How Small E-Booksellers Could Help Break the Amazon-Apple Duopoly

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Lisa Corson

Ruth Curry and Emily Gould of Emily Books

It’s a scary time for publishers. Last Wednesday, the Department of Justice filed a major antitrust lawsuit against Apple and five big publishers for allegedly price-fixing e-books. The goal was apparently to prevent Amazon, which dominates the market, from deflating prices of hardcover books by pricing those books’ electronic versions as low as $9.99 in order to persuade people to buy its line of Kindle e-readers and its Kindle Fire tablet.

Ironically, the antitrust lawsuit could end up creating a monopoly where Amazon dictates all the rules of the game. The question is: Why don’t publishers look elsewhere?

(MORE: 5 Famous Writers Who Loathe E-Books)

I’m not naive enough to believe that if given options, consumers would abandon Amazon and Apple en masse and rush to independent e-bookshops. But the publishing industry certainly isn’t making it any easier for smaller companies to compete.

Take the case of Emily Books. It’s a two-woman operation run by Emily Gould — former Gawker writer and author of And the Heart Says Whatever — and Ruth Curry.

“I worked with these large publishers for most of my career, and there is a lot of fear over how much power Amazon and Apple have over the marketplace,” says Curry. “But nobody is asking, ‘What can we do?’ or ‘How can we fix this?’”

Emily Books tries to offer readers something corporate giants can’t — a small, carefully curated selection of books, available through a monthly subscription or à la carte, alongside a quarterly collection of handpicked essays.

The first book the pair wanted to feature was the novel If You Follow Me by Malena Watrous. Right before the business was set to launch, the book’s publisher nixed the deal because Emily Books didn’t have the right DRM protections.

For those who don’t know, DRM stands for digital-rights management. It’s the technology that keeps people from sharing and reproducing everything from e-books to music to video games after they have been purchased. It’s the reason why, before 2009, you couldn’t share songs you bought on iTunes or why you have to be logged in to Steam to play Skyrim on your PC — essentially, the copyright holder wants to make sure you pay for anything you’re using.

(MORE: Hands On with Barnes & Noble’s New Nook Simple-Touch E-Reader with GlowLight)

“I’m not just anti-DRM across the board,” says Curry. “I’m a writer; I think that it’s important that people are compensated for their intellectual property. In this case, it seems like it hasn’t really been thought through. There are unintended negative consequences to this technology.”

One of the biggest hurdles to setting up DRM for e-books is that it’s expensive. Curry explained the problem on paidContent:

A new bricks and mortar bookstore, even the tiniest one, could have easily opened accounts with all the major distributors. But to sell electronic versions of those exact same books, publishers told us that you have to be a mega corporation.

She originally estimated a total cost of about $10,000 “to cover software, server and administration fees,” although it’s hard to know the exact figure since estimates are only available to those who undergo the process of instituting DRM.

That’s a lot more than most small bookstores can afford, let alone two young people trying to get their business off the ground. Adding insult to injury, DRM isn’t even that effective. Stripping DRM is fairly easy for a tech-savvy pirate, which is a fact that the publishing industry is probably well aware of. Sharing, not piracy, is the main target of this technology.

That’s the power of DRM: it locks consumers into purchases. Sure, there are work-arounds, but for the average person, buying an e-book from one source means that you’re not sharing it and you’re not using it on any other platform.

The music industry went through the same growing pains. Remember Napster? The file-sharing service and the threat it presented prompted the entire industry to embrace DRM. It wasn’t exactly a success: consumers felt like they had no control over their own purchases while labels eventually found themselves without the flexibility to embrace all of the new hardware and software options that the rapidly evolving tech sector was creating.

When it became apparent that digital downloads weren’t ancillary to CDs, they were replacing CDs, the music industry got wise and ditched DRM almost entirely. The publishing industry would be smart to follow suit. Until that happens, however, small booksellers have few options.

One of them used to be Google’s reseller partner program. Unfortunately, it’s slated to end in January of next year so “Google can focus on building the best e-books experience.” The move was mostly seen as a bid to make Google Play a serious competitor to Amazon’s and Apple’s online marketplaces.

Regardless of motive, it will leave a lot of booksellers — including Portland’s famous Powell’s Books — in the lurch. The problem is that Emily Books and even an institution like Powell’s are small potatoes as far as big publishers and the major tech players are concerned.

In aggregate, however, perhaps they could at least provide a small counterweight to the Apple and Amazon juggernaut. At the very least it would encourage innovation in an industry that desperately needs to find a new way to sell books.

Strangely enough, it might be a publishing giant who’s the catalyst for reform — J.K. Rowling. When she originally signed her publishing contracts, she retained the digital rights to her work, which she sat on until finally releasing her Harry Potter series as e-books last month.

They are sold entirely on her terms, through links to her Pottermore website with limited DRM. (They are “watermarked,” making them easier to track, and become subject to DRM if imported into your Kindle or Nook platform.)

It’s a step in the right direction, at least. The fact that Amazon and Apple had to make any concessions at all shows that the system can be changed. Rowling’s empire isn’t small, but it’s independent, providing hope that less famous entrepreneurs can follow in her path.

For small booksellers like Emily Books to keep growing, DRM requirements are going to have to go. It’s probably going to happen eventually; if I were a publisher, I’d get ahead of the curve and embrace a more diverse marketplace sooner rather than later.

MORE: How Apple’s Steve Jobs and Book Publishers Cost Consumers Millions

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