Reading Fine Print: What Are The Terms For The Books You Buy?

This week, thanks to the retraction of 1984 from Kindle customers and the uproar/apology that ensued, there are a lot of people raising the flag of consumer rights for ebooks. It seems the corporate expectations for control are revealing themselves to be out-of-step with the popular expectations of ownership. But maybe we get the service we deserve. How complicit are we in enabling the controls that irk us?

When we quoted Peter Brown, executive director of the Free Software Foundation, who said "The real issue here is Amazon's use of DRM and proprietary software. They have unacceptable power over users," we knew that he had touched on a sensitive nerve.

A discussion on the popular site Reddit.com today is a lightning rod for similar sentiment of consumer entitlement: "It's simple: I want the media I buy to play on all the devices I own. I want the devices I own to play all the media I can buy. If your business intentionally makes device-specific media or media-specific devices I want you to fail."

But I'm afraid I disagree with Peter Brown and his perspective of the broader implications. And while the Reddit discussion is engrossing, there's not much being said about one little word.

Liability.

When Peter Brown says Amazon has "unacceptable power," the truth is that we grant companies this power when customers accept the opaque and deliberately over-protective terms of use that we all too often gloss over to get to the good stuff as quickly as possible.

How many Kindle owners have read the terms that state:

Use of Digital Content. Upon your payment of the applicable fees set by Amazon, Amazon grants you the non-exclusive right to keep a permanent copy of the applicable Digital Content and to view, use, and display such Digital Content an unlimited number of times, solely on the Device or as authorized by Amazon as part of the Service and solely for your personal, non-commercial use. Digital Content will be deemed licensed to you by Amazon under this Agreement unless otherwise expressly provided by Amazon.

Changes to Service. Amazon reserves the right to modify, suspend, or discontinue the Service at any time, and Amazon will not be liable to you should it exercise such right.

Termination. Your rights under this Agreement will automatically terminate without notice from Amazon if you fail to comply with any term of this Agreement. In case of such termination, you must cease all use of the Software and Amazon may immediately revoke your access to the Service or to Digital Content without notice to you and without refund of any fees. Amazon's failure to insist upon or enforce your strict compliance with this Agreement will not constitute a waiver of any of its rights.

(Complete terms of use found here.)

It may seem Draconian, but essentially Amazon is stating that it has rights, too, to protect itself from companies or individuals using its service. Without those protections, Amazon and other companies would have little incentive to partner-up with new technologies that are ripe with the opportunity to exploit, harm, and cause serious problems without strict legalese behind them.

I think the digital reading experience provided by the Kindle and Amazon cannot be equated with older notions about ownership and traditional physical books. The digital service industry is built around licenses, permissions, and tacit agreements about copyright. What would the Kindle be without its 3G cell phone service (a special license), or the internet cloud functionality of Whispernet, which is a service with terms of use agreements?

When we buy a book in a system comprised of those complex arrangements, what we're really doing is licensing the book for our use so long as those terms are offered. This isn't how we traditionally think about shopping for goods. But in the last 30 years, our society is increasingly becoming familiar with this arrangement, whether it's music or movies or software. It's renting disguised as ownership. We have a hard time acknowledging that this is in fact happening under our noses while we stick to antiquated ideas of entitlement.

It may not seem fair, especially to those who like to reverse engineer and repurpose everything they purchase, but it is a perfectly valid business objective. However, where the business objective comes undone is in enforcement. DRM and unexpected retractions aren't the only enforcement companies use. It can get much more heavy-handed.

As Stephen Fry recently lamented about copyright law, the prosecutions used to criminalize young users are obviously both overzealous and unfair in most cases. A single teenager stealing music doesn't deserve a worse financial penalty than most white-collar criminals with deliberate intent to profit.

The truth is that the intent of most people breaking their terms of use is not to profit, but to enjoy an experience or connection with artists.

But that's not always the case. It may be the most popular reason, but there are always sneaky deviations. And so enters the legalese of terms of use, which try to foreshadow any and all possible infringements and damages. By inducing you to quickly accept their terms, they try to stave off worse case scenarios that could bankrupt a company with litigation. And there's the rub: we want the toys and media these companies develop but we must risk that accepting their terms might not be in our best interests. Everytime we agree to unread terms of use (and we do, don't we?), we may be complicit in feeding that beast that can bite us. And what about the free media that has no such terms - are we all willing to take a risk that we trust free media to cause us no harm, with no recourse if it does? It's a murky problem in these dark days of DRM.

- Michael Gaudet

Pondering Google EBooks: Ex Nebulae Libri

For years I’ve wanted to do ebooks served efficiently from the cloud and I'm glad Google is finally implementing it with bravado, but I think publishers need to be aware that Google’s plans could have some serious implications for their content in the long run. How will customers use it? What will publishers have to do to compete in a space where Google is both the most popular search engine and a retailer? Do the other retailers who rely on searches or who pay for ad space with Google see it as a conflict of interest? And how do we as a publisher use this effectively to distinguish our needles in the haystack?

Recently, publishing guru Mike Shatzkin began talking about his project to chart the constantly developing ebook space as it relates to all the current devices, including the necessary software, supported formats, and retailers. Google is joining this grid in a big way. I’ll be very interested to see how he lines up all these new and old platforms, particularly if he starts to rank them in terms of profitability based on royalty rates and returns. But Shatzkin has also been making some excellent points that relate to how publishers see this space, namely that the continuing format and device wars make the role of publishers just as important as ever. “The more complicated this world becomes,” he says, “the more an author will need a professional organization.” I understand this because every day at E-Reads we channel our expertise to tailor authors’ content to fit what formats customers are asking for, and they continue to ask for plenty of options.

Google’s ebook sales channel will be the latest flavor. As Google prepares to enter the market, I’ve been wondering if there’s going to be any negative impact on other format sales or if there's going to be trouble with Cloud City. It’s hard to say until we've seen what Google finally brings out. Google will be doing a multifaceted delivery to many devices and future APIs. And the Google ebook platform doesn’t just allow publishers to monetize, it’s even open to author-bloggers. It’s the overdue advent of a paid premium text content system. As competition to services like Scribd, it's going to be easier than ever for the average person or company to set a price on written content they might have given away in the past, and to compete with traditional publishers.

As Shatzkin and the New York Times have pointed out, Google isn’t really aiming to sell files as much as they will be selling online access to ebooks and texts they’ve inventoried for their popular search engine. In that way, if your device can access Google on the net (iPhone, Android, Palm, Windows, Mac, Linux, etc.) you’ll be able to read premium content from your Google book shelf. Future web-applications might even be able to filter and reuse the Google-served content (with permission, of course), and deliver texts in ways we can't even imagine today.

Publishers will do very well in adopting Google as a sales partner for their content, providing they accept that this is a pivotal development that requires them to pay much more attention to marketing etext (both books and snippets, content integrated into different hashes) in the future. This is a natural evolution that coincides with the rise of social data increasingly being served from the cloud and the pressure Google faces to create a semantic Web 3.0 experience that can analyze data more effectively, particularly in valuable resources like books, and serve it up in new ways. And those new ways are going to make the retail space for etexts much more interesting in the coming years.

So what’s to worry about?

For the last few years, Google's business practice has been to take advantage of digitized books to extend the web's reference material, and thus add value to their searches and databases (not without some hiccups). Publishers were happy to see that it was driving sales for print and ebooks at retailers like Amazon. It was a means to an end at another location. But when Google starts merchandizing their data cache of library books and publisher content, publishers will have to work harder to make their content stand out at Google's site, especially older books, to make their upkeep worthwhile financially, seeing as it might be the only stop customers need anymore.

I’m sure Amazon is worried on our behalf. Despite appealing to publishers with a low discount rate, Google sees themselves as retailer agnostic, a mere stepping stone to helping customers get to the content they want, and so in some ways they’ve hobbled Google Books from being too competitive against the other players. You see, like Scribd, for the time being it’s not the best-looking presentation of material that publishers can ask for when you compare it to some of the better formats. I don’t think Google wants to dry up all the other format sales initially. But they may be devaluing the content anyway, unintentionally.

Books Still Need Packaging

Google wants to aggregate literature, which is traditionally stand-alone content, into fast-served web content and that can devalue the market value of authors' full length literary work. If you just want the words, why pay for bells and whistles? A library doesn't need curb appeal, right?

Customers are increasingly attracted to biting off smaller chunks of written content if the opportunity is presented to them. That's not to say that truncated and abridged versions are what people prefer to read, but I think eventually serving books from the cloud will allow Google to break up book content for micro sales, which is what publisher ebook services like LibreDigital have been anticipating. What if you only need the third chapter of a Malcolm Gladwell book? As it already stands, Google makes it easy to filter the content you need from the chaff, and now they'll sell it to you.

The cloud methodology of serving and selling books will further blur the lines about what a “book” really is. Is it just a lump sum of accessed words? Where’s the sense of unified aesthetic package? Long stories, novels and reference books without packaging don't compete for attention and pageviews well against attractive blogs, wikis, or streamed video, but book fragments and book widgets will be increasingly competitive. Google Books’ search tools already fragment the larger texts so that customers can quickly access relevant material. Google sees the web as a big haystack for which they map the way to your specific needle. It used to be that most publishers thought they were selling more than just another needle for the haystack.

I wonder how self-aware Google is that they are working at effacing the relevance of a "book" by supplanting it with data nodes on the Internet. Is Google Reader an adequate way to present long-form material and give it the luster it deserves? Publishers need to decide if they are sacrificing too much of the quality in a reading experience just to fit this new format. It's something I already worry about with ebooks on successful platforms like the Kindle and Sony.

You’re Now Shopping, Not Searching

It used to be that shopping was not analogous to web searching, but the future wants it to be. Does Google expect small publishers to start treating ebook content as if it deserves Google marketing ad words? This is money that large publishers know how to spend for traditional marketing, but it's more nebulous when it means spending money to distinguish older, backlist content. It doesn't look worthwhile at this point, but to protect the relevance of the material (even novels) at Google, publishers will have to adopt new strategies, including even more efforts at advertiser sponsorship. Widgets and viral campaigns aren't enough. Pushing content into Google and various ebook formats can't remain a relatively passive activity for too much longer: ebooks will need more of their own marketing.

But even when Google directs potential customers to premium content successfully, most people will look for alternatives where they don't have to pay. That's the nature of the web. Pirate material and advertiser sponsored Freemiums. Today you can pay $1.99 for the TV episode on iTunes or watch it for free with Hulu. Hulu wins.

Maybe the time for integrating books into the Internet is overdue, but it's divesting old social structures of their roles in book sales. The internet has increasingly been jeopardizing the influence of print culture, shaping a new discourse of short and snappy bite size reading experiences. Or maybe this is the happy start to a better future. Either way, publishers have their work cut out for them. Luckily, there are two strong groups who are proactively supporting publishers. First, public libraries are adopting ebook technology and are contributing to the ebook landscape in their efforts to survive the paradigm shift. And the IDPF has been helping publishers to rally around an open standards future with the ePub format. The increasing pervasiveness of the ePub format at retail points will be important for customers once the competition among devices and sales channels really heats up. After PDF, with all its limitations, the ePub format is the best-looking and most future-proof format you can buy.

And even the iPhone is demonstrating that users still choose to have it both ways: old-school (long form ebooks) and new school (short-form cloud-served micro content). Thanks to strong support from graphically inclined developers, iPhone ebook apps allow publisher content to flourish a bit better as “books,” especially titles that can sell themselves as stand-alone applications (such as with Iceberg Reader). These ebook apps set themselves apart and overcome the bias against long form content with excellent graphic presentation, and appear "special" to the readers and customers, and all this distinguishes the content much better. And that’s what matters to a publisher. Its why many of us love what we do. We strive to distinguish good content as a relevant experience for readers.

Michael Gaudet

The New Kindle DX: Amazon's First Large Screen Reader

As we've been expecting, today Jeff Bezos announced the new Kindle DX, a $489 large screen (9.7") e-book reader modeled after the Kindle 2. The DX is the first big step in Amazon's effort to create a platform for newspapers, textbooks, and other large scale documents. While developers such as Plastic Logic and Hearst are still preparing their large format devices, Amazon has beat them all out of the gate with a device available this summer in the U.S. (exact first shipping date is yet unknown.)

Besides the larger screen, the Kindle DX offers some special improvements: 3.3GB of storage, wide screen reading (rotate the device sideways), native PDF support (it's unknown if Amazon will support DRM for this format), and resizing/reflowing based on how many words per line you want. Other features remain similar to the Kindle 2, such as 3G Whispernet wireless service, USB charging, and the 16 shades of grey.

Importantly, Amazon has been working to ensure new content is available from newspaper and text book publishers. New arrangements with the New York Times, Boston Globe, and the San Francisco Chronicle will offer special rate subscriptions that will subsidize the cost of the DX. And Princeton, Arizona State University, Case Western, Reed College, and the University of Virginia will all be piloting programs serving text books to students with the Kindle DX. Hopefully, when more information about this initiative comes out, we'll see what Amazon's foray into the $9.8 billion text book market has in store for students at other universities.

The Kindle DX is available for pre-order now, although its price is $120 more than the Kindle 2, which continues to sell well. Many people who've already purchased the Kindle 2 may be feeling annoyed that the new model boasts the extra screen real estate and PDF support, but perhaps the higher cost pushes the Kindle DX farther out of reach for most casual customers. The premium will be worth it for those people who work extensively with large PDF documents, and when Amazon's text book pricing is revealed it may actually represent a big savings for students. Those who use the device over a number of years will probably get the most savings. However, at the rate that the technology is developing, the Kindle DX might not have the long legs you'd expect to justify its cost, especially when students might want to wait until a color device and more text books are easily found at retail to begin their investment strategy in an e-book device. University book stores will have to find a way to compete, and digital text books also means no used texts or selling-back for students. But we have to start somewhere. It might just be that the DX is an appetizer for things to come.

- Michael Gaudet

Aarrr! Pirates Forced To Walk The Plank Thanks To Latest Swedish Court Ruling

The other shoe dropped for the Pirate Bay today (news here, and for the first act, see The Pirate Bay: Standing Up In Court For a Generation of Blackbeards). The four co-defendants were each found guilty of being accessories to copyright infringement in a Swedish court. The courts documents say that the Pirate Bay co-founders helped promote theft and so they've each been sentenced to 1 year in prison and fined $3.5 million ($14m total). If the judgment stands, maybe the next files they'll be looking to share in secret will be in a cake.

Sweden had already been strengthening its reputation for being hard on piracy since they recently began requesting that local internet service providers log all the IP addresses of computers involved in file sharing starting at the beginning of this month. Consequently, Swedish internet traffic has fallen by over 30% (see this BBC article). If something similar were to be enacted in the U.S., it could be decried as further infringement on our right to privacy and it wouldn't be tolerated well at all.

Much is going to be made about this Swedish court decision and the forthcoming appeals in the short term, but it's hard to predict if the outcome is really going to deliver much of a blow to file sharing in general until the stigma of copyright transgressions is something that's educated effectively to scoffing young users.

The Pirate Bay is akin to a fleet of off-shore gambling boats floating in international waters. Even while the main defendants are caught up in Swedish courts, the operations can and probably will continue under the supervision of other affiliated groups. And it's not like the Navy can escort our copyrighted materials. So, while this news is fresh validation for the media rights holders, it's still not the end of the battle.

- Michael