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)



  1. What makes team content look even stupider, in this case, is that they had the opportunity to watch exactly the same thing happen to the music guys at the hands of Apple.

    Team Music wanted a shiny architecture of control. Apple built one. Suddenly(despite rather pathetic attempts like PlaysForSure and Helix and whatever utter crap Sony tried) There was only one shiny architecture of control, and Team Music was at its mercy.

    Now they are practically giving away mp3-format distribution rights to Amazon just to try to control what they created.

    Be careful, dead tree guys, Amazon knows the score and owns the store(and the pirates are stripping ebooks or trading scans on bittorrent anyway)…

    1. And that is why i wonder when Apple will be under investigation for abuse of market position, as the joining at the hip of hardware and software acts as one hell of a leverage…

  2. DRM is the single biggest reason that I don’t own an ebook reader, and have no intention of buying one. Imagine the lost sales that represents. Easily in the tens of dollars.

    1. I’ve owned an eReader for about three an a half years.  No, not a Kindle; better than a Kindle.

      I’ve gone through more than 5,000 books, magazine articles, and research papers, for about one and a third GB of PDFs and other formats.

      I’ve yet to load any DRMed documents on my eReader – all perfectly legally acquired.

  3. Like Cory, I have made one of my books available under Creative Commons (by-nc-nd)

    and have left the rewrite and the sequel as DRM-free ebooks available from a number of different retailers.

    As we already know, DRM solves nothing and only makes the life of the legitimate purchasers a nightmare. I actually thought that DRM on books was dead and buried, to be honest, so this article sort of surprises me.

  4. With all due respect to Charlie, he comes off here sounding like he either doesn’t know what he’s talking about or is applying how things work outside the US to how they work here.  He claims Amazon exerts monopsony power and will break the Big 6 publishers, when in fact Amazon tried to challenge the publishers over agency pricing and lost.  Amazon would love pricing power over ebooks, but they don’t have it.  Thus, many many Kindle titles that are more expensive than their dead tree equivalents.  Charlie also claims that the agency model is how book pricing traditionally worked.  This may be true outside the US, but it’s not been the case here.  Apple wanted to get into the ebook market, so they gave into publisher demands, and now we get to pay $13 -25 for ebooks instead of $10.  Preventing competition on ebook prices just means the ebook sellers have to look elsewhere for differentiation.

    1. “or is applying how things work outside the US to how they work here.”

      Given how often the US tech press seems to assume that USA == World, i say it is fair game to reverse the process from time to time.

    2. I would point out that as 50% of his income comes from the US market, he is very much aware of how things work here. Read some of his other posts on the publishing industry, he had a multi part series on the subject.

      Not saying you are wrong, mind you, just that I know he has addressed at least some of your issues.

  5. I frakking LOVE my local independent bookstore. It’s Borderlands, on Valencia and 19th in the Mission.

    When I finally bite the bullet and get an iPad, I want to buy ebooks through them rather than Amazon. IS there any way set up for indpendent bookstores to do this? Any sort of standard or consortium that will make this possible, rather than going through Amazon directly?

    Otherwise it seems like independent bookstores will get crushed even further. And I absolutely don’t want to see that.

    1. Several independent bookstores sell Google ebooks on their websites. I just glanced at its website, and Borderlands doesn’t, but, as a for instance, The Booksmith does. If you go to their website,, you’ll see it on the righthand sidebar. I’m not sure what their agreement is with Google, but I reckon some income from ebooks is better than none.

      1. We sell Google ebooks at my bookstore. They can be read online, through an android app or on any device except the Kindle. In that sense they’re “open” but they still have DRM through Adobe Digital Editions which limits your book to six devices. Standard mark-up for books is 40%, we get 30% for Google ebooks.

    2. There are other ebook reader apps for iDevices which allow ebooks to be obtained from various sources. I have ereader, Stanza, (now sadly owned and fucked by Amazon), iBooks, Kobo…
      I have lots of books on each, many free, and I get paid for books from the cheapest source. I have some of Charlie Stross’ books in iBooks, all of William Gibson’s across three apps, three of Tim Powers across two.
      iTunes isn’t a ‘walled garden, there’s no DRM and bought or ripped music can be played on any phone or player. I’m sure Apple would be delighted to drop DRM in iBooks, just like in iTunes; but I think publishers are going to be more entrenched than the music biz.

      1. When my publisher, Macmillan, approached Apple about releasing my books without DRM for iBooks, Apple refused to allow this.

        1. Apple had DRM on music and now they don’t.  I must have missed the part in between when they were making one-off changes for individual artists.

          By the way, did Macmillan offer to release all of Macmillan’s library without DRM or just your books?

  6. DRM is easy to disable using plugins from calibre. I shop eBooks from all the players, run them through calibre and finally upload them to my cloud storage provider to read on the device of my choice. It’s not rocket science.

  7. “And that is why i wonder when Amazon will be under investigation for abuse of market position, as the joining at the hip of hardware and software acts as one hell of a leverage…”
    Fixed it for ya…

  8. I don’t have to pretend much to claim that I don’t understand what the hell this article is about.

    What does the Kindle have to do with DRM or locking users into Amazon?

    I’ve owned a Kindle for over a year now, I’ve used it almost every day, and I have never once purchased an ebook from Amazon.  I certainly agree that DRM is disgusting on the order of mold on bread, but my solution is the same: avoid the moldy bread, avoid the materials with DRM.  It’s not that difficult.

    I don’t know how many dozens of books I’ve read on my Kindle, and NONE of them had any DRM, nor did I pay a cent for them (aside from what I pay my cable company for Internet service to download books).  It’s fun, it’s easy, and everything I want to read is out there, cost-free and mold, er, DRM-free.

    If I like a book — which usually happens when I read something by Mr. Stross — I’ll buy a hardcopy and give it away.  But sometimes I suspect that this fine author is almost as blindered as these publishers he mentions.

  9. To the above posters: I know what you mean. I own an ereader (Sony) and I use mainly to read “free” books, articles and MSs. 
    That has almost nothing to do with the point Mr Stross is making, however. He’s saying that 
    1) More and more people are buying ebooks
    2) Most of these people are buying them from Amazon, because their Kindle service is great
    3) Kindle has some serious problems and is potentially dangerous for the industry as a whole, because it tends to shrink margins, and that means that ultimately authors will work for less money.

Comments are closed.