Digital Rights Management, better known by its abbreviation, DRM, is the collective name for tools designed to prevent unauthorized copying of digital items. It has existed almost as long as consumer software: I recall that some software for my Apple ][ in 1980 had "copy protection" on the floppy disk.
Modern DRM schemes typically "bind" a digital product (a video, a music track, a computer game or aplication, or an ebook) to one or more "authorized devices." You are prevented from using the protected digital product on any other device.
There are many problems with DRM. A friend recently lost her ebook reader while on a business trip. All her ebooks were bound to that "authorized" device. She is an avid reader, and had many unread books on the device, together with a large number she had finished reading. Losing the device meant losing the books and her investment in them.
If I purchase a printed book and want to let my son or daughter read it when I am finished, I give it to them. If I purchase a DRM-laden ebook to read on my iPad, someone else in my family can only read it if we share a family iTunes account, or if I hand over my iPad for the time it takes them to read the book.
These are very consumer-unfriendly scenarios which dramatically change the way we have historically treated books. I could argue, as a publisher, that ebooks are (mostly) sold at a lower price than print, and I want to maximize revenue for the authors I publish. But I can also argue, and will, that encouraging honest sharing actually improves sales by allowing others to discover new authors and new imprints.
One more issue: I have never seen any study, with actual numbers, which shows that adding DRM to ebooks has a positive effect on sales. Never. I attend publishing conferences, talk to others in the industry, and read as much as I can on publishing issues. If anyone has scientifically compared with-DRM sales to without-DRM sales, they are hiding the results. Which begs the question, why?
Everyone who has used computers for more than a very brief period of time knows that operating systems and the software we use is in a constant state of change. The same applies to ebooks. The earliest ebooks used file formats developed by Palm and Microsoft, neither of which is now in the ebook business. Those early formats are effectively "dead" and ebooks in those formats are not readable on modern reading devices.
The currently dominant ebook formats, EPUB 2 and MOBI/AZW are also evolving. EPUB 3 is starting to move from theory to actual reading devices and ebooks, and Amazon has replaced MOBI/AZW with a new and different format, KF8, on the Kindle Fire. Apple has yet another format, iBooks, for education titles.
It is only a matter of time (a year or two, probably), before today's most common formats are obsolete and no longer supported by the latest reading devices. I don't know if someone will create conversion tools to allow people to "upgrade" their current ebook libraries to newer formats and so keep the books accessible.
The reality is, so long as an ebook is encumbered with DRM, your "purchase" is actually a rental, constrained by the DRM. Format changes add to the possibility that any ebook purchase today is a rental.
"Piracy" does happen, and DRM does nothing to stop it. It is trivially easy to remove the DRM protection from software. Freely available tools can be downloaded and used by anyone who has even a passing knowledge of using software on a computer, and no programming is required.
I have friends who regularly break the DRM on ebooks they buy, not to distribute the ebooks to all and sundry, but simply in order to have a backup copy in case they lose their reading device, or have a computer crash which destroys data. A number of those friends are published authors; others include lawyers, graphic artists, and publishers. None of them thinks books should be free, or that authors and publishers should not earn money from ebooks. All of them view DRM the way I do: as a bad idea.
Piracy, in the sense of making ebooks and other software available for free download via "torrent" sites is theft, and must be treated as such. There are laws (notably the Digital Millennium Copyright Act) which make dealing with such piracy fairly straightforward.
Letting a family member or close friend read an ebook one has purchased is not, I think, an instance of piracy and should not be treated as such.
The worst thing that can happen to any book is obscurity. People talking about a book is generally the best possible form of publicity, because we trust the opinions and recommendations of our friends and acquaintances far more than those of obscure "reviewers" or others we don't know. If I know you, as a friend, or as someone I have some involvement with, perhaps through Twitter, or Facebook, or some other social media, your favorable commentary about a book you are reading is going to have a strong influence on my interest in that book.
Is any DRM good?
Yes, I think there are one or two valid cases for DRM. The most obvious one to me is computer games. That is a business in which the great majority of sales occur in a very few weeks after a game is released. Big games cost literally millions to develop, and the initial weeks of sales are a "make or break" time for each new title. This is why pretty much every big game has shifted to purely digital distribution. Those games allow multiple players to compete, or to form teams to compete, and the use of DRM locking the installed game to a user's computer allows games makers to have a reasonable shot at recovering their investment and making a profit.
To some extent, the same is true for the "apps" one buys and installs on devices like the iPad and smartphones. The life expectancy of many of those apps is pretty short and so the publisher's revenue is heavily front-loaded.
So for games and apps, DRM makes sense. Neither is likely to be a "collectible" over time.
The music business made a staggering series of bad decisions, starting with the transition from cassette tapes to CDs. Consumers were not happy with needing to replace their music collections because the delivery format had changed, but most (myself included) ended up spending the money. Then digital downloads became available, through companies like Microsoft and Walmart. But those downloads were DRM-laden and locked to specific hardware.
Napster became the poster child for unhappy consumers. Music companies tried to sell "album" downloads (mirroring the vinyl, 8-track, cassette, and CD progression), when consumers of pop music wanted specific tracks. Piracy became rampant. Early music vendors (such as Walmart) gave up and shuttered their music sites, orphaning the albums consumers had purchased because when the DRM server shut down, the DRM-managed music stopped being playable.
Eventually, Amazon and Apple forced the music industry to abandon DRM and to sell individual tracks. Sales ramped up sharply and piracy declined rapidly. The message is obvious: give the consumer what she wants at a fair price and she will spend her money and not pirate the product.
Digital delivery of video has effectively killed off DVD rental companies like Blockbuster. The industry looks to be heading towards a digital rental model, led by "all you can consume for a monthly fee" outfits like NetFlix while "new releases" are rented (or optionally bought by collectors) through Amazon and iTunes at a premium.
I think the average consumer, offered a fair price and DRM-free ebooks, is an honest consumer. Yes, there will always be a small group on the fringe who will steal. These are the sad people who shoplift in retail stores, or try to avoid paying the fare on public transit. DRM will not stop their efforts to avoid paying for an ebook. Adding DRM to our ebooks would just make life harder for the honest majority.
We have been selling DRM-free ebooks on this website since the first one was added to the site many months ago. We distribute our ebooks to vendors around the world via a service created by the Association of Canadian Publishers. We were recently shocked to find that our ebooks, despite being flagged as DRM-free, were being encumbered with DRM by retailers because the distribution service had arbitrarily decided to do that without telling us; they were ignoring our distribution settings. Following a strong protest, this high-handed decision is being reversed. Unfortunately, it looks likely to take some time before that process is completed by the distributor. The fact that a growing number of publishers, including some of the global "big six" publishers, are now moving some of their imprints away from DRM is helping.