DRM-Free as a Market Opportunity.

TOR, an imprint of Macmillan publishers, posted on the anniversary of stopping the use of DRM for their titles. The most eye-catching comment was that there was “no discernible increase in piracy on any of our titles, despite them being DRM-free for nearly a year”.

The use of the word discernable is interesting; perhaps it’s as much a comment on how difficult it is to measure piracy as it is a comment on the effectiveness of DRM to combat piracy. The best numbers are from sales figures, and if sales figures haven’t been hurt, then DRM isn’t effective in combating piracy. Hmm, maybe. I would argue that there are a few trends that add up to this result:

1. We’re not used to DRM, e.g. in the same way as we’re used content protection in satellite TV. So naturally, we don’t want DRM in books. (Yet we don’t care about putting a smart card into a set top box.)
2. Being able to lend books was an inherent feature of owning books that DRM constrained, so removing DRM feels like giving back something that we expected to be there in the first place. (Again, we don’t have this expectation of other digital media, particularly broadcast media; we don’t expect to lend others our TV.)
3. The readership of a particular book is far lower than the viewership of an equivalent movie, so the impact of piracy per book is lower.
4. Lending books is an important marketing tool in its own right, called superdistribution.
5. Fair use anyone?

There’s an article from Wired in 1994 that explains the concept of superdistribution well, but also misses one key point: because I lend a book to you, I recommend it to you, and therefore there is a much higher likelihood that you will be pre-disposed to like it, and to buy it or further works from the same author. In other words, this is incredibly focused targeted marketing. And best of all, it’s free to the publisher.

So if removal of DRM is all good for the publishing industry, why does the music industry still insist on numbers that illustrate a catastrophic impact of piracy? ($800 for every man, woman, and child in America, and twice the number of jobs lost than those employed in the entire motion picture industry in 2010.) Apart from the fact that organisations like the RIAA are making their point in the most unsympathetic and ridiculous way possible, they are also making counterfactual assumptions: that piracy = lost sales, and that DRM = no piracy.

The digital world that we live in opens up far more interesting opportunities to reward the truly creative amongst us. It’s a shame that the industry that has evolved to make money from these creatives has decided that they will make more money pursuing litigious protectionist strategies than to pursue new, fairer and therefore ultimately more valuable strategies.