Digital piracy hits the e-book industry (CNN.com)

[Jon Loomis]

(CNN) -- When Dan Brown's blockbuster novel "The Lost Symbol" hit stores in September, it may have offered a peek at the future of bookselling.

On Amazon.com, the book sold more digital copies for the Kindle e-reader in its first few days than hardback editions. This was seen as something of a paradigm shift in the publishing industry, but it also may have come at a cost.

Less than 24 hours after its release, pirated digital copies of the novel were found on file-sharing sites such as Rapidshare and BitTorrent. Within days, it had been downloaded for free more than 100,000 times.

Digital piracy, long confined to music and movies, is spreading to books. And as electronic reading devices such as Amazon's Kindle, the Sony Reader, Barnes & Noble's Nook, smartphones and Apple's much-anticipated "tablet" boost demand for e-books, experts say the problem may only get worse.

More at the link: http://www.cnn.com/2010/TECH/01/01/ebook.piracy/index.html

Nobody could have predicted this would happen...

[I. J. Parker]

This was in response to having "free samples" via pirated downloads and not an attack on libraries.

[Jon Loomis]

Colin--all you have to do is walk into a Best Buy (or Aussie equivalent) and take a look at their amazing shrinking CD section to get a sense of the state of the recording industry. The music industry as a whole is still ticking along because performance revenues are actually up significantly in the last decade or so--so musicians are doing okay while the big companies that used to call the shots are slowly swirling the bowl. Good for musicians, but if we're following that model (and it sure looks as though we are), I'm not sure how it's going to shake out for writers, since there's no secondary revenue stream for us.

I would argue that the musical genres and big name musicians the major record companies of the 1980s and '90s promoted remain popular, largely, but that consumers rebelled against what they rightly felt was overpricing at the retail level. $17 for a CD made sense when CD technology was new and dazzling, but twenty years in the price point should have been closer to $10. Ditto the price of hardcovers: forget all the fancy discounts and return schemes, and set the retail price at $10 for everybody--that's the way to fight piracy.

It's also worth noting that many big name recording artists are now ditching the major record companies in favor of other entities (hard to know what to call them) as a means of producing and distributing their recorded music. Good for them, but it may well be the final death blow to the old school record boyz, and it's a trend that ought to send a chill of fear up the spines of publishing execs everywhere.

[John McFetridge]

Well, in musc it's really more than one industry we're talking about. Yeah, a few years ago Madonna signed with a company that had until then specialized in arranging concert tours and Prince gave away CDs free with the pruchase of a concert ticket, but has there really been a mass exodus from recording companies?

Record stores may be gone, CD stores, but iTunes is doing some pretty good business in paid downloading.

There are lessons to be learned here, as you say forget the discounts and return schemes, set the retail prices properly - but many people believe the e-book market is quite seperate from the traditional book market and that they can both be served. As long as the price is set properly for e-books that will also fight piracy - but not eliminate it entirely any more than store security has eliminated shopifting.

[Jon Loomis]

iTunes works, IMO, because the platform is incredibly sexy (love my iPod touch) and the download process is seamless and super easy. The price point is just where it should be at .99/song: I balk at paying $1.29, which is interesting. Maybe the publishing industry will develop an equivalent model: B&N is closer with the Nook, I think, than Amazon is with the Kindle. We'll see. I actually don't hate reading books on the iTouch, and evidently Apple's new tablet gadget (due out this year) will be a knockout--so you never know.

[minervaK]

I think I agree that the interface for e-readers needs a LOT of improvement before people are going to be willing to buy stuff to read on it. Part of the draw of downloading songs is stocking them on your extremely cool i-gadget. The current e-readers out right now are not at all 'sexy' -- they're clunky, and more to the point, they only do one thing. I'm really curious about the iSlate, which will be an e-reader, computer, phone, music & movie player, nuclear reactor and transporter device all in one. If people could leave the house with just ONE electronic gadget that covers all their media 'needs,' it's really no contest. Even I, an electronics Luddite, might shell out some dollars for that.

MK
www.minervakoenig.com

[EDWARD C MORGAN]

Regarding the music industry, something I find interesting is this.

The day after Christmas, I took my eldest niece to a skateboard shop - she's a pretty decent skateboarder with the scars and acl surgery to prove it.

I was intrigued to see a decent sized CD selection at the shop. Of course it was mostly punk and alternative rock bands that the skateboarding crowd is into, and it was mostly labels I've never heard of - and I like a bit of punk.

Related, I had what turned out to be the pleasure of attending the "Warped Tour" - a punk rock festival - in Indiannapolis this year. Those bands that performed were doing a booming business selling CD's to kids. I even bought a couple (check out a band called Streetlight Manifesto if you like horns - they will change your view on punk rock).

It seems that music is doing a decent job of figuring out ways to get around "traditional" record store/mass market retail distribution. Books have done some of this, but I am running into CD's in a lot of places I don't expect to these days - and it is outside the mass market retailers where you tend to find more interesting, non-mainstream bands.

[EDWARD C MORGAN]

Theft is theft and it is nothing new in business. For decades "shrinkage of inventory" has caused stores to close. Now it is also electronic. Should we really be surprised?

[John Dishon]

It should be noted that the article gives absolutely no source for the "100,000" figure and actually provides not actual data at all, except for this:

Sales for digital books in the second quarter of 2009 totaled almost $37 million. That's more than three times the total for the same three months in 2008, according to the Association of American Publishers (AAP).

So basically this is an article of people's fears.

From the article: "J.K Rowling has thus far refused to make any of her Harry Potter books available digitally because of piracy fears and a desire to see readers experience her books in print."

Doesn't matter, since the last Harry Potter book was pirated before the print book was released.

The fact is ebook piracy is not new at all. It's been around as long as music and movie piracy has. The article even mentions that textbooks are frequently pirated. Doesn't that tell them anything? Textbooks are usually not available as ebooks; if they were then the bookstores couldn't make their massive profits by buying back students' books and re-selling them. So keeping a book in print has never prevented piracy. The rise of ebooks hasn't all of a sudden led to book piracy. That's just ignorant. It's been around for a while.

Also the article doesn't point out how well The Last Symbol sold. Let's say the 100,000 figure is accurate (the real number is likely greater than that). Okay, so first off, that doesn't mean 100,000 sales were lost, as many people who downloaded it wouldn't have bought the book if purchasing it was the only way to get it; they would have just done without. But even if every download did equal a lost sale, it obviously didn't even put a dent in The Last Symbol's performance. That book was #1 on Amazon through pre-orders alone, months before the book was released.

"I'd be really worried if I were Stephen King or James Patterson or a really big bestseller that when their books become completely digitized, how easy it's going to be to pirate them," said novelist and poet Sherman Alexie on Stephen Colbert's show last month."

How ridiculous. Stephen King's books have been available as pirated editions for years. He stills tops bestseller lists with every book. The writers most likely to be pirated extensively, such as Stephen King, have already been pirated for a long time. It's not like ebooks are suddenly making piracy worse, they're just making it easier.

[Eric Christopherson]

You make some solid points here John, but I'll point out that the 100,000 downloads (if there truly were that many) might well have put a dent in Brown's sales. That pre-orders were high doesn't mean much. How many sales weren't made after the book was published? Answer: no one really knows, but there is a little something called common sense, which says at least it ain't zero.

Also, Stephen King's sales numbers have been down for years. Same goes most of the mega-authors. I can think of a few potential factors, but wonder what percentage of the decline ought to be assigned to illegal ebook downloads.

FYI, what I'd really like to see is the criminalization of what websites like RapidShare and BitTorrent provide and the prosecution of their owners and operators. A rapid bite in the ass.

[John McFetridge]

I would settle for an admission that what they do is wrong. The amount of justification that goes on in the illegal download world is, on one hand, pretty funny, but on the other quite sad. Watching people talk abou it is often like watching a spoiled teenager arguing with his Mom at the mall.

Still, it is impossible to quantify and I suppose the histrionics from the big companies involved is also kind of funny. Here we ae, caught in the middle.

I remember one of the accusations about the Da Vinci Code was that the print run was huge and the amount of ARCs given away was unprecedented. We all accept that in order to sell some books we've got to give away a lot of free copies (I see them on my royalty statements) and that there will be a lot of returns of unsold books (I also see those on my royalty statements), so maybe another factor in selling books is a lot of pirated e-books.

I think Sherman Alexie deserves to sell more books than he does and it's possible that if he gave away some his short stories online for free as samples of his work he might even sell more books. Lots of products use free samples to increase sales. Of course, I think it should be his choice and no one should put the books online for him.

[I. J. Parker]

This raises the possibility of publishers offering free e-versions of books that are being released. That should be a savings in ARCs. (Would they appear on royalty statements???) It also means that the author can sell electronic rights and still get permission to offer chapters on his/her web site. That was possible in my case, and I always run a chapter of every book before it is released.

The whole electronic publishing world may offer some astonishing advantages for authors, but I have to say that my agent balks at electronic publication because she thinks that will adversely affect any print sale.

[EDWARD C MORGAN]

At the end of the day, I believe it becomes about preference. Do you want to read in some sort of electronic format? Would you prefer print?

At the papers I run, we now "deliver" the paper in several formats. You can get the old fashioned print edition. You can buy an electronic edition. You can read the web site. You can set up an RSS feed to read headlines. You can utlize our facebook page for highlights. Mobile phone, home computer, whatever.

It's all about preference. Each version has its own "perks" - things that cannot be found in other versions.

Yet, the preferences are there. We have people who will rather pay $50 per year for the weekly newspaper for an out-of-state subscription mailed to their home when they can get the electronic edition for $13.50 per year.

I think the industry is going to have to embrace a wider view of distribution. At the same time I think consumers will have to accept that some distribution methods (print) are going to be more expensive and eventually may be a little harder to find.