Harvard Business Review Press Goes DRM-Free And Platform Independent

from the DRM:-keeping-pirates-in-business-since-1995 dept

Despite the growing evidence that consumers absolutely hate DRM, many publishers still hold harbor fantasies that locking down digital goods prevents unauthorized copies from spreading across the internet. Most DRM ends up serving one purpose: to make authorized copies less functional than unauthorized versions.

This practice is particularly prevalent in the book publishing industry. With rare exceptions, most major publishers still keep their products under digital lock and key. There are a few exceptions. Baen was one of the first publishers to go DRM-free, recognizing the limitations far outweighed the benefits to it or its authors. O'Reilly Media has also shunned DRM for the same reasons, noting that unauthorized sharing leads to more readers without an appreciable drop in sales. TOR has attempted to do away with most of its DRM, although it has been hampered by publishers insisting the DRM remain in place.

Perhaps noting, as Cory Doctorow pointed out, that "no one's ever bought a book because it has DRM," another publisher, Harvard Business Review Press has opted to go DRM-free.

[H]BR have adopted the “buy once, read anywhere model” and that anywhere includes a Kindle. This means their consumers aren’t locked into a device or format. And it means that their purchases are ‘future proof’ to a good degree. It also means that if they want to share a book, there are no ‘technical’ things stopping that. To be sure, selling an HBR eBook is illegal but this mode is more tolerant of sharing.

Here's HBR's official statement, one that treats its customers with respect.

We make our ebooks available to you DRM-free so you can read them on the device of your choice. We trust that our customers will abide by copyright law and refrain from distributing ebook files illegally. Please note that in the case that you download a PDF, it will be personalized with your email address.

This small statement asking readers to respect its copyright is preferable to installing DRM and treating every paying customer like a thief. Additionally, HBR is offering multiple formats which gives readers more options and keeps them from being locked into any particular device.

Joshua Gans points out that offering this freedom to its customers should pay off for HBR, whose target audience is a bit different than most publishers.

[T]he business book market is a little different than other book markets. Many sales are generated by people giving books to each other. The typical case is of a boss insisting all of his underlings read something. But there are also bulk distributions to clients and the like. Amazon and all other platforms do not offer bulk sales so HBR had to do something different. Moreover, to manage that with DRM would just be too hard. So instead they went their own way and so now you can buy eBooks in bulk with a volume discount. A real innovation.

Gans notes that this additional freedom comes at a price.

But there is a cost to this. HBR have not gone ‘all in’ on DRM free. For instance, one of the books they offer is Clay Christensen’s famous book, The Innovator’s Dilemma. Buy it from HBR directly and it will cost you $17.99 (and you can also see there they currently have the eBook ‘In stock’) but on the Kindle from Amazon it is $9.89 and from the iTunes bookstore it is $10.99 (not sure what happened to the most favored customer clause there!).

The question is, will customers pay extra to avoid being locked into a device? In HBR's case, the answer is likely a "yes." As was mentioned earlier, HBR offers bulk purchases, something Amazon and iTunes don't. Additionally, these bulk rates are discounted depending on the number of copies purchased, bringing the price per copy more in line with its competition. Purchasing directly also gives the buyer three different formats (PDF, ePub, mobi) for the price of one, allowing them to move books from one device to another.

Gans suggests that HBR's ebook policy could lend itself to more innovative offerings, leading to more reasons to buy directly from the publisher and giving authors more reasons to offer their books through HBR:

I have my own eBook coming out with HBR Press in a very short time. I’d love it to be the case that they decided to offer the book on their site with an explicit ‘sharing’ option. For instance, the normal ‘don’t share’ this book might cost the same as Amazon while the ‘sharing’ option may be somewhat higher but would say allow you to assign ‘ownership’ of the book to another person as well.

One of the best ways to avoid locking yourself or your customers into walled gardens like Amazon or iTunes is to give them a direct, DRM-free option that recognizes the reality of digital life. Trying to lock them into a single device or punishing them for the actions of others isn't really giving them any reason to buy from anyone but the lowest bidder. Treating your customers with respect and recognizing that most people have more than one form of "e-reader" is a better way to grow your audience. Once you've decided to stop policing infringement, you can throw that time, energy and creativity into building better, more innovative offerings for your paying customers.

Filed Under: drm, ebooks, harvard business review, hbr
Companies: hbr press

One Reason Companies Don't Do 'Free': They're Scared Of Pissing Off Those Who Bought?

from the could-be... dept

Behavioral economist Dan Ariely, whose experiments with how people value "free" we've discussed before, has a fascinating column in the Harvard Business Review, explaining why companies don't experiment, where the basic answer is that they're afraid that some consumers will get a less acceptable experience during the experiment compared to others. For example, Ariely had worked for a while with a company to get them to put in place a series of experiments to see if offering things for "free" worked -- but eventually the company balked:

Several months later, right before we were due to go live, we had a meeting about the final details of the experiment--this time with a bigger entourage from marketing. One of the new members noted that because we were extending differing offers, some customers might buy a product that was not ideal for them, spend too much money, or get a worse deal overall than others. He was correct, of course. In any experiment, someone gets the short end of the stick. Take clinical medical trials, I said to the team. When testing chemotherapy treatments, some patients suffer more so that, down the road, others might suffer less. I hoped this put it in perspective. Fortunately, I said, price testing household products requires far less suffering than chemo trials.

But I could tell I was losing them. In a sense, I was impressed. It was a beautiful human sentiment they were conveying: We care about all customers and don't want to treat any one of them unfairly. A debate ensued among the group: Are we willing to sacrifice some customers "just" to learn how the new pricing approaches work?

They hedged. They asked me what I thought the best approach was. I told them that I was willing to share my intuition but that intuition is a remarkably bad thing to rely on. Only an experiment gives you the evidence you need. In the end, it wasn’t enough to convince them, and they called off the project.

I'm not actually convinced Ariely is correct on the reasoning here. It might not be this "beautiful human sentiment" where they "don't want to treat any [customer] unfairly." I suspect that it's the same reason why dynamic pricing often gets shunned by companies: because if customers find out that someone else got a better deal, even if they were happy with the original deal they suddenly change their minds and believe they got ripped off. It's because we tend to judge things relatively, rather than in absolutes, and companies that have been caught charging different prices to different customers often have found that the backlash is worse than the benefits of differential pricing.

However, it is interesting that many companies fear experimenting and prefer to just make a decision and go with it. I think this is less true in some tech companies. Google, for example, is infamous in their ridiculous level of experimenting and detailed A-B testing on things before going live with a final decision. But for companies that are worried about how any sort of "experiment" is viewed by consumers, you could see them being afraid to even try a concept like "free." I'm not convinced this is really a strong enough effect to keep companies from using "free," but it could be one explanation for why legacy companies are often so resistant to the idea.

Filed Under: dan ariely, economics, free, harvard business review
Companies: google