Waiting for a miracle
eBooks may become really popular once affordable devices are introduced to the market and extensive libraries, including all the current bestsellers, are available for download. The introduction of the latest Harry Potter novel serves as a good example for the reservation of publishers and authors towards entering the eBook market (Rowling 2005).

The issue of eBooks has lately re-entered the spotlight of attention with the introduction of Sony’s Librié. Since reader hardware made by Franklin, RCA, or Gemstar is no longer being distributed, the Librié is the first newly developed device to have entered the market for years. Its display closely resembles that of a real book. It can hold 10 MB of digital content, and costs ¥ 41,790 (about 320€ at Amazon Japan) (Lewis 2005).

DRM infrastructure
There is some confusion concerning the term eBook. We distinguish eBook content, eBook reader hardware and eBook reader software.
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Figure 1: Digital devices capable of displaying eBooks

If the reading hardware is dedicated, it is developed for the convenient consumption of eBooks. Regarding weight and readability, they try to emulate the experience of a real book.

Integrated reading hardware offers the technical capability to process eBooks. But in contrast to dedicated hardware, its use is not limited to reading. Personal Digital Assistants (PDAs), desktop computers, Tablet PCs and laptops can be used for reading eBooks. Mobile phones originally were not developed for reading, but technical advancement of screens, user interfaces, and memory continue to improve the potential of these devices for reading eBooks.

The capability of reading eBooks sometimes is even a by-product not intended by the manufacturer. This is for example the case with Nintendo’s Game Boy or Apple’s iPod. Featuring respectable screens, it is private developers who offer software to convert digital content into formats readable by these devices. The manufacturers do not support this, but do not hinder their development either.

eBook reading software
Special software is required for reading eBooks. It comes pre-installed on a reading device or can be downloaded from the companies’ websites. The basic version usually is free of charge. As each software format is linked to its own file format, there is no interoperability. For example, an eBook purchased in Mobipocket’s file format cannot be read with Acrobat Reader (requiring pdf-files). Unfortunately, there is no single commercial reading device or software that can handle all the different file formats.

Acrobat Reader (Macintosh, Windows, Unix, Palm, Pocket PC, Symbian OS): Acrobat Reader’s success rests heavily on the wide use of the pdf-format. The pdf-format is still without doubt the format of choice for desktop eBooks in many online bookstores. Nevertheless it is noteworthy that Adobe’s Content Server DRM system has been discontinued as of November 2004. It has been replaced by the LiveCycle Policy Server solution. This move indicates that Adobe is abandoning DRM-solutions for publishers, concentrating on the enterprise documents market (Rosenblatt 2005).

eReader (Macintosh, Windows, Windows mobile, Palm): The eBook store of the same name has developed this software primarily to support their own file format. It also works with Palm’s document format. In order to activate a commercial eBook, a special code is required. It is generated using the credit card number the customer has given to purchase the book.

Microsoft Reader (Windows, Tablet / Pocket PC): In order to read DRM-protected eBooks, the reading software needs to be activated via Microsoft’s website. Using a single account, the consumer can activate up to six devices. There can be activation problems if the customer uses a new device and wants to read books purchased with older versions of the software (Rothman 2003). Quoting a major publishing company’s representative, they do not support this software, because “it is not even supported by Microsoft themselves”.

Mobipocket (availability: Macintosh, Windows, PalmOS, Psion, Symbian OS): The French company Mobipocket has developed the software primarily for PDAs. Upgrading the free basic software allows the user to define usage rights for non-commercial use. Commercial publishers use Mobipocket’s eBookbase to protect and distribute digital content. A wide range of international retailers and platforms supports this software.

Of the major eBook distributors in Germany (Amazon, bol, ciando, libri, pdassi), three support Acrobat Reader, one supports eReader and Mobipocket respectively. In the desktop environment, Acrobat Reader is the common standard, while the decision is still open in the portable environment.

Usage rights and their influence on eBooks’ success
Primarily, usage rights that are controlled by the DRM system comprise: Print content, add notes, copy / paste, period of usage, extract or add single pages and authentication of reading hardware and software. Problems arise mostly with the period of usage and authentication. The authentication scheme sometimes requires a code composed partly of the customers´ credit card number. Consumers may feel rather reluctant to accept this policy.

Sony’s Librié, which is without doubt technologically very sophisticated, is an example of how great platforms and the advantages of digital content can become almost useless for the consumer through DRM. Apart from featuring a price not suitable for mass marketing, only eBooks protected by Sony’s proprietary Open MG DRM technology are available at the dedicated download store. There is a selection of a mere 200 volumes to date.

The files are set to expire after two months upon authentication. So the consumer is forced to read the book within that period of time. Given Librié’s price tag, it seems unlikely that consumers will accept this (Lytle 2004). The company has reacted to the format problems, allowing for conversion of pdf-files into the Sony’s proprietary BBeB-format (cf. Dynamism.com)

Applying DRM to the consumer’s benefit
Once the technical issues described are resolved, existing online retail business models can be enhanced using DRM. And there are business models that can only work with the help of DRM. Also, substantial differences exist based on whether a book is used for entertainment (e.g. novels), education (textbooks, encyclopedias) or orientation (travel guides).

Term-lease: While limited usage rights (e.g. expiry after two months) are hardly tolerable with novels, they can make sense in the educational environment. In case a student needs to buy a book for a course at university, its expiry after a predefined period of time might not be a problem. After all, upon successfully passing an exam, the textbook is hardly needed much longer, or becomes outdated. Thus, stricter usage rights along with a reduction in price can be in the mutual interest of both parties.

Course-packs: If the consumer opts for longer use, updates can be delivered digitally upon publication. Also, the customer can buy content chapter-wise, which would be impossible with traditional books. Publishers could sell “course packs” existing of individual chapters, articles and multimedia content (Vaknin 2005).

In Asian countries such as Japan or South Korea, there are providers offering eBooks on a subscription basis: Japanese publisher Shinchosha delivers serialized novels daily throughout the workweek to consumers´ mobile phones in chunks of 1,000 to 1,200 characters at a price of about ¥100 (0,75 €) per month. After a short time, they cannot be accessed any more. Yet, due to technically sophisticated screens and longer commutes, this services is starting to become widely accepted (Fitzpatrick 2004).

DRM and the interplay with the operating system
Digital media can also be of great benefit for referential and encyclopedic use. In Germany, the popular Duden and Brockhaus – the leading multi-volume dictionary and encyclopedia – are available for desktop computers and PDAs.

On the upside, consumers carry with them large amounts of knowledge and easily access them even on mobile devices. Also, there is a steep reduction in price, because of the much lower production cost for reference works of such large volume. It is also easier to access single entries. Volumes can be updated on a regular basis.

But there can be problems concerning the interplay of the DRM and operating systems involved. To give an example concerning the Brockhaus Encyclopedia: If customers update Windows XP using service pack 2, the DRM system is blocked and the program cannot be executed any more, due to downward compatibility problems. In order to fix this problem, Brockhaus offers a lengthy “how-to” guide. A patch must be downloaded and installed on the computer. While this is still a nuisance to the tech-savvy user, it can be prohibitively disadvantageous for the average customer.

Existing DRM systems are not suitable for every product
Gate5 offers navigational applications that can be integrated with guides to major German cities. Partners with experience in the publishing of travel literature provide the content. Supported devices are Symbian Series 60 and 80 mobile phones, MS Windows Mobile Smartphones, Pocket PC and the Palm PDA. The company has developed a proprietary DRM system, as existing solutions are not capable of securely delivering products that are bundles of diverging formats like text, video and pictures.

Doing without DRM
Independent publishers such as Baen Books rely on mutual trust and the quality of their content rather than active DRM. Baen’s books are released without any DRM protection and are often made accessible as free downloads for promotional purposes. Readers buy an actual book in case they liked the free digital version. For independent publishers, wide exposure of their content is a prime promotional tool.

There are also individual works published under a Creative Commons license. Examples are the science-fiction novels by Canadian author Cory Doctorov. While everyone is free to download them from his personal website, they are also on sale at major digital retail outlets and actual bookstores (cf. Sources). The underlying idea is that the best promotion for a book is itself.

Conclusion
DRM holds opportunities and threats for the popularity of eBooks. There are technical issues to be resolved, e.g. concerning software and operating system updates and downward compatibility. Necessary updates should be more concerted with content providers and developers of DRM technologies.

DRM can hold benefits for both publishers and consumers. There is great promise if it is able to provide flexibility for the various forms of eBooks. Expiry could be set according to customers’ needs, resulting in greater demand for more flexible products coming with a lower price. Due to similar experiences in the “real” world (e.g. lending books, subscribing to magazines), consumers are more likely to accept DRM limiting usage rights. Content that could hardly be distributed before – such as serialized novels – may become real business due to digital distribution.

Bottom line
Until basic problems – interoperability, support of different eBook formats and their DRM systems, affordability and choice of eBook reading hardware – are resolved, the breakthrough of eBooks will be further delayed. But there are some business models that would make DRM acceptable for consumers.

Sources

About the author: After having graduated from University of Mannheim (Business Administration), Philipp Bohn has joined Berlecon Research as Junior Analyst. He is a member of the INIDICARE team. Contact: pb@berlecon.de

Status: first posted 29/07/05; included in INDICARE Monitor Vol. 2, No. 5, 29 July 2005; licensed under Creative Commons
URL: http://www.indicare.org/tiki-read_article.php?articleId=127