eBooks – product or service?

Apparently the EU has decided eBooks should be taxed as services (link) instead of goods (like physical books).

I don’t think it’s that simple. 

When Digital Products Are Services

eBook “retailers” like Amazon are essentially offering you a licence to access a digital product, not ownership of a copy of the product. 

Of course, their casual wording might lead you to believe otherwise:

But you’ve purchased a licence, not a book. 

Compare it to NetFlix. You pay a monthly fee to access a library of digital content. It happens to be the same library everyone else gets too, not a customized library. We are more comfortable with the idea of subscription because we aren’t picking specific movies, and we even expect that some titles will disappear. 

These are services – the companies sell access, not goods. 

When Digital Products Are Goods

When I buy a book from Humble Bundle or Baen though, I’m buying a book (aren’t I?). I’m allowed to use it in certain ways (e.g. on multiple devices), and they’re not able to revoke my licence (I don’t think). There is no DRM to lock me into a platform or a service, and the expectation is that I will manage my purchases honestly and appropriately. 

And I’m glad they provide the ability to download my books at any time, but I don’t expect them to maintain my library for me. I keep my local copies, just in case. 

I’m certainly thinking of an eBook as a thing I’m buying, not a licence I’m buying. I want permanent access.

Can’t the Retailer and/or Publisher Choose?

I think there is room for both types of access, but it’s currently not clear to the consumer what they’re paying for. 

It would be nice for the publisher, or possibly the publisher and retailer together, to decide whether they’re licensing or selling (or both), and then price differentially and accordingly. 

Don’t forget

I have no legal training. I’m just making lay observations, so don’t interpret any of this as legal advice, silly.


My thoughts on DRM: Digital Rights Management

DRM has been around for a long time. There are a lot of arguments for and against DRM from the perspective of the creator and the consumer, the publisher and the distributor.

I see these arguments being talked about along with the Amazon-Hachette battle. People are concerned about being locked into a platform.

I understand that. I like it when products are offered DRM-free, because I’m more confident that I will be able to access the product in several years, and because I have choice in how I consume the product.

I also understand how publishers are afraid of piracy; if it’s too easy to copy digital media, people may steal instead of paying.

But I think both groups are missing something (at least, some people in both groups).

DRM isn’t such a huge problem sometimes

At least, it’s not a huge problem when the management platform provider is good about ensuring the media is available forever on all popular devices. Amazon, for example, lets you read your Kindle books on pretty much everything. They don’t lock you into the Kindle device [anymore]. I have a Kindle, an iPhone, an iPad, and a laptop; all of them are perfectly happy with my books.

It’s also not a problem if DRM is a choice. If I can choose to purchase a book with DRM or without DRM, even at a premium, I’m a happy consumer.

What’s more, Amazon isn’t the only place to get books. I’ll admit, I prefer to buy books there (because then I have everything in the same account), but publishers have lots of other options (including other prominent booksellers like B&N, or distributing the books themselves). Amazon has provided a robust distribution platform, but anyone can publish and distribute an ebook. I’ve done it myself (for free, of course), several times.

Tor Books recently started a new imprint for ebooks. They’re going to be DRM-free because it doesn’t hurt sales and it’s best for the consumer. I’m happy about that.

DRM is a huge problem sometimes

Sometimes DRM is terrible. You have to have 17 different apps, which all function a little differently, to read graphic novels from 17 different DRMing publishers. That’s really irritating (“terrible” is overstating the case, I suppose). I don’t buy graphic novels for Kindle unless they’re exceptionally cheap because I don’t like how the iPad app handles them.

And if the publisher goes belly-up, stops supporting the app, or even stops supporting the app on your specific device, you’re out of luck. Enjoy your eternal subscription to the media you can’t view.

And it doesn’t work

If you want to keep people from copying digital works, you have to prevent them from viewing digital works.

For books, screen captures are inconvenient but effective, and only one person needs to do it. Retyping is slow, but people do that too.

You want to prevent people from copying music? You can’t let them play music, then, or they’ll find a way to copy it.

It’s not a solvable problem, since our playback and recording devices are the same things.

Interestingly, DRM actually encourages piracy in some ways. If you require your graphic novel to be viewed in your own app and a consumer already has a different preferred app, they might seek out a pirated copy so that they don’t have to use your platform. See?

I’m not worried

For now I’ll just make my choices, and hope that publishers start removing DRM from their products (they’re allowed to, after all, even/especially on Amazon). I want to be able to archive my own stuff, just in case Amazon deletes my account or Dark Horse stops supporting iOS apps.

To the publishers reading this, though: I sometimes decided to not purchase a work because it was DRMed and not available in the ecosystem I live in. I didn’t want to download another app or create another account, so you didn’t get my dollars, neither did your author, and I enjoyed someone else’s book. If you hadn’t DRMed it, I would have bought it. Sorry.

e-Books should cost no more than physical books (and maybe less)

I own a lot of e-Books. I don’t read paper books anymore if I can help it (with the exception of graphic novels and other texts which have strict layout requirements). I’ve purchased most from Amazon (I have a Kindle Keyboard, which I love reading on), and a few from other retailers.

I didn’t expect to be able to transfer ownership of these e-Books; I knew that going in. I just tell friends about the great books I’ve read and they can buy the book themselves or borrow it from the library. Authors tend to make more money this way, I think, which is good.

But it sounds like I don’t own the e-Books anyway; it sounds like I’ve purchased a licence to read them on digital devices. (Aside: A greater concern for readers, but maybe not publishers, might be the legal terms like “Amazon reserves the right to refuse service, terminate accounts, remove or edit content, or cancel orders in its sole discretion” which might instantly cancel your licence to read. DRM makes this possible. A little scary, and good reason to purchase from non-DRM e-Books retailers like Baen, which also has DRM-free books on Amazon.)

But there is still the matter of my ability to resell a hardcover book (and recoup some of my costs) but not a digital book. Is that the essential difference? e-Books are non-transferable but physical books are?

Here’s an example of some book pricing on Amazon. Note that the publisher set the Kindle Edition price at $16.10, which is why it’s not listed in the “Amazon Price” column:

Sample book pricing on Amazon.

Sample book pricing on Amazon.

Right now, many e-Books I consider buying licensing cost as much as or more than their physical counterparts. I can’t resell it, and there are no significant per-unit production and shipping costs, so I think it should cost less than the cheapest available print book (less than $11.55 in my example). I’m not buying a copy; I’m buying a non-transferable licence. I can even choose to revoke my own licence if I want to (I recently deleted a short story that was not very good because I don’t want it cluttering up my library). On the other hand, I like the convenience of e-Books, so that’s worth something too, but enough to justify charging more than for a hardcover? I don’t think so.

I’m fine with not being able to share, sell, and transfer the e-Books I pay for, but pretending that there is no residual value in a physical book or that it’s free to produce and ship that physical book is ridiculous. Make it easy to buy e-Books at a reasonable price and I will buy them (and keep them). I read about twice as many books now as I did pre-Kindle, even with the price discrepancies. I’m interested in reading great books and supporting great authors (and their publishers!) so they can create more great books.