KhaDoeCrosby

Used E-books for Sale

When customers buy traditional print books, they expect to be able to use the book however they please. When that customer buys a book they can sell, trade, or give it away because they own the product. E-books are different in this aspect, though. When a customer buys an e-book, they do not own the product. Rather, they own the licensing to use the book, and the licensing agreement usually states that customers cannot sell or trade the e-book.

Amazon’s licensing agreement states,

Unless specifically indicated otherwise, you may not sell, rent, lease, distribute, broadcast, sublicense, or otherwise assign any rights to the Kindle Content or any portion of it to any third party, and you may not remove or modify any proprietary notices or labels on the Kindle Content. In addition, you may not attempt to bypass, modify, defeat, or otherwise circumvent any digital rights management system or other content protection or features used as part of the Service.

The rules outlined in this agreement might confuse some users or make them feel unsettled about their purchase. However, some changes may arise in the world of e-books, soon. A few years ago, rumors that Amazon and Apple were looking to change their licensing agreements began to circulate. These changes would allow e-book “owners” to resell their used e-books.

While Amazon and Apple have both applied for patents concerning e-book resale, it has been about three years since there have been any advancements surrounding the issue. This time gap could mean that Amazon has completely done away with the idea, or that this new feature could be right around the corner. This article aims to deep dive into what this theoretical change would mean for e-book readers and publishers.

How Would It Work?

What makes reselling traditional print easy is its simple nature. The seller resells the book to a buyer and when the buyer gives the seller money in return for the book, the seller then no longer owns the book. If the resale of e-books becomes possible, the reselling process will be slightly different because buyers do not actually own the e-books.

The resale of e-books would require an e-book owner to sell the license to use the book to another reader. Selling the license to the material means they then give up their rights to use the e-book. This transfer of rights is made possible through digital rights management, or DRM.

In my previous article Is DRM For You?, (Links to an external site.) “Digital rights management controls not only when the customer can use the product, but also how the product is used.” Once the seller resells their e-book, they will no longer be able to view the book because of DRM.

Possible Issues

To put it simply, e-books are essentially one unified code that creates pages readers can view on electronic devices. Since there is not a new code for each copy of a particular book, reselling e-books would mean that there needs to be something that identifies each specific book. For example, every print book has an International Standard Book Number (ISBN). According to the International ISBN Agency, “An ISBN is essentially a product identifier used by publishers, booksellers, libraries, internet retailers and other supply chain participants for ordering, listing, sales records and stock control purposes. The ISBN identifies the registrant as well as the specific title, edition and format.”

If it is made possible for readers to resell their e-books, there must be something created to identify each specific e-book. If this identification doesn’t exist, keeping up with e-book piracy will be a much more difficult, if not impossible, task.

When a reader resells a physical book, there are a few factors that affect the price at which it will be sold. For example, the publishing year of a book and its current condition can determine its value. Since e-books are digital, the condition of the book will never be an issue. David Pogue (Links to an external site.) of The New York Times writes,

Turns out material degradation isn’t just a fond side effect of book resales. It’s essential. It’s what ensures that the resale price matches the diminishing value of the product. If every copy is perfect, the whole thing breaks down. With unlimited e-book sales, every book’s price would eventually drop to a penny.

With the patents proposed by Amazon and Apple, publishers may be able to set a limit to the amount of times one copy of an e-book can be resold in order to help prevent this “one-penny problem (Links to an external site.).” According to Pogue,

Both proposals suggest that publishers could also limit the number of times a digital item can be resold: ‘A threshold may limit how many times a used digital object may be permissibly moved to another personalized data store, how many downloads (if any) may occur before transfer is restricted, etc.,’ says Amazon’s patent. ‘These thresholds help to maintain scarcity of digital objects in the marketplace.’

It is also possible that companies like Amazon and Apple would seek to take a percentage of the money made from the reselling of an e-book, which is similar to how Amazon takes a percentage of a textbook sold on their Amazon Textbook section.

This raises concerns with authors and publishers because they do not make a profit when their physical books are resold, so what then gives these companies the right to make money from digital resales? The control these companies currently have over e-book buyers and the control they could have with a new e-book resale patent could potentially be dangerous for the e-book community.

The idea of reselling digital property is a new frontier and, while rumors of possible e-book resales have died down in recent years, users cannot help but wonder what companies such as Amazon and Apple have in store for the future of buying and selling e-books.

The Aesthetics of E-book Publication

When writing an e-book, one of the biggest considerations concerning the aesthetics of the publication is that of profit. Knowing the market is important for the publication of any work -physical or electronic – but the e-book market has special considerations, including whether the length of the work effects its earnings. Overall, while shorter e-books sell the best, it is the content of the work itself that really makes a difference in e-book sales.

Length, Genre, and the E-book Market

Every genre has a different average number of pages per book. The word count depends on what the author wants to achieve with their work. The author has to both consider their audience – some audiences prefer longer books with extensive details, while others enjoy books with simple, easy to follow plotlines – and examine how much content they have to write about. According to Catia Shattuck (Links to an external site.), writer for Book Cave (Links to an external site.), “The average nonfiction [print] book is about 50,000 to 75,000 words, which is about 153 to 230 ebook pages. A minimum [word] count for a nonfiction ebook is about 10,000 words, as long as the content is solid.”

Meanwhile, works of fiction average “about 80,000 to 100,000 words, which is about 246 to 307 ebook pages.” The shortest of all the book genres is fiction novellas. Shattuck says that “fiction novellas are usually 32,000 to 55,000 words, which is 100 to 170 ebook pages. Short stories are even shorter (of course), but are often 99 cents or free because readers will feel cheated otherwise.”

I have personally felt that I can read e-books much quicker than I can read physical print books – though this may be because e-books tend to be shorter. Derek Haines (Links to an external site.), writer for Just Publishing Advice, said “By chance, I was looking at the Amazon Kindle Store and clicked on an ebook listed in the top twenty bestsellers. I scanned down the book’s details and was surprised to note that the ebook was listed as being only 105 pages in length.” (105 pages is about the length of an average fiction novella.)

Shorter e-books tend to sell better because of the nature of e-books. People carry their e-readers with them almost everywhere they go, and can quickly take them out in the airport, coffee shop, wine bar, and doctor office waiting room. Haines writes,

All of these situations though are prone to interruption, unlike reading a long work of speculative fiction while in bed or lazing on a sofa on a Sunday afternoon. In these situations, light, short reads would make sense and would give a good reason as to why short ebooks are popular and sell well. Sure, there are reasons to publish long, but it appears that there is definitely a new reading market, for selling short stories. For authors, it creates new possibilities. It opens the door to write short story collections, novellas or prose fiction.

E-book Pricing

There are quite a few other factors when it comes to pricing of e-books, including the popularity of the author. A Stephen King novel is obviously going to be more popular than a Kha’Doe Crosby novel, which explains why Stephen King’s new novel is priced at $14.99 in the iBook store while a run-of-the-mill book is priced around $9.99.

Even though popularity plays a big part in pricing, length is still a major consideration. Most customers will feel ripped off if they were forced to pay $15 for an e-book that is only 32 pages. Fiction books prices tend to vary from author to author – at the moment the average price is $9.99.

Non-fiction books can be slightly more expensive than other genres. “Nonfiction ebooks are often shorter than fiction, and yet are generally more expensive,” Shattuck writes. “This is because they require more research and fact-checking and can become valuable resources to readers.”

Overall, when writing a manuscript for an e-book it’s important for writers to remember not to let a designated word count get in the way of their content. Rather than obsessing over the length of a work, writers should look at whether their manuscript has a detailed and cohesive plot, interesting characters, and an introduction and ending that keep readers hooked and looking for more. Though the aesthetic and physical factors of the novel shouldn’t be ignored, ultimately, it’s the content that will sell the e-book to audiences looking for their next literary journey.

IS DRM For You?

What Is Digital Rights Management?

Digital rights management controls not only when the customer can use the product, but also how the product is used. According to Margaret Rouse, “DRM is implemented by embedding code that prevents copying, specifies a time period in which the content can be accessed or limits the number of devices the media can be installed on.”

Effects of Digital Rights Management

According to Copy Issues with e-books (Links to an external site.), “When buyers are purchasing e-books, they are not merely buying the book to own. In reality, e-book consumers are purchasing a licensing agreement.” Digital rights media is often active because of these kinds of licensing agreements. The DRM serves as a way to uphold the licensing deal for an e-book.

For example, Microsoft Office made an entrance into the e-book market in 2017 and left two years later. When Microsoft went under, customers of Microsoft’s e-books no longer could read e-books on their e-readers. Every Microsoft e-book that was purchased received their money back although customers deemed the product to be more valuable than money.

DRM for Authors

Digital rights management was first created to prevent online piracy. Now, the DRM has extended to being used to control the author’s content. One possible benefit of having DRM is the ability to edit e-books after it has uploaded. If the author notices an error, it will be easily fixed. Through the DRM, all of the author’s edits will be up to date since it connects to the server. Then if an author dislikes the feedback from a particular section, they can completely delete the section. The DRM adds an extra layer of protection that many authors have considered using.

Like every other coin, there are two sides to the DRM. A group of critics who are highly against the use of DRM has created a #DayAgainstDRM. Now is the time to raise awareness about the harms of DRM. According to Creative Commons Timothy Vollmer (Links to an external site.), ”

There are serious problems with attaching DRM to creative works: not only does it frustrate legitimate users in enjoying the content they’ve paid for in the ways they wish, but it also limits access and interaction with these works for educational and socially beneficial purposes.”

DRM has to be connected to a certain server; control is inevitable. Anderson (Links to an external site.)writes, “If you want to shift your Kindle books to an e-reader that doesn’t support Kindle files, you have to break the DRM. And as e-readers and e-books become more common, this fact becomes unavoidable.”

How does DRM affect E-book customers?

Companies who decide to use DRM have more control over the e-book. Thus, if a customer buys a book from Amazon, the book can only be read on a Kindle Fire or Kindle app. E-books purchased from Amazon are unable to be shared with other Amazon users.

Purchasers of e-books using DRM may limit how many devices an individual can download the same e-book. Some individuals are unable to print from e-books. If a person manages to print their e-books a watermark will appear on every page.Through DRM e-books are unsharable because it violates the Digital Millennium Copyright Act.

Is DRM stronger than Vibranium?

DRM is far from being impenetrable. If a company decides to use DRM, possibilities of setbacks still exist. For many customers, breaking the DRM off of their device is advantageous.

If a customer owns an e-book by a company that uses DRM, they could lose their e-book when they travel out of the country. K.T. Bradford (Links to an external site.)explains, “attempting to access Google Play Books from a country where that service is not available isn’t possible, even if you bought the books in an access country. This affects people traveling internationally as well as those who move from one country to another.” Customers who are wary of the future of e-book companies also may want to break DRM. When the DRM is broken customers will be able to keep the e-books, even if the company goes under.

While the use of DRM has changed, so has the initial market. As a result, DRM is both valuable and unhelpful for authors and consumers. Depending on a person’s perspective, DRM may be beneficial to authors and customers alike.

United States v. Apple

In April of 2012, the United States of America’s Department of Justice filed a lawsuit against Apple Inc. This was a United States antitrust case in which Apple was accused of conspiring with the top six major publishing companies to raise the price of e-books. In order to understand why the United States filed suit on Apple, it is pertinent to understand the original and legal model by which publishing companies must abide.

The legal model starts with the book publisher’s ownership of the e-books. Book publishers will sell the e-book rights to distributors; meaning distributors like Amazon and Apple are legally permissible to distribute and sell the e-books bought. Book publishers sell their e-books to distributors like Apple at wholesale price. The wholesale price is less than the suggested selling price of the e-book. Through competitive market forces, distributors have to compete for business with the consumers. In order to be competitive, distributors will set their prices just above the price they paid for the rights of the e-book. Thus, distributors making marginal profits from e-books is a typical occurrence. What’s important here is that price of the e-books sold to consumers is set by the distributors, not by the book publishers. What is also important is the distributors are vying for business with each other, which in turns causes lower prices.

According to the United States Court for the Southern District of New York (Links to an external site.), “[Book Publishers] conspired with each other to eliminate retail price competition in order to raise e-book prices, and that Apple played a central role in facilitating and executing that conspiracy”. The basis of the anti-trust lawsuit is a new and illegal model that Apple and the book publishers decided to indulge in. The book publishing industry is controlled by five major publishing companies. The five publishing companies consist of Hachette Book Group, Harper Collins, Macmillan Publishers, Penguin Random House, and Simon & Schuster.

Prior to Apple joining the e-book market, Amazon was by far the biggest e-book retailer. According to Fortune Magazine’s article Second Bite: Can Apple clear its name in the ebooks drama?, “Apple was breaking into a market then dominated by Amazon, which had an 80% to 90% market share—monopoly power in almost anyone’s book.” With Amazon being a monopoly power in the e-book market, they were able to set the prices of their e-books at whatever price they wanted without competition in the market. According to Fortune Magazine’s senior editor, Rodger Parloff (Links to an external site.), “publishers sold e-books to Amazon under this wholesale model for about $10. To their horror, however, Amazon resold the e-books to the public for $9.99.” There is nothing legally wrong with Amazon selling their e-books for $9.99, but the publishing companies were not okay with Amazon’s price choice.

The publishing companies were under the impression that Amazon’s lower e-book prices would in turn cause the value of physical books to go down. According to Rodger Parloff, “In response, some publishers chose to raise their wholesale e-book prices to $12 or even $15, but Amazon continued to sell even those e-books for $9.99 — now absorbing a $2 to $5 loss on every single book sold.” With the top five publishing companies being discontent with Amazon’s set retail prices, some of the publishers stopped wholesaling their books to Amazon. The book publishers started to collude in 2009 in order to fix their issue with Amazon.

Apple rolled out their first e-reader called the iPad in January of 2010. Prior to launching the iPad, Apple wanted to release the new i-bookstore app on the same day that they rolled out the iPad. At the same time of Apple’s release, Amazon already had their Kindle Fire e-reader out. The main difference between Amazon’s Kindle Fire and Apple’s iPad was the color display. The Kindle Fire had a back light that displayed in black and white, whereas the iPad had a colorful display. According to the U.S. Court for the Southeastern District of New York, “Apple did not want to compete with Amazon on price.”

Apple knew the big publishing companies were discontent with Amazon’s price of $9.99. Apple decided they would help the publishing companies with their problem, if the publishing company helped Apple enter into the e-book market. According to the U.S Court for the Southeastern District of New York, “Apple decided to offer the Publisher Defendants the opportunity to move from a wholesale model — where a publisher receives its designated wholesale price for each e-book and the retailer sets the retail price — to an agency model, where 12 publishers set the retail price and the retailer sells the e-book as its agent.” The wholesale to agency model change is not an illegal change, but it becomes illegal since Apple did this change with all five of the top publishers at the same time.

Horizontal competitors like these five publishers are not legally allowed to talk amongst each other about pricing. This collusion in order to change the market value of e-books is a direct violation of the Sherman Antitrust Act. According to the Legal Information Institute at Cornell Law School (Links to an external site.), “the Sherman Antitrust Act of 1890 is a federal statute which prohibits activities that restrict interstate commerce and competition in the marketplace.” This infringement of the law is where the lawsuit against Apple begins. The other publishing companies all took settlement deals, while Apple tried the case in court and was referred to as the “ringleader” of the “cartel”.

The Sherman Antitrust Act is set in place to not only maintain the integrity of the free market economy of the United States, but to also protect the consumer from being abused by big corporations. In the case of the top five publishing companies, they acted as an oligopoly with full control of the e-book market, and overstepped their boundaries with their price fixing. In June of 2015, the 2nd US Circuit Court of Appeals found that Apple was guilty of e-book price fixing. Consequently, Apple was required to pay a 450-million-dollar settlement. Major cases like this show the American people that no person or entity is above the law. It also shows the big entitles that they will not be allowed to take advantage of the people of United States in a court of law.

Copyright Issues with e-books

In the realm of copyright laws one of many ongoing issues is the ownership of products. For example, the “first sale” doctrine suggests that once one legally buys a product, they own it. Thus, lending and selling of a purchased product without the copyright owner’s permission is legally okay. This idea seems simple enough, but it becomes complicated when one involves the consumption of e-books.

The Vernor v. Autodesk case is one which reflects that, often, the copyright law domain is one that is not always black and white. Timothy Vernor, a reseller of online software, tried to resell Autodesk’s product on eBay. Vernor was under the impression that he because he bought the software, he was legally permitted to resell the product. The confusion arose when Autodesk claimed their Term of Use did not imply that a purchaser of their software owned the rights to the software.

According to EFF.org (Links to an external site.), “Autodesk’s position is that its software is ‘licensed’ rather than sold, and thus the first sale doctrine doesn’t apply (it only applies to copies you ‘own’ not those you merely lease).” In 2009 the district court ruled that Autodesk sells product but does not license them. Thus, according to the Copyright Act, Vernor was legally allowed to resell Autodesk’s software. The United States Court of Appeals for the Ninth Circuit reversed this ruling.

The Vernor v. Autodesk case is extremely relevant for the e-book publishing world as it was one of the frontrunners in the emerging world of copyright laws. When consumers would buy books, they would inevitably buy the physical copy of a book. While the Vernor v. Autodesk case was specifically pertaining to digital software, it set precedent for other digital products like e-books.

The emergence of this case caused others to be wary of their rights when it came to digital property. Today, libraries are still trying to protect the right for consumers to borrow e-books. According to CNN (Links to an external site.)“for the first two months after a Macmillan book is published, a library can only buy one copy, at a discount. After eight weeks, they can purchase ‘expiring’ e-book copies which need to be re-purchased after two years or 52 lends.”

This decision is advantageous for publishing companies, but is it for libraries? Libraries buy (Links to an external site.)about 45% of Macmillan e-books. When libraries buy books in print, they have every right to do whatever they please with the product. To many readers, and libraries, it seems unnecessary for to have to continue to buy the same product more than once.

As a publishing company, these decisions make sense; they need to make a profit so they can not only sustain a business, but also pay the writers of the books. If they were to allow libraries to buy one copy of the e-book and own the rights to it, publishers would not make as much money. Even though libraries are forced to continuously repurchase the same books, they are still receiving a better deal than an individual buying an e-book. Publishing companies allowing their e-book to be lent out 52 times allows the libraries to pay less money than if they were having to buy a new copy every time someone wanted to check-out an e-book. This is advantageous for both the library and the publishing company.

The new world of digital technology makes the world of copyright law more difficult than it has been in the past. Due to the emergence of e-books and software platforms like Autodesk, sustaining the rights of the writers and software developers has caused new issues. It is because of this technology that new laws have come forth.

Even though the “first-sale” doctrine suggest that if one buys a product then they own the rights to that product, there are stipulations to this rule. Buyers of e-books cannot lend that e-book to someone else and still have access to it on their own computer. This is violating the author of that e-book’s rights. This is because when buyers are purchasing e-books, they are not merely buying the book to own. In reality, e-book consumers are purchasing a licensing agreement. The word “buy” can be misleading to some purchasers because many may believe they own the book. Instead, they own the rights to read that e-book. Consumers cannot resell, lend, or make copies of e-books because of this agreement.

The question lingers to many about who these licensing agreements benefit. These agreements would suggest that purchasers of e-books have the possibility of losing their rights to the books under certain circumstances. Kindle’s Terms of Use (Links to an external site.)says:

“Kindle Content is licensed, not sold, to you by the Content Provider. The Content Provider may include additional terms for use within its Kindle Content. Those terms will also apply, but this Agreement will govern in the event of a conflict. Some Kindle Content, such as interactive or highly formatted content, may not be available to you on all Reading Applications.”

Due to agreements like this, e-book readers may believe publishers are not treating their readers fairly with their licensing agreements. The problem arises when one compares the rights that the purchaser gets when buying the traditional print book against buying e-books. The “first-sale” doctrine makes sense with traditional books. Once you buy the book and resell it, they no longer have the product. This, however, is not true for digital e-books. If someone sends an email with an e-book attached, the receiver of the email will now have the book as well as the original owner of the e-book.

The realm of copyright law and licensing agreements is set in place to protect the rights of all those involved in the creating and consuming of e-books. Without these laws in place, writers, as well as their readers, could be taken advantage of.