“It’s a very valuable thing to us to own that customer relationship. It gives us a tremendous opportunity to create new products that we can sell to those consumers around the Harry Potter brand,” Redmayne says.
Publishing consultant Michael Shatzkin thinks other authors are unlikely to copy Rowling and set up their own stores—Rowling is “The Beatles” of the literary world and an industry unto herself. But he believes publishers who can aggregate the works of many authors on their sites are going to figure out that they can bypass Amazon as long as they’re willing to give up DRM.
“If you don’t have DRM, it opens up strategies that aren’t available to you if you insist on DRM,” says Shatzkin. “The question is: Is the fear of piracy greater than the fear of Amazon?”
Amazon is thought to account for about 60 percent of the eBooks sold in the U.S. Barnes & Noble Inc. is the second-largest seller, with around 25 percent.
Berlucchi likens the state of the eBook industry to the one in the music industry before 2008. Music publishers insisted on protecting legally sold songs with DRM, but all they did was allow Apple to corner the market, he says, because tracks bought from other stores wouldn’t work on iPods.
“It took five years from the launch of the iPod for the music industry to realize that they weren’t achieving anything with DRM,” Berlucchi says.
Early in 2008, music publishers allowed Amazon to launch a music store with DRM-free songs. Apple’s iTunes store went completely DRM-free the next year.
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Andi Sporkin, a spokeswoman for the Association of American Publishers, says DRM “has value,” enabling things like library lending of eBooks (without DRM, there’s no way to “return” an eBook). Going the route of the music industry and going DRM-free hasn’t really been discussed in the publishing industry yet, she says.
In the case of Pottermore, Amazon is collaborating, sending shoppers from its site to Pottermore if they search for “Harry Potter” books. Shatzkin believes this is because Amazon, faced with getting nothing from sales of Harry Potter books, likely decided it should be in on the game to at least get referral fees.
Amazon didn’t comment on its reasons for sending shoppers to Pottermore, nor would it confirm it gets referral fees.
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