Digital Vs. Physical Goods

[susan_cassidy]

Originally Posted by KevinH

Where is this EULA? In some faq someplace? It is typically not on the main website that they call a "Store". The Sony Store, the Kindle Store, the Kobos Bookstore, etc. Where do they claim in any add or in any place that they are not a "Store" where you buy things to take home and own and instead are a "Rental Agency". I think almost any jury would rule that what we have now amounts to deceptive practices if they do intend to only "license the book".

All ebook retailers have some sort of end-user agreement, displayed at some point. Amazon has one, Kobo has this:
"All literary works at kobobooks.com are the exclusive property of the publisher or its licensors and is protected by copyright and other intellectual property laws. The download of these literary works is intended for Kobo's Registered Users' personal and non-commercial use. Any other use of literary works downloaded from kobobooks.com is strictly prohibited. Registered Users may not modify, transmit, publish, participate in the transfer or sale of, reproduce, create derivative works from, distribute, perform, display, or in any way exploit, any of the content of these literary works, in whole or in part. By downloading literary works from kobobooks.com, the Registered User hereby acknowledges and agrees to these terms. "

Often you have to click to agree to something like this when you establish an account on the site.

It would have to be required to have an agreement like this, to have publishers willing to have them sell ebooks for them. Publishers have lawyers, after all.

[leebase]

Originally Posted by Fayth

I don't think DRM is very helpful to booksellers.

I hear ya. Kind of hard to tackly any part of this subject without instantly balooning out into ALL the aspects of this discussion.

I'm paying particular attention, in this thread, to the different nature of digital goods verses physical goods such that you really can't expect that they will be treated exactly the same.

To say that "because I can give away a physical book I bought" or even resell it -- would not mean it's just as ok to give away a digital copy.

Once you establish this understanding, then one can proceed to discuss how one might go about dealing with the situation.

DRM as it's practiced today, I find many flaws with. Just like everyone else. I do, though, have an appreciation for WHY there is DRM and even agree that there SHOULD be SOME kind of DRM.

I think the "honest people will buy" is just as much a fantasy world view as "DRM works". DRM is greatly flawed, but so is the notion that you can put out an easily copied digital file and feel no financial repercussions.

After all, authors do not have concert revenue such that ebooks can be considered purely promotional.

Lee

[Elfwreck]

Originally Posted by kovidgoyal

2) It is impossible to prevent a digital file from being copied by its intended recipient. Not impractical, not difficult, but impossible

AFAIK, it's impossible to keep a digital file from being copied by *anyone*--it's just that the key to access to the contents may only be available to to the intended recipient.

Anyone can technically make copies; it's just that nobody sues over unreadable copies.

But this means that, even without the Nifty Magic Key that allows the recipient to open the file properly, someone else with enough resources could open the file. (I think Convertlit will work on DRM'd .lit files, even away from the original computer.) Current encryption tech is such that this is difficult, maybe impossible on a practical level, but that may not last.

[Fayth]

Originally Posted by leebase

I hear ya. Kind of hard to tackly any part of this subject without instantly balooning out into ALL the aspects of this discussion.

I'm paying particular attention, in this thread, to the different nature of digital goods verses physical goods such that you really can't expect that they will be treated exactly the same.

To say that "because I can give away a physical book I bought" or even resell it -- would not mean it's just as ok to give away a digital copy.

Once you establish this understanding, then one can proceed to discuss how one might go about dealing with the situation.

DRM as it's practiced today, I find many flaws with. Just like everyone else. I do, though, have an appreciation for WHY there is DRM and even agree that there SHOULD be SOME kind of DRM.

I think the "honest people will buy" is just as much a fantasy world view as "DRM works". DRM is greatly flawed, but so is the notion that you can put out an easily copied digital file and feel no financial repercussions.

After all, authors do not have concert revenue such that ebooks can be considered purely promotional.

Lee

The thing is it is already an easily copied digital file. One person breaks the DRM and uploads it. Bam, its freely available to the world as an easily copied file. The DRM does nothing to prevent this. No DRM will ever do anything to stop it. As I have being saying repeatedly, the DRM changes nothing about the pirating world, but what it does do is stop those who are not good with technology from easily transferring media between friends and family.

That is the only valid argument for DRM, stopping local sharing by those who would otherwise lack the ability to get it from the pirating world. This won't last long either. With the state of technology as it is, it wont be long before those who aren't technically inclined are phased out, and almost everyone will be more than knowledgeable enough to grab stuff from torrents or other filesharing sites. Then DRM will be truly useless.

The only thing that I think would actually be effective at combating piracy would be governments forcing ISPs to closely monitor their networks and issue consequences to pirates. However, I don't think anyone, even legitimate consumers, agrees that giving ISPs this kind of power is a good idea.

[Elfwreck]

Originally Posted by leebase

To say that "because I can give away a physical book I bought" or even resell it -- would not mean it's just as ok to give away a digital copy.
...
I think the "honest people will buy" is just as much a fantasy world view as "DRM works". DRM is greatly flawed, but so is the notion that you can put out an easily copied digital file and feel no financial repercussions.

OTOH, if ebooks could legally be resold, there'd be a lot less incentive to mass-distribute free copies. Customers would look for ways to restrict access to the books they bought & hoped to resell. They wouldn't blithely participate in mass torrenting and fileshare sites.

(I don't think allowing ebook resales, at this point, would change the filesharing sites quickly enough to suit publishers. But had there always been an awareness that "you can resell this," the free sites would be a lot smaller.)

[Kali Yuga]

Originally Posted by mr ploppy

Not true. Revenue for the music industry has increased year on year since the advent of Napster in the 90s, the publicity about which made mp3 downloading a mainstream activity.

Uh... no.

US music recording sales dropped about 50% between 1999 and 2009.
http://money.cnn.com/2010/02/02/news...usic_industry/

Global recording sales fell by about the same amount.

Meanwhile, growth of digital sales has slowed and may be plateauing:
http://www.nytimes.com/2011/01/24/te...y/24music.html

And while concerts have done better in recent years, concert sales grosses in North America fell by 26% in 2010, as attendance dropped by 12%:
http://www.variety.com/article/VR1118029386

Apparently the UK is a small bright spot -- as indicated by the very report you cite, which points out that the UK's increase in revenues in 2009 "bucked the trends" in previous years and internationally.



Again there are lots of reasons for the various sales losses: A broad-based international recession, rising ticket prices, no more re-purchasing of vinyl or tape. And again, I do not definitively state that if CD's had effective DRM that anything would be different.

But there really is little doubt that recordings are suffering (contrary to KevinH's claims), or that piracy has reduced sales and drastically slowed the adoption of paid downloads of music.

[Kali Yuga]

Originally Posted by KevinH

1 infringing download shared among friends may in fact result in additional sales!

Or, 100 infringing downloads among total strangers may result in, oh, let's say 5 sales losses.

Originally Posted by KevinH

Where is this EULA?

Kindle EULA: http://www.amazon.com/gp/help/custom...deId=200144530
Nook TOS: http://www.barnesandnoble.com/nook/legal/index.asp
iTunes TOS: http://www.apple.com/legal/itunes/us/terms.html#SALE
Smashwords TOS: http://www.smashwords.com/about/tos
Sony eBook store TOS: http://ebookstore.sony.com/termsofservice.html

These are all click-throughs when you buy the device, install the software and/or purchase content.

Originally Posted by KevinH

What else can you call Amazon being forced to raise it prices via the collusion of multiple publishers getting into a group and agreeing to agency pricing and then pushing it.

It's called "Amazon caving after clumsily pulling MacMillan's books in an ill-conceived attempt to apply pressure to the publishers."

There was no "group" that coordinated agency pricing, and several of the largest publishers in the world do not use agency pricing.

It's similar to how Walmart routinely tells its vendors "you WILL provide this much product, at this exact wholesale price, which we will sell at this price in the store, and you will not be so much as 5 minutes late on any deliveries, and if you don't do what we say then your goods won't be sold in the biggest retail chain in the US." You may not like it, and vendors may kvetch about it, but it's 100% legal.

And again: Developers set prices for their apps on the App Store; self-publishers and small pubs set their prices for a variety of outlets including Smashwords, Amazon's DTP, B&N's Pubit and so forth. Is that "anti-competitive?"

[GreenMonkey]

Originally Posted by Fayth

That is the only valid argument for DRM, stopping local sharing by those who would otherwise lack the ability to get it from the pirating world. This won't last long either. With the state of technology as it is, it wont be long before those who aren't technically inclined are phased out, and almost everyone will be more than knowledgeable enough to grab stuff from torrents or other filesharing sites. Then DRM will be truly useless.

DRM does nothing to stop piracy. Nothing. It doesn't even stop casual copying between friends. People simply download a torrent instead.

Even for me, a techie, it's often simpler to download a torrent of something than to rip a copy of it. Say for some DVDs, I want to put a copy on our laptop for the kids when we're on vacation. It's seriously much easier to find and download it than it is for me to circumvent the DRM, rip the disk and convert it.

Oh wait, to the industry, I'm a criminal. I should buy it on DVD, on BD, a digital version for itunes for PC and our ipods, a digital version for my android device, over and over and over again. Like Sony, who famously said before that ripping CDs to mp3 should be illegal.

All DRM does is encourage people to say "**** this, I'll just download a torrented version, at least that will work right". It might, might stop a few older or super-non-tech-saavy folks who then just spend the money to buy it. BUT - I know plenty of people in their 30s and 40s that aren't techies, but they know how to google something + torrent and download a torrent...with the DRM already cracked and removed. Guess what? It's a a better product that probably JUST WORKS.

Industries need to adapt to the digital age, not DRM the hell out of their products in an effort to pretend it's not here. For music, the amount of money they were spending on DRM schemes, programming, tech support, and losing from angry or frustrated customers surely was more than the DRM realistically netted them in profit after all of those expenses.

As far as the music industry, I'm so fed up with the RIAA mafia I've simply bowed out. I went from a Columbia House multiple-accounts person that bought probably 20-40 CDs a year to buying zero new CDs, ever. I buy less than 1 new CD a year now. I get used ones of my favorite bands...maybe a couple per year now, if that. I do fine with radio, internet radio, public radio podcasts, the occasional used CD, and free mp3 downloads/promos/etc. That's what happens when you treat your customers like garbage. They stop buying.

There's no reason not to treat digital goods like any other good. They expect us to pay the same price (or more!) for them...but have far, far, far less rights. How does that make sense?

[Blue Tyson]

Yep, when you buy what they say is a CD - a standard - and it turns to be altered/DRMed junk and wouldn't play on a garden variety CD player that played all the others, and you have to waste a couple of hours and 10 bucks travel taking it back again, then why ever bother again?

Apart from say, some local act that you know made their own CDs on their own machine the night before, and will be fine.

[lebleaux]

An interesting discussion. I don't know what is 'right', but I know what I want to do.

When I have read a physical book I put it on the bookshelf. If another member of my family wants to read it they take it off the shelf and do so. I want to do this with electronic books, have a library stored on the family media server and have those that want to read a book load it onto the reader of their choice. I have a Kindle, my daughter has a Nook, I expect my other daughter will soon have a Kobo, we have a laptop or two in the house etc etc. In order to achieve this I have standardized on a neutral content - epub - and create reader specific versions as required - typically via Calibre. It appears that the current intent of DRM is that I can not/should not do this, I should buy individual versions for each reader. This makes no sense and I will not do it. DRM will drive me to the torrent world OR (in my case anyway) hopefully everyone will support epub.

Yes I am aware that I want to do something that could not be done with physical books and have more than one person reading a 'single' book at once - of course I want to do this, thats why I have invested in digital content, so I can do this and other things like it. What I want is for the publishers to come to me - I am a movin' on.

[Fastolfe]

There is a much, much simpler way of approaching all these issues. Let me elaborate my logic:

Forget about digital vs paper book, DRM or clear-text, etc. Consider these premises:

(1) Special products:

Books, sound recordings (LPs, tapes, CDs, MP3s, whatever) and images (photos, paintings, etc) are special types of products: when you buy one, you buy it for the information they contain, not for the media.

(2) Everything can be reproduced or copied. It's just a matter of time and cost. It isn't new either: Mozart "stole" the Allegri Miserere, which was a controlled piece of religious music, by listening to it twice and transcribing it entirely by memory. But the cost to him was a lifetime of learning how to read and write sheet music. Rather a high investment just for a copy; nevertheless, the Miserere was copied. Similarly, if you're willing to learn how to paint for many years, you could have your very own copy of a Picasso painting. It's not cost-effective but it's doable - and regularly done.

(3) People who produce something must be paid for their effort, if only to give them an incentive to continue producing.

(4) There are 3 kinds people:

- The fundamentally honest no matter what: they are the ones who bring back a wallet full of cash to the police, even if it means losing the cash. They are a minority.

- The mostly-honest who do petty thefts if they can get away with it and if it's not too much hard work: they are those who see the wallet, look around to check that no-one is around, and pocket the cash. They are the overwhelming majority of people.

- The thieves: they are the one who don't wait for wallets to drop onto the street and come pick them out of people's pockets. They are a minority.

Now, honest people aren't a problem, they're honest. Thieves aren't a problem either: whatever you do, they'll find a way to steal anyway, and there is no cost-effective way to prevent theft 100%. The real problem is this: how to get mostly-honest people to pay content producers for what they consume?

There are two ways to make it happen:

(1) Make copying difficult or long enough that it's not worth the effort or the investment over buying the genuine thing.

When LPs were the only source of music, nobody copied LPs because it's just too expensive to buy a press. In this case, the copy protection was natural.

Digital files however are intrinsically, I would even say violently easy and free to copy. Publishers are trying to bring back cost and difficulty into the equation: they hope that DRM will be too long or too difficult to crack for the common man, and they make the law threaten the common man (which is a form of cost too, in the form of jail time to be served if you get caught).

Neither scheme works, because DRM is never 100% secure by definition, and legal threats are too diluted by the sheer mass of people engaged in copying.

(2) Make the genuine article better than the copy, so that people have an incentive to pay for the better product.

When magnetic tape (cassette, VHS or otherwise) was common, people could copy music or movies onto a tape, but with a certain loss in quality. Folks with low income did that a lot, and ended up with free but pretty crappy copies of copies of copies. Folks with more disposable bought the better, officially-sanctioned copy at the store, and everybody was happy, including publishers.

However, again, digital files change the game: they are also violently identical to the original master copy. Even multiple copies of an original encoded with a lossy compression degrades in quality only once. Several schemes have been tried to prevent lossless copies of protected content, for instance at OS level by Microsoft, but we all know how that went.

So, with digital files, we are left with two simple, unescapable conclusions:

- Left totally unchecked, people copy everything all the time without paying a dime. Period.

- Artificial barriers to illegal copying don't work very well because, well, they're artificial.

We therefore need a radical new way of making premise (3) happen. In fact, it's not just fair to the content producers that they get paid, it's of great societal importance: if no-one sees a way to make a living writing, making music or making movies, our society's culture will stall!

What can we do?

- Try to educate people from the youngest age to recognize the importance of paying for what they consume - make them more honest at core, so to speak, so they'll police themselves into paying: it would require a gigantic effort in state-sponsored brainwashing for several decades, and I'm not sure it would work too well because it runs against human nature. But it's certainly a worthwhile effort.

- Try to find new revenue streams not directly associated with copies of the work: it's already happening within the movie industry and on the internet, where the content is cheap, sometimes free, and advertising makes up a sizable portion of the revenues of the content producer. In the music world, musicians often make a lot of money by selling seats to live concerts, something that can't be copied I'm not sure how this would apply to the world of books however.

- Some radical new paradigm to allow writers to make a living in a world of free unstoppable copying. I must admit, I've been thinking about the problem for years, and could not come up with an answer.

So you see, more questions than answers. My personal response is to put myself voluntarily in the group of honest people, but it's not a global, sustainable answer to the problem. All I know is, we all need to think of a way to free ourselves from the stranglehold of DRM and old business practices, while at the same time allowing talented authors to be richly paid for their talent. I'm not sure how it'll happen, but it'll have to happen.

[crossi]

If they are trying to prevent people giving copies to their family members DRM doesn't do it. Those people typically are on the same account and can read all the books there legally. Friends are perhaps less often on the same account but it is not really uncommen either, there are joint reading groups. Also now that there is legal sharing on both the kindle and the nook there is a legal way to occasionally share with people who aren't on your account.

As for people hosting torrent sites. Those people can strip DRM in a few minutes, it doesn't even slow them down. Or they simply buy a paper book and run it through a scanner to produce their file. The Potter books have been available since they were published. DRM is a failure here also.

Also I do not believe that having the book on a torrent site really hurts sales. Most people are willing to pay for convenience and service. Amazon is a one stop place for buying books. No need to search the net trying to find the book you are looking for. You know Amazon is safe and you won't be downloading viruses or malware by shopping there. If books are updated and errors fixed Amazon will notify you and send the corrected book to you. They backup all your books for you free of charge, a useful service. They keep track of your notes and underlines for you. And they sync your books over multiple devices. These things apply to most of the legitimate vendors, I'm just using Amazon as an example. Most people prefer to buy things legally and with all the advantages you get from legal vendors I do not think the torrent sites really cause much loss of real sales. They lose more sales from people who don't like DRM and are afraid of one day losing their investment in books due to orphaned readers that are no longer supported.

[GreenMonkey]

Originally Posted by crossi

Also I do not believe that having the book on a torrent site really hurts sales. Most people are willing to pay for convenience and service. Amazon is a one stop place for buying books. No need to search the net trying to find the book you are looking for. You know Amazon is safe and you won't be downloading viruses or malware by shopping there. If books are updated and errors fixed Amazon will notify you and send the corrected book to you. They backup all your books for you free of charge, a useful service. They keep track of your notes and underlines for you. And they sync your books over multiple devices. These things apply to most of the legitimate vendors, I'm just using Amazon as an example. Most people prefer to buy things legally and with all the advantages you get from legal vendors I do not think the torrent sites really cause much loss of real sales. They lose more sales from people who don't like DRM and are afraid of one day losing their investment in books due to orphaned readers that are no longer supported.

Yes.

There's a reason that we aren't down to just Walmart, Target, Lowe's, etc.

Corner convenience stores still exist, drugstores still exist, bookstores, etc...local businesses still exist.

Sure mega-stores have driven some businesses out with rock-bottom pricing...but not all restaurants are Taco Bell.

Adaptation is what is necessary. Good service, convenience, etc count for a lot.

For example, my wife occasionally pays for TV shows on itunes to watch on the go. Why? Because it's easy and she's lazy. I tell her not to pay for what we already have on the Tivo...it drives me crazy. Given some effort she can transfer the videos from the Tivo and convert...but that's too much effort. She'd rather pay $1.

[taming]

Originally Posted by KevinH

Where is this EULA? In some faq someplace? It is typically not on the main website that they call a "Store". The Sony Store, the Kindle Store, the Kobos Bookstore, etc.

The link to the Kobo EULA (called "Terms of Use") is at the bottom of every page of the kobobooks.com website. It is part of the site-wide footer. The privacy policy link is part of the footer as well.

[Anke Wehner]

Originally Posted by leebase

Surely you lessened the probablility that the author could sell books to those you lent your book too.

That assumption contradicts my experience. In the bookcase closest to me right now there are a dozen books I bought after borrowing them from friends or the library. I would not have bought them, probably not even have heard of them, if I had not read them for free first.

I also think your case against "lending" ebooks is a bit too black-and-white. Vendors and/or publishers for example could have come up with a DRM system that allowed lending analoguous to paper-book lending (AFAIK a VERY limited version is available for some Kindle ebooks), and that allowed transferring the license for an ebook to someone else (which would allow resale), but they chose a system that would instead even take access to a book away from the buyer after a few broken or otherwise replaced ebook readers.
For that, $2 might be a fair price, but not the same pricetag you see on print books.

Where is the moral/ethical difference between giving away a paper book, and sending ONE person an ebook one bought, and afterwards deleting all one's own copies?