Stross: publishers' insistence on DRM "hands Amazon a stick with which to beat them"

Charlie Stross unloads both barrels on the big six publishers and their insistence on using DRM in connection with their ebooks, arguing that their demands for DRM lock their customers into Amazon's Kindle platform, "handing Amazon a stick with which to beat them harder."

DRM on ebooks gives Amazon a great tool for locking ebook customers into the Kindle platform. If you buy a book that you can only read on the Kindle, you're naturally going to be reluctant to move to other ebook platforms that can't read those locked Kindle ebooks — and even more reluctant to buy ebooks from rival stores that use incompatible DRM. Amazon acquired an early lead in the ebook field (by selling below cost in the early days, and subsidizing the Kindle hardware price to consumers), and customers are locked into the platform by their existing purchases. Which is pretty much how they gained their 80% market share.

An 80% share of a tiny market slice worth maybe 1% of the publishing sector was of no concern to the big six, back in 2008. But today, with it rising towards 40%, it's another matter entirely.

As ebook sales mushroom, the Big Six's insistence on DRM has proven to be a hideous mistake. Rather than reducing piracy[*], it has locked customers in Amazon's walled garden, which in turn increases Amazon's leverage over publishers. And unlike pirated copies (which don't automatically represent lost sales) Amazon is a direct revenue threat because Amazon are have no qualms about squeezing their suppliers — or trying to poach authors for their "direct" publishing channel by offering initially favourable terms. (Which will doubtless get a lot less favourable once the monopoly is secured ...)

Cutting their own throats

(Image: DRM PNG 600 2, a Creative Commons Attribution Share-Alike (2.0) image from listentomyvoice's photostream)