[Worldwalker]

Addressing the original topic, whether piracy will harm ebook sales, my take is this:

First, there are two broad groups of readers. I think of them as the bestseller readers and the bibliophiles. The former buy maybe a dozen books a year, the latter a dozen books a month. For the bestseller readers, books make up only a small part of their entertainment menu. They read books, yes, and sometimes a whole lot of them read the same book, but they don't read like the bibliophiles do. Reading is just a thing they do sometimes. The bibliophiles are the ones where, when you go into their houses, you have to move books before you can sit in any chair. Possibly before you can get in the door. In other words, they're us. There aren't nearly as many of us as there are bestseller readers, but on a per-person basis, we buy a hell of a lot more books, which may make our weight in the market closer to theirs than the publishers realize. We're the ones buying the backlist and midlist. We're the ones who go without other things so we can buy more books.

Out of those two groups, it's the bibliophiles who are most likely to buy and use ebook readers. Why is someone who reads a book once a month going to shell out hundreds of dollars to read that book in, frankly, a less convenient form? By and large, they're not. It's us, the people whose physical libraries put their houses' structural stability at risk, who own more bookcases than all other articles of furniture put together, who want and need devices that can carry around hundreds of books at once. Sure, we buy bestsellers too. We buy just about everything with words on it. We're the real mass market when it comes to ebooks. A device that's a gimmick to Joe Average is to us the means of saving our floor joists.

Now, out of those two groups, the bestseller buyers aren't going to be downloading illicit books -- if they have ebook readers at all (which is questionable, given the ratio of the price of the device to the amount of use they'll get out of it) they're not spending so much on ebooks that the effort to collect and use second-rate copies is even worth it. So publishers aren't losing any money from them. The bibliophiles, on the other hand, are already spending every penny we can spare on books. We're maxed out; there's no book-buying capacity left. If some bibliophiles are getting illicit copies of books, that is probably supplementing, rather than replacing, their normal book buying.

Part of the problem, and part of the scare tactics, is how the industry figures its "losses". Just like the BSA assumes that every warez d00d who has a cracked copy of Photoshop CS4 would have bought it at full retail price otherwise (because every teenager has $700 to spend on software to put lame captions on his Facebook pictures), the publishers assume, or claim to assume, that everyone who downloads a 3,000-book torrent would have bought every single book in it at list. That's a $36,000 loss! Except, of course, that I don't think any of us know anyone who spends $36,000 a year, or probably even a decade, on books. Certainly not any of the people who are downloading torrents of bad OCR's of worse scans. If someone who isn't a customer anyway is making copies of a product for free, the seller has really lost nothing. You can't lose money you don't have, and never had a chance of getting. And who knows, maybe they'll find a book they like in there, and decide to buy a legit copy.

If piracy really harmed ebook sales, Baen Books would be out of business. They not only don't weep and wail about "theft", they have a huge list of electronic copies of some of their finest books available on their website, in many handy formats, that they encourage you to download and share with everyone you know. They pack CD-ROMs in the back of some of their books (not sure if they still do) with more of the same, and again, with an exhortation to copy the CD and give it to everyone. And it pays. By and large, people want to feel virtuous, and if they can get a good product, a product that fills their needs, at a fair price, from someone they respect, and with warm fuzzy feelings attached, they'll buy it. Aside from the substantial cubic footage of dead-trees books I've bought, and continue to buy, from Baen, I shelled out about sixty bucks a couple of weeks ago for another batch of ebooks. They deal fairly with me, and they give me a good product for a good price, so why shouldn't I?

(by the way, I should point out that all of my ebooks are either legitimately free, such as the BFL and PG, or properly paid for; I'm discussing the reasons for piracy in hypothetical, not personal, terms)

Something else to consider: Remember the early days of the video rental industry, when the studios tried hard to shut the stores down because they feared rentals were cutting into the sales of their $50+ videotapes to the handful of people who had players? Yeah, about that ... now DVDs sell for $10-$20, there's a Blockbuster on every corner, I don't know anyone including my elderly mother who doesn't own a DVD player of some sort ... and movies can make more off of DVD sales than they do at the box office. Everyone buys them. They found a price point that makes them cheap enough to buy to make it worthwhile to buy the necessary hardware, and with said hardware being widespread, there's a huge market for the DVDs. So instead of where the video industry started, with a tiny handful of people paying $200 in today's dollars for each movie, they have practically everyone on the planet paying $10 each for zillions of movies.

That's what the ebook publishers need to do: sell their books cheaply enough so that buying an expensive device to read them with makes sense, and by doing so, they'll cause their market to explode, and their profits will follow. If you sell one book at $10 profit or 10 books at $1 profit, you're making the same money -- and the more the customers have, the more they want. It worked for the movie industry, it will work for the publishing industry.

Speaking of the cost of producing an ebook, it costs a hell of a lot more to produce a movie -- yet compare the prices of the end product. Even direct-to-video movies, with no theater revenue to help offset the production costs, still seem to turn a profit for their producers at those prices. Customers do notice this, and they consequently start feeling gouged when a book is selling for more than a movie.

So ... no, as long as the publishers provide a means for customers to buy a good product at a fair price, and don't treat their customers like their blood enemies (e.g., Baen), piracy isn't likely to be a serious problem. If things keep on as they are, where most publishers are making legitimate purchases harder and more inconvenient than obtaining illicit copies, charging disproportionately more, compared to printed versions, for what the customer actually gets, and applying DRM that inconveniences only the legitimate customers ... well, yeah, it's gonna be an issue.