Silicon Valley Watcher - Former FT journalist Tom Foremski reporting from the intersection of technology and media

Analysis: DRMStore Wars Begin...Bad News For E-Books, E-Readers But Good For Notebooks

Posted by Tom Foremski - January 30, 2010

Paul Mooney pointed me to this article by Cory Doctorow on Boing Boing: Amazon and Macmillan go to war: readers and writers are the civilian casualties

Book publisher Macmillan pulled its e-books from Amazon's Kindle because it wants to be able to charge $15 per book instead of all Kindle books being $10.

Macmillan wants to be able to set its own prices -- a reasonable request. But Amazon wants a one-price-fits-all market.

This is similar to Apple's iTunes store which groups music, TV shows, and movies, into one or two price points. Publishers on the iTunes store are also unable to set their own pricing.

Cory Doctorow points out that there is a danger of fragmentation among book publishers over the issue of DRM and pricing.

If the big book publishers adopt different DRM licenses and pricing, people will have to cart around "a half-dozen tablets and readers, one for each permutation of which corporate elephant is trying to crush another."

Disputes are bad for business...

Either way, disputes such as the one between Macmillan and Amazon aren't good for e-readers and e-book markets.

It will stunt this young, emerging market because it points out that fragmentation in e-reader markets will require multiple devices.

With Apple's iPad we already have two e-readers with separate libraries. And there will be many more e-readers coming onto the market.

There will undoubtably be promotional deals where exclusive content will only be available on a specific e-reader to encourage sales of that device. That will highlight the fragmentation issue even further, reminding people that their digital libraries are stuck to a specific device. That will slow overall market growth.

A better e-reader...

In such a scenario, a lightweight notebook computer with a great screen might be the winner. The Macbook Air, and other thin, lightweight notebooks, could become the preferred e-reader, with many advantages over dedicated e-readers:

- PC or Mac notebooks are open platforms based on standard browser interfaces.

- Content is not tied to the device.

- Content is available from many sources instead of being tied to Amazon or Apple's DRMStores.

- People can switch notebook makers and keep their investment in their digital libraries intact.

- A notebook based e-reader can be used for many other tasks.

The higher price for lightweight notebooks becomes quickly outweighed by all these advantages.

Price becomes even less of an issue when people consider the total value of a growing e-media library.

It won't take long for people to build up a library of media content that is worth tens of thousands of dollars. The cost of the e-reader, whether dedicated or notebook based, becomes negligible when compared with the total cost of the library. Choosing a notebook as an e-reader becomes a much simpler choice.

A return to old media...

The DRMStore wars might lead to a new appreciation for physical media, paper books, DVDs, and CDs, and their 'DRM-lite' properties.

I can resell my books, DVDs, and CDs. Or I can lend them to a friend. I can also create digital versions for my own use. I can't do that with the restrictive DRMs that accompany most e-media.

- - -

Please see:

The Mysterious Apple A4 Chip - Where's MSFT's and GOOG's Chip?


Analysis: iPad Is an iDRM Storefront For Apple Ambitions To Dominate All Digital Media Sales


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