Digital Textbooks: Fairness in Pricing after DRM is Hacked

In my last post, I put forward my argument for how digital textbooks can result in a win-win for publishers, students and authors. (Okay, so I didn’t mention the authors. I hope it doesn’t take much to realize that more copies sold by the publisher will result in more royalties paid to the authors. )

Part of my argument hinged on the elimination of the resale market in large part due to the robust DRM (copy protection) afforded by the digital books.  Unfortunately, when I presented this argument a few weeks ago, someone pointed me to a site that shared the (convoluted) steps necessary to break the DRM on the Kindle.  So much for secure. ¹

This forced me to think a bit further.

In this post, I hope to make a case for reasonably priced digital textbooks in an era of “cracked DRM” that can still result in a win-win.

If students can copy textbooks and share them, will they?  Perhaps I have a more optimistic view of the world, but I think that, when given a choice to do the right thing, students will.  That is, if they think they are being treated as adults, and not being unjustly charged.  Let me explain.

I believe that students will buy the textbooks rather than steal them, if the books are affordable.  and by affordable I mean, as one student put it when asked on Twitter “@ steep discount.”  Probably $30 for a textbook that in print sells for $150.  Remember from my previous post that publishers aren’t selling to every student as it is.  Capturing a significantly larger piece of the market, semester over semester, will result in significant revenue increases–without any additional overhead or variable costs.

I also believe that students will buy a reasonably priced textbook if, along with the book, they receive other types of “digital” support.  That support will be available, but may require them to have a “licensed” copy of the book.  Simple enough.  Your digital reader has a serial number/PID, so the licensed copy can access additional licensed material.   The additional materials could include podcasts, video lectures, or video/audio tutorials on working through homework problems.

I also believe students will pay for books, because the system supports the buying of books.  Loans cover tuition and expenses, to include books. Parents buy books.  My students have reminded me that there is a significant amount of “outside” money that comes their way for book purchases.  But that alone won’t be enough to get them to buy the books. What will?

How about providing a way for students to continue to “resell” their books?  Another common criticism from students is that they get pennies on the dollar when they go back to resell the book.  They are more incensed when they see the mark-up the bookstore then places on the book they sold back!² Students currently fight back by selling (and buying) their used books on sites such as half.com, a used book online marketplace.

I think that a technological solution to book resales, that allows the students to transfer digital ownership to another student, will result in more students buying legitimate copies.  Why? In the paragraph above I mention that students get “outside” money for book purchases.  More than a few students pointed out to me that, at the end of the semester, they sell those book back and that money then becomes “theirs.”  A few call it “Beer money” but I am sure there are other uses as well.  Given that this is digital, this doesn’t have to be seen as a competitor to the publisher, but rather as another opportunity for the publisher to “add value.”

Imagine this:  the publisher, who controls the DRM accounts, sets up a clearing house where the student who purchased the book can make the book (and the license to read/use that book) available for resale, setting the sale price themselves.  At the end of the sale, the seller essentially will turn over the digital rights to the book to the new purchaser.  This is half.com made simpler.  There are no shipping costs.  The transfer can be automatic and nearly instantaneous.  And if the publisher manages the site, the publisher can charge a “reasonable” handling fee, just like half.com.  And we know students are willing to pay it–because they already do!

So, in summary, the hacking of the DRM doesn’t have to spell the doom of affordable digital textbooks.  Despite what RIAA and the MPAA may say, we aren’t all criminals.  When provided with affordable content, and a reasonable way to re-sell the content when the semester is over, students will continue to buy books from the publishers, and the publishers can continue to make revenue–even in the resale market!

Win! Win! Win!

¹ For the record, I tried it, and it works.  I broke the protection of a book I bought, and read it in another device that I own. After that, I deleted them.

² (For example, a $180 book was “bought back” at $15. Resold at $80. Yes, that is an extreme example, but it is a true one!)