The booming popularity of e-book readers has added a new focus to the piracy debate. As with MP3s in the late 90s, and video and movie files during the last decade, the technology to read digital books has become mainstream. What does this mean for the print industry and book publishers?

When MP3-players became popular in the late 90s the music industry started to panic about a supposed drop in revenues. Likewise, the film industry panicked when computers and dedicated equipment were able to play video files easily on computer screens and television sets.

Both claimed that such technologies, and the file-sharing networks that sprung up to support them, have decimated their industries. And yet both groups have never been healthier financially.

With the increasing popularity of e-book readers such as Apple’s iPad, the Barnes & Noble Nook and Amazon’s Kindle, many in the publishing industry are starting to make the same claims as their music and film brethren.

At the start of the year CNN ran an article about e-books, their increasing sales and the fears of piracy. But how realistic are these fears? After conducting some early research on download statistics after the iPad introduction, we also touched on the subject and concluded ‘”Don’t worry about things.” It’s a position that seems to be borne out by the evidence. Let’s look at an example.

At the end of June, David Weber’s novel “Mission of Honor” was published by Baen books. Baen is a big supporter of e-books and has run a free e-book library of some of their titles over the last 10 years, called The Baen Free Library strangely enough. One of the other ways they support e-books is to include a bound-in CD with certain hardcover editions, containing the e-book files of that title in several formats including several DRM-free ones.

Mission of Honor had one of those CDs. Mission’s CD didn’t just contain one e-book though, it had e-books for a good chunk of the author’s published works, including all the previous books in the series. Again all these files were in multiple (DRM-free) formats – there’s even an occasionally audiobook version (and yes, you guessed it, no DRM on it either).

Here’s the kicker though, Baen has no problems with people distributing the contents of the CD in non-commercial ways. Fellow author, David Drake put it best in the Orientation on one of the earlier CD’s.

The files on this CD are not encrypted. Jim [Baen] doesn’t understand the logic of making his books hard for people to read. Neither do I, though we seem to be in the minority among publishers and authors. Read them. Copy them. Give them to your friends.[..] You’re not supposed to sell the files. “Who’d be stupid enough to buy something they could have for free?” you may well ask yourself. If you do sell them, you are a Bad Person and may later exhibit signs of wanting to run for political office; but between you and me, I’m not going to come hunt you down.

If e-book pirates are killing the industry as some people seem to believe, this free CD would have guaranteed that the book will sell badly, but that doesn’t seem to be the case.

The hardcover went on sale June 20th and the e-book CD went up the same day. Yet the book was #13 on the New York Times (NYT) bestseller list for July 2nd. It had slipped a bit to #24 the next week, and then to #26 the week after. But if e-books are killing the industry, how could a niche book (book 12 in a sci-fi series) sell so well? Especially when sci-fi fans are the ones most likely to be technologically oriented, and thus more likely to read e-books?

Can e-books improve the publishing industry? Without a doubt. One of the more innovative methods Baen uses to promote books is a teaser section. It’s not ‘official’ but it’s strongly supported by Baen. Three times a week, sections of a chapter of upcoming books are uploaded to a website called “Collected Driblets of Baen: A Frankly Promotional Endeavor…” and the author decides how much or little of his as-yet unpublished work will be previewed. In the case of Matter of Honor the previews started in February 2010 and ran until July 2nd – scoring some 71,000 hits over the publication of the 18 chapters.

The preview concept is relatively new, but it could be a huge boon for the publishing industry. Never before has it been so easy to tease potential readers, and sell more books because of it. Aside from the previews, another advantage is that people can buy books on their e-book readers and start reading straight away. This as opposed to waiting a day or two for a book to arrive, or going to an actual book store.

The question then is how best publishers should act to encourage people to buy e-books and physical books. As with films and music publishers they should address the concerns of the buying public, and treat them with respect instead of pushing DRM and revocable licenses. Trying to hide away from e-books has not worked for Harry Potter or Twilight, so pre-empt readers and convert them.

In that way, music and TV/movies differ from books in that the physical object of a book is different from the digital version; holding a book in your hands is different from holding and reading an e-book. Rather than treating e-books like the great Satan (as many publishers and authors do), or a replacement (as Amazon currently does), Baen has done very well by treating them as promotion. Eric Flint, author, editor, and ‘Librarian’ of the Baen Free Library made the following observation back in 2000.

“Dave Weber’s On Basilisk Station has been available for free as a “loss leader” for Baen’s for-pay experiment “Webscriptions” for months now. And — hey, whaddaya know? — over that time it’s become Baen’s most popular backlist title in paper! And so I volunteered my first novel, Mother of Demons, to prove the case. And the next day Mother of Demons went up online, offered to the public for free. Sure enough, within a day, I received at least half a dozen messages (some posted in public forums, others by private email) from people who told me that, based on hearing about the episode and checking out Mother of Demons, they either had or intended to buy the book. In one or two cases, this was a “gesture of solidarity. “But in most instances, it was because people preferred to read something they liked in a print version and weren’t worried about the small cost — once they saw, through sampling it online, that it was a novel they enjoyed. (Mother of Demons is a $5.99 paperback, available in most bookstores. Yes, that a plug. )

E-books have the potential to increase sales of physical books as well as provide their own source of income. That is, if authors and publishers are willing to accept them and deal with their users fairly, instead of hiding behind curiously high prices or DRM. E-books are the future. Last month Amazon reported it was selling more e-books than hardcovers. E-books are not going to go away any time soon, nor are they a flash in the pan. The lessons should have been learned from the 10+ year music fight. Throwing money at enforcement and litigation doesn’t work. Instead embracing the medium can be beneficial.