DRM, eBooks, iTunes, and the Next iPod

So I just read an article, that reviewed a new ebook reader (which seems to have a really nifty display technology) and comes to the conclusion that books won't succeed because the reading technology isn't as good as paper (he's mostly right, though this is the secondary argument), but that content producers can't manage the DRM the right way. DRM is copy protection, that restricts users ability to rip off and redistribute digital files, and eat dangerously into the publisher's (and artists) money making ability.

We've always had some sort of copy protection, with paper printing, it takes the form of hassle. You can photo-copy entire books (and most of us, particularly in the academy, I suspect), but it's a hassle, and I know I would generally rather fork over the 10 bucks and get a book out of the operation, than spend a a long time with a photocopy machine that never works. When books are out of print, particularly short, and time is short, it happens. I doubt very much that I'm crimping anyone's profit margin though. It's possible to scan in books, (I've restrained myself to articles,) but the process is tedious as well, and again hassle and tedium keep the work safe.

There is no such thing as a full proof DRM, any code can be cracked, or even worked around. Like with print, the key for content producers, is to make it easier to buy the content from the source, than it is to "beat" the DRM. Perhaps the key to the ultimate DRM system is not one that is particularly harsh and limiting, but one that makes it hard enough to "work around" the protection that it's worth buying it new.

Lets take the iTunes music store. There's one really easy way to beat the encryption of the itunes music store: burn the songs to cd (as a music CD) and then import the songs back into iTunes: DRM disappears. And now you have a copy to play in your home stero system, or in your car. If you don't want to waste the CD media, use a CD-RW and you're still DRM free. The thing about this, is that it's a pain in the ass, given that you can play the song of 5 different computers at the same time (and as long as you keep back ups, if an authorized computer crashes with one of your five authorizations, you can reauthorize all the computers, which also gives you a way to "beat" the drm with a flash drive and an unnetworked machine... But you get the idea. The other big selling point of the system, is that if you're on an authorized machine (which we've established is easy enough) and you've bought a song, it behaves exactly like a song that isn't copy protected, to the point where you would forget that there's copy protection. The system isn't full proof, but it throws up road blocks that say, "hey, wouldn't you rather pay an extra buck to not have to go through with this?" and the answer is frequently "yes."

The other key for successful digital content is price/feature benefits. Digital media, is "better" than print media, it takes up less space, it is searchable, more readily indexable, and can be interactive, among other benifits (depending on what kind of content it is). Digital content must harness these features, otherwise, why bother. Beyond that, the content is significantly cheaper to produce and distribute than traditional media, because there isn't any material costs. All you have to pay is production costs, royalties, and bandwidth/server costs. The first two expenses are the same, the second costs a fraction of what the paper does. So digital media, I think, should be cheaper than the traditional format. Again, in iTunes, songs cost a buck, albums cost 10 dollars, with some allowances made for EPs and the like.

Even still, I think songs should cost even less, as I suspect that even after royalties and hosting, cost is between 10-30 cents, if that, but a dollar is ok. Would-be-ebook producers should take note. There is a magic price point, for this, and I suspect it's under 5 bucks for a book, probably more like 2.50 or 3. Remember for a moment that book files are tiny, easily 25%, and in most cases less than 10% of the average iTunes song, so distribution is even easier. Then, If ebooks are ever to succeed they have to be affordable enough, they have to be full featured, and any DRM has to be transparent and unobtrusive. I'm just saying....


The last iPod update was really incremental. Lots of folks were predicting a phone, widescreen, or wireless capabilities, and we didn't see that. I frankly can't see apple getting into the phone market, I think that we'll see bluetooth eventually on an iPod, but that's not a major step up in functionality. Likewise, a larger screen is probably in store (likely in terms of pixels rather than area), but I suspect that keeping a small form factor is more important that huge strides in functionality. If you want a much larger screen, get an iTV or some similar TV integration device. The iPod succeeds because it does one thing really well, not because it is the height of convergence technology. The next big feature of the iPod, will fit into this somehow. Why? Because it's apple, and that's what they do.

So having said that: I think the next feature will be etext capability. Here are some reasons:

  • iPod already has limited PIM (contacts, calendar, notes) functionality. Apple appears to be of the opinion that entering data in a mobile device is less then effective on all sorts of levels, but that viewing it whilst mobile, is much more effective. Because of that I don't suspect that they will go down the PDA road, they're already there.
  • iTunes has functionality for managing PDFs, it's a rather dinky feature for it to be coded just for the odd album booklet, so there's probably more code just under the surface.
  • If they're going to make the screen a little bit bigger for videos which I think is a demand (if you made the scroll wheel a bit smaller, you could probably fit a 2.5x2 screen on an ipod in the same form, you have a pretty good sized screen for eBook reading.
  • The iPod is a device that is built around scrolling, and this is the main control that you would want in an ebook device. It seems like all the pieces are there.
  • By establishing themselves as a successful content provider for music and television content, I think Apple will likely be able to--through the iTunes (anyone else waiting for the rename to: iMedia?) convince the print publishers that they have the market, and DRM system that will make content producers willing to come on board. And this is the key, of course. It always is.

We'll see.

Cheers!

comments powered by Disqus