for hindering and keeping old models instead of hopping into the frontline and providing renewed value to their customers, which is how their money-making should always be oriented.
I'm pretty sure the reason the companies don't do as you suggest is, they know perfectly well that they will not survive it. Their owners, their shareholders, and their controlling interests will not willingly flush their business down the toilet... so they continue to force the old way of doing things as long as they can. Of course, they are in it for the money, so in a way, you can't blame them for wanting to continue to make money.

Most of the publishers of the future will be new companies, with little to lose and a lot to gain by embracing the new business models. The few old companies that will survive will be transformed significantly, mostly unrecognizable from their former selves. That's the way of business when a radical new shift in the business models take place, much like the change from a feudal to a democratic society. And we all have front row seats, and some of us are participants, to the storming of the castle.
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