A friend of mine emailed me this past week asking me for information about how to buy her sister a gift of ebooks. Her sister had a Sony Reader and my friend wanted to buy books from Fictionwise because unless you had a Sony Reader, you couldn’t actually buy a Sony Reader compatible book. I tried to explain the tortuous way in which she could install MS Reader, then Converlit GUI, then buy the books, then convert them to some format that could be converted again to Sony Reader compatible. I think she and I gave up somewhere in the fifth email.
Digital rights management (DRM) had stymied this friend in buying a couple of books for her sister’s e Reader. DRM is just something that publishers can’t give up. (It’s hard to say whether the push for DRM is stronger from the authors or the publishers so for now I’ll just lay the blame at the door of the publishers.)
There is also the concern around the giving away of free ebooks and whether that will lead to a consumer class devaluing literature to the point that they expect ebooks to be free. Giving away free ebooks doesn’t makes sense unless you are using the ebook to seed future purchases. For example, the Julia Spencer-Fleming free ebook giveaway made a lot of sense because Book 6 was a continuation of a long running series and thus it encouraged the purchase of Books 3-5 that might not have been made. I also don’t think that simply because you have free ebooks as a promotional device, that leads consumers to expect all books, even in digital form, to be free.
I think we can conclude from the empirical evidence in our own romance community that there is money to be made even selling DRM free ebooks. It is possible that it is because epublishers went DRM free that they have been successful and had ebooks been locked in some fashion that EC, Samhain, Loose ID and so forth would not be the success stories that they are today. The 2007 Forbes article on Ellora’s Cave represented that EC had annual revenue of $6.7 million. Royalty rates for EC authors is 40% which means that the EC authors took home a little over $2.6 million. In fact, I think the money that has been made in the past from ebooks is one reason we see so many new epublishers entering the marketplace.
It’s probably safe to say that epublished books, free of DRM, are pirated at a higher rate than other published books yet both sides parts of the publishing side of the equation are making money.
If there is one company that could undertake to experiment with DRM free ebooks, it would be Harlequin. It’s contracts, I believe, are all encompassing in terms of the rights it acquires when it buys a book. It could release some percentage of ebooks with DRM and without and track the comparable sales. Harlequin is so innovative in other ways (releasing books early, digitizing its entire frontlist, enabling the one click bundles) that it could really be a leader in this regard.