E-Book Piracy Doesn't Frighten Publishers

FRAMINGHAM (04/07/2000) - Those who stand to lose revenue from electronic-book piracy are being remarkably stoic in the face of the first high-profile incident.

While the recording industry is up in arms about piracy, the book publishing industry apparently sees it as a good marketing strategy.

Within days of the March 14 release of Riding the Bullet, Stephen King's 66-page electronic novella, someone cracked the encryption that protected the content of the book. After it was downloaded and opened in a software-based reader, the material showed up on the Web.

But the security breach wasn't much of a surprise to Riding the Bullet distributor Glassbook Inc. in Waltham, Massachusetts.

Because of the rush to release the book, Glassbook knowingly used a reader equipped with less-than-robust encryption, which made the content vulnerable to piracy, according to Glassbook President Len Kawall.

Piracy of downloadable music content from MP3.com Inc. has resulted in lawsuits, police searches and seizures, and criminal charges against accused crackers. But King's publisher has no plans to pursue charges against the perpetrators.

"These things happen," said Simon & Schuster Inc. Online Publisher Kate Tentler. "It's the usual Web behavior. It was kids."

New York-based Simon & Schuster initially tried to downplay the incident to avoid the appearance of "issuing a challenge" to crackers, said Tentler. But the company is highly concerned about the piracy of electronic intellectual property, she added.

At the same time, publishers and sellers also want electronic books to be inexpensive to purchase and easy to download and read. The trick is to strike a balance.

"In book publishing, a little bit of piracy may be good marketing," said Chris MacAskill, CEO of online electronic publishing sites Fatbrain.com Inc. and MightyWords.com Inc. in Santa Clara, California.

Electronic-book publishers don't stand to suffer much financial damage since electronic distribution cuts out the most expensive and time-consuming parts of producing a book: printing and shipping.

Overall, MacAskill said, electronic publishing cost savings are seen to outweigh the risk of minor piracy incidents because the new strategy eliminates the traditional publishing industry middleman - the printer - which accounts for 40 percent of costs.

"E-matter disaggregates all of that. Customers get a cheaper product," said MacAskill.

The fact that online booksellers such as Amazon.com Inc. gave away the King electronic book may have contributed to the perception that pirating it would be harmless. Amazon.com declined to comment when asked by Computerworld for a response.

Kawall said the publishing industry "has learned to live with piracy." He cited the 400,000 to 500,000 legitimate copies of the King book in distribution compared with what he estimates to be "a few" pirated copies.

"It is not the end of e-books," he said.

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