11/30/2010 10:55 am ET | Updated May 25, 2011

DRM is a Business Decision, Not a Moral Decision

When we started building our new audiobook publishing company, iambik, we made an early decision: no digital rights management (DRM). (*See below for a definition of DRM). We were worried that our partner publishers from the print side would demand DRM on our audiobooks, and so we tried to lay out a coherent explaination why we wouldn't use it. Here is that explanation:

People who buy digital media -- that is, our customers -- don't tend to like DRM much, though publishers seem to, and there is an awful lot of rhetoric about DRM afloat on the Internet, on both sides.

But for iambik, the decision not to use DRM is not rhetorical, but rather practical.

The DRM Decision Is a Business Decision, Not a Moral Decision

Publishing is a business, so when a publisher makes the decision to use or not to use DRM, the decision should be based on this question:

What is best in the long-run for my business?

It seems so often DRM gets tied up in moral arguments -- on the one side you have the anti-DRM freedom fighters, on the other side you have the anti-piracy DRM absolutists. In schoolyard lingo, this is the battle between the "thieves" and the "fascists."

While the moral arguments are interesting for philosophers, historians, sociologists, BoingBoing commenters, and others, for a business, the question must descend from moral abstraction at a certain point, and come back to the reality of deciding what is best for business.

What Is Best for Our Business Is What Is Best for Our Listeners

It is our belief at iambik audiobooks that what is best in the long run for our business is what is best in the long run for our listeners.

If we do everything we can to make our listeners happy, we believe we will have much more success as a business, we will grow in a sustainable way, we'll sell more audiobooks, and make more audiobooks, make more money for our partner publishers, narrators, and authors. And more money for ourselves. And more money means that we can keep doing what we want to be doing: bringing great audiobooks to people who want to listen to them.

Where Are the Studies Showing a Link Between Aggressive DRM & Revenue Growth?

You often hear about studies claiming astronomical sums of publishing sales lost to piracy -- with the implication that DRM is the best way to address that problem.

What you never hear about is studies showing an increase in revenue as a result of aggressive DRM policies. And if DRM doesn't increase revenue, what's the point?

DRM introduces cost into the system (adding DRM to your files means paying a DRM vendor for the right). It introduces complexity into the process of publishing digital files. That cost is passed on to the consumer, and more importantly the complexity is multiplied many times for the consumer.

The clear desire expressed by consumers is for digital files that they can use on whatever device they want, however they want, with as little headache or complications as possible. DRM blocks so many simple/obvious things that legitimate customers want to do. DRM almost always causes headaches, at some point.

So a publisher must ask: is whatever benefit might come from DRM worth the headache to my customers?

We'd Rather Spend Our Energy Helping Our Customers

We say no, it's not worth the headache. And we would much rather spend our time helping our customers find and buy great audiobooks, than blocking them from doing things that they rightly believe they ought to be able to do. If someone wants to pass their iambik audiobook on to a friend or family member - as they would a CD - we see no reason why they shouldn't. If a father wants to put an audiobook from his listening device onto his daughters', we see no reason why he shouldn't be able to do that. Sharing the books we love - and the audiobooks we love - is an integral part of a healthy book ecosystem, an integral part of a healthy audiobook business.

In any case, DRM has not proved effective in its implementation in other audio businesses, notably the music business which has, more or less, abandoned DRM.

This is the trend in audiobooks as well: the big publishers are going DRM-free for audiobooks. A few big publishers are taking a diffeernt tack, and are sticking to a hard-stance on DRM and piracy.

I predict they will spend lots of time & money fighting piracy, and eventually will find what other businesses that have done the same have found: in the end it is better to invest in meeting consumer demand than in fighting piracy.

Maximize Customer Happiness

But back to the beginning: our desire at iambik, as at any publisher, is to maximize happy customers, maximize sales, and maximize revenues for all our partners, while publishing audiobooks we truly love. We believe the best way to do that (and the best way to address piracy) is by making great audiobooks easily accessible and usable to the people who want them, at reasonable prices.

Without DRM.

* Definition: Digital Rights Management (DRM) in common usage is technology employed to limit how digital files can be used, generally used to combat unauthorized copying and sharing of files, or as the media industry likes to call it: piracy.

DRM is usually what stops you from moving your files from one device (say, your iPhone) to another (say, your daughter's iPod), and is supposed to stop people from posting unauthorized copies of your music, books, movies, or other digital goods, to the Internet - for instance on bit torrent sites.