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Amazon does not require or even suggest that only family members share an account and has said that it is perfectly fine to loan out ebooks as long as you loan them on a Kindle device.
Everyone here seems to have given this general topic a lot of thought. And yet, almost everyone who has posted has a different version of what they think is or is not legal, TOC compliant, morally justifiable, responsible, etc.
At least one poster thinks that loaning an ebook on a Kindle is piracy but stripping DRM for format shifting is ok, while other posters mention that Amazon permits sharing books on Kindles but that stripping DRM is illegal (and that format shifting deprives the author/publisher of income because otherwise each format would have to be bought separately). And I don't think anyone has even mentioned geo restrictions yet.
I don’t see how anyone would expect the average casual ebook buyer to have a clear understanding of any of this – or even to have heard of most of it. I’m willing to do the work required to maintain my Calibre library of stripped and converted books, but it does take some time and effort. If authors who worry about casual sharing insist on “educating” readers on all the restrictions and possible inconveniences that ebooks involve I think they risk losing most of their sales.
As for prominent watermarking (especially with “gentle” reminders to not be a thief), I think I would find it even more irritating than the FBI warnings at the beginning of DVD movies.
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