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Originally Posted by gmw
Since the online application that displays the text of your book is a signed component loaded from the site, its ability to tightly manage the access to the book should be quite flexible and secure.
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Not if it's running on my device, that I have local access to. Encryption is only feasible if you want to keep something secret. You can't show it to somebody and hide it from them simultaneously. Sure, you can make it more difficult for a number of people for some time, but ultimately it's not going to work for a sufficiently motivated adversary. As we've seen time and again, might I add.
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If the ebook is never fully downloaded onto your device
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This also means I'm probably not interested, but that might just be me. I like to take my ereader places that have no net access.
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Disturbing thought: If reading books becomes a service, what does that do to the author's royalties, which are currently based on product sales?
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Pretty much the same as musicians and other performing artists; they get a cut out of CD sales, but are remunerated for radio broadcasts, public performances etc as well. I don't see an unsurmountable problem here.