By foolishly insisting on DRM, and then selling to Amazon on a wholesale basis, the publishers handed Amazon a monopoly on their customers—and thereby empowered a predatory monopsony. [link mine]
It doesn’t matter whether Macmillan wins the price-fixing lawsuit bought by the Department of Justice. The point is, the big six publishers’ Plan B for fighting the emerging Amazon monopsony has failed (insofar as it has been painted as a price-fixing ring, whether or not it was one in fact). This means that they need a Plan C. And the only viable Plan C, for breaking Amazon’s death-grip on the consumers, is to break DRM.
If the major publishers switch to selling ebooks without DRM, then they can enable customers to buy books from a variety of outlets and move away from the walled garden of the Kindle store. They see DRM as a defense against piracy, but piracy is a much less immediate threat than a gigantic multinational with revenue of $48 Billion in 2011 (more than the entire global publishing industry) that has expressed its intention to “disrupt” them, and whose chief executive said recently “even well-meaning gatekeepers slow innovation” (where “innovation” is code-speak for “opportunities for me to turn a profit”).
And so they will deep-six their existing commitment to DRM and use the terms of the DoJ-imposed settlement to wiggle out of the most-favoured-nation terms imposed by Amazon, in order to sell their wares as widely as possible.
If they don’t, they’re doomed. And all of us who like to read (or write) fiction get to live in the Amazon company town.
Will publishers start to recognize this? We’ll see. I hope so, for their sakes and for readers sakes — readers need a diverse book retail market too, and readers also need to have ebooks without DRM that don’t lock them into a particular vendors ecosystem. The publishers “Plan B”, the “agency model” with Amazon, whether or not it was correct that it got busted as price fixing, would actually have given consumers neither.