By Roger Tagholm

LONDON: It won’t be the UK government that forces Amazon to relinquish its walled garden DRM – but it could be the might of the newly merged Penguin Random House (PRH). That was the view of some delegates responding to the passionate address by Seni Glaister, CEO of The Book People — the UK’s highly successful bookseller — at last week’s Futurebook Conference in London.

Glaister said that without “significant government intervention, it is impossible to compete [with Amazon]. Without in-app purchasing, it is impossible for competition to flourish. The businesswoman in me wants to admire Amazon, but as a parent this dominance worries me. Does it matter if we only have one or two ebook players? Yes, because you end up with only one physical bookseller too. It’s a dystopian disaster.”

Seni Glaister: If Amazon achieves total market dominance it would be a “dystopian disaster.”

Ending DRM Could Unseat Amazon Hegemony

Speaking during a break and referring to the possibility of a challenge to Amazon’s system, Simon Appleby of Bookswarm, the company behind Nudge and other digital applications for publishers, agents and authors, said: “It does have to happen. You can’t have customers locked in like that. The music industry has shown that customers will still pay for content they could otherwise get for free if it’s fairly priced and the user experience is free. It’s not about DRM and piracy — it’s about quality, convenience and price. I firmly believe it will happen — it will need one big publisher to take the lead.”

Can’t happen? Think again: back in the early Nineties in the UK, the Reed group — which then included such venerable imprints as Heinemann and Secker — de-netted some of its titles, which meant that the titles in question were no longer bound by the Net Book Agreement, which fixed prices, and could be discounted. Other publishers followed suit and the NBA collapsed.

Could PRH ‘de-DRM’ today? “No, that would lead to chaos,” said Stuart Biles, MD of the History Press, and a former Random House sales director. “The parent company [Bertelsmann] is very conservative. It wouldn’t happen. But they could take them on in some other way.”

Publishers have two choices when it comes to DRM. If they want to sell through Kindle — and of course, they do — they use Amazon’s proprietary MOBI ebook format; and for everyone else they use Adobe DRM, which is recognized by other retailers. So almost every book in the world has editions with both MOBI and Adobe DRM, provided by the publisher.

What if PRH pulled out of MOBI, or used that threat to improve terms? At the risk of sounding clumsy, could PRH ‘de-MOBI’?  It’s a thought.

But some industry observers say that the real villain is not Amazon, but Adobe. As one senior figure put it: “Because they are the only system that anyone else can use they charge massive license feels to retailers and publishers. They are torture. They are the monopoly that exploits us in my view, not Amazon.”

Simon Appleby: “It will take one big publishers to take the lead” in challenging Amazon.

Amazon’s Biggest Rival: Chaos and Complexity

Glaister had been preceded in her speech by Brad Stone, author of the business book of the moment, The Everything Store: Jeff Bezos and the Age of Amazon. What did he think of Glaister’s comments? “I agreed with a lot of what she sad. Amazon can be pretty ruthless, pushing the book industry to change. Publishers need to innovate at the same pace in order to survive.”

Does he think Amazon will open up its closed system? “Why would they? To allow other players in would undermine their business and would also put the price of the Kindle up. At the moment, they sell the Kindle at cost.”

Although he is at pains to point out that he is not a spokesman for Amazon, everyone hung on every word of his presentation to get a glimpse into the industry’s second most secretive company (the first begins with an “A” too). Stone’s speech was peppered with little gems and insights:

“Publishers did not have a boogie man in the way the music industry did with Napster. So Bezos decided to turn Amazon into that boogie man. For all of Amazon’s faults, Bezos is always leaning into the future…

“Amazon’s biggest rival is chaos and complexity. It had to master its own supply chain.  Apple just farms out its complexity to China…

“Bezos is stubborn in his vision, flexible on the details….he is weaving a rope to bring customers in.”

Brad Stone: “Bezos is stubborn in his vision…he is weaving a rope to bring customers in.

Four Other Takeaways from Futurebook

Now, as the #fb13 ‘twitvalanche’ has subsided, what are the other takeaways from Futurebook?

First: It must be noted what a success this conference is, the only danger perhaps being that as digital becomes mainstream — ‘becomes’? ‘Is already’ might be more accurate — does the name “Futurebook” still sound viable? After all, O’Reilly abandoned its “Tools of Change for Publishing” brand after it felt there was little more to contribute on the topic. That said, Futurebook is an excellent name (all credit to The Bookseller Publisher Nigel Roby here) and one has caught the imagination of the publishing community in the UK

Second: HarperCollins’ CEO Charlie Redmayne, who has been a ubiquitous presence on the speaking circuit since taking over earlier this year, was especially generous in his praise of other publishers’ initiatives. He cited Pan Macmillan’s SF site Tor.com, Faber/Touch Press’ TS Eliot app and Noisy Crow’s apps, as among those he thought praiseworthy. However, Redmayne observed, “There are still publishing companies who think that the extent of digital opportunity is ebooks and maybe a £15,000 app which you never make your money back on. It’s not. It’s about telling stories across multiple devices and platforms, using the functionality of that particular product to create the most telling experience.”

Third: As digital matures, the focus is now on the “c-words”: ‘community,’ ‘conversation’ and ‘crowd-sourcing’. Macmillan’s Digital and Communications Director Sara Lloyd put it like this: “In the old days it was all about broadcasting your message; now it’s about a conversation.” Meanwhile, Unbound’s CEO Dan Kieran used the conference to announce expansion of its crowd sourcing platform to other publishers, among them Canongate.

Finally, let’s not forget Stone’s ‘hovel man.’ This character was surely the hero of the day. This is the worker at one of Amazon’s giant warehouses in Kansas and was found to have hollowed out a kind of den in between the pallets. “It was amazing,” Stone said. “This guy had food in there and drinks, everything you would need. Rather disturbingly, he also had some pornographic calendars Amazon was selling. And he’d just stay in there the whole day….”

Perhaps he’s working on his own book. That really would be ‘inside’ Amazon.