"However I suspect that the big 6 are going to accept a world without DRM the same way as the MPAA and RIAA before them: kicking, screaming and fighting until the last breath to prevent anyone from staunching the massive gaping wounds they've inflicted on themselves."
This is completely true. As someone has worked in the ebook sector for close to 10 years, the publishers (with a few notable exceptions) continue to dig a deeper hole for themselves. The three main problems in the ebook sector are:
- DRM, Territoriality, The Agency Model introduced in 2010
The problems of DRM have already been covered in detail.
Regarding territoriality, we have ridiculous set of restrictions about who we, as a retailer, can sell an ebook to. A large publishing house will have separate entities setup in the US, Candada, the UK and Australia. Each one of these produces the same ebook that can be sold in a restricted set of countries at different prices. This causes all kinds of complications. Take for example a US citizen who in the army who is trying to purchase an ebook in Afghanistan. Do we rely on their IP address or credit card when determining whether they're allowed the book? The is a litany of other examples where territoriality complicates things helping no one, not even the people imposing it.
By 2010 Amazon had cut prices on ebooks to a level where they were losing money on each sale. Their strategy was fairly clear, build a large user base locked into their platform, bankrupt the competition then strong-arm the publishers to get a larger cut of the profits. The publishers freaked out and imposed a new model in the US where all ebook retailers were considered agents and couldn't discount their books; fixed prices across all retailers.
This move means that the publishers have complicated their own business model to the extent where they can't handle it. Taxes down to the city level must be applied to any ebook sales made with the US. The publishers are struggling to ensure all their distributors are complying with fixed prices and Amazon is monitoring this situation closely. How come retailer X is not complying with your fixed pricing but we have to? The publishers are fearing lawsuits with good reason.
I don't know what the answer is. Our only options as an indie retailer is to pursue a mobile based reading experience on either android, wp7 or through the browser (DRM problems come into play here). Everyone has been pushed off IOS since August last year when Apple imposed a 30% commission on any purchases made through an app. This 30% is exactly the same percentage that retailers receive as an agent.
This is completely true. As someone has worked in the ebook sector for close to 10 years, the publishers (with a few notable exceptions) continue to dig a deeper hole for themselves. The three main problems in the ebook sector are:
- DRM, Territoriality, The Agency Model introduced in 2010
The problems of DRM have already been covered in detail.
Regarding territoriality, we have ridiculous set of restrictions about who we, as a retailer, can sell an ebook to. A large publishing house will have separate entities setup in the US, Candada, the UK and Australia. Each one of these produces the same ebook that can be sold in a restricted set of countries at different prices. This causes all kinds of complications. Take for example a US citizen who in the army who is trying to purchase an ebook in Afghanistan. Do we rely on their IP address or credit card when determining whether they're allowed the book? The is a litany of other examples where territoriality complicates things helping no one, not even the people imposing it.
By 2010 Amazon had cut prices on ebooks to a level where they were losing money on each sale. Their strategy was fairly clear, build a large user base locked into their platform, bankrupt the competition then strong-arm the publishers to get a larger cut of the profits. The publishers freaked out and imposed a new model in the US where all ebook retailers were considered agents and couldn't discount their books; fixed prices across all retailers.
This move means that the publishers have complicated their own business model to the extent where they can't handle it. Taxes down to the city level must be applied to any ebook sales made with the US. The publishers are struggling to ensure all their distributors are complying with fixed prices and Amazon is monitoring this situation closely. How come retailer X is not complying with your fixed pricing but we have to? The publishers are fearing lawsuits with good reason.
I don't know what the answer is. Our only options as an indie retailer is to pursue a mobile based reading experience on either android, wp7 or through the browser (DRM problems come into play here). Everyone has been pushed off IOS since August last year when Apple imposed a 30% commission on any purchases made through an app. This 30% is exactly the same percentage that retailers receive as an agent.