As digital book publishing continues to expand at a rapid pace to meet reader demands, piracy rears its head at the forefront of many a discussion in publisher circles. Many publishers respond to the perceived threat with strict digital rights management (DRM) software. But is this the best solution? And does it even provide protection from piracy?

In the following interview, Magellan Media founder and TOC 2011 speaker Brian O’Leary (@brianoleary) discusses the current state of book piracy, how measurement data isn’t sufficient to determine its impact, and why DRM is a poor anti-piracy tool.

What’s the current impact of piracy on the book publishing industry?

Brian O’Leary: We don’t know. Some people will tell you that it’s the biggest problem facing publishing or that ebook piracy will kill publishing. None of those perspectives are informed by solid data.

We undertook research two-and-a-half-years ago with O’Reilly, and we’ve been studying Thomas Nelson as well, to measure the impact of piracy on paid content sales. We approached it as if it were cooperative marketing. We would look at the impact of what sales looked like before there was piracy, say for four to eight weeks, and then we’d look at the impact of piracy afterward. Essentially, if the net impact of piracy is negative, then you would see sales fall off more quickly after piracy; if it were positive, the opposite.

Data that we collected for the titles O’Reilly put out showed a net lift in sales for books that had been pirated. So, it actually spurred, not hurt, sales. But we were only looking at O’Reilly and Thomas Nelson. The results are not emblematic of publishing overall. It could be more conservative, it could be less conservative. We just don’t have enough data. I’ve tried to get other publishers to join in, but it really hasn’t been a successful mission. Even at a low- or no-cost offer, publishers seem reluctant to collect the data required to reveal the true impact of book piracy.

Can content tracking tools, such as those from Attributor, curb piracy?

BO: Companies like Attributor gather data that specifies how many files were uploaded or downloaded from pirate sites. Their methodology, to me, is a little problematic, but that’s not really the big problem. The most significant challenge is we don’t know what the impact is on paid sales. Common methodologies count the number of times that something appears on a site and assumes every one of those is a lost sale.

I would offer two counter points: First, the method for counting downloads of pirated books is clunky at best. Second, you can’t say that every download is equivalent to a lost sale. Some are, but there’s at least some likelihood that the pirated titles either spurred sales or represented a download that never would have resulted in a sale anyway.

The other thing, too, is you’ve got to look at where the downloads occur. If it’s a North American title and the downloads occurred in Romania, I’m not that worried about it if I’m a publisher. It actually, if anything, says to me I should be moving my English language rights and my translation rights faster.

It’s not that piracy is not a problem, it’s just that it’s not demonstratively a problem until you know what’s actually happening.

I think content-tracking tools are good if you’re using them as a starting point for a conversation. No one can sample all of the torrent sites and know exactly what’s going on. The sampling is limited in how broadly you can draw conclusions, particularly about things like trade publishing versus academic publishing. Companies like Attributor tell you when piracy is occurring. What they can’t do, and what publishers need to generate the data to do, is understand the impact of piracy.

What tactics are publishers using to thwart piracy?

BO: Most publishers focus on variations of enforcement. They find out that piracy occurs, they issue a takedown order, and they escalate it if they so choose. The jury’s out on whether that actually works. I think in general for offshore torrent sites, it’s probably not that effective. All you need to do is look at WikiLeaks and you’ll see a whole host of examples of how hard it is in a global Internet environment to get something truly taken down.

Some companies are focused on applying fairly strict DRM software to their digital books. I’m pretty adamant on DRM: It has no impact whatsoever on piracy. Any good pirate can strip DRM in a matter of seconds to minutes. A pirate can scan a print copy easily as well. DRM is really only useful for keeping people who otherwise might have shared a copy of a book from doing so.

Is piracy really a threat to the book industry?

BO: I don’t have enough data to say unequivocally “yes” or “no” to the extent of the piracy threat. I think what leads to rampant piracy is not meeting emergent demands. The publishing industry should be working as hard as we can to develop new and innovative business models that meet the needs of readers. And what those look like could be community-driven. I think of Baen Books, for example, which doesn’t put any DRM restrictions on its content but is one of the least pirated book publishers.

As to sales, Paulo Coelho is a good example. He mines the piracy data to see if there’s a burgeoning interest for his books in a particular country or market. If so, he either works to get his book out in print or translate it in that market.

I think piracy has become more acute with ebooks, not because ebooks are easily pirated but because ebooks are easily visible. So, for example, if I’m living in South Africa and I speak English, but I want to read Nora Roberts, and Nora Roberts is only published in North America, I might have to wait through a four-year cycle to get her latest book. That lead time made sense when it was about ink on paper. But if it’s an ebook, as a reader, I want to read it today — I love Nora Roberts, and I’d pay for her latest book, but I can’t get it here because there’s no service that will sell me an ebook in South Africa. That’s when piracy starts to occur. Readers say: “I would have paid for it, but they wouldn’t give it to me. They frustrated my demand.”

Will publishers — and content producers in general — get past the “lost revenue” mindset attached to digital piracy?

BO: I think they already are. Not globally and not entirely, but I think that people are beginning to say, “Maybe this isn’t as big a deal as we thought it was.” When you see companies like O’Reilly moving a lot of their sales from print to digital, you’d think they would be more prone to piracy. And yet, we didn’t see that in our research. Publishers have seen other things occur that suggest that being widely available in digital formats that are not DRM restricted has helped with predictable sales. Baen Books, again, is a good example.

I think there are plenty of people paying Attributor and other companies to monitor and issue takedown notices. I’m just not sure that it makes a difference. The really interesting things are happening around innovation in how we deliver content to people. That’s what’s fun, and those innovators will find ways to make money. I just hope the folks who find interesting ways to make money are not all technology providers and platform companies, but publishers as well.

Related: