Could This Sink the e-Book Industry?

With sales of e-books and e-readers exploding, there's a troublesome issue brewing that has thus far flown under the e-radar. It's the same one that has bedeviled the music industry for years: Should e-books be copy protected?

Why is this an issue? Let's say you're an Amazon (Nasdaq: AMZN  ) Kindle user, and after two or three years, you've accumulated dozens of e-books. But suppose you drop and break the Kindle, and you'd like to try a different e-reader, from Barnes & Noble (NYSE: BKS  ) , Sony (NYSE: SNE  ) , or whomever. As things stand now, you'd have no way of accessing your books with your new e-reader. You're banned from reading your own books.

David Pogue of The New York Times has a unique take on this. He's been an advocate for non-copy-protected music, something we've only recently started seeing after years of contentious debate. Now, finally, users are much less tethered to an Apple (Nasdaq: AAPL  ) iPod or other music device; in most cases, they can buy a different music player and still listen to their tunes.

But Pogue is an author himself, and while he believes copy protection hurts consumers, he's also "terrified" over the piracy potential of unprotected e-books. "I can't stand seeing my books," he writes, "which are the primary source of my income, posted on all these piracy websites, available for anyone to download free."

So there's the dilemma. Copy protection clearly harms law-abiding e-citizens, but unprotected works could decimate an author's earning potential. The book industry, already sparring with Google (Nasdaq: GOOG  ) over copyright issues, has another whopper on its hands.

Any thoughts on this issue ... or better yet, solutions? If so, post them below in all their non-copy-protected glory.

Fool analyst Rex Moore authorizes the use of all vowels in this article for non-commercial purposes. Google is a Motley Fool Rule Breakers pick. Apple and Amazon.com are Motley Fool Stock Advisor recommendations. Try any of our Foolish newsletter services free for 30 days. The Fool's disclosure policy loves Fahrenheit 451.


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Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On December 18, 2009, at 12:38 PM, gwconcord wrote:

    A difference between the book and music industry is that music artists can afford to have their music stolen and still make money off the concerts. The book author doesn't have that secondary source of revenue.

  • Report this Comment On December 18, 2009, at 12:55 PM, Fool wrote:

    A rental of an ebook for a set time is something I've tried for a textbook and could work for others as well.

  • Report this Comment On December 18, 2009, at 1:21 PM, savvyelrod wrote:

    The free market will work this out. Newspapers and pretty much all info venues face a new world due to mass comunications at the speed of light. The music wandered without direction due to ignoring the balance of cost vs product. Nobody, I mean nobody expects to pay an equal price for internet accessed info compared to internet. The music industry tried to place a price on their product that reflected buying a hard copy from a store. Thus they encouraged the public to download from bandit sites. When i-tunes came along, due to Steve Jobs, not the music industry folks, cost dropped to the point folks would pay instead of stealing the tunes. Take a book sale for example, the author might recieve 50 cents to a couple of bucks per copy on a well recieved book. The publisher, printer, shipper, retail store all tack their cost and profit on the book. In the end, if the folks can download a copy of a book for less than a couple of bucks, folks will likely buy the product. If the e-book cost 10-20 bucks on line, expect a brisk business for bandit download sites. The up side is, if priced properly more writers will have more folks reading their product.

  • Report this Comment On December 18, 2009, at 1:45 PM, DingDongDilly wrote:

    "Content is King". A very 20th century concept that no longer applies. The owners of conduit-to-personal-device (iPhone, Android, Apple TV, etc.) are now king in this digital age. The game now is all about media harvested on the customer's terms and not on the content owner's terms. DRM is just a small speed bump in the e-business juggernaut. This is why I wonder about the recent NBC/Comcast deal. Seems like an odd, sideways move at best. Folks you're just witnessing a tectonic shift in the profit model. That's all.

  • Report this Comment On December 18, 2009, at 2:10 PM, marv08 wrote:

    I expected Pogue to be more intelligent than that. DRM does not work. Period. It annoys legitimate buyers and does not stop piracy. Did not work for music. Does not work for movies. Will not work for books. Adequate pricing and convenience will bring buyers, DRM will not. It is even worse with eBooks, as nobody knows which systems will survive in the end. This limits the acceptance (as could be seen with the Blu-ray vs HD DVD dilemma - in the end nobody was buying until all but one system died). If they want to succeed, they have to create a standard distribution format that will work (at least basic functionality) on any reader.

  • Report this Comment On December 18, 2009, at 2:20 PM, BMFPitt wrote:

    Copy protection only hurts paying customers. It simply slightly inconveniences pirates. All the money I've spent on Amazon's DRM-free MP3s would have never gone to the artists/labels if they only offered "protected" files. I would have simply downloaded them without thinking twice.

  • Report this Comment On December 18, 2009, at 2:28 PM, Melaschasm wrote:

    Copy protected movies and music are readily available for illegal download. Having copy protections on books will not stop the criminals from illegally downloading them, it will mostly hurt law abiding purchasers of the copy protected books.

  • Report this Comment On December 21, 2009, at 8:50 PM, Handworn wrote:

    I'm assuming you mean copy-protected using some kind of software "lock." Can they be? E-books are not as data-intense even as music, much less DVDs. OCR programs are common. Take a screenshot of the text, run it through an OCR program, clean it up, and what do you have?

  • Report this Comment On December 21, 2009, at 9:07 PM, AvianFlu wrote:

    I'll tell you what will destroy e-books. That would be REGULAR books! There is no contest when it comes to the physical experience of reading a genuine book.

  • Report this Comment On February 07, 2010, at 1:24 AM, BethanyGM wrote:

    How much does an author really make per book through the regular book industry? If you wrote the book and hired the editor and artist for the cover yourself, you could probably sell your book in ebook format for under 5.00 and keep MOST of that per book. If your book were reasonably priced, people WOULD buy it, rather than bother with the hassle of finding it free somewhere.

    I know how to get music, software, videos, and ebooks for free, but I still have a netflix account, a rhapsody account, buy my software, and I have a Kindle. Downloading illegally is a hassle and a risk (viruses) and so the average consumer would happily drop a few bucks for a song, an ebook, or a reasonably priced copy of some software.

    Also, I don't see how your content is lost if you switch e-readers. I can convert my files to some other file type and be able to still read them. It will just be a huge pain and something I don't really want to have to do.

    As the gatekeepers to becoming an author are pushed out, the market will be flooded with the good and the bad. New ways of discovering the "good" authors will be found. Those authors who are internet savvy, like you, will have an audience for their books and will have a reputation that lends credibility to whatever ebooks they write. Those that don't will have to either get with it, or pay a lot of money to market their books out of pocket.

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