E-book piracy: The publishing industry's next epic saga?

As e-readers such as the Amazon Kindle continue to rise, so follows the publishing industry's worst nightmare: e-book piracy. For years e-book piracy was the exclusive province of the determined few willing to ferret out mostly nerdy textbook titles from the Internet's dark alleys and read them on their PC. But publishers say that the problem is ballooning as e-readers grow in popularity and the appetite for mainstream e-books grows.

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"We are now seeing large volumes of e-books being pirated on everything from file-sharing networks to Websites," says Ed McCoyd of the Association of American Publishers, a trade organization representing major U.S. book publishers. The year-to-year percentage growth of available e-book titles is unknown, McCoyd says. Other publishers, such as Hachette Book Group, say that e-book piracy has grown "exponentially" over the past year.

A review of e-books currently available for illicit download confirms that e-book piracy is no longer dominated by technical how-to e-books but includes best-selling authors Janet Evanovich, John Grisham, and James Patterson. PC World found that one-third of Publishers Weekly's 2009 top 15 best-selling fiction books were available for illicit download through a growing variety of book-swapping sites, file-sharing services, and peer-to-peer networks.

The availability of best sellers is just the start. PC World discovered virtual bookshelves stuffed with pirated e-book titles ranging from copyrighted popular fiction and nonfiction titles to college textbooks and how-to e-books. All of these titles are downloadable and ready for viewing on your e-reader of choice, be it the Amazon Kindle, Sony Reader, or Barnes & Noble Nook.

"We know e-book piracy is a problem, and we are taking the issue very seriously," says Paul Aiken, executive director of The Authors Guild, an advocacy group for writers. "We've seen the music and film industry deal with this, and it stands to reason we will grapple with it too." Aiken says that while he is concerned about the growth in the availability of e-book titles on the Internet, he is not convinced that the number of people who are actually downloading the digital files is increasing as rapidly.

Compared with music piracy, illicit e-books are not nearly as widespread or as easy to acquire. Pirates must be determined to track down specific e-book titles. Pirated e-book files (usually available as PDFs) can sometimes be poorly reproduced, and are sometimes made up of scanned page images—not text.

Publishers stuck between a digital rock and a hard place

Worries of piracy have kept many publishers and authors, most notably J.K. Rowling, author of the Harry Potter book series, from embracing the e-book format. They fear that e-book files protected by digital rights management (DRM) technology could be hacked anyway. However, refusing to take advantage of the e-book format can sometimes backfire and drive piracy, says consumer technology analyst Rob Enderle of the Enderle Group.

For a relatively small amount of money, pirates can convert any hard-copy book into an unprotected text file, even if a legitimate electronic book is never created, Enderle says. "This fear of electronic piracy is actually fueling the piracy movement," he says.

That's what happened with Rowling's works. Even though Rowling's publisher, Scholastic Books, doesn't currently offer any Harry Potter titles in e-book format, hackers have scanned all of the books and turned them into PDF files that are viewable on any e-reader.

"If electronic books can't be had legitimately, others will step in and fill the need; and once a pirate industry is established, it probably won't go away easily," says Enderle. The best way for the publishing industry to combat piracy is to follow the music industry's lead and make more e-book titles available.

Publishers have been producing more digital editions for their books, and revenues are up. Wholesale trade in e-books in the United States for the first three quarters of 2009 ($110 million) is up threefold compared with 2008, according to the International Digital Publishing Forum.

DRM is no e-book piracy fix

While publishing e-books protected by DRM seems like a no-brainer solution to piracy, the idea has faced criticism from within the publishing industry and from consumers. First, publishers are weary of reports that the DRM technology used in the Kindle and the Sony Reader has been hacked, says Nick Bogaty, an expert in DRM technology for Adobe. Second, consumers are hesitant to buy digital books with inflexible DRM that ties an e-book to a limited number of e-readers.

Critics say that the two providers of DRM-protected e-books, Amazon and Adobe, are stunting the e-book industry's progress. For instance, Amazon's Kindle uses its own DRM-restricted AZW e-book format. People who purchase an e-book on a Kindle cannot transfer it for reading on another, competing e-book reader from a different company.

DRM issues get thornier when device makers, such as Amazon, start negotiating exclusive e-publishing rights for their products. Amazon signed a deal with best-selling business writer Stephen R. Covey to publish several of his books, including The 7 Habits of Highly Effective People and Principle-Centered Leadership, exclusively for the Kindle. The company has also negotiated exclusive rights for Kindle e-books from author Stephen King and for a biography of First Lady Michelle Obama.

The idea of exclusive e-book rights tied to devices seems as annoying as being allowed to play a particular new CD only on a certain company's CD players. But Ian Fried, the vice president of Amazon Kindle, has stated that Kindle customers don't mind its DRM. That could change, however, as a predicted flood of new, rival e-readers hit the market in 2010, and Kindle owners think about jumping ship—only to discover that they can't take their e-books with them. Remember the backlash against DRM-protected content in Apple's iTunes Store?

Bogaty points out that Adobe, whose DRM technology is used by Sony and Barnes & Noble, is yielding to critics who say that its antipiracy technology is too restrictive. Adobe is loosening the grip of its DRM, allowing users to share e-books with friends and to read books on up to 12 different devices (six desktop and six handheld).

Author Marcia Layton Turner says she is less concerned about piracy and more interested in making her books available via the e-book format. Turner says the potential of new e-book revenue is reason enough to jump on the e-book bandwagon, despite the risk of piracy. "I'd rather sell twice as many books and lose a few sales due to stealing than to miss out on those additional sales altogether," Turner says.

And many other authors agree: The problem of piracy takes a backseat to the challenge of getting people to read books in the first place.

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